0001518520
2016-12-31
0001518520
us-gaap:EmployeeStockOptionMember
srt:MinimumMember
2016-12-31
0001518520
us-gaap:EmployeeStockOptionMember
srt:MaximumMember
2016-12-31
0001518520
srt:MinimumMember
us-gaap:WarrantMember
2016-12-31
0001518520
srt:MaximumMember
us-gaap:WarrantMember
2016-12-31
0001518520
us-gaap:EmployeeStockOptionMember
2016-12-31
0001518520
us-gaap:WarrantMember
2016-12-31
0001518520
icfn:IcagenTIncMember
us-gaap:ConvertibleDebtMember
2017-05-15
0001518520
icfn:IcagenTTermLoanMember
icfn:GpbThreeYearSeniorSecuredConvertibleNoteMember
2017-05-15
0001518520
icfn:IcagenTTermLoanMember
icfn:GpbThreeYearSeniorSecuredConvertibleNoteOneMember
2017-05-15
0001518520
us-gaap:NoteWarrantMember
2017-05-15
0001518520
icfn:IcagenTIncMember
us-gaap:ConvertibleDebtMember
2017-05-02
2017-05-15
0001518520
icfn:IcagenTTermLoanMember
icfn:GpbThreeYearSeniorSecuredConvertibleNoteMember
2017-05-02
2017-05-15
0001518520
icfn:IcagenTTermLoanMember
icfn:GpbThreeYearSeniorSecuredConvertibleNoteOneMember
2017-05-02
2017-05-15
0001518520
us-gaap:NoteWarrantMember
2017-05-02
2017-05-15
0001518520
icfn:IcagenTTermLoanMember
2017-05-02
2017-05-15
0001518520
us-gaap:BeneficialOwnerMember
2017-05-02
2017-05-15
0001518520
2017-06-01
2017-06-19
0001518520
2017-06-30
0001518520
2017-07-01
2017-09-30
0001518520
us-gaap:WarrantMember
2017-07-01
2017-09-30
0001518520
us-gaap:StockOptionMember
2017-07-01
2017-09-30
0001518520
icfn:ServicesRevenuesMember
2017-07-01
2017-09-30
0001518520
icfn:GovernmentGrantsMember
2017-07-01
2017-09-30
0001518520
icfn:SubsidyRevenueMember
2017-07-01
2017-09-30
0001518520
us-gaap:ConvertibleNotesPayableMember
2017-07-01
2017-09-30
0001518520
2017-01-01
2017-09-30
0001518520
us-gaap:WarrantMember
2017-01-01
2017-09-30
0001518520
us-gaap:StockOptionMember
2017-01-01
2017-09-30
0001518520
icfn:ServicesRevenuesMember
2017-01-01
2017-09-30
0001518520
icfn:GovernmentGrantsMember
2017-01-01
2017-09-30
0001518520
icfn:SubsidyRevenueMember
2017-01-01
2017-09-30
0001518520
us-gaap:ConvertibleNotesPayableMember
2017-01-01
2017-09-30
0001518520
2017-09-30
0001518520
2017-01-01
2017-12-31
0001518520
srt:MinimumMember
us-gaap:WarrantMember
2017-01-01
2017-12-31
0001518520
srt:MaximumMember
us-gaap:WarrantMember
2017-01-01
2017-12-31
0001518520
us-gaap:EmployeeStockOptionMember
2017-01-01
2017-12-31
0001518520
us-gaap:WarrantMember
2017-01-01
2017-12-31
0001518520
2017-12-31
0001518520
us-gaap:EmployeeStockOptionMember
srt:MinimumMember
2017-12-31
0001518520
us-gaap:EmployeeStockOptionMember
srt:MaximumMember
2017-12-31
0001518520
srt:MinimumMember
us-gaap:WarrantMember
2017-12-31
0001518520
srt:MaximumMember
us-gaap:WarrantMember
2017-12-31
0001518520
us-gaap:EmployeeStockOptionMember
2017-12-31
0001518520
us-gaap:WarrantMember
2017-12-31
0001518520
icfn:AssetPurchaseArrangementsMember
2017-12-31
0001518520
us-gaap:SeriesBPreferredStockMember
2017-12-31
0001518520
us-gaap:ComputerEquipmentMember
2017-12-31
0001518520
icfn:CellLinesMember
2017-12-31
0001518520
us-gaap:EquipmentMember
2017-12-31
0001518520
icfn:AssembledWorkforceMember
2017-12-31
0001518520
us-gaap:SeriesAPreferredStockMember
2017-12-31
0001518520
us-gaap:LeaseholdImprovementsMember
2017-12-31
0001518520
us-gaap:TrademarksAndTradeNamesMember
2017-12-31
0001518520
icfn:DiscoveryPlatformMember
2017-12-31
0001518520
icfn:PatentsAndLicensesMember
2017-12-31
0001518520
us-gaap:ComputerSoftwareIntangibleAssetMember
2017-12-31
0001518520
icfn:ShortTermPortionMember
2017-12-31
0001518520
icfn:LongTermPortionMember
2017-12-31
0001518520
icfn:DentonsDisputeMember
2017-12-31
0001518520
icfn:LegalSettlementEisenschenkMatterMember
2017-12-31
0001518520
icfn:LegalSettlementotherMatterMember
2017-12-31
0001518520
us-gaap:SeriesCPreferredStockMember
2017-12-31
0001518520
icfn:ShortTermPortionMember
2017-12-31
0001518520
us-gaap:ShareBasedCompensationAwardTrancheOneMember
2018-03-25
2018-04-04
0001518520
icfn:TimothyTysonMember
icfn:PreferredStockUnitsMember
2018-03-25
2018-04-04
0001518520
us-gaap:ShareBasedCompensationAwardTrancheTwoMember
2018-05-26
2018-05-30
0001518520
icfn:CliveKabatznikMember
icfn:PreferredStockUnitsMember
2018-05-26
2018-05-30
0001518520
icfn:TimothyTysonMember
icfn:PreferredStockUnitsMember
2018-07-01
2018-07-13
0001518520
us-gaap:ShareBasedCompensationAwardTrancheThreeMember
2018-07-01
2018-07-13
0001518520
us-gaap:SeriesCPreferredStockMember
us-gaap:ShareBasedCompensationAwardTrancheThreeMember
2018-07-01
2018-07-13
0001518520
us-gaap:BridgeLoanMember
2018-08-13
0001518520
2018-08-01
2018-08-13
0001518520
us-gaap:BridgeLoanMember
2018-08-01
2018-08-13
0001518520
icfn:SecuritiesPurchaseAgreementMember
2018-08-01
2018-08-13
0001518520
icfn:TimothyTysonMember
icfn:BridgeNoteUnitsMember
2018-08-01
2018-08-13
0001518520
icfn:CliveKabatznikMember
icfn:BridgeNoteUnitsMember
2018-08-01
2018-08-13
0001518520
icfn:MichaelTaglichMember
icfn:BridgeNoteUnitsMember
2018-08-01
2018-08-13
0001518520
icfn:RobertTaglichMember
icfn:BridgeNoteUnitsMember
2018-08-01
2018-08-13
0001518520
icfn:MichaelTaglichMember
icfn:PreferredStockUnitsMember
2018-08-16
2018-08-27
0001518520
icfn:RobertTaglichMember
icfn:PreferredStockUnitsMember
2018-08-16
2018-08-27
0001518520
us-gaap:SeriesCPreferredStockMember
icfn:ShareBasedCompensationAwardTrancheFourMember
2018-08-01
2018-08-27
0001518520
icfn:IcagenTTermLoanMember
2018-08-31
0001518520
icfn:ShareBasedCompensationAwardTrancheFourMember
2018-08-31
0001518520
icfn:IcagenTermLoanMember
2018-08-31
0001518520
icfn:IcagenCreditAgreementMember
2018-08-31
0001518520
icfn:ThirdPartyMember
2018-08-31
0001518520
icfn:CreditAgreementMember
2018-08-31
0001518520
icfn:CreditAgreementsMember
2018-08-31
0001518520
2018-08-01
2018-08-31
0001518520
icfn:IcagenTTermLoanMember
2018-08-01
2018-08-31
0001518520
icfn:IcagenTermLoanMember
2018-08-01
2018-08-31
0001518520
icfn:IcagenCreditAgreementMember
2018-08-01
2018-08-31
0001518520
icfn:ThirdPartyMember
2018-08-01
2018-08-31
0001518520
icfn:CreditAgreementMember
2018-08-01
2018-08-31
0001518520
icfn:CreditAgreementsMember
2018-08-01
2018-08-31
0001518520
icfn:ShareBasedCompensationAwardTrancheFourMember
2018-04-01
2018-08-31
0001518520
2018-07-01
2018-09-30
0001518520
us-gaap:WarrantMember
2018-07-01
2018-09-30
0001518520
us-gaap:StockOptionMember
2018-07-01
2018-09-30
0001518520
icfn:ServicesRevenuesMember
2018-07-01
2018-09-30
0001518520
icfn:GovernmentGrantsMember
2018-07-01
2018-09-30
0001518520
icfn:SubsidyRevenueMember
2018-07-01
2018-09-30
0001518520
us-gaap:ConvertibleNotesPayableMember
2018-07-01
2018-09-30
0001518520
2018-01-01
2018-09-30
0001518520
srt:MinimumMember
us-gaap:WarrantMember
2018-01-01
2018-09-30
0001518520
srt:MaximumMember
us-gaap:WarrantMember
2018-01-01
2018-09-30
0001518520
us-gaap:EmployeeStockOptionMember
2018-01-01
2018-09-30
0001518520
us-gaap:WarrantMember
2018-01-01
2018-09-30
0001518520
us-gaap:WarrantMember
2018-01-01
2018-09-30
0001518520
us-gaap:StockOptionMember
2018-01-01
2018-09-30
0001518520
icfn:ServicesRevenuesMember
2018-01-01
2018-09-30
0001518520
icfn:GovernmentGrantsMember
2018-01-01
2018-09-30
0001518520
icfn:SubsidyRevenueMember
2018-01-01
2018-09-30
0001518520
us-gaap:ConvertibleNotesPayableMember
2018-01-01
2018-09-30
0001518520
us-gaap:PrivatePlacementMember
2018-01-01
2018-09-30
0001518520
us-gaap:EmployeeStockOptionMember
icfn:RangeFourMember
2018-01-01
2018-09-30
0001518520
icfn:RangeOneMember
us-gaap:EmployeeStockOptionMember
2018-01-01
2018-09-30
0001518520
us-gaap:EmployeeStockOptionMember
icfn:RangeTwoMember
2018-01-01
2018-09-30
0001518520
us-gaap:EmployeeStockOptionMember
icfn:RangeFiveMember
2018-01-01
2018-09-30
0001518520
us-gaap:EmployeeStockOptionMember
icfn:RangeSixMember
2018-01-01
2018-09-30
0001518520
us-gaap:WarrantMember
icfn:ThreePointFiveZeroMember
2018-01-01
2018-09-30
0001518520
icfn:ThreePointEightFiveMember
us-gaap:WarrantMember
2018-01-01
2018-09-30
0001518520
us-gaap:EmployeeStockOptionMember
icfn:RangeThreeOneMember
2018-01-01
2018-09-30
0001518520
srt:MaximumMember
2018-01-01
2018-09-30
0001518520
srt:MinimumMember
2018-01-01
2018-09-30
0001518520
us-gaap:PrivatePlacementMember
us-gaap:SeriesCPreferredStockMember
2018-01-01
2018-09-30
0001518520
icfn:EarnOutPaymentMember
2018-01-01
2018-09-30
0001518520
icfn:PfizerResearchMember
2018-01-01
2018-09-30
0001518520
us-gaap:EquipmentMember
2018-01-01
2018-09-30
0001518520
icfn:LaboratorySoftwareMember
2018-01-01
2018-09-30
0001518520
2018-09-30
0001518520
us-gaap:EmployeeStockOptionMember
srt:MinimumMember
2018-09-30
0001518520
us-gaap:EmployeeStockOptionMember
srt:MaximumMember
2018-09-30
0001518520
srt:MinimumMember
us-gaap:WarrantMember
2018-09-30
0001518520
srt:MaximumMember
us-gaap:WarrantMember
2018-09-30
0001518520
us-gaap:EmployeeStockOptionMember
2018-09-30
0001518520
us-gaap:WarrantMember
2018-09-30
0001518520
icfn:AssetPurchaseArrangementsMember
2018-09-30
0001518520
us-gaap:SeriesBPreferredStockMember
2018-09-30
0001518520
us-gaap:ComputerEquipmentMember
2018-09-30
0001518520
icfn:CellLinesMember
2018-09-30
0001518520
us-gaap:EquipmentMember
2018-09-30
0001518520
icfn:AssembledWorkforceMember
2018-09-30
0001518520
us-gaap:SeriesAPreferredStockMember
2018-09-30
0001518520
us-gaap:LeaseholdImprovementsMember
2018-09-30
0001518520
us-gaap:TrademarksAndTradeNamesMember
2018-09-30
0001518520
icfn:DiscoveryPlatformMember
2018-09-30
0001518520
icfn:PatentsAndLicensesMember
2018-09-30
0001518520
us-gaap:ComputerSoftwareIntangibleAssetMember
2018-09-30
0001518520
icfn:ShortTermPortionMember
2018-09-30
0001518520
icfn:LongTermPortionMember
2018-09-30
0001518520
icfn:DentonsDisputeMember
2018-09-30
0001518520
icfn:LegalSettlementEisenschenkMatterMember
2018-09-30
0001518520
icfn:LegalSettlementotherMatterMember
2018-09-30
0001518520
us-gaap:SeriesCPreferredStockMember
2018-09-30
0001518520
icfn:ShortTermPortionMember
2018-09-30
0001518520
us-gaap:EmployeeStockOptionMember
icfn:RangeFourMember
2018-09-30
0001518520
icfn:RangeOneMember
us-gaap:EmployeeStockOptionMember
2018-09-30
0001518520
us-gaap:EmployeeStockOptionMember
icfn:RangeTwoMember
2018-09-30
0001518520
us-gaap:EmployeeStockOptionMember
icfn:RangeFiveMember
2018-09-30
0001518520
us-gaap:EmployeeStockOptionMember
icfn:RangeSixMember
2018-09-30
0001518520
us-gaap:WarrantMember
icfn:ThreePointFiveZeroMember
2018-09-30
0001518520
icfn:ThreePointEightFiveMember
us-gaap:WarrantMember
2018-09-30
0001518520
us-gaap:EmployeeStockOptionMember
icfn:RangeThreeOneMember
2018-09-30
0001518520
srt:MaximumMember
2018-09-30
0001518520
srt:MinimumMember
2018-09-30
0001518520
us-gaap:EquipmentMember
2018-09-30
0001518520
icfn:LaboratorySoftwareMember
2018-09-30
0001518520
us-gaap:ChiefExecutiveOfficerMember
us-gaap:SubsequentEventMember
2018-11-01
2018-11-14
0001518520
us-gaap:SubsequentEventMember
icfn:ChiefScientificOfficerMember
2018-11-01
2018-11-14
0001518520
us-gaap:BoardOfDirectorsChairmanMember
us-gaap:SubsequentEventMember
2018-11-01
2018-11-14
0001518520
2018-11-16
xbrli:shares
iso4217:USD
iso4217:USDxbrli:shares
xbrli:pure
icfn:Customer
Icagen, Inc.
0001518520
false
--12-31
10-Q
2018-09-30
2018
Q3
Non-accelerated Filer
true
false
false
6393107
4938948
5796786
6025263
2763596
2954230
1739895
1898113
73885
47216
213367
216084
4790743
5115643
7427071
5153664
211875
637500
1087875
336157
7258333
5153664
190688
637500
979088
297393
2181753
43816
1396617
24460
716860
1706777
37708
1315353
11900
341816
238987
238987
9847811
9204097
14638554
14319740
1471645
2076091
2440442
1923827
493333
10000
219828
130244
206458
2200000
398833
139394
56436
140165
4971100
6935596
8232664
6306971
71296
26740
12593700
5861794
4168964
5229068
18334718
24156479
23305818
31092075
800
6392
6392
25084252
26598605
237
237
-33757671
-43377895
-8667264
-16772335
14638554
14319740
0.001
0.001
0.001
0.001
10000000
1142856
10000000
1142856
0
799988
0
799988
3000000
400000
3000000
400000
5457144
5457144
4199937
0.001
0.001
0.001
50000000
50000000
6720107
6720107
6393107
6393107
327000
327000
5421965
3021965
2400000
17016462
9495718
320744
7200000
3007928
3007928
10465046
10465046
2751087
8772433
1377571
6898815
2670878
8244029
1630357
3566231
3448053
10360873
2382648
8023292
368217
1211122
364712
1190442
56246
168738
56246
168738
3872516
11740733
2803606
9382472
-1201638
-3496704
-1173249
-5816241
473
500699
118834
125218
495783
495783
572524
572524
730677
1735556
815238
2366170
201459
279178
-300665
-1346202
-528745
-955679
-1073810
-3663895
-1730383
-4452383
-2247059
-9480136
-1730383
-4452383
-2247059
-9480136
80548
140088
-1730383
-4452383
-2327607
-9620224
-0.27
-0.70
-0.36
-1.50
6393107
6393107
6393107
6393107
368217
1211122
364712
1190442
165282
480474
151713
457333
786339
1017408
-500000
432326
224307
570066
158218
96063
-26669
60883
2717
-517908
604446
-3200000
-343725
-89584
-397095
-1006331
-7338302
-6197224
100000
150000
791156
715466
153164
20381
-1023939
-865466
15250000
9600000
10000000
1500000
500000
1500000
962162
207000
207000
2800000
157766
309210
127514
9448556
7253324
1086315
190634
400877
1055426
1858663
330353
116485
1746065
3890826
4518278
<div><table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;" cellspacing="0" cellpadding="0"><tr style="font: 10pt/normal 'times new roman', times, serif; vertical-align: top; font-size-adjust: none; font-stretch: normal;"><td style="font: 10pt/normal 'times new roman', times, serif; width: 48px; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>1.</b></font></td><td style="font: 10pt/normal 'times new roman', times, serif; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>GENERAL INFORMATION</b></font></td></tr></table><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b> </b></font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">Icagen, Inc. (“the Company”, “we”, “us”, “our”) is a Delaware corporation. The principal office of the Company is in Durham, North Carolina. The Company was incorporated in November 2003.</font></p></div>
<table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;" cellspacing="0" cellpadding="0"><tr style="font: 10pt/normal 'times new roman', times, serif; vertical-align: top; font-size-adjust: none; font-stretch: normal;"><td style="font: 10pt/normal 'times new roman', times, serif; width: 48px; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>2.</b></font></td><td style="font: 10pt/normal 'times new roman', times, serif; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>ACCOUNTING POLICIES AND ESTIMATES</b></font></td></tr><tr style="font: 10pt/normal 'times new roman', times, serif; vertical-align: top; font-size-adjust: none; font-stretch: normal;"><td style="font: 10pt/normal 'times new roman', times, serif; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></td><td style="font: 10pt/normal 'times new roman', times, serif; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></td></tr><tr style="font: 10pt/normal 'times new roman', times, serif; vertical-align: top; font-size-adjust: none; font-stretch: normal;"><td style="font: 10pt/normal 'times new roman', times, serif; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></td><td style="font: 10pt/normal 'times new roman', times, serif; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>General</b></font></td></tr></table><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The (a) unaudited condensed consolidated balance sheets as of September 30, 2018, which have been derived from the unaudited condensed consolidated financial statements, and as of December 31, 2017, which have been derived from audited consolidated financial statements, and (b) the unaudited interim condensed consolidated statements of operations and cash flows of the Company, have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and the instructions to Form 10-Q and Rule 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months and nine months ended September 30, 2018 are not necessarily indicative of results that may be expected for the year ending December 31, 2018. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Form 10-K for the year ended December 31, 2017, filed with the Securities and Exchange Commission (“SEC”) on April 17, 2018.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>Basis of Presentation</b></font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; color: #000000; text-transform: none; text-indent: 0.5pt; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b> </b></font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“US GAAP”).</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in;
text-align: justify;
color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">In the opinion of management, all adjustments necessary to fairly present the results for the interim periods presented have been made. All adjustments made are of a normal and recurring nature and no non-recurring adjustments have been made in the presentation of these interim financial statements.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">All amounts referred to in the notes to the unaudited condensed consolidated financial statements are in United States Dollars ($) unless stated otherwise.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>Consolidation</b></font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The unaudited condensed consolidated financial statements include the financial statements of the Company and its subsidiaries in which it has a majority voting interest. Investments in affiliates are accounted for under the cost method of accounting, where appropriate. All significant intercompany accounts and transactions have been eliminated in the condensed consolidated financial statements. The entities included in these condensed consolidated financial statements are as follows:</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">Icagen, Inc. - Parent Company</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">Icagen Corp - Wholly owned subsidiary</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">Icagen-T Inc. - Wholly owned subsidiary</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal;
word-spacing: 0px; white-space: normal;
orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">Caldera Discovery, Inc. - Wholly owned subsidiary</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">XRPro Sciences, Inc. - Wholly owned subsidiary</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The preparation of these unaudited condensed consolidated financial statements in accordance with US GAAP requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. The Company continually evaluates its estimates, including those related to bad debts and recovery of long-lived assets. The Company bases its estimates on historical experience and on various other assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Any future changes to these estimates and assumptions could cause a material change to the Company’s reported amounts of revenues, expenses, assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions. The Company believes the following critical accounting policies affect its more significant judgments and estimates used in the preparation of the financial statements. Significant estimates include the allowance for doubtful accounts, the useful life of plant and equipment and intangible assets, the valuation of certain assets and intangibles acquired from a subsidiary of Pfizer, Inc., Icagen, and assumptions used in assessing impairment of long-term assets, the assumptions used in determining percentage of completion on its long-term contracts, and the assumptions used to calculate fair value of warrants and options granted, in addition to assumptions used to calculate the value of the derivative liability.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">   </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>Concentrations of credit risk</b></font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; color: #000000; text-transform: none; text-indent: 0.5pt; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b> </b></font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The Company maintains cash with major financial institutions. The Federal Deposit Insurance Corporation (“FDIC”) provides insurance coverage for deposits of corporations, the current limit of coverage is $250,000. As a result of this coverage the Company has cash balances of $2,290,537 that are not covered by the FDIC as of September 30, 2018.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>Concentration of major customers</b></font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; color: #000000; text-transform: none; text-indent: 0.5pt; letter-spacing: normal; word-spacing: 0px;
white-space: normal; orphans: 2; widows: 2;
font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The Company derives its revenues from commercial pharmaceutical and biotechnology companies from Government research contracts and Government grants.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The Company derived 71.0% of its services revenue from four major customers during the nine months ended September 30, 2018. During the nine months ended September 30, 2017, the Company derived 77.5% of its revenue from three major customers. The Company continues to expand its customer base of major customers and partners.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif;"> </font></p><table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; border-collapse: collapse; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;" cellspacing="0" cellpadding="0"><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="6"><font style="font-family: 'times new roman', times, serif;">Three months ended</font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="6"><font style="font-family: 'times new roman', times, serif;">Nine months ended</font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2"><font style="font-family: 'times new roman', times, serif;">September 30, 2018</font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2"><font style="font-family: 'times new roman', times, serif;">September 30, 2017</font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2"><font style="font-family: 'times new roman', times, serif;">September 30, 2018</font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2"><font style="font-family: 'times new roman', times, serif;">September 30, 2017</font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td colspan="2"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times,
serif;"> </font></td><td colspan="2"><font style="font-family: 'times new roman',
times,
serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td colspan="2"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td colspan="2"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="width: 0.5in; background-color: white;"> </td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;">Services revenue</font></td><td style="width: 15px;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="width: 125px; text-align: right;"><font style="font-family: 'times new roman', times, serif;">3,007,928</font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="width: 15px;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="width: 125px; text-align: right;"><font style="font-family: 'times new roman', times, serif;">3,021,965</font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="width: 15px;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="width: 125px; text-align: right;"><font style="font-family: 'times new roman', times, serif;">10,465,046</font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="width: 15px;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="width: 125px; text-align: right;"><font style="font-family: 'times new roman', times, serif;">9,495,718</font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;">Subsidy revenue</font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">-</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">2,400,000</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">-</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">7,200,000</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;">Government grants</font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">-</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">-</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">-</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">320,744</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color:
black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td
style="text-align:
right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">3,007,928</font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">5,421,965</font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">10,465,046</font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">17,016,462</font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr></table><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; color: #000000; text-transform: none; text-indent: 0.5in; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>Accounts receivable and other receivables</b></font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; color: #000000; text-transform: none; text-indent: 0.5in; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font
style="font-family: 'times new roman', times, serif; font-size: 10pt;">The Company has a policy of reserving for uncollectible accounts based on its best estimate of the amount of probable
credit losses in its
existing accounts receivable. As a basis for accurately estimating the likelihood of collection of its accounts receivable, the Company considers a number of factors when determining reserves for uncollectable accounts. The Company believes that it uses a reasonably reliable methodology to estimate the collectability of its accounts receivable. The Company reviews its allowances for doubtful accounts on a regular basis. The Company also considers whether the historical economic conditions are comparable to current economic conditions. If the financial condition of its customers or other parties that it has business relations with were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The balance of the receivables provision as at September 30, 2018 and December 31, 2017 was $0 and $0, respectively. The amount charged to bad debt provision for the three and nine months ended September 30, 2018 and 2017 was $0 and $0, respectively.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; color: #000000; text-transform: none; text-indent: 0.5in; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>Inventory</b></font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; color: #000000; text-transform: none; text-indent: 0.5in; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">Inventory consists of laboratory consumables.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The Company values inventory at the lower of cost or net realizable value applied on a first-in, first-out basis. The Company identifies and writes down its excess and obsolete inventory to net realizable value based on usage forecasts, order volume and inventory aging.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">   </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; color: #000000; text-transform: none; text-indent: 0.5in; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>Revenue recognition</b></font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; color: #000000; text-transform: none; text-indent: 0.5in; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">  </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px;
letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial;
text-decoration-color:
initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The Company’s revenue recognition policy is consistent with the requirements of Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 606, Revenue.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.75in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The Company has analyzed its revenue transactions pursuant to ASC 606, Revenue, and it has no material impact as a result of the transition from ASC 605 to 606. The Company’s revenues are recognized when control of the promised services are transferred to a customer, in an amount that reflects the consideration that the Company expects to receive in exchange for those services. The Company derives its revenues from the sale of its services, as defined below. The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its revenue transactions:</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;" cellspacing="0" cellpadding="0"><tr style="font: 10pt/normal 'times new roman', times, serif; vertical-align: top; font-size-adjust: none; font-stretch: normal;"><td style="font: 10pt/normal 'times new roman', times, serif; width: 48px; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></td><td style="font: 10pt/normal 'times new roman', times, serif; width: 24px; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">i.</font></td><td style="font: 10pt/normal 'times new roman', times, serif; text-align: justify; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">identify the contract with a customer;</font></td></tr><tr style="font: 10pt/normal 'times new roman', times, serif; vertical-align: top; font-size-adjust: none; font-stretch: normal;"><td style="font: 10pt/normal 'times new roman', times, serif; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></td><td style="font: 10pt/normal 'times new roman', times, serif; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></td><td style="font: 10pt/normal 'times new roman', times, serif; text-align: justify; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></td></tr><tr style="font: 10pt/normal 'times new roman', times, serif; vertical-align: top; font-size-adjust: none; font-stretch: normal;"><td style="font: 10pt/normal 'times new roman', times, serif; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></td><td style="font: 10pt/normal 'times new roman', times, serif; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">ii.</font></td><td style="font: 10pt/normal 'times new roman', times, serif; text-align: justify; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">identify the performance obligations in the contract;</font></td></tr><tr style="font: 10pt/normal 'times new roman', times, serif; vertical-align: top; font-size-adjust: none; font-stretch: normal;"><td style="font: 10pt/normal 'times new roman', times, serif; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></td><td style="font: 10pt/normal 'times new roman', times, serif; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></td><td style="font: 10pt/normal 'times new roman', times, serif; text-align: justify; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></td></tr><tr style="font: 10pt/normal 'times new roman', times, serif; vertical-align: top; font-size-adjust: none; font-stretch: normal;"><td
style="font: 10pt/normal 'times new roman', times, serif; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif;
font-size:
10pt;"> </font></td><td style="font: 10pt/normal 'times new roman', times, serif; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">iii.</font></td><td style="font: 10pt/normal 'times new roman', times, serif; text-align: justify; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">determine the transaction price;</font></td></tr><tr style="font: 10pt/normal 'times new roman', times, serif; vertical-align: top; font-size-adjust: none; font-stretch: normal;"><td style="font: 10pt/normal 'times new roman', times, serif; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></td><td style="font: 10pt/normal 'times new roman', times, serif; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></td><td style="font: 10pt/normal 'times new roman', times, serif; text-align: justify; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></td></tr><tr style="font: 10pt/normal 'times new roman', times, serif; vertical-align: top; font-size-adjust: none; font-stretch: normal;"><td style="font: 10pt/normal 'times new roman', times, serif; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></td><td style="font: 10pt/normal 'times new roman', times, serif; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">iv.</font></td><td style="font: 10pt/normal 'times new roman', times, serif; text-align: justify; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">allocate the transaction price to performance obligations in the contract; and</font></td></tr><tr style="font: 10pt/normal 'times new roman', times, serif; vertical-align: top; font-size-adjust: none; font-stretch: normal;"><td style="font: 10pt/normal 'times new roman', times, serif; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></td><td style="font: 10pt/normal 'times new roman', times, serif; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></td><td style="font: 10pt/normal 'times new roman', times, serif; text-align: justify; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></td></tr><tr style="font: 10pt/normal 'times new roman', times, serif; vertical-align: top; font-size-adjust: none; font-stretch: normal;"><td style="font: 10pt/normal 'times new roman', times, serif; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></td><td style="font: 10pt/normal 'times new roman', times, serif; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">v.</font></td><td style="font: 10pt/normal 'times new roman', times, serif; text-align: justify; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">recognize revenue as the performance obligation is satisfied.</font></td></tr></table><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; color: #000000; text-transform: none; text-indent: 0.5in; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">Revenue sources consist of commercial contracts, deferred subsidy revenue and government grants and contracts.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The Company enters into fixed fee commercial development contracts that are associated with the delivery of feasible research on drug candidates and the development of drug candidates. Revenue under such contracts is generally recognized upon
delivery or as the development is performed.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal;
word-spacing: 0px;
white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">In the prior year, the Company had received certain deferred subsidy revenue which was utilized to support its operations, maintain the facilities that it operates in and continue the employment of certain employees to provide, if needed, resources to certain of its customers. This deferred subsidy revenue was amortized over a straight-line basis to match the expected expenses to be incurred over the period July 15, 2016 to December 31, 2017.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The Company received and will receive certain revenue in advance of services delivered. This revenue is deferred and only recognized when services have been performed in terms of master services agreements entered into with customers, together with their associated Statements of Work.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The Company accounts for its long-term Firm Fixed Price Government contracts and grants associated with the delivery of research on drug candidates and the development of drug candidates using the percentage-of-completion accounting method. Under this method, revenue is recognized based on the extent of progress towards completion of the long-term contract.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The Company generally uses the cost-to-cost measure of progress for all its long-term contracts, unless it believes another measure will produce a more reliable result. The Company believes that the cost-to-cost measure is the best and most reliable performance indicator of progress on its long-term contracts as all its contract estimates are based on costs that it expects to incur in performing its long-term contracts and it has not experienced any significant variations on estimated to actual costs to date. Under the cost-to-cost measure of progress, the extent of progress towards completion is based on the ratio of costs incurred-to-date to the total estimated costs at the completion of the long-term contract. Revenues, including estimated fees or profits are recorded as costs are incurred.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">When estimates of total costs to be incurred on a contract exceed total estimates of revenue to be earned, a provision for the entire loss on the contract is recorded in the period the loss is determined.</font></p><p
style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2;
font-size-adjust: none;
font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">  </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>Net income (loss) per Share</b></font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b> </b></font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">Basic net income (loss) per share is computed on the basis of the weighted average number of common stock outstanding during the period.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">Diluted net income (loss) per share is computed on the basis of the weighted average number of common stock and common stock equivalents outstanding. Dilutive securities having an anti-dilutive effect on diluted net income (loss) per share are excluded from the calculation.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">Dilution is computed by applying the treasury stock method for options and warrants. Under this method, “in-the money” options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. Dilution is computed by applying the if-converted method for convertible preferred stocks. Under this method, convertible preferred stock is assumed to be converted at the beginning of the period (or at the time of issuance, if later), and preferred dividends (if any) will be added back to determine income applicable to common stock. The shares issuable upon conversion will be added to the weighted average number of common stock outstanding. Conversion will be assumed only if it reduces earnings per share (or increases loss per share).</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>  </b></font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>Fair value of financial instruments</b></font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.75in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2;
font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The Company adopted the guidance of Accounting
Standards Codification
(“ASC”) 820 for fair value measurements which clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.75in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">Level 1-Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.75in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">Level 2-Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.75in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">Level 3-Inputs are unobservable inputs which reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.75in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The carrying amounts reported in the balance sheets for cash, accounts receivable, other current assets, other assets, accounts payable, accrued liabilities, and notes payable, approximate fair value due to the relatively short period to maturity for these instruments. The Company identified derivative liabilities relating to convertible debt instruments and certain variably priced warrants which are required to be presented on the balance sheets at fair value in accordance with the accounting guidance.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.75in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">ASC 825-10 “<i>Financial Instruments</i>” allows entities to voluntarily choose to measure certain financial assets and liabilities at fair value (fair value option). The fair value option may be elected on an instrument-by-instrument basis and is irrevocable, unless a new election date occurs. If the fair value option is elected for an instrument, unrealized gains and losses for that instrument
should be reported in earnings at each subsequent reporting date. The Company elected to apply the fair value option to derivative liabilities arising on convertible debt instruments and certain variably priced warrants.</font></p><p style="font: 10pt/normal 'times new
roman', times, serif; margin:
0px 0px 0px 0.5in; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b> </b></font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>Beneficial conversion feature of convertible notes payable</b></font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The Company accounts for convertible notes payable in accordance with guidelines established by the FASB ASC Topic 470-20, “Debt with Conversion and Other Options”. The beneficial conversion feature of a convertible note is normally characterized as the convertible portion or feature of certain notes payable that provide a rate of conversion that is below market value or in-the-money when issued. The Company records a beneficial conversion feature related to the issuance of a convertible note when issued and also records the estimated fair value of any warrants issued with those convertible notes. The beneficial conversion features that are contingent upon the occurrence of a future event are recorded when the contingency is resolved.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The beneficial conversion feature of a convertible note is measured by first allocating a portion of the note’s proceeds to any warrants, if applicable, as a discount on the carrying amount of the convertible on a relative fair value basis. The discounted face value is then used to measure the effective conversion price of the note. The effective conversion price and the market price of the Company’s common stock are used to calculate the intrinsic value of the conversion feature. The intrinsic value is recorded in the financial statements as a debt discount from the face amount of the note and such discount is amortized over the expected term of the convertible note (or to the conversion date of the note, if sooner) and is charged to amortization of debt discount on the Company’s consolidated statement of operations. The Company also records, when necessary, deemed dividends for the intrinsic value of conversion options embedded in preferred shares based upon the differences between the fair value of the underlying common stock at the commitment date of the preferred shares transaction and the effective conversion price embedded in the preferred shares.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">  </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>Derivative Liabilities</b></font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b> </b></font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font
style="font-family: 'times new roman', times, serif; font-size: 10pt;">The Company has derivative financial instruments as of September 30, 2018 and December 31, 2017.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align:
justify; color: #000000;
text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">ASC 815 generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re- measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument subject to the requirements of ASC 815. ASC 815 also provides an exception to this rule when the host instrument is deemed to be conventional, as described.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The accounting treatment of derivative financial instruments requires that the Company record the embedded conversion option and warrants at their fair values as of the inception date of the agreement and at fair value as of each subsequent balance sheet date. Any change in fair value is recorded as non-operating, non-cash income or expense for each reporting period at each balance sheet date. The Company reassesses the classification of its derivative instruments at each balance sheet date. If the classification changes as a result of events during the period, the contract is reclassified as of the date of the event that caused the reclassification.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The Black-Scholes option valuation model was used to estimate the fair value of the conversion options. The model includes subjective input assumptions that can materially affect the fair value estimates. The expected volatility is estimated based on the most recent historical period of time, of other comparative securities, equal to the weighted average life of the options.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">Conversion options related to debt instruments are recorded as debt discount and are amortized as interest expense over the life of the underlying debt instrument using effective interest method.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px;
white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">Conversion options
related to equity instruments
are recorded as a deemed dividend at the grant date of the equity instrument.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; color: #000000; text-transform: none; text-indent: 0.5in; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>Research and Development</b></font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; color: #000000; text-transform: none; text-indent: 0.5in; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b> </b></font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The remuneration of the Company’s research and development staff, materials used in internal research and development activities, and payments made to third parties in connection with collaborative research and development arrangements, are all expensed as incurred. Where the Company makes a payment to a third party to acquire the right to use a product formula which has received regulatory approval, the payment is accounted for as the acquisition of a license or patent and is capitalized as an intangible asset and amortized over the shorter of the license period or the patent life.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;">The amount expensed for unrecovered research and development salaries, included in Selling, general and administrative expenses during the three and nine months ended September 30, 2018 was $696,823 and $2,232,601 and for the three and nine months ended September 30, 2017 was $925,533 and $2,412,153 respectively.</p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; color: #000000; text-transform: none; text-indent: 0.5in; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>Related parties</b></font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; color: #000000; text-transform: none; text-indent: 0.5in; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b> </b></font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">Parties are considered to be related to the Company if the parties that, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, its board members and members of the immediate families of principal owners of the Company. Parties are also considered related parties if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. The Company discloses all related party transactions. All transactions are recorded at fair value of the goods or services exchanged.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; color: #000000; text-transform: none; text-indent: 0.5in; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2;
font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">  </font></p><p style="font: 10pt/normal 'times new roman', times,
serif; margin: 0px; color: #000000;
text-transform: none; text-indent: 0.5in; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>Recent accounting pronouncements</b></font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; color: #000000; text-transform: none; text-indent: 0.5in; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) Changes to the Disclosure Requirements for Fair Value Measurement.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.75in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The amendments in this Update modify the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.75in; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b> </b></font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>Removals</b></font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b> </b></font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The following disclosure requirements were removed from Topic 820:</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif;"> </font></p><table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; margin-top: 0pt; margin-bottom: 0pt; word-spacing: 0px; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;" cellspacing="0" cellpadding="0"><tr style="font: 10pt/normal 'times new roman', times, serif; vertical-align: top; font-size-adjust: none; font-stretch: normal;"><td style="font: 10pt/normal 'times new roman', times, serif; width: 0.5in; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"></td><td style="font: 10pt/normal 'times new roman', times, serif; width: 0.25in; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">1.</font></td><td style="font: 10pt/normal 'times new roman', times, serif; text-align: justify; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy</font></td></tr></table><p style="color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; font-family: 'times new roman', times, serif; font-size: 13.33px; font-style: normal; font-weight: 400; margin-top: 0px;
margin-bottom: 0px; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-variant-ligatures: normal; font-variant-caps: normal;"><font style="font-family: 'times new roman', times, serif;"> </font></p><table
style="font: 10pt/normal 'times new
roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; margin-top: 0pt; margin-bottom: 0pt; word-spacing: 0px; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;" cellspacing="0" cellpadding="0"><tr style="font: 10pt/normal 'times new roman', times, serif; vertical-align: top; font-size-adjust: none; font-stretch: normal;"><td style="font: 10pt/normal 'times new roman', times, serif; width: 0.5in; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"></td><td style="font: 10pt/normal 'times new roman', times, serif; width: 0.25in; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">2.</font></td><td style="font: 10pt/normal 'times new roman', times, serif; text-align: justify; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The policy for timing of transfers between levels</font></td></tr></table><p style="color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; font-family: 'times new roman', times, serif; font-size: 13.33px; font-style: normal; font-weight: 400; margin-top: 0px; margin-bottom: 0px; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-variant-ligatures: normal; font-variant-caps: normal;"><font style="font-family: 'times new roman', times, serif;"> </font></p><table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; margin-top: 0pt; margin-bottom: 0pt; word-spacing: 0px; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;" cellspacing="0" cellpadding="0"><tr style="font: 10pt/normal 'times new roman', times, serif; vertical-align: top; font-size-adjust: none; font-stretch: normal;"><td style="font: 10pt/normal 'times new roman', times, serif; width: 0.5in; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"></td><td style="font: 10pt/normal 'times new roman', times, serif; width: 0.25in; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">3.</font></td><td style="font: 10pt/normal 'times new roman', times, serif; text-align: justify; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The valuation processes for Level 3 fair value measurements</font></td></tr></table><p style="color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; font-family: 'times new roman', times, serif; font-size: 13.33px; font-style: normal; font-weight: 400; margin-top: 0px; margin-bottom: 0px; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-variant-ligatures: normal; font-variant-caps: normal;"><font style="font-family: 'times new roman', times, serif;"> </font></p><table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; margin-top: 0pt; margin-bottom: 0pt; word-spacing: 0px; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;" cellspacing="0" cellpadding="0"><tr style="font: 10pt/normal 'times new roman', times, serif; vertical-align: top; font-size-adjust: none; font-stretch: normal;"><td style="font: 10pt/normal 'times new roman', times, serif; width: 0.5in; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"></td><td style="font: 10pt/normal 'times new roman', times, serif; width: 0.25in; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">4.</font></td><td style="font: 10pt/normal 'times new roman', times, serif; text-align: justify; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">For nonpublic entities, the changes in unrealized gains and losses for the period included in earnings for recurring Level 3 fair value measurements held at the end of the reporting period.</font></td></tr></table><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b> </b></font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>Modifications</b></font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif;"> </font></p><p
style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style:
initial; text-decoration-color:
initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The following disclosure requirements were modified in Topic 820:</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif;"> </font></p><table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; margin-top: 0pt; margin-bottom: 0pt; word-spacing: 0px; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;" cellspacing="0" cellpadding="0"><tr style="font: 10pt/normal 'times new roman', times, serif; vertical-align: top; font-size-adjust: none; font-stretch: normal;"><td style="font: 10pt/normal 'times new roman', times, serif; width: 0.5in; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"></td><td style="font: 10pt/normal 'times new roman', times, serif; width: 0.25in; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">1.</font></td><td style="font: 10pt/normal 'times new roman', times, serif; text-align: justify; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">In lieu of a rollforward for Level 3 fair value measurements, a nonpublic entity is required to disclose transfers into and out of Level 3 of the fair value hierarchy and purchases and issues of Level 3 assets and liabilities.</font></td></tr></table><p style="color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; font-family: 'times new roman', times, serif; font-size: 13.33px; font-style: normal; font-weight: 400; margin-top: 0px; margin-bottom: 0px; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-variant-ligatures: normal; font-variant-caps: normal;"><font style="font-family: 'times new roman', times, serif;"> </font></p><table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; margin-top: 0pt; margin-bottom: 0pt; word-spacing: 0px; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;" cellspacing="0" cellpadding="0"><tr style="font: 10pt/normal 'times new roman', times, serif; vertical-align: top; font-size-adjust: none; font-stretch: normal;"><td style="font: 10pt/normal 'times new roman', times, serif; width: 0.5in; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"></td><td style="font: 10pt/normal 'times new roman', times, serif; width: 0.25in; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">2.</font></td><td style="font: 10pt/normal 'times new roman', times, serif; text-align: justify; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">For investments in certain entities that calculate net asset value, an entity is required to disclose the timing of liquidation of an investee’s assets and the date when restrictions from redemption might lapse <i>only </i>if the investee has communicated the timing to the entity or announced the timing publicly.</font></td></tr></table><p style="color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; font-family: 'times new roman', times, serif; font-size: 13.33px; font-style: normal; font-weight: 400; margin-top: 0px; margin-bottom: 0px; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-variant-ligatures: normal; font-variant-caps: normal;"><font style="font-family: 'times new roman', times, serif;"> </font></p><table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; margin-top: 0pt; margin-bottom: 0pt; word-spacing: 0px; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;" cellspacing="0" cellpadding="0"><tr style="font: 10pt/normal 'times new roman', times, serif; vertical-align: top; font-size-adjust: none; font-stretch: normal;"><td style="font: 10pt/normal 'times new roman', times, serif; width: 0.5in; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"></td><td style="font: 10pt/normal 'times new roman', times, serif; width: 0.25in; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">3.</font></td><td style="font: 10pt/normal 'times new roman', times, serif; text-align: justify; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The amendments clarify that the measurement uncertainty disclosure is to communicate information about the uncertainty in measurement as of the reporting date.</font></td></tr></table><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial;
text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2;
font-size-adjust: none; font-stretch:
normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>Additions</b></font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The following disclosure requirements were added to Topic 820; however, the disclosures are not required for nonpublic entities:</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif;"> </font></p><table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; margin-top: 0pt; margin-bottom: 0pt; word-spacing: 0px; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;" cellspacing="0" cellpadding="0"><tr style="font: 10pt/normal 'times new roman', times, serif; vertical-align: top; font-size-adjust: none; font-stretch: normal;"><td style="font: 10pt/normal 'times new roman', times, serif; width: 0.5in; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"></td><td style="font: 10pt/normal 'times new roman', times, serif; width: 0.25in; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">1.</font></td><td style="font: 10pt/normal 'times new roman', times, serif; text-align: justify; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period</font></td></tr><tr style="font: 10pt/normal 'times new roman', times, serif; vertical-align: top; font-size-adjust: none; font-stretch: normal;"><td style="font: 10pt/normal 'times new roman', times, serif; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="font: 10pt/normal 'times new roman', times, serif; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="font: 10pt/normal 'times new roman', times, serif; text-align: justify; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr></table><table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; margin-top: 0pt; margin-bottom: 0pt; word-spacing: 0px; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;" cellspacing="0" cellpadding="0"><tr style="font: 10pt/normal 'times new roman', times, serif; vertical-align: top; font-size-adjust: none; font-stretch: normal;"><td style="font: 10pt/normal 'times new roman', times, serif; width: 0.5in; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"></td><td style="font: 10pt/normal 'times new roman', times, serif; width: 0.25in; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">2.</font></td><td style="font: 10pt/normal 'times new roman', times, serif; text-align: justify; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. For certain unobservable inputs, an entity may disclose other quantitative information (such as the median or arithmetic average) in lieu of the weighted average if the entity determines that other quantitative information would be a more reasonable and rational method to reflect the distribution of unobservable inputs used to develop Level 3 fair value measurements.</font></td></tr></table><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px;
white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">In addition, the amendments eliminate <i>at a minimum </i>from the phrase <i>an entity shall disclose at a minimum </i>to
promote the appropriate exercise of
discretion by entities when considering fair value measurement disclosures and to clarify that materiality is an appropriate consideration of entities and their auditors when evaluating disclosure requirements.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"> </p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;">The amendments in this Update are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. Early adoption is permitted upon issuance of this Update. An entity is permitted to early adopt any removed or modified disclosures upon issuance of this Update and delay adoption of the additional disclosures until their effective date.</p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"> </p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;">The impact of this ASU on the Company’s consolidated financial statements is not expected to be material.</p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;">In August 2018, the FASB issued ASU 2018-15, Intangibles – Goodwill and Other Internal – Use Software (Subtopic 350-40).</p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.75in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The amendments in this Update align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal use software license). The accounting for the service element of a hosting arrangement that is a service contract is not affected by the amendments in this Update.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;">The amendments in this Update require an entity (customer) in a hosting arrangement that is a service contract to follow the guidance in Subtopic 350-40 to determine which implementation costs to capitalize as an asset related to the service contract and which costs to expense. Costs to develop or obtain internal-use software that cannot be capitalized under Subtopic 350-40, such
as training costs and certain data conversion costs, also cannot be capitalized for a hosting arrangement that is a service contract. Therefore, an entity (customer) in a hosting arrangement that is a service contract determines which project stage (that is, preliminary project stage, application development stage, or post-implementation stage) an implementation activity relates to. Costs for implementation
activities in the application development
stage are capitalized depending on the nature of the costs, while costs incurred during the preliminary project and post-implementation stages are expensed as the activities are performed.</p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The amendments in this Update also require the entity (customer) to expense the capitalized implementation costs of a hosting arrangement that is a service contract over the term of the hosting arrangement. The term of the hosting arrangement includes the non-cancellable period of the arrangement plus periods covered by (1) an option to extend the arrangement if the customer is reasonably certain to exercise that option, (2) an option to terminate the arrangement if the customer is reasonably certain not to exercise the termination option, and (3) an option to extend (or not to terminate) the arrangement in which exercise of the option is in the control of the vendor. The entity also is required to apply the existing impairment guidance in Subtopic 350-40 to the capitalized implementation costs as if the costs were long-lived assets. The amendments in this Update clarify that the capitalized implementation costs related to each module or component of a hosting arrangement that is a service contract are also subject to the guidance in Subtopic 360-10 on abandonment.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The amendments in this Update also require the entity to present the expense related to the capitalized implementation costs in the same line item in the statement of income as the fees associated with the hosting element (service) of the arrangement and classify payments for capitalized implementation costs in the statement of cash flows in the same manner as payments made for fees associated with the hosting element. The entity is also required to present the capitalized implementation costs in the statement of financial position in the same line item that a prepayment for the fees of the associated hosting arrangement would be presented.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. For all other entities, the amendments in this Update are effective for annual reporting periods beginning after December 15, 2020, and interim periods within annual periods beginning after December 15, 2021. Early adoption of the amendments in this Update is permitted, including adoption in any interim period, for all entities.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;">The amendments in this Update should be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption.</p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none;
text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"> </p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px;
letter-spacing: normal; word-spacing: 0px;
white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;">The impact of this ASU on the Company’s consolidated financial statements is not expected to be material.</p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"> </p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;">Any new accounting standards, not disclosed above, that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption.</p>
<div><table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;" cellspacing="0" cellpadding="0"><tr style="font: 10pt/normal 'times new roman', times, serif; vertical-align: top; font-size-adjust: none; font-stretch: normal;"><td style="font: 10pt/normal 'times new roman', times, serif; width: 48px; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>3.</b></font></td><td style="font: 10pt/normal 'times new roman', times, serif; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>GOING CONCERN</b></font></td></tr></table><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;">As shown in the accompanying unaudited condensed consolidated financial statements, the Company incurred a net loss of $(9,480,136) for the nine months ended September 30, 2018 and $(4,452,383) for the nine months ended September 30, 2017, respectively. As of the nine months ended September 30, 2018, and the year ended December 31, 2017 the Company had accumulated deficits of $43,377,895 and $33,757,671, respectively. The Company’s working capital deficit increased from $(180,357) as of December 31, 2017 to $(1,819,953) as of September 30, 2018. The Company’s working capital is insufficient to meet its short-term cash requirements and fund any future operating losses. These operating losses create an uncertainty about the Company’s ability to continue as a going concern. The Company’s plan, through the acquisition of the assets of Sanofi U.S. Services, Inc. (“Sanofi”) and an indirect subsidiary of Pfizer, Inc. and the continued promotion of its services to existing and potential customers is to generate sufficient revenues to cover its anticipated expenses. The Company closed 4 tranches of a preferred stock equity raise from April 2018 through August 2018, raising an aggregate of $2,800,000. On August 13, 2018, the Company closed the first tranche of its best efforts offering of fifty units, each unit consisting of a note in the principal amount of $10,000 and a warrant to purchase 1,500 shares of common stock at an exercise price of $3.50 per share, raising an additional $500,000. On August 31, 2018, the Company and its wholly owned subsidiary, Icagen-T, Inc., each entered into a Credit Agreement with Perceptive Credit Holdings II, LP whereby aggregate gross proceeds of $15,250,000 were advanced to the Company. The proceeds were used for general working capital purposes and to repay the convertible notes in the aggregate principal amount of $10,000,000 advanced to the Company and Icagen-T on May 15, 2017. The factors mentioned above raise substantial doubt about our ability to continue as a going concern  for the next twelve month period from November 19, 2018, although no assurances can be given as to the Company’s ability to deliver on its revenue plans, or that unforeseen expenses may arise, the management of the Company believes that the revenue to be generated from operations together with additional issuances of equity or other potential financing will provide the necessary funding for the Company to continue as a going concern. The unaudited condensed consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. The Company is economically dependent upon future capital or financing to fund ongoing operations.</p></div>
<div><table style="font: 10pt/normal 'times new roman', times, serif; width: 1557px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;" cellspacing="0" cellpadding="0"><tr style="font: 10pt/normal 'times new roman', times, serif; vertical-align: top; font-size-adjust: none; font-stretch: normal;"><td style="font: 10pt/normal 'times new roman', times, serif; width: 48px; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>4.</b></font></td><td style="font: 10pt/normal 'times new roman', times, serif; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>INVENTORY</b></font></td></tr></table><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">Inventory represents the value of certain consumables utilized in the Company’s biological screening processes. These consumables are purchased in bulk and expensed as they are utilized.</font></p></div>
<div><table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;" cellspacing="0" cellpadding="0"><tr style="font: 10pt/normal 'times new roman', times, serif; vertical-align: top; font-size-adjust: none; font-stretch: normal;"><td style="font: 10pt/normal 'times new roman', times, serif; width: 48px; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>5.</b></font></td><td style="font: 10pt/normal 'times new roman', times, serif; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>PREPAID EXPENSES AND OTHER CURRENT ASSETS</b></font></td></tr></table><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;"> </p><table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; border-collapse: collapse; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;" cellspacing="0" cellpadding="0"><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">September 30,<br />2018</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">December 31,<br />2017</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td></tr><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="width: 0.5in; background-color: white;"> </td><td style="text-align: left;">Prepaid insurance</td><td style="width: 15px;"> </td><td style="width: 15px; text-align: left;">$</td><td style="width: 125px; text-align: right;">60,061</td><td style="width: 15px; text-align: left;"> </td><td style="width: 15px;"> </td><td style="width: 15px; text-align: left;">$</td><td style="width: 125px; text-align: right;">75,774</td><td style="width: 15px; text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="text-align: left;">Prepaid maintenance</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">90,036</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">129,260</td><td style="text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="text-align: left;">Prepaid property tax</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">62,237</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">-</td><td style="text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="text-align: left;">Prepaid rent</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">-</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">2,500</td><td style="text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="text-align: left; padding-bottom: 1.5pt;">Prepaid subscriptions</td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">3,750</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">5,833</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">$</td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">216,084</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">$</td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">213,367</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td></tr></table></div>
<div><table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;" cellspacing="0" cellpadding="0"><tr style="font: 10pt/normal 'times new roman', times, serif; vertical-align: top; font-size-adjust: none; font-stretch: normal;"><td style="font: 10pt/normal 'times new roman', times, serif; width: 48px; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>6.</b></font></td><td style="font: 10pt/normal 'times new roman', times, serif; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>INTANGIBLE ASSETS</b></font></td></tr></table><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">Intangible assets consist of the following:</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">  </font></p><table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; border-collapse: collapse; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;" cellspacing="0" cellpadding="0"><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="10"><font style="font-family: 'times new roman', times, serif;">September  30, <br />2018</font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2"><font style="font-family: 'times new roman', times, serif;">December 31, <br />2017</font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2"><font style="font-family: 'times new roman', times, serif;">Cost</font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2"><font style="font-family: 'times new roman', times, serif;">Amortization and Impairment</font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2"><font style="font-family: 'times new roman', times, serif;">Net book value</font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2"><font style="font-family: 'times new roman', times, serif;">Net book value</font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td colspan="2"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td colspan="2"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman',
times, serif;"> </font></td><td><font
style="font-family: 'times new roman', times, serif;"> </font></td><td colspan="2"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td colspan="2"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="width: 0.5in; background-color: white;"> </td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;">Cell lines</font></td><td style="width: 15px;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="width: 125px; text-align: right;"><font style="font-family: 'times new roman', times, serif;">5,153,664</font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="width: 15px;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="width: 125px; text-align: right;"><font style="font-family: 'times new roman', times, serif;">-</font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="width: 15px;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="width: 125px; text-align: right;"><font style="font-family: 'times new roman', times, serif;">5,153,664</font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="width: 15px;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="width: 125px; text-align: right;"><font style="font-family: 'times new roman', times, serif;">5,153,664</font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;">Discovery platform</font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">1,450,500</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">(471,412</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;">)</font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">979,088</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">1,087,875</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;">Trade names and trademarks</font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">637,500</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">-</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">637,500</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">637,500</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;">Assembled workforce</font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">282,500</font></td><td
style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font
style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">(91,812</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;">)</font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">190,688</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">211,875</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td><font style="font-family: 'times new roman', times, serif;">Patents</font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">972,000</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">(674,607</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;">)</font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">297,393</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">336,157</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="text-align: right; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">8,496,164</font></td><td style="text-align: left; padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times,
serif;"> </font></td><td style="text-align: left; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">$<font
style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">(1,237,831</font></td><td style="text-align: left; padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;">)</font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="text-align: right; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">7,258,333</font></td><td style="text-align: left; padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="text-align: right; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">7,427,071</font></td><td style="text-align: left; padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr></table><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The aggregate amortization expense charged to operations was $56,246 for each of the three months ended September 30, 2018 and 2017, and $168,738 for each of the nine months ended September 30, 2018 and 2017, respectively. </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">Amortization expense for future periods is summarized as follows:</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">  </font></p><table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; border-collapse: collapse; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;" cellspacing="0" cellpadding="0"><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2"><font style="font-family: 'times new roman', times, serif;">Amount</font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td colspan="2"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="width: 0.5in; background-color: white;"> </td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;">2018</font></td><td style="width: 15px;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="width: 125px; text-align: right;"><font style="font-family: 'times new roman', times, serif;">56,246</font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times,
serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="text-align: left;"><font style="font-family: 'times new roman',
times, serif;">2019</font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">224,984</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;">2020</font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">224,984</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;">2021</font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">224,984</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;">2022 and thereafter</font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">735,971</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="text-align: left; padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;">Total</font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="text-align: right; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">1,467,169</font></td><td style="text-align: left; padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr></table></div>
<div><table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;" cellspacing="0" cellpadding="0"><tr style="font: 10pt/normal 'times new roman', times, serif; vertical-align: top; font-size-adjust: none; font-stretch: normal;"><td style="font: 10pt/normal 'times new roman', times, serif; width: 48px; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>7.</b></font></td><td style="font: 10pt/normal 'times new roman', times, serif; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>PLANT AND EQUIPMENT</b></font></td></tr></table><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b> </b></font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">Plant and equipment consists of the following:</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">  </font></p><table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; border-collapse: collapse; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;" cellspacing="0" cellpadding="0"><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="10"><font style="font-family: 'times new roman', times, serif;">September 30, <br />2018</font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2"><font style="font-family: 'times new roman', times, serif;">December 31, <br />2017</font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2"><font style="font-family: 'times new roman', times, serif;">Cost</font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2"><font style="font-family: 'times new roman', times, serif;">Amortization and Impairment</font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2"><font style="font-family: 'times new roman', times, serif;">Net book value</font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2"><font style="font-family: 'times new roman', times, serif;">Net book value</font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td colspan="2"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td colspan="2"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman',
times, serif;"> </font></td><td><font
style="font-family: 'times new roman', times, serif;"> </font></td><td colspan="2"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td colspan="2"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="width: 0.5in; background-color: white;"> </td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;">Laboratory equipment</font></td><td style="width: 15px;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="width: 125px; text-align: right;"><font style="font-family: 'times new roman', times, serif;">2,612,194</font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="width: 15px;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="width: 125px; text-align: right;"><font style="font-family: 'times new roman', times, serif;">(1,296,841</font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;">)</font></td><td style="width: 15px;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="width: 125px; text-align: right;"><font style="font-family: 'times new roman', times, serif;">1,315,353</font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="width: 15px;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="width: 125px; text-align: right;"><font style="font-family: 'times new roman', times, serif;">1,396,617</font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;">Computer software</font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">1,860,305</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">(1,518,489</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;">)</font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">341,816</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">716,860</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;">Computer equipment</font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">96,673</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">(58,965</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;">)</font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">37,708</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">43,816</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;">Leasehold improvements</font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times,
serif;">38,974</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times,
serif;"> </font></td><td><font
style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">(27,074</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;">)</font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">11,900</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">24,460</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="text-align: right; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">4,608,146</font></td><td style="text-align: left; padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">$<font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">(2,901,369</font></td><td style="text-align: left; padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;">)</font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="text-align: right; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">1,706,777</font></td><td style="text-align: left; padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="text-align: right; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new
roman', times, serif;">2,181,753</font></td><td style="text-align: left; padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman',
times,
serif;"> </font></td></tr></table><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">Depreciation expense for the three months ended September 30, 2018 and 2017 was $364,712 and $368,217, respectively, and $1,190,442 and $1,211,122 for the nine months ended September 30, 2018 and 2017, respectively.</font></p></div>
<div>
<table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;" cellspacing="0" cellpadding="0">
<tr style="font: 10pt/normal 'times new roman', times, serif; vertical-align: top; font-stretch: normal;">
<td style="font: 10pt/normal 'times new roman', times, serif; width: 48px; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>8.</b></font></td>
<td style="font: 10pt/normal 'times new roman', times, serif; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>OTHER PAYABLE AND ACCRUED EXPENSES</b></font></td>
</tr>
</table>
<p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-stretch: normal; -webkit-text-stroke-width: 0px;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p>
<p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-stretch: normal; -webkit-text-stroke-width: 0px;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">Other payables and accrued expenses consist of the following: </font></p>
<p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-stretch: normal; -webkit-text-stroke-width: 0px;"> </p>
<table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; border-collapse: collapse; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;" cellspacing="0" cellpadding="0">
<tr style="vertical-align: bottom;">
<td style="white-space: nowrap; background-color: white;"> </td>
<td style="white-space: nowrap;"> </td>
<td style="padding-bottom: 1.5pt; font-weight: bold; white-space: nowrap;"> </td>
<td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid; white-space: nowrap;" colspan="2">September 30,<br />2018</td>
<td style="padding-bottom: 1.5pt; font-weight: bold; white-space: nowrap;"> </td>
<td style="padding-bottom: 1.5pt; font-weight: bold; white-space: nowrap;"> </td>
<td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid; white-space: nowrap;" colspan="2">December 31,<br />2017</td>
<td style="padding-bottom: 1.5pt; font-weight: bold; white-space: nowrap;"> </td>
</tr>
<tr style="vertical-align: bottom;">
<td style="background-color: white;"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr style="vertical-align: bottom; background-color: #cceeff;">
<td style="width: 0.5in; background-color: white;"> </td>
<td style="text-align: left;">Bonus and vacation accrual</td>
<td style="width: 15px;"> </td>
<td style="width: 15px; text-align: left;">$</td>
<td style="width: 125px; text-align: right;">910,471</td>
<td style="width: 15px; text-align: left;"> </td>
<td style="width: 15px;"> </td>
<td style="width: 15px; text-align: left;">$</td>
<td style="width: 125px; text-align: right;">1,871,488</td>
<td style="width: 15px; text-align: left;"> </td>
</tr>
<tr style="vertical-align: bottom; background-color: white;">
<td style="background-color: white;"> </td>
<td style="text-align: left;">Payroll liabilities</td>
<td> </td>
<td style="text-align: left;"> </td>
<td style="text-align: right;">42,159</td>
<td style="text-align: left;"> </td>
<td> </td>
<td style="text-align: left;"> </td>
<td style="text-align: right;">44,858</td>
<td style="text-align: left;"> </td>
</tr>
<tr style="vertical-align: bottom; background-color: #cceeff;">
<td style="background-color: white;"> </td>
<td style="text-align: left;">Severance cost accrual</td>
<td> </td>
<td style="text-align: left;"> </td>
<td style="text-align: right;">417,208</td>
<td style="text-align: left;"> </td>
<td> </td>
<td style="text-align: left;"> </td>
<td style="text-align: right;">262,966</td>
<td style="text-align: left;"> </td>
</tr>
<tr style="vertical-align: bottom; background-color: white;">
<td style="background-color: white;"> </td>
<td style="text-align: left;">Interest accrual</td>
<td> </td>
<td style="text-align: left;"> </td>
<td style="text-align: right;">176,823</td>
<td style="text-align: left;"> </td>
<td> </td>
<td style="text-align: left;"> </td>
<td style="text-align: right;">108,333</td>
<td style="text-align: left;"> </td>
</tr>
<tr style="vertical-align: bottom; background-color: #cceeff;">
<td style="padding-bottom: 1.5pt; background-color: white;"> </td>
<td style="padding-bottom: 1.5pt;">Other</td>
<td style="padding-bottom: 1.5pt;"> </td>
<td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td>
<td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">377,166</td>
<td style="text-align: left; padding-bottom: 1.5pt;"> </td>
<td style="padding-bottom: 1.5pt;"> </td>
<td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td>
<td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">152,797</td>
<td style="text-align: left; padding-bottom: 1.5pt;"> </td>
</tr>
<tr style="vertical-align: bottom; background-color: white;">
<td style="background-color: white;"> </td>
<td> </td>
<td> </td>
<td style="text-align: left;"> </td>
<td style="text-align: right;"> </td>
<td style="text-align: left;"> </td>
<td> </td>
<td style="text-align: left;"> </td>
<td style="text-align: right;"> </td>
<td style="text-align: left;"> </td>
</tr>
<tr style="vertical-align: bottom; background-color: #cceeff;">
<td style="background-color: white;"> </td>
<td style="padding-bottom: 1.5pt;"> </td>
<td style="padding-bottom:
1.5pt; font-weight: bold;"> </td>
<td style="text-align: left; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">$</td>
<td style="text-align: right; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">1,923,827</td>
<td style="text-align: left; padding-bottom: 1.5pt; font-weight: bold;"> </td>
<td style="padding-bottom: 1.5pt; font-weight: bold;"> </td>
<td style="text-align: left; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">$</td>
<td style="text-align: right; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">2,440,442</td>
<td style="text-align: left; padding-bottom: 1.5pt; font-weight: bold;"> </td>
</tr>
</table>
<p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-stretch: normal; -webkit-text-stroke-width: 0px;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p>
<p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-stretch: normal; -webkit-text-stroke-width: 0px;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The Company accrues for vacation pay and bonus accruals in anticipation of making payments based on the achievement of predetermined goals.</font></p>
<p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-stretch: normal; -webkit-text-stroke-width: 0px;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p>
<p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-stretch: normal; -webkit-text-stroke-width: 0px;">During the quarter ended September 30, 2018, the Company restructured its management team and streamlined operations at its Tucson site, thereby reducing head count by a total of nine people. The Company provided severance packages to these employees based on written agreements entered into. The severance costs will be incurred over the next four months.</p>
</div>
<div><table style="font: 10pt/normal 'times new roman', times, serif; width: 1557px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;" cellspacing="0" cellpadding="0"><tr style="font: 10pt/normal 'times new roman', times, serif; vertical-align: top; font-size-adjust: none; font-stretch: normal;"><td style="font: 10pt/normal 'times new roman', times, serif; width: 48px; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> <b>9.</b></font></td><td style="font: 10pt/normal 'times new roman', times, serif; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>LEGAL SETTLEMENT LIABILITIES</b></font></td></tr></table><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The legal settlement liabilities consists of the following:</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif;">  </font></p><table style="font: 10pt/normal 'times new roman', times, serif; width: 1557px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; border-collapse: collapse; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;" cellspacing="0" cellpadding="0"><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2"><font style="font-family: 'times new roman', times, serif;">September 30,<br />2018</font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2"><font style="font-family: 'times new roman', times, serif;">December 31,<br />2017</font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td colspan="2"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td colspan="2"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td style="font-weight: bold;"><font style="font-family: 'times new roman', times, serif;">Settlement liability accruals</font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td colspan="2"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td colspan="2"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="width: 0.5in; background-color: white;"> </td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;">Dentons dispute</font></td><td style="width: 15px;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="width: 124px; text-align: right;"><font style="font-family: 'times new roman', times, serif;">-</font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="width: 15px;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="width: 124px; text-align: right;"><font style="font-family: 'times new roman', times, serif;">400,000</font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;">Eisenschenk
matter</font></td><td><font style="font-family: 'times
new
roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">-</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">83,333</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;">Other</font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">10,000</font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">10,000</font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">10,000</font></td><td style="text-align: left; padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">493,333</font></td><td style="text-align: left; padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="font-weight: bold;"><font style="font-family: 'times new roman', times, serif;">Disclosed as follows:</font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;">Short-term portion</font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">10,000</font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">493,333</font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; font-weight: bold;
border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times
new
roman', times, serif;">$</font></td><td style="text-align: right; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">10,000</font></td><td style="text-align: left; padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="text-align: right; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">493,333</font></td><td style="text-align: left; padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr></table><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The Company has settled all outstanding legal matters with the remaining $10,000 representing a contingency accrual.</font></p></div>
<div><table style="font: 10pt/normal 'times new roman', times, serif; width: 1557px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;" cellspacing="0" cellpadding="0"><tr style="font: 10pt/normal 'times new roman', times, serif; vertical-align: top; font-size-adjust: none; font-stretch: normal;"><td style="font: 10pt/normal 'times new roman', times, serif; width: 48px; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>10.</b></font></td><td style="font: 10pt/normal 'times new roman', times, serif; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>DEFERRED REVENUE</b></font></td></tr></table><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">Deferred revenue represents payments received in advance from customers in terms of master service agreements entered into with them. Revenue is recognized as and when the work is performed.</font></p></div>
<div><table style="font: 10pt/normal 'times new roman', times, serif; width: 1557px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;" cellspacing="0" cellpadding="0"><tr style="font: 10pt/normal 'times new roman', times, serif; vertical-align: top; font-size-adjust: none; font-stretch: normal;"><td style="font: 10pt/normal 'times new roman', times, serif; width: 48px; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>11.</b></font></td><td style="font: 10pt/normal 'times new roman', times, serif; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>DEFERRED PURCHASE CONSIDERATION</b></font></td></tr></table><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">In terms of the Icagen asset purchase agreement entered into on July 1, 2015, with a subsidiary of Pfizer, Inc, now known as Pfizer Research (NC), Inc., the Company has the following deferred purchase price obligations:</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><table style="font: 10pt/normal 'times new roman', times, serif; width: 1557px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;" cellspacing="0" cellpadding="0"><tr style="font: 10pt/normal 'times new roman', times, serif; vertical-align: top; font-size-adjust: none; font-stretch: normal;"><td style="font: 10pt/normal 'times new roman', times, serif; width: 48px; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></td><td style="font: 10pt/normal 'times new roman', times, serif; width: 24px; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">●</font></td><td style="font: 10pt/normal 'times new roman', times, serif; text-align: justify; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">commencing May 30, 2017, the Company is obligated to pay additional purchase price consideration calculated (“Earn Out Payment”) at the greater of (i) 10% (ten percent) of gross revenues per quarter (exclusive of revenue paid by Sanofi to Icagen-T) and (ii) $250,000 per quarter up to an aggregate maximum of $10,000,000 (the “Maximum Earn Out Payment”), subject to the next paragraph. These earn out payments are payable quarterly, 60 days after the completion of each calendar quarter. There are no indications that the Company will not meet the maximum earn out payment.</font></td></tr></table><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.75in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The Company amended its agreement with Pfizer Research (NC), Inc. (the “Second Amendment”), whereby the Company, at its option, may defer payment of any amount exceeding $50,000 of the minimum additional purchase price consideration of $250,000 per quarter until March 31, 2019 such that the Company is only required to pay $50,000 per quarter for the quarters ending March 2017 to December 2018. Deferred purchase consideration bears interest at a rate of 12.5% per annum, which interest is payable quarterly. The deferred purchase consideration in terms of this agreement is payable, together with the deferred purchase consideration for the quarter ended March 31, 2019, as one lump sum. The Second Amendment also provides that if there is an Insolvency Event (as such term is defined in the Second Amendment) prior to the time that Pfizer Research (NC), Inc. has received the Maximum Earn Out Payment, then upon such Insolvency Event, the full amount of any Earn Out Shortfall (the difference between the Maximum Earn Out Payment and the amount of all Earn Out Payments paid to date) shall be due and payable without further notice, demand or presentment for payment.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal;
word-spacing: 0px;
white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><table style="font: 10pt/normal 'times new roman', times, serif; width: 1557px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;" cellspacing="0" cellpadding="0"><tr style="font: 10pt/normal 'times new roman', times, serif; vertical-align: top; font-size-adjust: none; font-stretch: normal;"><td style="font: 10pt/normal 'times new roman', times, serif; width: 48px; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></td><td style="font: 10pt/normal 'times new roman', times, serif; width: 24px; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">●</font></td><td style="font: 10pt/normal 'times new roman', times, serif; text-align: justify; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The $500,000 deferred purchase consideration due on July 1, 2017, was not earned by Pfizer due to Pfizer not meeting its $4,000,000 revenue target. This liability of $500,000 was reversed as other income during the year ended December 31, 2017.</font></td></tr></table><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">Deferred purchase consideration is disclosed as follows:</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">  </font></p><table style="font: 10pt/normal 'times new roman', times, serif; width: 1557px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; border-collapse: collapse; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;" cellspacing="0" cellpadding="0"><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2"><font style="font-family: 'times new roman', times, serif;">September 30, <br />2018</font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2"><font style="font-family: 'times new roman', times, serif;">December 31, <br />2017</font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td style="font-weight: bold;"><font style="font-family: 'times new roman', times, serif;">Deferred purchase consideration</font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td colspan="2"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td colspan="2"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="width: 0.5in; background-color: white;"> </td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;">Opening balance</font></td><td style="width: 15px;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="width: 124px; text-align: right;"><font style="font-family: 'times new roman', times, serif;">9,856,458</font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="width: 15px;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="width: 124px; text-align: right;"><font style="font-family: 'times new roman', times, serif;">10,500,000</font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom;
background-color: white;"><td style="background-color:
white;"> </td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;">Reversal of unearned purchase consideration</font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">-</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">(500,000</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;">)</font></td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;">Interest due on deferred purchase consideration</font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">85,005</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">25,578</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;">Repayment</font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">(228,963</font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;">)</font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">(169,120</font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;">)</font></td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;">Closing balance</font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">9,712,500</font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">9,856,458</font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="text-align: left; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;">Present value discount on future payments</font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font
style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family:
'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;">Opening balance</font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">(1,417,336</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;">)</font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">(1,712,689</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;">)</font></td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;">Imputed interest expense</font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">224,307</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">300,511</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;">Fair value adjustments</font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">-</font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">(5,158</font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;">)</font></td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;">Closing balance</font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">(1,193,029</font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;">)</font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">(1,417,336</font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;">)</font></td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="text-align: left; padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;">Deferred purchase consideration, net</font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; font-weight: bold; border-bottom-color: black; border-bottom-width:
1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; font-weight: bold; border-bottom-color: black;
border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">8,519,471</font></td><td style="text-align: left; padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">8,439,122</font></td><td style="text-align: left; padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="font-weight: bold;"><font style="font-family: 'times new roman', times, serif;">Disclosed as follows:</font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;">Short-term portion</font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">2,200,000</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">206,458</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;">Interest disclosed under other payables</font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">12,500</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">-</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;">Long-term portion</font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">6,306,971</font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">8,232,664</font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom;
background-color: #cceeff;"><td style="background-color: white;"> </td><td style="text-align: left; padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;">Deferred purchase consideration,
net</font></td><td
style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="text-align: right; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">8,519,471</font></td><td style="text-align: left; padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="text-align: right; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">8,439,122</font></td><td style="text-align: left; padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr></table></div>
<div><table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;" cellspacing="0" cellpadding="0"><tr style="font: 10pt/normal 'times new roman', times, serif; vertical-align: top; font-size-adjust: none; font-stretch: normal;"><td style="font: 10pt/normal 'times new roman', times, serif; width: 48px; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>12.</b></font></td><td style="font: 10pt/normal 'times new roman', times, serif; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>BRIDGE NOTES</b></font></td></tr></table><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">On August 13, 2018, the Company closed the first tranche of its note and warrant offering of a maximum of one hundred fifty (150) units and entered into a Securities Purchase Agreement (the “Purchase Agreement”) with four accredited investors, which included a trust of which one member of the Company’s Board of Directors is the trustee and two other members of the Board of Directors (the “Purchasers”), pursuant to which the Company issued to the Purchasers an aggregate of fifty (50) units, at a purchase price of $10,000 per unit, each unit consisting of: (i) the Company’s 10% Subordinated Promissory Note in the principal amount of $10,000 due on the earlier of: (x) the date that is twelve (12) months after its issue date or (y) the Company’s receipt of the proceeds of funding from its next collaboration/partnership (the “Note”) and (ii) a five year warrant to purchase 1,500 shares of common stock of the Company for each $10,000 Note investment of the Company at an exercise price of $3.50 per share (the “Warrant”). An aggregate of $500,000 in principal amount of Notes and Warrants to purchase an aggregate of 75,000 shares of common stock were sold at the closing. The gross cash proceeds to the Company from the sale of the fifty (50) units was $500,000.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The Warrants also contains certain anti-dilution provisions that apply in connection with any stock split, stock dividend, stock combination, recapitalization or similar transaction.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The movement on bridge notes is as follows:</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">  </font></p><table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; border-collapse: collapse; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;" cellspacing="0" cellpadding="0"><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2"><font style="font-family: 'times new roman', times, serif;">September 30,<br />2018</font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2"><font style="font-family: 'times new roman', times, serif;">December 31,<br />2017</font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom;"><td style="background-color:
white;"> </td><td
style="font-weight: bold;"><font style="font-family: 'times new roman', times, serif;">Bridge note liability</font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td colspan="2"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td colspan="2"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="width: 0.5in; background-color: white;"> </td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;">Bridge notes raised</font></td><td style="width: 15px;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="width: 125px; text-align: right;"><font style="font-family: 'times new roman', times, serif;">500,000</font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="width: 15px;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="width: 125px; text-align: right;"><font style="font-family: 'times new roman', times, serif;">1,500,000</font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;">Repayment</font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">-</font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">(1,500,000</font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;">)</font></td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;">Closing balance</font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">500,000</font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">-</font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="text-align: left; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;">Discount on bridge notes</font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr
style="vertical-align: bottom; background-color: white;"><td style="background-color:
white;"> </td><td><font style="font-family: 'times new roman', times, serif;">Fair value of warrants issued</font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">(116,485</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;">)</font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">(330,353</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;">)</font></td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;">Amortization of bridge note discount</font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">15,318</font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">330,353</font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;">Closing balance</font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">(101,167</font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;">)</font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">-</font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="text-align: left; padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;">Bridge notes, net</font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="text-align: right; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">398,833</font></td><td style="text-align: left; padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="text-align: right; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">-</font></td><td style="text-align: left; padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td><font style="font-family: 'times new roman', times,
serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family:
'times
new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="font-weight: bold;"><font style="font-family: 'times new roman', times, serif;">Disclosed as follows:</font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="padding-bottom: 1.5pt; background-color: white;"> </td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;">Short-term portion</font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">398,833</font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">-</font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr></table></div>
<div><table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;" cellspacing="0" cellpadding="0"><tr style="vertical-align: top;"><td style="width: 48px; font-size: 10pt;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>13.</b></font></td><td style="font-size: 10pt;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>LOANS PAYABLE</b></font></td></tr></table><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"> </p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;">Loans payable consist of the following:</p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"> </p><table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; border-collapse: collapse; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;" cellspacing="0" cellpadding="0"><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td> </td><td style="font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">September 30,<br />2018</td><td style="font-weight: bold;"> </td><td style="font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">December 31,<br />2017</td><td style="font-weight: bold;"> </td></tr><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="width: 0.5in; background-color: white;"> </td><td style="text-align: left;">Asset purchase arrangements</td><td style="width: 15px;"> </td><td style="width: 15px; text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">$</td><td style="width: 141px; text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">83,176</td><td style="width: 15px; text-align: left;"> </td><td style="width: 15px;"> </td><td style="width: 15px; text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">$</td><td style="width: 141px; text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">210,690</td><td style="width: 15px; text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;"> </td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;"> </td><td style="text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="font-weight: bold;">Disclosed as follows:</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;"> </td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;"> </td><td style="text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="text-align: left;">Short-term portion</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">56,436</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">139,394</td><td style="text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="text-align: left;">Long-term portion</td><td> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">26,740</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">71,296</td><td style="text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td> </td><td> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">$</td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">83,176</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">$</td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">210,690</td><td style="text-align:
left;"> </td></tr></table><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align:
justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;">Future principal payments under loans payable are as follows:</p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"> </p><table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; border-collapse: collapse; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;" cellspacing="0" cellpadding="0"><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">Amount</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td></tr><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="width: 0.5in; background-color: white;"> </td><td style="text-align: left;">Within 1 year</td><td style="width: 15px;"> </td><td style="width: 15px; text-align: left;">$</td><td style="width: 141px; text-align: right;">56,436</td><td style="width: 15px; text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="text-align: left; padding-bottom: 1.5pt;">Within 1 - 2 years</td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">26,740</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="padding-bottom: 1.5pt; background-color: white;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: left; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">$</td><td style="text-align: right; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">83,176</td><td style="text-align: left; padding-bottom: 1.5pt; font-weight: bold;"> </td></tr></table><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"> </p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><b>Asset Purchase arrangements</b></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px; color: #000000; text-transform: none; text-indent: 0.5in; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><b> </b></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;">The Company acquired laboratory equipment on August 11, 2017 for a purchase consideration of $59,320 in terms of a deferred purchase arrangement whereby a deposit of $5,932 was paid and twenty-four monthly installments of $2,472 will be paid commencing on September 11, 2017. The installments bear interest at an effective rate of 10.33% per annum. The Company owed $26,103 as of September 30, 2018.</p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"> </p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;">The Company acquired laboratory software during September 2017 for a purchase consideration of $98,446 in terms of a deferred purchase arrangement whereby a deposit of $10,546 was paid and the balance payable in thirty-five monthly installments of $2,750 each, which commenced on September 30, 2017. The installments bear interest at an effective rate of 6.15% per annum. The Company owed $57,073 as of September 30, 2018.</p></div>
<div><table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;" cellspacing="0" cellpadding="0"><tr style="vertical-align: top;"><td style="width: 48px; font-size: 10pt;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>14.</b></font></td><td style="font-size: 10pt;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>CONVERTIBLE DEBT</b></font></td></tr></table><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;"><b> </b></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;">On May 15, 2017, the Company, and its wholly owned subsidiary, Icagen-T, Inc. (“Icagen-T”), entered into a Securities Purchase Agreement (“Securities Purchase Agreement”) with an institutional investor (the “Purchaser”), pursuant to which (i) the Company issued to the Purchaser a three year Senior Secured Convertible Note (“Company Note”), maturing on May 15, 2020, bearing interest at the rate of 13% per annum (which interest rate increases to 18% per annum upon the occurrence of an event of default, as defined in the Company Note), in the aggregate principal amount of $2,000,000 for cash proceeds of $1,920,000 after an original issue discount of 4% or $80,000, before deal related expenses; and (ii) Icagen-T issued to the Purchaser a three year Senior Secured Convertible Note (“Icagen-T Note”), maturing on May 15, 2020, bearing interest at the rate of 13% per annum, in the aggregate principal amount of $8,000,000 for cash proceeds of $7,680,000 after an original issue discount of 4% or $320,000, before transaction related expenses. The Company Note and the Icagen-T Note (collectively, the “Convertible Notes”) are each convertible into shares of common stock at a conversion price of $3.50 per share.</p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px; text-align: justify; color: #000000; text-transform: none; text-indent: -0.7pt; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;"> </p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;">In addition, any time after issuance, so long as no Event of Default has occurred and/or is continuing, each of the Company and Icagen-T, had the right to redeem all or part of each Convertible Note then outstanding, with a minimum prepayment amount of $500,000, at any time upon five (5) business days’ notice to the Purchaser by paying an amount in cash equal to: a range between 101% and 103% of the Conversion Amount being redeemed if paid in full and if an Event of Default has occurred and is continuing the Purchaser has the right to require the Company to redeem the Conversion Amount for an amount of cash equal to a range between 116% and 118% of the Conversion Amount being redeemed. The “Conversion Amount” is defined as the sum of (a) the portion of the principal to be converted, redeemed or otherwise with respect to which this determination is being made, (b) all accrued and unpaid Interest with respect to such portion of such principal, (c) all accrued and unpaid late charges with respect to such portion of such principal and such Interest, if any, and (d) all other amounts due thereunder.</p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;"> </p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;">On August 31, 2018 the Company raised an aggregate of $15,250,000 in principal amount of term loans from a third party institutional investor (note 16 below) and exercised its right to redeem the convertible notes in the principal amount of $10,000,000 that had been issued in May 2017 by the payment of the aggregate principal outstanding amount of $10,000,000, plus accrued interest thereon of $108,333 and an early redemption cash payment of $200,000. The Company recorded a net gain on extinguishment of $495,783 of convertible debt, related accrued interest, derivative liability, unamortized discount and early redemption cash payment during the three and nine months ended September 30, 2018.</p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;"> </p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;">In addition, pursuant to the Securities Purchase Agreement, the Company and Icagen-T have agreed to provide certain registration rights if Rule 144 under the Securities Act, is unavailable, for the Warrant Shares and underlying the original Company Note.</p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;"> </p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in;
text-align:
justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;">In connection with the Convertible Notes, the Company issued a warrant (the “Purchaser Warrant”) to purchase initially up to 857,143 shares of Common Stock at an initial exercise price of $3.50 per share, subject to applicable adjustments. The Purchaser Warrant expires on May 15, 2022.</p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;"> </p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;">In addition, subject to limited exceptions, a holder of the Purchaser Warrant will not have the right to exercise any portion of the Purchaser Warrant if such holder, together with its affiliates, would beneficially own in excess of 4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to its conversion (the “Beneficial Ownership Limitation”). A holder of the Purchaser Warrant may adjust the Beneficial Ownership Limitation upon not less than 61 days’ prior notice to the Company, provided that such Beneficial Ownership Limitation in no event shall exceed 9.99%.</p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;"> </p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;">The Purchaser Warrant also contain certain anti-dilution provisions that apply in connection with any stock split, stock dividend, stock combination, recapitalization and, issuances of securities at prices below the conversion price or similar transactions.</p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;"> </p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;">If, at the time a holder exercises the Purchaser Warrant, there is no effective registration statement available for an issuance of the shares underlying the Purchaser Warrant to the holder, then in lieu of making the cash payment otherwise contemplated to be made to us upon such exercise in payment of the aggregate exercise price, the holder may elect instead to receive upon such exercise (either in whole or in part) the net number of shares of the Company’s Common Stock determined according to a formula set forth in the Purchaser Warrant. If the Company fails to timely deliver the shares underlying the Purchaser Warrants, it will be subject to certain buy-in provisions.</p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;"> </p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;">The Purchaser Warrant also provides that the Company will not enter into or be party to a Fundamental Transaction (as defined in the Purchaser Warrant) unless (i) the Successor Entity (as defined in the Purchaser Warrant) assumes in writing all of the obligations of the Company under the Purchaser Warrant and the other Transaction Documents (as defined in the Securities Purchase Agreement) pursuant to written agreements in form and substance satisfactory to the Purchaser, including agreements to deliver to the Purchaser in exchange for the Purchaser Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to the Purchaser Warrant; (ii) the Parent or the Successor Entity (as the case may be) agrees at the election of the Company or the Successor Entity (as the case may be) to purchase the Purchaser Warrant from the Purchaser by paying to the Purchaser cash in an amount equal to the Black Scholes Value (as defined in the Purchaser Warrant); or (iii) the Purchaser, at its election, requires the Company or the Successor Entity (as the case may be) to purchase the Purchaser Warrant from the Purchaser by paying to the Purchaser cash in an amount equal to the Black Scholes Value.</p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;"> </p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;">The Company Note was secured by a security interest in all of the existing and future assets of the Company and the domestic subsidiaries, other than Icagen-T, including a pledge of all of the capital stock of each of the Domestic Subsidiaries, other than Icagen-T, subject to existing security interests, for the benefit of the Purchaser, to secure the Company obligations under the Company Note, as evidenced by (i) a security and pledge
agreement, and (ii)
a guaranty executed by each Domestic Subsidiary, other than Icagen-T, pursuant to which the domestic subsidiaries, other than Icagen-T, guaranteed all obligations of the Company under the Transaction Documents.</p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;"> </p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;">The Icagen-T Note was secured by a security interest in all of the existing and future assets of the Company, Icagen-T and the other Domestic Subsidiaries, including a pledge of all of the capital stock of each of the Domestic Subsidiaries, other than Icagen-T, subject to existing security interests, for the benefit of the Purchaser, to secure Icagen-T’s obligations under the Icagen-T Note, as evidenced by (i) a security and pledge agreement, and (ii) a guaranty executed by the Company and each Domestic Subsidiary, other than Icagen-T, pursuant to which the Company and the Domestic Subsidiaries, other than Icagen-T, guaranteed all of the obligations of Icagen-T under the Transaction Documents.</p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;"> </p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;">In addition, the Company and Icagen-T entered into a Subordinated Deed of Trust, Assignment of Rents, Fixture Filing and Security Agreement with the trustee named therein and the Purchaser as beneficiary, securing all of Icagen-T’s obligations to the Purchaser by a senior priority security interest in the Property/Facilities, which is subordinated only to a Deed of Trust entered into with Sanofi.</p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;"> </p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;">Upon an Event of Default, the Purchaser could among other things, collect or take possession of the Company collateral or Icagen-T collateral, as the case may be, proceed with the foreclosure of the security interest in the collateral or sell, lease or dispose of the collateral. Each of the Subsidiaries had also guaranteed all of the Company’s obligations under the Company Note pursuant to the terms of the Company Guaranty and the Icagen-T Guaranty.</p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;"> </p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;">All security interests granted to the holders of the Convertible notes above were released on August 31, 2018 upon the repayment of the convertible notes by the Company.</p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;"> </p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;">The movement on convertible debt is as follows:</p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;"> </p><table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; border-collapse: collapse; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;" cellspacing="0" cellpadding="0"><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">September 30,<br />2018</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">December 31,<br />2017</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td></tr><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td></tr><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td
style="font-weight: bold;">Convertible
debt</td><td> </td><td colspan="2"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="width: 0.5in; background-color: white;"> </td><td style="text-align: left;">Opening balance</td><td style="width: 15px;"> </td><td style="width: 15px; text-align: left;">$</td><td style="width: 141px; text-align: right;">10,000,000</td><td style="width: 15px; text-align: left;"> </td><td style="width: 15px;"> </td><td style="width: 15px; text-align: left;">$</td><td style="width: 141px; text-align: right;">-</td><td style="width: 15px; text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="text-align: left;">Convertible debt issued</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">-</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">10,000,000</td><td style="text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="padding-bottom: 1.5pt;">Repayment</td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">(10,000,000</td><td style="text-align: left; padding-bottom: 1.5pt;">)</td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">-</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="text-align: left; padding-bottom: 1.5pt;">Closing balance</td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">-</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">10,000,000</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;"> </td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;"> </td><td style="text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="text-align: left; font-weight: bold;">Debt discount</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;"> </td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;"> </td><td style="text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="text-align: left;">Opening balance</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">(4,138,206</td><td style="text-align: left;">)</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">-</td><td style="text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="text-align: left;">Original issue discount</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">-</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">(400,000</td><td style="text-align: left;">)</td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="text-align: left;">Fair value of warrants and beneficial conversion feature of notes</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">-</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">(4,518,277</td><td style="text-align: left;">)</td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="text-align: left;">Amortization of debt discount</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">950,163</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">780,071</td><td style="text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="text-align: left; padding-bottom: 1.5pt;">Extinguishment of debt discount</td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">3,188,043</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">-</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="text-align: left; padding-bottom: 1.5pt;">Closing balance</td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left;
border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt;
border-bottom-style: solid;">-</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">(4,138,206</td><td style="text-align: left; padding-bottom: 1.5pt;">)</td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;"> </td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;"> </td><td style="text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="text-align: left; padding-bottom: 1.5pt; font-weight: bold;">Convertible debt, net</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: left; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">$</td><td style="text-align: right; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">-</td><td style="text-align: left; padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: left; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">$</td><td style="text-align: right; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">5,861,794</td><td style="text-align: left; padding-bottom: 1.5pt; font-weight: bold;"> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;"> </td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;"> </td><td style="text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="font-weight: bold;">Disclosed as follows:</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;"> </td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;"> </td><td style="text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="padding-bottom: 1.5pt; background-color: white;"> </td><td style="text-align: left; padding-bottom: 1.5pt;">Long-term portion</td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">$</td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">-</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">$</td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">5,861,794</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td></tr></table></div>
<div>
<table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;" cellspacing="0" cellpadding="0">
<tr style="vertical-align: top;">
<td style="width: 48px; font-size: 10pt;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>15.</b></font></td>
<td style="font-size: 10pt;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>DERIVATIVE LIABILITY</b></font></td>
</tr>
</table>
<p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"> </p>
<p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;">The Convertible Notes, together with the Purchaser Warrants issued to the note holders, disclosed in note 14 above, had variable priced conversion rights which may adjust whenever new securities are issued at prices lower than the current conversion and exercise price of the Convertible Notes and Purchaser Warrants issued to note holders. This gave rise to a derivative financial liability, which was initially valued upon the issue of the Convertible Notes and Purchaser Warrants using a Black-Scholes valuation model. The Beneficial conversion feature of the Convertible Notes was valued at $3,069,649 and the Purchaser Warrants issued in connection with the Convertible Notes were valued at $1,448,629.</p>
<p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"> </p>
<p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;">Between April 2018 and August 2018 the Company closed four tranches of the Series C Preferred units, discussed in note 17 below. Each Preferred Series C unit includes warrants exercisable over 28,571 shares of common stock at an initial exercise price of $3.50 per share subject to anti-dilution pricing adjustments. The anti-dilution pricing adjustments give rise to a derivative financial liability which was initially valued using a Black Scholes valuation model at $1,858,663.</p>
<p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"> </p>
<p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;">On August 31, 2018, in connection with the entry into the Credit Agreements described in note 16 below, the Company issued to Perceptive, or its registered assigns, a warrant to purchase 723,550 shares of the Company’s common stock, par value $0.001 per share. The warrant is exercisable for a period of seven years from August 31, 2018 and the per-share exercise price is $3.50, subject to certain adjustments as specified in the warrant (the “Exercise Price”). Upon any exercise of the Warrant, the Exercise Price is payable in cash or, at the holder’s option, by withholding a number of shares of Common Stock then issuable upon exercise of the Warrant with an aggregate fair market value equal to the aggregate Exercise Price. The Warrant also contains customary anti-dilution adjustments and price protection. The pricing adjustments stipulated in the warrant give rise to a derivative liability which was initially valued using a Black Scholes valuation model at $1,746,065.</p>
<p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"> </p>
<p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;">The value of the derivative liability is re-assessed periodically and a mark-to-market adjustment, if applicable will be recorded in the statement of operations. The value of the derivative liability was re-assessed on September 30, 2018 and a mark-to-market adjustment of $1,346,202 was debited to the statement of operations for the nine months ended September 30, 2018.</p>
<p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"> </p>
<p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color:
#000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;">The following assumptions were used in the Black-Scholes valuation model.</p>
<p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"> </p>
<table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; border-collapse: collapse; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;" cellspacing="0" cellpadding="0">
<tr style="vertical-align: bottom;">
<td style="background-color: white;"> </td>
<td> </td>
<td style="padding-bottom: 1.5pt; font-weight: bold;"> </td>
<td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">Nine months ended<br />September 30,<br />2018</td>
<td style="padding-bottom: 1.5pt; font-weight: bold;"> </td>
</tr>
<tr style="vertical-align: bottom;">
<td style="background-color: white;"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr style="vertical-align: bottom; background-color: #cceeff;">
<td style="width: 0.5in; background-color: white;"> </td>
<td>Calculated stock price</td>
<td style="width: 15px;"> </td>
<td style="width: 15px; text-align: left;">$</td>
<td style="width: 141px; text-align: right; white-space: nowrap;">3.50</td>
<td style="width: 15px; text-align: left;"> </td>
</tr>
<tr style="vertical-align: bottom; background-color: white;">
<td style="background-color: white;"> </td>
<td style="text-align: left;">Risk free interest rate</td>
<td> </td>
<td style="text-align: left;"> </td>
<td style="text-align: right; white-space: nowrap;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">2.39 to 3.01</font></td>
<td style="text-align: left;">%</td>
</tr>
<tr style="vertical-align: bottom; background-color: #cceeff;">
<td style="background-color: white;"> </td>
<td>Valuation period</td>
<td> </td>
<td style="text-align: left;"> </td>
<td style="text-align: right; white-space: nowrap;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">1.7 to 7 years</font></td>
<td style="text-align: left;"> </td>
</tr>
<tr style="vertical-align: bottom; background-color: white;">
<td style="background-color: white;"> </td>
<td style="text-align: left;">expected volatility of underlying stock</td>
<td> </td>
<td style="text-align: left;"> </td>
<td style="text-align: right; white-space: nowrap;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">44.6 to 74.9</font></td>
<td style="text-align: left;">%</td>
</tr>
<tr style="vertical-align: bottom; background-color: #cceeff;">
<td style="background-color: white;"> </td>
<td style="text-align: left;">Expected dividend rate</td>
<td> </td>
<td style="text-align: left;"> </td>
<td style="text-align: right; white-space: nowrap;">0</td>
<td style="text-align: left;">%</td>
</tr>
</table>
<p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"> </p>
<p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;">The movements in the derivative financial liability is as follows:</p>
<p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"> </p>
<table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; border-collapse: collapse; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;" cellspacing="0" cellpadding="0">
<tr style="vertical-align: bottom;">
<td style="white-space: nowrap; background-color: white;"> </td>
<td style="text-indent: -0.125in; padding-left: 0.125in; white-space: nowrap;"> </td>
<td style="padding-bottom: 1.5pt; font-weight: bold; white-space: nowrap;"> </td>
<td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid; white-space: nowrap;" colspan="2">September 30,<br />2018</td>
<td style="padding-bottom: 1.5pt; font-weight: bold; white-space: nowrap;"> </td>
<td style="padding-bottom: 1.5pt; font-weight: bold; white-space: nowrap;"> </td>
<td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid; white-space: nowrap;" colspan="2">December 31,<br />2017</td>
<td style="padding-bottom: 1.5pt; font-weight: bold; white-space: nowrap;"> </td>
</tr>
<tr style="vertical-align: bottom;">
<td style="background-color: white;"> </td>
<td style="text-indent: -0.125in; padding-left: 0.125in;"> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr style="vertical-align: bottom; background-color: #cceeff;">
<td style="width: 0.5in; background-color: white;"> </td>
<td style="text-align: left; text-indent: -0.125in; padding-left: 0.125in;">Opening balance</td>
<td style="width: 15px;"> </td>
<td style="width: 15px; text-align: left;">$</td>
<td style="width: 141px;
text-align: right;">4,168,964</td>
<td style="width: 15px; text-align: left;"> </td>
<td style="width: 15px;"> </td>
<td style="width: 15px; text-align: left;">$</td>
<td style="width: 141px; text-align: right;">-</td>
<td style="width: 15px; text-align: left;"> </td>
</tr>
<tr style="vertical-align: bottom; background-color: white;">
<td style="background-color: white;"> </td>
<td style="text-align: left; text-indent: -0.125in; padding-left: 0.125in;">Derivative liability on conversion option of convertible debt and warrants issued to note holders</td>
<td> </td>
<td style="text-align: left;"> </td>
<td style="text-align: right;">-</td>
<td style="text-align: left;"> </td>
<td> </td>
<td style="text-align: left;"> </td>
<td style="text-align: right;">4,518,277</td>
<td style="text-align: left;"> </td>
</tr>
<tr style="vertical-align: bottom; background-color: #cceeff;">
<td style="background-color: white;"> </td>
<td style="text-align: left; text-indent: -0.125in; padding-left: 0.125in;">Derivative liability on warrants issued to term loan note holders and series C preferred stock holders</td>
<td> </td>
<td style="text-align: left;"> </td>
<td style="text-align: right;">3,604,728</td>
<td style="text-align: left;"> </td>
<td> </td>
<td style="text-align: left;"> </td>
<td style="text-align: right;">-</td>
<td style="text-align: left;"> </td>
</tr>
<tr style="vertical-align: bottom; background-color: white;">
<td style="background-color: white;"> </td>
<td style="text-indent: -0.125in; padding-left: 0.125in;">Extinguishment of derivative liability on convertible debt</td>
<td> </td>
<td style="text-align: left;"> </td>
<td style="text-align: right;">(3,890,826</td>
<td style="text-align: left;">)</td>
<td> </td>
<td style="text-align: left;"> </td>
<td style="text-align: right;">-</td>
<td style="text-align: left;"> </td>
</tr>
<tr style="vertical-align: bottom; background-color: #cceeff;">
<td style="background-color: white;"> </td>
<td style="text-align: left; text-indent: -0.125in; padding-bottom: 1.5pt; padding-left: 0.125in;">Mark-to-market adjustment</td>
<td style="padding-bottom: 1.5pt;"> </td>
<td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td>
<td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">1,346,202</td>
<td style="text-align: left; padding-bottom: 1.5pt;"> </td>
<td style="padding-bottom: 1.5pt;"> </td>
<td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td>
<td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">(349,313</td>
<td style="text-align: left; padding-bottom: 1.5pt;">)</td>
</tr>
<tr style="vertical-align: bottom; background-color: white;">
<td style="background-color: white;"> </td>
<td style="text-align: left; text-indent: -0.125in; padding-bottom: 1.5pt; padding-left: 0.125in;">Closing balance</td>
<td style="padding-bottom: 1.5pt;"> </td>
<td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">$</td>
<td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">5,229,068</td>
<td style="text-align: left; padding-bottom: 1.5pt;"> </td>
<td style="padding-bottom: 1.5pt;"> </td>
<td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">$</td>
<td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">4,168,964</td>
<td style="text-align: left; padding-bottom: 1.5pt;"> </td>
</tr>
</table>
</div>
<div>
<table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;" cellspacing="0" cellpadding="0">
<tr style="vertical-align: top;">
<td style="width: 48px; font-size: 10pt;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>16.</b></font></td>
<td style="font-size: 10pt;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>TERM LOAN</b></font></td>
</tr>
</table>
<p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"> </p>
<p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;">On August 31, 2018, the Company, and its wholly owned subsidiaries, Icagen Corp., Caldera Discovery, Inc., and XRPro Sciences, Inc., (collectively, the “Subsidiaries”) entered into a Credit Agreement and Guaranty (the “Icagen Credit Agreement”) with the banks and other financial institutions from time to time party thereto, as lenders (collectively, the “Icagen Lenders”) and Perceptive Credit Holdings II, LP, a Delaware limited partnership (“Perceptive”), as administrative agent for the Icagen Lenders (in such capacity, the “Administrative Agent”).</p>
<p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px; text-align: justify; color: #000000; text-transform: none; text-indent: 0.5in; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"> </p>
<p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;">In addition, on August 31, 2018, Icagen-T, Inc., a Delaware corporation, as borrower (“Icagen-T”), the Company, Icagen Corp., Caldera Discovery, and XRPro Sciences entered into a Credit Agreement and Guaranty (the “Icagen-T Credit Agreement” and together with the Icagen Credit Agreement, the “Credit Agreements”) with the banks and other financial institutions from time to time party thereto, as lenders, and Perceptive, as administrative agent for the lenders (in such capacity, the “Icagen-T Administrative Agent”).</p>
<p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px; text-align: justify; color: #000000; text-transform: none; text-indent: 0.5in; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><b><i> </i></b></p>
<p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;">The Icagen Credit Agreement provides for a $7,250,000 term loan (the “Icagen Term Loan”), which was drawn in full on August 31, 2018 (the “Closing Date”). The Icagen-T Credit Agreement provides for an $8,000,000 term loan (the “Icagen-T Term Loan” and together with the Icagen Term Loan, the “Term Loans”), which was drawn in full on the Closing Date.</p>
<p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px; text-align: justify; color: #000000; text-transform: none; text-indent: 0.5in; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"> </p>
<p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;">The Company and Icagen-T used the proceeds from the respective Term Loans (i) for general working capital purposes, including, without limitation, business development and licensing purposes, (ii) and repaid the convertible debt disclosed in note 14 above; and (iii) to pay fees, costs and expenses incurred in connection with the transactions contemplated by the Credit Agreements.</p>
<p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px; text-align: justify; color: #000000; text-transform: none; text-indent: 0.5in; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><b><i> </i></b></p>
<p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;">Commencing on the last day of each month after August 31, 2020, the Term Loans amortize in an amount equal to 1.0% of the aggregate principal amount of the Term Loans borrowed on the Closing Date.</p>
<p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px; text-align: justify; color:
#000000; text-transform: none; text-indent: 0.5in; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><b><i> </i></b></p>
<p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;">The Term Loans mature on August 31, 2022 (the “Maturity Date”) unless accelerated pursuant to an event of default, as described below. All amounts outstanding under the Term Loans will be due and payable upon the earlier of the Maturity Date or the acceleration of the loans and commitments upon an event of default.</p>
<p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px; text-align: justify; color: #000000; text-transform: none; text-indent: 0.5in; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><b><i> </i></b></p>
<p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;">Amounts borrowed under the Credit Agreements bear interest at a rate per annum equal to the sum of the greater of: (i) the London Interbank Offered Rate (LIBOR) for one month periods and (ii) two and one-quarter percent (2.25%), plus an applicable margin rate of 9.75% per annum (the “Interest Rate”).  Furthermore, interest is payable on a monthly basis.</p>
<p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px; text-align: justify; color: #000000; text-transform: none; text-indent: 0.5in; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><b><i> </i></b></p>
<p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;">On August 31, 2018, the Company and Icagen-T each paid a non-refundable closing fee of 2% of the Term Loans (or a total of $305,000) pursuant to the terms of the respective Credit Agreements.</p>
<p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px; text-align: justify; color: #000000; text-transform: none; text-indent: 0.5in; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><b><i>  </i></b></p>
<p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;">Prepayments of the Term Loans (other than certain mandatory prepayments) prior to the Maturity Date are subject to the following prepayment premium based on the aggregate principal amount of the Term Loans as of the date of any such prepayment: (i) on or prior to the first anniversary of the Closing Date, 12% of the aggregate outstanding principal amount of the Term Loan being prepaid, (ii) following the first anniversary or the Closing Date, but on or prior to the second anniversary of the Closing Date, 8% of the aggregate outstanding principal amount of the Term Loan being prepaid, and (iii) at any time after the second anniversary of the Closing Date and on or prior to the third anniversary of the Closing Date, 3% of the aggregate outstanding principal amount of the Term Loan being prepaid.</p>
<p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px; text-align: justify; color: #000000; text-transform: none; text-indent: 0.5in; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><b><i> </i></b></p>
<p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;">The repayment of the Term Loans and the Company’s and Icagen-T’s other obligations under the Icagen Credit Agreement or Icagen-T Credit Agreement, as applicable, are guaranteed by each of the Company’s subsidiaries (excluding Icagen-T with respect to the Icagen Credit Agreement).</p>
<p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"> </p>
<p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;">Pursuant to the terms and conditions of the Security Agreement, dated August 31, 2018, among the Company, the Subsidiaries and Perceptive (the “Icagen Security Agreement”), the Company’s and the Subsidiaries’
obligations under the Icagen Credit Agreement are secured by (i) a first priority lien on all of the existing and after acquired tangible and intangible assets, including intellectual property, of the Company and the Subsidiaries, and (ii) a pledge of 100% of the Company’s equity interests in the Subsidiaries. In addition, pursuant to the terms and conditions of the Security Agreement, dated August 31, 2018, among Icagen-T, the Company, the Subsidiaries and Perceptive (the “Icagen-T Security Agreement”), Icagen-T’s, the Company’s and the Subsidiaries’ obligations under the Icagen-T Credit Agreement are secured by (i) a first priority lien on all of the existing and after acquired tangible and intangible assets, including intellectual property, of the Company and the Subsidiaries other than real estate for which they have a second priority lien, and (ii) a pledge of 100% of the Company’s equity interests in the Subsidiaries.</p>
<p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><b><i> </i></b></p>
<p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;">The Credit Agreements contain customary representations, warranties and covenants, including covenants by each of the Company and Icagen-T limiting additional indebtedness, liens, guaranties, mergers and consolidations, substantial asset sales, investments and loans, sale and leasebacks, transactions with affiliates and fundamental changes and acquisitions. The Credit Agreements also contain covenants requiring that the Company and its subsidiaries maintain cash and cash equivalents held in one or more accounts subject to the first priority perfected security interests of the lenders under the Credit Agreements of not less than (a) $1,000,000 following the Closing Date until March 31, 2019, and (b) $1,500,000 at all times thereafter. In addition, the Credit Agreements provide for specified quarterly minimum consolidated net revenue covenants of the Company and its subsidiaries for the trailing twelve month period ended on each such calculation date during the term of the Credit Agreements.</p>
<p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px; text-align: justify; color: #000000; text-transform: none; text-indent: 0.5in; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><b><i> </i></b></p>
<p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;">The Credit Agreements provide for events of default customary for credit facilities of this type, including but not limited to non-payment of principal and interest, defaults on other debt, misrepresentations, breach of covenants, representations and warranties, change of control, insolvency, bankruptcy and the occurrence of a material adverse effect on the Company and its subsidiaries. After the occurrence of an event of default and for so long as it continues, all outstanding obligations under the Credit Agreements shall accrue interest at the Interest Rate plus 4% per annum. Upon an event of default relating to insolvency, bankruptcy or receivership, the amounts outstanding under the Credit Agreements will become immediately due and payable. Upon the occurrence and continuation of any other event of default, lenders holding a majority of the outstanding loans and commitments may accelerate payment of all obligations and terminate the Lenders’ commitments under the Credit Agreements.</p>
<p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px; text-align: justify; color: #000000; text-transform: none; text-indent: 0.5in; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"> </p>
<p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;">On May 15, 2017, the Company and Icagen-T entered into a Securities Purchase Agreement with GPB Debt Holdings II, LLC (“GPB”), pursuant to which (i) the Company issued to GPB a three year Senior Secured Convertible Note maturing on May 15, 2020, bearing interest at the rate of 13% per annum in the aggregate principal amount of $2,000,000; and (ii) Icagen-T issued to GPB a three year Senior Secured Convertible Note maturing on May 15, 2020, bearing interest at the rate of 13% per annum, in the aggregate principal amount of $8,000,000. The Company and Icagen-T, respectively, used a portion of the proceeds from their Term Loans to repay all amounts due (principal, accrued and unpaid interest and other charges) as of the Closing Date under the GPB Senior Secured Convertible Notes. The Company and Icagen-T paid a total of $10,308,333, which satisfied all outstanding amounts due to GPB, terminated the loan facility with GPB and terminated all commitments of GPB to extend credit under the notes and the other transaction documents.</p>
<p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px; text-align: justify; color: #000000; text-transform: none; text-indent: 0.5in; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"> </p>
<p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align:
justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;">In addition, on August 31, 2018, the Company issued to GPB a second amended and restated warrant to purchase 857,143 shares of Common Stock (the “GPB Warrant”), pursuant to which, among other things, GPB was granted piggyback registration rights upon the same terms as the Warrant issued to Perceptive (described below).</p>
<p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><i> </i></p>
<p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;">In connection with the entry of the Credit Agreements, on August 31, 2018, the Company issued to Perceptive, or its registered assigns, a warrant (the “Warrant”) to purchase 723,550 shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”). The Warrant is exercisable for a period of seven years from the Closing Date and the per-share exercise price is $3.50, subject to certain adjustments as specified in the Warrant (the “Exercise Price”). Upon any exercise of the Warrant, the Exercise Price is payable in cash or, at Perspective’s option, by withholding a number of shares of Common Stock then issuable upon exercise of the Warrant with an aggregate fair market value equal to the aggregate Exercise Price. The Warrant also contains customary anti-dilution adjustments and price protection.</p>
<p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"> </p>
<p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;">The Company also granted Perceptive customary demand and piggy-back registration rights with respect to the shares of Common Stock issuable upon exercise of the Warrant. At any time commencing nine months following the closing of a Qualifying PO (as defined in the Warrant) if the Company is not qualified to register securities under the Securities Act of 1933, as amended (the “Securities Act”), pursuant to a registration statement on Form S-3 (or any successor form), then upon the request of the holder(s) of at least 51% of the Warrants and/or shares of Common Stock issuable thereunder (the “Majority Holders”), the Company is obligated, among other things, to (i) file a registration statement on Form S-1 with the U.S. Securities and Exchange Commission (the “SEC”) within 90 days following the date on which the request is given for purposes of registering the shares of Common Stock issuable upon exercise of the Warrants, (ii) use its commercially reasonable efforts to have the registration statement declared effective by the SEC as soon as practicable after filing, subject to any cut backs requested by the SEC, and (iii) maintain the registration until all registerable securities may be sold pursuant to Rule 144 under the Securities Act, without restriction as to volume. In addition, at all times after a Qualifying PO, the Company shall use its commercially reasonable efforts to qualify and remain qualified to register securities under the Securities Act pursuant to a registration statement on Form S-3 or any successor form thereto. At any time commencing nine (9) months after such time as the Company shall have qualified for the use of a registration statement on Form S-3, the Majority Holder(s) shall have the right to request registration on Form S-3 or any similar short-form registration. Further, whenever the Company proposes to register any shares of its Common Stock under the Securities Act (with certain exceptions), the Company shall also include in such registration statement Perceptive’s shares of Common Stock issuable upon exercise of the Warrant, provided that cut backs may apply in certain situations.</p>
<p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"> </p>
<p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;">In connection with the entry into of the Credit Agreements, on August 31, 2018, each of the holders of the Company’s 10% Subordinated Promissory Note, entered into an Amended and Restated 10% Subordinated Promissory Notes, to clarify that the subordination provisions of the Notes that were applicable to the note holder of the May 2017 notes were applicable to the lenders under the Credit Agreements and Perceptive.</p>
<p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"> </p>
<p style="font: 10pt/normal 'times new
roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;">In connection with the entry into of the Credit Agreements, effective August 31, 2018 (i) each holder of the Company’s Series C Convertible Redeemable Preferred Stock entered into a Subordination Agreement with the lenders under the Credit Agreement and Perceptive prohibiting declaration of and payment of accrued dividends on the Company’s Series C Convertible Redeemable Preferred Stock until payment in full of all amounts owing under the Credit Agreements and (ii) holders of a majority of the Company’s Series C Convertible Redeemable Preferred Stock effected an amendment to the Securities Purchase Agreements executed by the holders of the Company’s Series C Convertible Redeemable Preferred Stock that clarified that references in the Securities Purchase Agreements to the prior lender now included Perceptive and that the registration rights of such holders was subject to approval of each of the prior lender and Perceptive until the shares underlying the warrants to each had been sold or registered on a registration statement that had been declared effective by the Securities and Exchange Commission.</p>
<p style="margin: 0pt 0px; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; font-family: 'times new roman', times, serif; font-size: 13.33px; font-style: normal; font-weight: 400; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-variant-ligatures: normal; font-variant-caps: normal;"> </p>
<p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;">The movement on the term loans is as follows:</p>
<p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"> </p>
<table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; border-collapse: collapse; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;" cellspacing="0" cellpadding="0">
<tr style="vertical-align: bottom;">
<td style="white-space: nowrap; background-color: white;"> </td>
<td style="white-space: nowrap;"> </td>
<td style="padding-bottom: 1.5pt; font-weight: bold; white-space: nowrap;"> </td>
<td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid; white-space: nowrap;" colspan="2">September 30,<br />2018</td>
<td style="padding-bottom: 1.5pt; font-weight: bold; white-space: nowrap;"> </td>
</tr>
<tr style="vertical-align: bottom;">
<td style="background-color: white;"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr style="vertical-align: bottom;">
<td style="background-color: white;"> </td>
<td style="font-weight: bold;">Term Loan</td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr style="vertical-align: bottom; background-color: #cceeff;">
<td style="width: 0.5in; background-color: white;"> </td>
<td style="text-align: left; padding-bottom: 1.5pt;">Term loan issued</td>
<td style="width: 15px; padding-bottom: 1.5pt;"> </td>
<td style="width: 15px; text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">$</td>
<td style="width: 141px; text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">15,250,000</td>
<td style="width: 15px; text-align: left; padding-bottom: 1.5pt;"> </td>
</tr>
<tr style="vertical-align: bottom; background-color: white;">
<td style="background-color: white;"> </td>
<td style="text-align: left; padding-bottom: 1.5pt;">Closing balance</td>
<td style="padding-bottom: 1.5pt;"> </td>
<td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td>
<td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">15,250,000</td>
<td style="text-align: left; padding-bottom: 1.5pt;"> </td>
</tr>
<tr style="vertical-align: bottom; background-color: #cceeff;">
<td style="background-color: white;"> </td>
<td> </td>
<td> </td>
<td style="text-align: left;"> </td>
<td style="text-align: right;"> </td>
<td style="text-align: left;"> </td>
</tr>
<tr style="vertical-align: bottom; background-color: white;">
<td style="background-color: white;"> </td>
<td style="text-align: left; font-weight: bold;">Debt discount</td>
<td> </td>
<td style="text-align: left;"> </td>
<td style="text-align: right;"> </td>
<td style="text-align: left;"> </td>
</tr>
<tr style="vertical-align: bottom; background-color: #cceeff;">
<td style="background-color: white;"> </td>
<td style="text-align: left;">Debt issuance costs</td>
<td> </td>
<td style="text-align: left;"> </td>
<td style="text-align: right;">(962,162</td>
<td style="text-align: left;">)</td>
</tr>
<tr style="vertical-align: bottom; background-color: white;">
<td style="background-color: white;"> </td>
<td style="text-align: left;">Fair value of warrants</td>
<td> </td>
<td style="text-align: left;"> </td>
<td style="text-align: right;">(1,746,065</td>
<td style="text-align: left;">)</td>
</tr>
<tr style="vertical-align: bottom; background-color: #cceeff;">
<td style="background-color: white;"> </td>
<td style="text-align: left; padding-bottom: 1.5pt;">Amortization of debt discount</td>
<td style="padding-bottom: 1.5pt;"> </td>
<td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td>
<td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style:
solid;">51,927</td>
<td style="text-align: left; padding-bottom: 1.5pt;"> </td>
</tr>
<tr style="vertical-align: bottom; background-color: white;">
<td style="background-color: white;"> </td>
<td style="text-align: left; padding-bottom: 1.5pt;">Closing balance</td>
<td style="padding-bottom: 1.5pt;"> </td>
<td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td>
<td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">(2,656,300</td>
<td style="text-align: left; padding-bottom: 1.5pt;">)</td>
</tr>
<tr style="vertical-align: bottom; background-color: #cceeff;">
<td style="background-color: white;"> </td>
<td> </td>
<td> </td>
<td style="text-align: left;"> </td>
<td style="text-align: right;"> </td>
<td style="text-align: left;"> </td>
</tr>
<tr style="vertical-align: bottom; background-color: white;">
<td style="background-color: white;"> </td>
<td style="text-align: left; padding-bottom: 1.5pt; font-weight: bold;">Term Loan, net</td>
<td style="padding-bottom: 1.5pt; font-weight: bold;"> </td>
<td style="text-align: left; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td>
<td style="text-align: right; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">12,593,700</td>
<td style="text-align: left; padding-bottom: 1.5pt; font-weight: bold;"> </td>
</tr>
<tr style="vertical-align: bottom; background-color: #cceeff;">
<td style="background-color: white;"> </td>
<td> </td>
<td> </td>
<td style="text-align: left;"> </td>
<td style="text-align: right;"> </td>
<td style="text-align: left;"> </td>
</tr>
<tr style="vertical-align: bottom; background-color: white;">
<td style="background-color: white;"> </td>
<td style="font-weight: bold;">Disclosed as follows:</td>
<td> </td>
<td style="text-align: left;"> </td>
<td style="text-align: right;"> </td>
<td style="text-align: left;"> </td>
</tr>
<tr style="vertical-align: bottom; background-color: #cceeff;">
<td style="background-color: white;"> </td>
<td style="text-align: left; padding-bottom: 1.5pt;">Long-term portion</td>
<td style="padding-bottom: 1.5pt;"> </td>
<td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">$</td>
<td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">12,593,700</td>
<td style="text-align: left; padding-bottom: 1.5pt;"> </td>
</tr>
</table>
</div>
<div><table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;" cellspacing="0" cellpadding="0"><tr style="vertical-align: top;"><td style="width: 48px; font-size: 10pt;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>17.</b></font></td><td style="font-size: 10pt;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>SERIES C PREFERRED STOCK</b></font></td></tr></table><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px; color: #000000; text-transform: none; text-indent: 0.5in; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;"> </p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;">Series C Preferred Stock consists of 1,142,856 authorized shares of $0.001 each, of which 799,988 and 0 shares are issued and outstanding as of September 30, 2018 and December 31, 2017, respectively.</p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;"> </p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;">On April 3, 2018, the Company filed the Certificate of Designation with the Secretary of State of the State of Delaware establishing the Series C Convertible Preferred Stock which entitles each holder of Series C Preferred Stock to a cumulative dividend at the rate of 12.0% per annum, payable quarterly in arrears.</p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;">  </p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;">The Company has offered on a best efforts basis up to a maximum of forty (40) units and a minimum of ten (10) units, at a purchase price of $100,000 per unit, each unit consisting of 28,571 shares of Series C Convertible Preferred Stock, par value $0.001 per share (the “Series C Preferred Stock”) and a seven year Warrant to acquire 28,571 shares of the Company’s common stock, par value, $0.001 per share, at an exercise price of $3.50 per share.</p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;"> </p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;">On April 4, 2018, the Company closed on its first tranche of 20 Series C Preferred units for gross proceeds of $2,000,000 with a trust of which a member of its Board of Directors is a trustee.</p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;"> </p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;">On May 30, 2018, the Company closed on its second tranche of 1 Series C Preferred unit for gross proceeds of $100,000 with a member of its Board of Directors.</p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;"> </p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;">On July 13, 2018, the Company closed on its third tranche of 4 Series C Preferred stock units for gross proceeds of $400,000 with a trust of which a member of its Board of Directors is a trustee.</p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;"> </p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;">On August 27, 2018, the Company closed on its fourth tranche of 3 Series C Preferred unit for gross proceeds of $300,000 with a member of its Board of Directors and a related party.</p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align:
justify; color:
#000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;"> </p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;">The Series C Preferred Stock ranks senior to the shares of the Company’s common stock, and any other class or series of stock issued by us with respect to dividend rights, redemption rights and rights on the distribution of assets on any voluntary or involuntary liquidation, dissolution or winding up of its affairs. Holders of Series C Preferred Stock are entitled to a cumulative dividend at the rate of 12.0% per annum, as set forth in the Certificate of Designation of Series C Convertible Preferred Stock. The Series C Preferred Stock is convertible at the option of the holders at any time into such number of shares of common stock as shall be equal to the $3.50 plus any accrued and unpaid dividends on such share of Series C Preferred Stock (the “Accreted Value”) divided by the conversion price, which initially is $3.50 per share, subject to certain customary anti-dilution adjustments. In addition, the Series C Preferred Stock automatically converts into shares of the Company’s common stock based upon the then effective conversion price upon the (i) closing of a sale of shares of common stock to the public in a Qualifying Public Offering (as defined below) or a reverse merger into a publicly reporting company that has its common stock listed or quoted and traded on a Trading Market (as such term is defined in the Certificate of Designation) or (ii) the date and time, or the occurrence of an event, specified by vote or written consent of the holders of at least seventy-five percent (75%) of the outstanding shares of Series C Preferred Stock (the “Requisite Holders”) (the time of such closing or the date and time specified of the event specified in such vote or written consent is referred to herein as the “Mandatory Conversion Date”).  A “Qualifying Public Offering” is defined as the first firm commitment underwritten public offering by the Company on or following the initial issuance date of the Series C Preferred in which shares of common stock are sold for its account solely for cash to the public resulting in proceeds to it and/or its subsidiary, Icagen-T, Inc. of no less than $8,000,000 (after deduction only of underwriter discounts and commissions) and where the shares of common stock registered under the Securities Act of 1933, as amended, and sold in such public offering are simultaneously listed and commence trading on a Trading Market (as such term is defined in the Certificate of Designation)</p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;"> </p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;">In the event of any liquidation, dissolution or winding-up of the Company, holders of the Series C Preferred Stock shall be entitled to a preference on liquidation equal to $5.25 per share of Series C Preferred Stock plus all accrued and unpaid dividends.</p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px; text-align: justify; color: #000000; text-transform: none; text-indent: 0.5in; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;"> </p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;">Each holder of Series C Preferred Stock shall have the right to cast the number of votes equal to three times the number of shares into which the Series C Preferred Stock is convertible and the Series C holders as a group, shall have the right to elect one director on the Company’s Board of Directors. The Company cannot take the following actions without the approval of the Requisite Holders and the consent of its Board of Directors, including the Series C Preferred Stock director: (i) liquidate, dissolve or wind up its business, (ii) amend its Certificate of Incorporation or Bylaws, (iii) create any new class of stock unless it ranks junior to the Series C Preferred Stock with respect to dividends and liquidation, (iv) amend or alter any class of stock pari passu with the Series C Preferred Stock to make it senior with respect to dividends and liquidation, (v) purchase or redeem any other shares of its stock, or (vi) increase the size of its Board of Directors.</p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;"> </p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;">Upon the occurrence of a Cash Liquidity Event, the holders of the Series C Preferred Stock can require the Company to redeem their shares for Series C Preferred Stock for a price per share equal to $5.25 subject to adjustments. In addition, the Company has the right to redeem the shares at any time for a price per share equal to $5.25 subject to adjustments. A “Cash Liquidity Event” is defined as the closing of any sale, lease or licensing transaction relating to a single asset or multiple assets other than in the ordinary course of the Company’s business, including, but not limited to a sale of a building, sale of biological assets or other upfront payments, resulting in aggregate gross proceeds received by us at
closing or closings in
a
transaction or transactions during any twelve (12) month period in excess of $40,000,000.</p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;"> </p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;">During the three and nine months ended September 30, 2018, the Company has accrued dividends of $80,548 and $140,088, respectively on Series C Preferred Stock.</p></div>
<div><table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;" cellspacing="0" cellpadding="0"><tr style="vertical-align: top;"><td style="width: 48px; font-size: 10pt;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>18.</b></font></td><td style="font-size: 10pt;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>COMMON STOCK</b></font></td></tr></table><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px; color: #000000; text-transform: none; text-indent: 0.5in; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"> </p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;">Common stock consists of 50,000,000 authorized shares of $0.001 each, 6,720,107 shares issued and 6,393,107 shares outstanding as of September 30, 2018 and December 31, 2017.</p></div>
<div><table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;" cellspacing="0" cellpadding="0"><tr style="vertical-align: top;"><td style="width: 48px; font-size: 10pt;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>19.</b></font></td><td style="font-size: 10pt;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>WARRANTS</b></font></td></tr></table><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;"> </p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;">As part of the Series C Preferred Units, the Company issued Warrants to the Purchaser at an initial exercise price of $3.50 per share (subject to applicable adjustments) (the “<b>Exercise Price</b>”), each unit consisting of 28,571 shares of Series C Preferred Stock and warrants exercisable over 28,571 shares of common stock. The Warrant expires seven years after the issuance date.</p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px; text-align: justify; color: #000000; text-transform: none; text-indent: 0.5in; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;"> </p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;">In addition, subject to limited exceptions, a holder of the Warrant will not have the right to exercise any portion of the Warrant if such holder, together with its affiliates, would beneficially own in excess of 9.99% of the shares of common stock outstanding immediately after giving effect to such exercise. A holder of the Warrant may adjust this limitation upon not less than 61 days’ prior notice to the Company, provided that such limitation in no event shall exceed 9.99%.</p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px; text-align: justify; color: #000000; text-transform: none; text-indent: 0.5in; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;"> </p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;">The Warrants also contain certain anti-dilution provisions that apply in connection with any stock split, stock dividend, stock combination, recapitalization and issuances of securities at prices below the conversion price or similar transactions.</p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px; text-align: justify; color: #000000; text-transform: none; text-indent: 0.5in; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;"> </p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;">If, at the time a holder exercises its Warrant, there is no effective registration statement available for an issuance of the shares underlying the Warrant to the holder, then in lieu of making the cash payment otherwise contemplated to be made to the Company upon such exercise in payment of the aggregate exercise price, the holder may elect instead to receive upon such exercise (either in whole or in part) the net number of shares of common stock determined according to a formula set forth in the Warrant. If the Company fails to timely deliver the shares underlying the Warrant, it will be subject to certain buy-in provisions.</p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px; text-align: justify; color: #000000; text-transform: none; text-indent: 0.5in; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;"> </p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;">The Warrant also provides that the Company will not enter into or be party to a Fundamental Transaction unless (i) the Successor Entity (as defined in the Warrant) assumes in writing all of the obligations of the Parent under the Warrant and the other Transaction Documents (as defined in the Securities Purchase Agreement) pursuant to written agreements in form and substance satisfactory to the Purchaser, including agreements to deliver to the Purchaser in exchange for the Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to the Warrant; (ii) the Company or the Successor Entity (as the case may be) agrees at the election of the Company or the Successor Entity (as the case may be) to purchase the Warrant from the Purchaser by paying to the Purchaser cash in an amount equal to the Black Scholes Value (as defined in the Warrant); or (iii) the Purchaser, at its election, requires the Company or the Successor Entity (as the case may be) to purchase the Warrant from the Purchaser by paying to the Purchaser cash in an amount equal to the Black Scholes Value.</p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1;
font-size-adjust:
none; font-stretch: normal; -webkit-text-stroke-width: 0px;"> </p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;">Between April 2018 and August 2018, the Company closed on four tranches of 28 Series C Preferred units for gross proceeds of $2,800,000, resulting in warrants exercisable over 799,989 shares of common stock at an initial exercise price of $3.50 per share.</p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;"> </p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;">In terms of the Company’s bridge note offering on August 13, 2018, the Company closed the first tranche of its note and warrant offering of an aggregate of fifty (50) units, at a purchase price of $10,000 per unit, each unit including a five year warrant to purchase 1,500 shares of common stock of the Company at an exercise price of $3.50 per share, resulting in warrants exercisable over 75,000 shares of common stock being issued. The Warrants also contains certain anti-dilution provisions that apply in connection with any stock split, stock dividend, stock combination, recapitalization or similar transaction.</p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;"> </p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;">In connection with the entry of the Credit Agreements, on August 31, 2018, the Company issued a warrant to purchase 723,550 shares of the Company’s common stock. The warrant is exercisable for a period of seven years at an exercise price of $3.50 per share, subject to certain adjustments as specified in the Warrant. Upon any exercise of the Warrant, the Exercise Price is payable in cash or, at the warrant holders option, by withholding a number of shares of Common Stock then issuable upon exercise of the Warrant with an aggregate fair market value equal to the aggregate Exercise Price. The Warrant also contains customary anti-dilution adjustments and price protection.</p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;"> </p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;">A summary of the Company’s warrant activity during the period January 1, 2017 to September 30, 2018 is as follows:</p><p style="font: 10pt/normal 'times new roman', times, serif; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; margin-top: 0px; margin-bottom: 0px; margin-left: 0.5in; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;"> </p><table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; border-collapse: collapse; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;" cellspacing="0" cellpadding="0"><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">No. of shares</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">Exercise<br />price <br />per share</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">Weighted<br />average<br />exercise <br />price</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td></tr><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="width: 0.5in; background-color: white;"> </td><td style="font-weight: bold;">Outstanding January 1, 2017</td><td style="width: 15px;"> </td><td style="width: 15px; text-align: left;"> </td><td style="width: 141px; text-align: right;">2,147,641</td><td style="width: 15px; text-align: left;"> </td><td style="width: 15px;"> </td><td style="width: 15px; text-align: left;">$</td><td style="width: 141px; text-align: right; white-space: nowrap;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">3.50 to $11.40</font></td><td style="width: 15px; text-align: left;"> </td><td style="width: 15px;"> </td><td style="width: 15px; text-align: left;">$</td><td style="width: 141px; text-align: right;">3.57</td><td style="width: 15px; text-align:
left;"> </td></tr><tr style="vertical-align: bottom; background-color:
white;"><td
style="background-color: white;"> </td><td>Granted</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">1,107,143</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right; white-space: nowrap;">3.50</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">3.50</td><td style="text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td>Forfeited/cancelled</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">(75,000</td><td style="text-align: left;">)</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right; white-space: nowrap;">4.20</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">4.20</td><td style="text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="padding-bottom: 1.5pt;">Exercised</td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">-</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid; white-space: nowrap;">-</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">-</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="font-weight: bold;">Outstanding December 31, 2017</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">3,179,784</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;">$</td><td style="text-align: right; white-space: nowrap;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">3.50 to $4.20</font></td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">3.50</td><td style="text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td>Granted</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">1,598,539</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right; white-space: nowrap;">3.50</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">3.50</td><td style="text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td>Forfeited/cancelled</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">(75,000</td><td style="text-align: left;">)</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right; white-space: nowrap;">4.20</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">4.20</td><td style="text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="padding-bottom: 1.5pt;">Exercised</td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">-</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid; white-space: nowrap;">-</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">-</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="padding-bottom: 1.5pt; font-weight: bold;">Outstanding September 30, 2018</td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">4,703,323</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">$</td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid; white-space: nowrap;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">3.50 to $3.85</font></td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">$</td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">3.51</td><td style="text-align: left;
padding-bottom: 1.5pt;"> </td></tr></table><p style="font: 10pt/normal 'times new roman', times, serif; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing:
normal;
margin-top: 0px; margin-bottom: 0px; margin-left: 0.5in; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;"> </p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;">The following table summarizes warrants outstanding and exercisable as of September 30, 2018:</p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;"> </p><table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; border-collapse: collapse; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;" cellspacing="0" cellpadding="0"><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td style="text-align: left;" colspan="2"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="10">Warrants outstanding</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="6">Warrants exercisable</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td></tr><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td style="text-align: left; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">Exercise price</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">No. of shares</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">Weighted<br />average<br />remaining years</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">Weighted<br />average<br />exercise price</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">No. of shares</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">Weighted<br />average<br />exercise price</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td></tr><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td style="text-align: left;" colspan="2"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="width: 0.5in; background-color: white;"> </td><td style="width: 15px; text-align: left;">$</td><td style="text-align: right;">3.50</td><td style="width: 15px; text-align: left;"> </td><td style="width: 15px;"> </td><td style="width: 15px; text-align: left;"> </td><td style="width: 188px; text-align: right;">4,559,922</td><td style="width: 15px; text-align: left;"> </td><td style="width: 15px;"> </td><td style="width: 15px; text-align: left;"> </td><td style="width: 188px; text-align: right;">3.83</td><td style="width: 15px; text-align: left;"> </td><td style="width: 15px;"> </td><td style="width: 15px; text-align: left;"> </td><td style="width: 188px; text-align: right;"> </td><td style="width: 15px; text-align: left;"> </td><td style="width: 15px;"> </td><td style="width: 15px; text-align: left;"> </td><td style="width: 188px; text-align: right;">4,559,922</td><td style="width: 15px; text-align: left;"> </td><td style="width: 15px;"> </td><td style="width: 15px; text-align: left;"> </td><td style="width: 172px; text-align: right;"> </td><td style="width: 15px; text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="text-align: left; padding-bottom: 1.5pt;">$</td><td style="text-align: right; padding-bottom: 1.5pt;">3.85</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">143,401</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">1.75</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td
style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td
style="text-align:
left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">143,401</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: left; padding-bottom: 1.5pt;"> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="text-align: right; padding-bottom: 1.5pt;"> </td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">4,703,323</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">3.77</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">$</td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">3.51</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">4,703,323</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">$</td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">3.51</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td></tr></table></div>
<div><table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;" cellspacing="0" cellpadding="0"><tr style="vertical-align: top;"><td style="width: 48px; font-size: 10pt;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>20.</b></font></td><td style="font-size: 10pt;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>STOCK OPTIONS</b></font></td></tr></table><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;"> </p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;">A summary of all of the option activity during the period January 1, 2017 to September 30, 2018 is as follows:</p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;"> </p><table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; border-collapse: collapse; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;" cellspacing="0" cellpadding="0"><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">No. of shares</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">Exercise<br />price <br />per share</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">Weighted<br />average<br />exercise <br />price</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td></tr><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="width: 0.5in; background-color: white;"> </td><td style="font-weight: bold;">Outstanding January 1, 2017</td><td style="width: 15px;"> </td><td style="width: 15px; text-align: left;"> </td><td style="width: 141px; text-align: right;">1,333,291</td><td style="width: 15px; text-align: left;"> </td><td style="width: 15px;"> </td><td style="width: 15px; text-align: left;">$</td><td style="width: 141px; text-align: right; white-space: nowrap;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">0.40 to $11.42</font></td><td style="width: 15px; text-align: left;"> </td><td style="width: 15px;"> </td><td style="width: 15px; text-align: left;">$</td><td style="width: 141px; text-align: right;">3.59</td><td style="width: 15px; text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td>Granted</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">120,000</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right; white-space: nowrap;">3.50</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">3.50</td><td style="text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td>Forfeited/cancelled</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">(50,346</td><td style="text-align: left;">)</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right; white-space: nowrap;">3.50</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">3.50</td><td style="text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="padding-bottom: 1.5pt;">Exercised</td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">-</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid; white-space: nowrap;">-</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">-</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="font-weight: bold;">Outstanding December 31, 2017</td><td> </td><td style="text-align: left;"> </td><td style="text-align:
right;">1,402,945</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;">$</td><td
style="text-align: right; white-space: nowrap;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">0.40 to $11.42</font></td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">3.59</td><td style="text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td>Granted</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">-</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right; white-space: nowrap;">-</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">-</td><td style="text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td>Forfeited/cancelled</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">(80,264</td><td style="text-align: left;">)</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right; white-space: nowrap;">3.50</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">3.50</td><td style="text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="padding-bottom: 1.5pt;">Exercised</td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">-</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid; white-space: nowrap;">-</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">-</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="padding-bottom: 1.5pt; font-weight: bold;">Outstanding September 30, 2018</td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">1,322,681</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">$</td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid; white-space: nowrap;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">0.40 to $11.42</font></td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">$</td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">3.59</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td></tr></table><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;"> </p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;">The following tables summarize information about stock options outstanding as of September 30, 2018:</p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;"> </p><table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; border-collapse: collapse; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;" cellspacing="0" cellpadding="0"><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td colspan="2"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="10">Options outstanding</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="6">Options exercisable</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="background-color: white;"> </td></tr><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td style="font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">Exercise price</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width:
1.5pt; border-bottom-style: solid;" colspan="2">No. of shares</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align:
center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">Weighted<br />average<br />remaining <br />years</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">Weighted<br />average<br />exercise <br />price</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">No. of shares</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">Weighted<br />average<br />exercise <br />price</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="background-color: white;"> </td></tr><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td colspan="2"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td><td style="background-color: white;"> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="width: 0.5in; background-color: white;"> </td><td style="width: 15px; text-align: left;">$</td><td style="text-align: right;">0.40</td><td style="width: 15px; text-align: left;"> </td><td style="width: 15px;"> </td><td style="width: 15px; text-align: left;"> </td><td style="width: 188px; text-align: right;">15,000</td><td style="width: 15px; text-align: left;"> </td><td style="width: 15px;"> </td><td style="width: 15px; text-align: left;"> </td><td style="width: 188px; text-align: right;">3.58</td><td style="width: 15px; text-align: left;"> </td><td style="width: 15px;"> </td><td style="width: 15px; text-align: left;"> </td><td style="width: 188px; text-align: right;">          </td><td style="width: 15px; text-align: left;"> </td><td style="width: 15px;"> </td><td style="width: 15px; text-align: left;"> </td><td style="width: 188px; text-align: right;">15,000</td><td style="width: 15px; text-align: left;"> </td><td style="width: 15px;"> </td><td style="width: 15px; text-align: left;"> </td><td style="width: 172px; text-align: right;"> </td><td style="width: 15px; text-align: left;"> </td><td style="width: 141px; background-color: white;"> </td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="text-align: left;">$</td><td style="text-align: right;">3.00</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">312,500</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">4.45</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;"> </td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">312,500</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;"> </td><td style="text-align: left;"> </td><td style="background-color: white;"> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="text-align: left;">$</td><td style="text-align: right;">3.50</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">841,890</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">7.12</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;"> </td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">576,704</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;"> </td><td style="text-align: left;"> </td><td style="background-color: white;"> </td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="text-align: left;">$</td><td style="text-align: right;">4.00</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">8,791</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">1.28</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;"> </td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">8,791</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;"> </td><td style="text-align: left;"> </td><td style="background-color: white;"> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="text-align: left;">$</td><td style="text-align: right;">5.00</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">128,500</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">2.24</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td
style="text-align: right;"> </td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">128,500</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;"> </td><td style="text-align: left;"> </td><td style="background-color:
white;"> </td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="padding-bottom: 1.5pt; background-color: white;"> </td><td style="text-align: left; padding-bottom: 1.5pt;">$</td><td style="text-align: right; padding-bottom: 1.5pt;">11.42</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">16,000</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">2.92</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">16,000</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt; background-color: white;"> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="text-align: left;"> </td><td style="text-align: right;"> </td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;"> </td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;"> </td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;"> </td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;"> </td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;"> </td><td style="text-align: left;"> </td><td style="background-color: white;"> </td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="text-align: right; padding-bottom: 1.5pt;"> </td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">1,322,681</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">5.89</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">$</td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">3.59</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">1,057,495</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">$</td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">3.61</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="background-color: white;"> </td></tr></table><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;"> </p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;">No options were granted during the nine months ended September 30, 2018. As of September 30, 2018, there were unvested options to purchase 265,186 shares of common stock. Total expected unrecognized compensation cost related to such unvested options is $511,716 which is expected to be recognized over a period of 33 months.</p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px;
letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;"> </p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;">Stock
option based compensation expense totaled $151,713 and $165,282 for the three months ended September 30, 2018 and 2017, respectively, and $457,333 and $366,900 for the nine months ended September 30, 2018 and 2017 respectively.</p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;"> </p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;">Stock options outstanding as of September 30, 2018 as disclosed in the above table, have an intrinsic value of $202,750.</p></div>
<div><table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;" cellspacing="0" cellpadding="0"><tr style="vertical-align: top;"><td style="width: 48px; font-size: 10pt;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>21.</b></font></td><td style="font-size: 10pt;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>GAIN ON EXTINGUISHMENT OF DEBT</b></font></td></tr></table><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;"> </p><table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; border-collapse: collapse; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;" cellspacing="0" cellpadding="0"><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td style="text-indent: -0.125in; padding-left: 0.125in;"> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">Three months<br />ended<br />September 30, <br />2018</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">Three months<br />ended <br />September 30,<br />2017</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">Nine months<br />ended<br />September 30, <br />2018</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">Nine months<br />ended <br />September 30,<br />2017</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td></tr><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td style="text-indent: -0.125in; padding-left: 0.125in;"> </td><td> </td><td colspan="2"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="width: 0.5in; background-color: white;"> </td><td style="text-align: left; text-indent: -0.125in; padding-left: 0.125in;">Unamortized debt discount on convertible debt</td><td style="width: 15px;"> </td><td style="width: 15px; text-align: left;">$</td><td style="width: 141px; text-align: right;">(3,188,043</td><td style="width: 15px; text-align: left;">)</td><td style="width: 15px;"> </td><td style="width: 15px; text-align: left;">$</td><td style="width: 141px; text-align: right;">              -</td><td style="width: 15px; text-align: left;"> </td><td style="width: 15px;"> </td><td style="width: 15px; text-align: left;">$</td><td style="width: 141px; text-align: right;">(3,188,043</td><td style="width: 15px; text-align: left;">)</td><td style="width: 15px;"> </td><td style="width: 15px; text-align: left;">$</td><td style="width: 141px; text-align: right;">              -</td><td style="width: 15px; text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="text-align: left; text-indent: -0.125in; padding-left: 0.125in;">Expenses directly related to debt extinguishment</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">(207,000</td><td style="text-align: left;">)</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">-</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">(207,000</td><td style="text-align: left;">)</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">-</td><td style="text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="padding-bottom: 1.5pt; background-color: white;"> </td><td style="text-align: left; text-indent: -0.125in; padding-bottom: 1.5pt; padding-left: 0.125in;">Derivative liability related to convertible debt on extinguishment date</td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">3,890,826</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">-</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">3,890,826</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">-</td><td style="text-align: left; padding-bottom:
1.5pt;"> </td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color:
white;"> </td><td style="text-indent: -0.125in; padding-bottom: 1.5pt; padding-left: 0.125in;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">$</td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">495,783</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">$</td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">-</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">$</td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">495,783</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">$</td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">-</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td></tr></table><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;"><b> </b></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;">The gain on extinguishment included the unamortized debt discount, the fair value of derivative liabilities related to the convertible debt and expenses directly related to the extinguishment of the convertible note.</p></div>
<div><table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;" cellspacing="0" cellpadding="0"><tr style="vertical-align: top;"><td style="width: 48px; font-size: 10pt;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>22.</b></font></td><td style="font-size: 10pt;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>OTHER EXPENSE</b></font></td></tr></table><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-stretch: normal; -webkit-text-stroke-width: 0px;"><b> </b></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-stretch: normal; -webkit-text-stroke-width: 0px;">Other expense is made up as follows:</p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-stretch: normal; -webkit-text-stroke-width: 0px;"> </p><table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; border-collapse: collapse; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;" cellspacing="0" cellpadding="0"><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">Three months <br />ended <br />September 30,<br />2018</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">Three months<br />ended<br />September 30,<br />2017</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">Nine months<br />ended<br />September 30,<br />2018</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">Nine months<br />ended<br />September 30,<br />2017</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td></tr><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="width: 0.5in; background-color: white;"> </td><td style="text-align: left; padding-bottom: 1.5pt;">Severance costs</td><td style="width: 15px; padding-bottom: 1.5pt;"> </td><td style="width: 15px; text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">$</td><td style="width: 141px; text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">(572,524</td><td style="width: 15px; text-align: left; padding-bottom: 1.5pt;">)</td><td style="width: 15px; padding-bottom: 1.5pt;"> </td><td style="width: 15px; text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="width: 141px; text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">              -</td><td style="width: 15px; text-align: left; padding-bottom: 1.5pt;"> </td><td style="width: 15px; padding-bottom: 1.5pt;"> </td><td style="width: 15px; text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">$</td><td style="width: 141px; text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">(572,524</td><td style="width: 15px; text-align: left; padding-bottom: 1.5pt;">)</td><td style="width: 15px; padding-bottom: 1.5pt;"> </td><td style="width: 15px; text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="width: 141px; text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">              -</td><td style="width: 15px; text-align: left; padding-bottom: 1.5pt;"> </td></tr></table><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-stretch: normal; -webkit-text-stroke-width: 0px;"> </p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-stretch: normal; -webkit-text-stroke-width: 0px;">The Company has restructured its management team and streamlined operations at its Tucson site, thereby reducing head count by a total of 9 people. The Company provided severance packages to these employees based on written agreements entered into. The severance costs will be incurred over the next four months.</p></div>
<div><table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;" cellspacing="0" cellpadding="0"><tr style="vertical-align: top;"><td style="width: 48px; font-size: 10pt;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>23.</b></font></td><td style="font-size: 10pt;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>INTEREST EXPENSE</b></font></td></tr></table><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;"><b> </b></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;">Interest expense consists of the following:</p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;"> </p><table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; border-collapse: collapse; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;" cellspacing="0" cellpadding="0"><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">Three months <br />ended <br />September 30, <br />2018</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">Three months<br />ended<br />September 30, <br />2017</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">Nine months<br />ended<br />September 30, <br />2018</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">Nine months<br />ended<br />September 30, <br />2017</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td></tr><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="width: 0.5in; background-color: white;"> </td><td style="text-align: left;">Imputed interest</td><td style="width: 15px;"> </td><td style="width: 15px; text-align: left;">$</td><td style="width: 141px; text-align: right;">(74,769</td><td style="width: 15px; text-align: left;">)</td><td style="width: 15px;"> </td><td style="width: 15px; text-align: left;">$</td><td style="width: 141px; text-align: right;">(139,809</td><td style="width: 15px; text-align: left;">)</td><td style="width: 15px;"> </td><td style="width: 15px; text-align: left;">$</td><td style="width: 141px; text-align: right;">(224,307</td><td style="width: 15px; text-align: left;">)</td><td style="width: 15px;"> </td><td style="width: 15px; text-align: left;">$</td><td style="width: 141px; text-align: right;">(432,326</td><td style="width: 15px; text-align: left;">)</td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="text-align: left;">Amortization of debt discount</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">(323,398</td><td style="text-align: left;">)</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">(251,057</td><td style="text-align: left;">)</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">(1,017,408</td><td style="text-align: left;">)</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">(786,339</td><td style="text-align: left;">)</td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="text-align: left;">Interest expense</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">(417,071</td><td style="text-align: left;">)</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">(339,811</td><td style="text-align: left;">)</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">(1,123,916</td><td style="text-align: left;">)</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">(515,078</td><td style="text-align: left;">)</td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="padding-bottom: 1.5pt;">Other</td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">-</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right;
border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">-</td><td style="text-align: left; padding-bottom:
1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">(539</td><td style="text-align: left; padding-bottom: 1.5pt;">)</td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">(1,813</td><td style="text-align: left; padding-bottom: 1.5pt;">)</td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">$</td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">(815,238</td><td style="text-align: left; padding-bottom: 1.5pt;">)</td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">$</td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">(730,677</td><td style="text-align: left; padding-bottom: 1.5pt;">)</td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">$</td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">(2,366,170</td><td style="text-align: left; padding-bottom: 1.5pt;">)</td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">$</td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">(1,735,556</td><td style="text-align: left; padding-bottom: 1.5pt;">)</td></tr></table></div>
<div><table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;" cellspacing="0" cellpadding="0"><tr style="vertical-align: top;"><td style="width: 48px; font-size: 10pt;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>24.</b></font></td><td style="font-size: 10pt;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>NET LOSS PER COMMON SHARE</b></font></td></tr></table><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;"><b> </b></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;">For the three and nine months ended September 30, 2018 and 2017, respectively, the following convertible securities, options and warrants were excluded from the computation of diluted net loss per shares as the result of the computation was anti-dilutive:</p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;"><b> </b></p><table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; border-collapse: collapse; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;" cellspacing="0" cellpadding="0"><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">Three months <br />and <br />nine months <br />ended<br />September 30,<br />2018</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">Three months <br />and <br />nine months<br />ended<br />September 30,<br />2017</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td></tr><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="width: 0.5in; background-color: white;"> </td><td style="text-align: left;">Stock options</td><td style="width: 15px;"> </td><td style="width: 15px; text-align: left;"> </td><td style="width: 141px; text-align: right;">1,322,681</td><td style="width: 15px; text-align: left;"> </td><td style="width: 15px;"> </td><td style="width: 15px; text-align: left;"> </td><td style="width: 141px; text-align: right;">1,453,291</td><td style="width: 15px; text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td>Warrants</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">4,703,323</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">3,254,784</td><td style="text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="text-align: left; padding-bottom: 1.5pt;">Convertible securities</td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">799,988</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">-</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">6,825,992</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">4,708,075</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td></tr></table></div>
<div><table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;" cellspacing="0" cellpadding="0"><tr style="vertical-align: top;"><td style="width: 48px; font-size: 10pt;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>25.</b></font></td><td style="font-size: 10pt;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>RELATED PARTY TRANSACTIONS</b></font></td></tr></table><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"> </p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><b><i>Timothy Tyson</i></b></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"> </p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;">On April 4, 2018 and July 13, 2018, the Company entered into a Securities Purchase Agreement whereby a trust of which Mr. Tyson is a trustee, acquired a total of twenty four (24) Series C Preferred Stock units for $100,000 each, each unit consisting of 28,571 Series C Preferred shares and a seven year warrant exercisable over 28,571 shares of common stock, at an exercise price of $3.50 per share. Mr. Tyson acquired a total of 685,704 Series C Preferred shares and warrants exercisable over 685,704 shares of common stock.</p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"> </p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;">On August 13, 2018, the Company entered into a Securities Purchase Agreement whereby Mr. Tyson acquired thirty (30) bridge note units of $10,000 each for gross proceeds of $300,000, each unit consisting of a 10% Subordinated Promissory Note in the principal amount of $10,000 due on the earlier of: (x) the date that is twelve (12) months after its issue date or (y) the Company’s receipt of the proceeds of funding from its next collaboration/partnership (the “Note”) and (ii) a five year warrant to purchase 45,000 shares of common stock of the Company at an exercise price of $3.50 per share.</p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"> </p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><b><i>Clive Kabatznik</i></b></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"> </p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;">On May 30, 2018, the Company entered into a Securities Purchase Agreement whereby Mr. Kabatznik acquired one (1) Series C Preferred Stock unit for $100,000 each, each unit consisting of 28,571 Series C Preferred shares and a seven year warrant exercisable over 28,571 shares of common stock, at an exercise price of $3.50 per share. Mr. Kabatznik acquired a total of 28,571 Series C Preferred shares and warrants exercisable over 28,571 shares of common stock.</p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"> </p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal;
-webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;">On August 13, 2018, the Company entered into a Securities Purchase Agreement whereby Mr. Kabatznik acquired fifteen (15) bridge note units of $10,000 each for gross proceeds of $150,000, each unit consisting of a 10% Subordinated Promissory Note in the principal amount of $10,000 due on the earlier of: (x) the date that is twelve (12) months after its issue date or (y) the Company’s receipt of the proceeds of funding from its next collaboration/partnership (the “Note”) and (ii) a five year warrant to purchase 22,500 shares of common stock of the Company at an exercise price of $3.50 per share.</p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"> </p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><b><i>Michael Taglich</i></b></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><b><i> </i></b></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;">On August 13, 2018, the Company entered into a Securities Purchase Agreement whereby Mr. Taglich acquired two and a half (2.5) bridge note units of $10,000 each for gross proceeds of $25,000, each unit consisting of a 10% Subordinated Promissory Note in the principal amount of $10,000 due on the earlier of: (x) the date that is twelve (12) months after its issue date or (y) the Company’s receipt of the proceeds of funding from its next collaboration/partnership (the “Note”) and (ii) a five year warrant to purchase 3,750 shares of common stock of the Company at an exercise price of $3.50 per share.</p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"> </p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;">On August 27, 2018, the Company entered into a Securities Purchase Agreement whereby Mr. Taglich acquired one and a half (1.5) Series C Preferred Stock unit for $100,000 each, for gross proceeds of $150,000, each unit consisting of 28,571 Series C Preferred shares and a seven year warrant exercisable over 28,571 shares of common stock, at an exercise price of $3.50 per share. Mr. Taglich acquired a total of 42,857 Series C Preferred shares and warrants exercisable over 42,857 shares of common stock.</p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"> </p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><b><i>Robert Taglich</i></b></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"> </p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;">On August 13, 2018, the Company entered into a Securities Purchase Agreement whereby Mr. Taglich acquired two and a half (2.5) bridge note units of $10,000 each for gross proceeds of $25,000, each unit consisting of a 10% Subordinated Promissory Note in the principal amount of $10,000 due on the earlier of: (x) the date that is twelve (12) months after its issue date or (y) the Company’s receipt of the proceeds of funding from its next collaboration/partnership (the “Note”) and (ii) a five year warrant to purchase 3,750 shares of common stock of the Company at an exercise price of $3.50 per share.</p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"> </p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000;
text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;">On August 27, 2018, the Company entered into a Securities Purchase Agreement whereby Mr. Taglich acquired one and a half (1.5) Series C Preferred Stock unit for $100,000 each, for gross proceeds of $150,000, each unit consisting of 28,571 Series C Preferred shares and a seven year warrant exercisable over 28,571 shares of common stock, at an exercise price of $3.50 per share. Mr. Taglich acquired a total of 42,857 Series C Preferred shares and warrants exercisable over 42,857 shares of common stock.</p></div>
<div>
<table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;" cellspacing="0" cellpadding="0">
<tr style="vertical-align: top;">
<td style="width: 48px; font-size: 10pt;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>26.</b></font></td>
<td style="font-size: 10pt;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>OPERATING LEASES</b></font></td>
</tr>
</table>
<p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"> </p>
<p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;">The Company entered into an asset purchase agreement with Icagen, Inc., a subsidiary of Pfizer, Inc., whereby certain assets were acquired from Icagen, Inc., the agreement included the sub-letting of premises located at Research Triangle Park, Durham, North Carolina. The lease terminates on April 30, 2019. The rental expense for the three months ended September 30, 2018 and 2017 was $55,329 and $48,341, respectively and for the nine months ended September 30, 2018 was $154,244 and $150,479, respectively.</p>
<p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px; color: #000000; text-transform: none; text-indent: 0.5in; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"> </p>
<p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;">Future annual minimum payments required under operating lease obligations as of September 30, 2018, are as follows:</p>
<p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"> </p>
<table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; border-collapse: collapse; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;" cellspacing="0" cellpadding="0">
<tr style="vertical-align: bottom;">
<td style="background-color: white;"> </td>
<td style="text-align: left;"> </td>
<td style="padding-bottom: 1.5pt; font-weight: bold;"> </td>
<td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">Amount</td>
<td style="padding-bottom: 1.5pt; font-weight: bold;"> </td>
</tr>
<tr style="vertical-align: bottom;">
<td style="background-color: white;"> </td>
<td style="text-align: left;"> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr style="vertical-align: bottom; background-color: #cceeff;">
<td style="width: 0.5in; background-color: white;"> </td>
<td style="text-align: left;">2018</td>
<td style="width: 15px;"> </td>
<td style="width: 15px; text-align: left;">$</td>
<td style="width: 141px; text-align: right;">48,326</td>
<td style="width: 15px; text-align: left;"> </td>
</tr>
<tr style="vertical-align: bottom; background-color: white;">
<td style="padding-bottom: 1.5pt; background-color: white;"> </td>
<td style="text-align: left; padding-bottom: 1.5pt;">2019</td>
<td style="padding-bottom: 1.5pt;"> </td>
<td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td>
<td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">66,949</td>
<td style="text-align: left; padding-bottom: 1.5pt;"> </td>
</tr>
<tr style="vertical-align: bottom; background-color: #cceeff;">
<td style="background-color: white;"> </td>
<td style="text-align: left;"> </td>
<td> </td>
<td style="text-align: left;"> </td>
<td style="text-align: right;"> </td>
<td style="text-align: left;"> </td>
</tr>
<tr style="vertical-align: bottom; background-color: white;">
<td style="background-color: white;"> </td>
<td style="text-align: left; padding-bottom: 1.5pt; font-weight: bold;">Total</td>
<td style="padding-bottom: 1.5pt; font-weight: bold;"> </td>
<td style="text-align: left; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">$</td>
<td style="text-align: right; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">115,275</td>
<td style="text-align: left; padding-bottom: 1.5pt; font-weight: bold;"> </td>
</tr>
</table>
</div>
<div><table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;" cellspacing="0" cellpadding="0"><tr style="vertical-align: top;"><td style="width: 48px; font-size: 10pt;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>27.</b></font></td><td style="font-size: 10pt;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>COMMITMENTS AND CONTINGENCIES</b></font></td></tr></table><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;"><b> </b></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;">As a result of the agreements that the Company entered into with Pfizer and Sanofi, the Company is obligated to; (i) make additional payments in terms of the Asset Purchase and Collaboration Agreement that it entered into on June 26, 2015 with Pfizer including beginning in 2017, a quarterly earn out payment (the “Earn Out Payment”) of 10% of revenue earned during the quarter, with a minimum payment of $250,000 per quarter, up to a maximum aggregate payment of $10,000,000, such minimum being reduced to $50,000 for the quarters ending March 2017 to December 2018 and the difference between $250,000 or the quarterly amount paid and the actual calculation of deferred purchase consideration at 10% of gross revenue per quarter is being deferred and paid as one lump sum with the payment being made the quarter ended March 31, 2019, bearing interest at 12.5% per annum, which interest is payable quarterly; (ii) make minimum lease payments in terms of a sub-lease agreement entered into with Pfizer for the period July l, 2015 to April 30, 2019 with annual escalations of 3.5%, estimated to be $115,275.</p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;"> </p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;">On June 19, 2017, the Company entered into a four-year employment agreement with Douglas Krafte, Ph.D., pursuant to which Dr. Krafte is entitled to an annual base salary of $285,000 and will be eligible for annual discretionary performance bonus payments of up to 35% of his base salary payable in cash, which bonus, if any, will be awarded in the sole and absolute discretion of the Company’s board of directors and the compensation committee of the board of directors. Dr. Krafte continues to be engaged as the Company’s Chief Scientific Officer.</p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;"> </p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;">On August 31, 2018, the Company, and its wholly owned subsidiary, Icagen-T, entered into a Credit Agreement an institutional investor (the “Purchaser”), pursuant to which the purchaser advanced to the Company and Icagen-T, Inc., the aggregate principal sum of $15,250,000 pursuant to four year senior secured term loans, maturing on August 31, 2022, bearing interest at the rate of one month Libor plus 9.75%, with a minimum rate of 12% per annum (the “Term Loans”). The Term Loans amortize at commencing on the last day of each month after August 31, 2020, the Term Loans amortize in an amount equal to 1.0% of the aggregate principal amount of the Term Loans borrowed on the Closing Date.</p></div>
<div>
<table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;" cellspacing="0" cellpadding="0">
<tr style="vertical-align: top;">
<td style="width: 48px; font-size: 10pt;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>28.</b></font></td>
<td style="font-size: 10pt;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>SUBSEQUENT EVENTS</b></font></td>
</tr>
</table>
<p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><b> </b></p>
<p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"></p>
<p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;">On November 14, 2018, the Board of Directors of the Company approved an amendment to the Company’s employment agreement with Richard Cunningham, increasing Mr. Cunningham’s salary to Three Hundred Seventy Five Thousand Dollars ($375,000) per year. Mr. Cunningham serves as the Chief Executive Officer of the Company.</p>
<p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"> </p>
<p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;">On November 14, 2018, the Board approved an amendment to the Company’s employment agreement with Douglas Krafte, Ph.D., increasing Dr. Krafte’s salary to Two Hundred Ninety Five Thousand Dollars ($295,000) per year and increased Dr. Krafte’s target bonus to up to 50% of his base salary. Dr. Krafte serves as the Chief Scientific Officer of the Company.</p>
<p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"> </p>
<p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;">On November 14, 2018, the Board granted under the Company’s 2015 Stock Incentive Plan the following: (i) options to each of the Company’s five non-executive members of the Board to purchase 25,000 shares of common stock, par value $0.001 per share of the Company, of which 12,500 options vest immediately and 12,500 options vest on the one year anniversary of the date of grant,; (ii) an additional option to the Company’s Chairman of the Board to purchase 100,000 shares of Common Stock, which vests immediately; (iii) an option to the Company’s Chief Executive Officer to purchase 535,000 shares of Common Stock, which vests pro rata on a monthly basis over a three year period; (iv) an option to the Company’s Chief Scientific Officer to purchase 120,000 shares of Common Stock, which vests pro rata on a monthly basis over a three year period; and (v) an option to the Company’s Chief Financial Officer to purchase 100,000 shares of Common Stock, which vests immediately. All of the stock options granted have an exercise price of $3.50 per share and, subject to early expiration, expire ten years after their date of grant.</p>
<p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"> </p>
<p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;">The Company has evaluated subsequent events through the date the unaudited condensed consolidated financial statements were available to be issued and has concluded that no such events or transactions took place that would require disclosure herein, except as disclosed above.</p>
</div>
<div><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>Basis of Presentation</b></font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; color: #000000; text-transform: none; text-indent: 0.5pt; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b> </b></font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“US GAAP”).</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">In the opinion of management, all adjustments necessary to fairly present the results for the interim periods presented have been made. All adjustments made are of a normal and recurring nature and no non-recurring adjustments have been made in the presentation of these interim financial statements.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">All amounts referred to in the notes to the unaudited condensed consolidated financial statements are in United States Dollars ($) unless stated otherwise.</font></p></div>
<div><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>Consolidation</b></font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The unaudited condensed consolidated financial statements include the financial statements of the Company and its subsidiaries in which it has a majority voting interest. Investments in affiliates are accounted for under the cost method of accounting, where appropriate. All significant intercompany accounts and transactions have been eliminated in the condensed consolidated financial statements. The entities included in these condensed consolidated financial statements are as follows:</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">Icagen, Inc. - Parent Company</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">Icagen Corp - Wholly owned subsidiary</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">Icagen-T Inc. - Wholly owned subsidiary</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">Caldera Discovery, Inc. - Wholly owned subsidiary</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">XRPro Sciences, Inc. - Wholly owned subsidiary</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The preparation of these unaudited condensed consolidated financial statements in accordance with US GAAP requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. The Company continually evaluates its estimates, including those related to bad debts and recovery of long-lived assets. The Company bases its estimates on historical experience and on various other assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Any future changes to these estimates and assumptions could cause a material change to the Company’s reported amounts of revenues, expenses, assets and liabilities. Actual results may differ from these estimates under different assumptions
or
conditions. The Company believes the following critical accounting policies affect its more significant judgments and estimates used in the preparation of the financial statements. Significant estimates include the allowance for doubtful accounts, the useful life of plant and equipment and intangible assets, the valuation of certain assets and intangibles acquired from a subsidiary of Pfizer, Inc., Icagen, and assumptions used in assessing impairment of long-term assets, the assumptions used in determining percentage of completion on its long-term contracts, and the assumptions used to calculate fair value of warrants and options granted, in addition to assumptions used to calculate the value of the derivative liability.</font></p></div>
<p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>Concentrations of credit risk</b></font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; color: #000000; text-transform: none; text-indent: 0.5pt; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b> </b></font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The Company maintains cash with major financial institutions. The Federal Deposit Insurance Corporation (“FDIC”) provides insurance coverage for deposits of corporations, the current limit of coverage is $250,000. As a result of this coverage the Company has cash balances of $2,290,537 that are not covered by the FDIC as of September 30, 2018.</font></p>
<div><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>Concentration of major customers</b></font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; color: #000000; text-transform: none; text-indent: 0.5pt; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The Company derives its revenues from commercial pharmaceutical and biotechnology companies from Government research contracts and Government grants.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The Company derived 71.0% of its services revenue from four major customers during the nine months ended September 30, 2018. During the nine months ended September 30, 2017, the Company derived 77.5% of its revenue from three major customers. The Company continues to expand its customer base of major customers and partners.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif;"> </font></p><table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; border-collapse: collapse; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;" cellspacing="0" cellpadding="0"><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="6"><font style="font-family: 'times new roman', times, serif;">Three months ended</font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="6"><font style="font-family: 'times new roman', times, serif;">Nine months ended</font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2"><font style="font-family: 'times new roman', times, serif;">September 30, 2018</font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2"><font style="font-family: 'times new roman', times, serif;">September 30, 2017</font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2"><font style="font-family: 'times new roman', times, serif;">September 30, 2018</font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2"><font style="font-family: 'times new roman', times,
serif;">September 30,
2017</font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td colspan="2"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td colspan="2"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td colspan="2"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td colspan="2"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="width: 0.5in; background-color: white;"> </td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;">Services revenue</font></td><td style="width: 15px;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="width: 125px; text-align: right;"><font style="font-family: 'times new roman', times, serif;">3,007,928</font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="width: 15px;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="width: 125px; text-align: right;"><font style="font-family: 'times new roman', times, serif;">3,021,965</font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="width: 15px;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="width: 125px; text-align: right;"><font style="font-family: 'times new roman', times, serif;">10,465,046</font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="width: 15px;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="width: 125px; text-align: right;"><font style="font-family: 'times new roman', times, serif;">9,495,718</font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;">Subsidy revenue</font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">-</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">2,400,000</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">-</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">7,200,000</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;">Government grants</font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">-</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">-</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">-</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font
style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font
style="font-family: 'times new roman', times, serif;">320,744</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">3,007,928</font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">5,421,965</font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">10,465,046</font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">17,016,462</font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr></table></div>
<div><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; color: #000000; text-transform: none; text-indent: 0.5in; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>Accounts receivable and other receivables</b></font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; color: #000000; text-transform: none; text-indent: 0.5in; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The Company has a policy of reserving for uncollectible accounts based on its best estimate of the amount of probable credit losses in its existing accounts receivable. As a basis for accurately estimating the likelihood of collection of its accounts receivable, the Company considers a number of factors when determining reserves for uncollectable accounts. The Company believes that it uses a reasonably reliable methodology to estimate the collectability of its accounts receivable. The Company reviews its allowances for doubtful accounts on a regular basis. The Company also considers whether the historical economic conditions are comparable to current economic conditions. If the financial condition of its customers or other parties that it has business relations with were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The balance of the receivables provision as at September 30, 2018 and December 31, 2017 was $0 and $0, respectively. The amount charged to bad debt provision for the three and nine months ended September 30, 2018 and 2017 was $0 and $0, respectively.</font></p></div>
<div><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; color: #000000; text-transform: none; text-indent: 0.5in; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>Inventory</b></font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; color: #000000; text-transform: none; text-indent: 0.5in; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">Inventory consists of laboratory consumables.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The Company values inventory at the lower of cost or net realizable value applied on a first-in, first-out basis. The Company identifies and writes down its excess and obsolete inventory to net realizable value based on usage forecasts, order volume and inventory aging.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"></p></div>
<div><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; color: #000000; text-transform: none; text-indent: 0.5in; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-stretch: normal; -webkit-text-stroke-width: 0px;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>Revenue recognition</b></font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; color: #000000; text-transform: none; text-indent: 0.5in; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-stretch: normal; -webkit-text-stroke-width: 0px;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">  </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-stretch: normal; -webkit-text-stroke-width: 0px;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The Company’s revenue recognition policy is consistent with the requirements of Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 606, Revenue.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.75in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-stretch: normal; -webkit-text-stroke-width: 0px;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-stretch: normal; -webkit-text-stroke-width: 0px;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The Company has analyzed its revenue transactions pursuant to ASC 606, Revenue, and it has no material impact as a result of the transition from ASC 605 to 606. The Company’s revenues are recognized when control of the promised services are transferred to a customer, in an amount that reflects the consideration that the Company expects to receive in exchange for those services. The Company derives its revenues from the sale of its services, as defined below. The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its revenue transactions:</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-stretch: normal; -webkit-text-stroke-width: 0px;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;" cellspacing="0" cellpadding="0"><tr style="font: 10pt/normal 'times new roman', times, serif; vertical-align: top; font-stretch: normal;"><td style="font: 10pt/normal 'times new roman', times, serif; width: 48px; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></td><td style="font: 10pt/normal 'times new roman', times, serif; width: 24px; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">i.</font></td><td style="font: 10pt/normal 'times new roman', times, serif; text-align: justify; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">identify the contract with a customer;</font></td></tr><tr style="font: 10pt/normal 'times new roman', times, serif; vertical-align: top; font-stretch: normal;"><td style="font: 10pt/normal 'times new roman', times, serif; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></td><td style="font: 10pt/normal 'times new roman', times, serif; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></td><td style="font: 10pt/normal 'times new roman', times, serif; text-align: justify; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></td></tr><tr style="font: 10pt/normal 'times new roman', times, serif; vertical-align: top; font-stretch: normal;"><td style="font: 10pt/normal 'times new roman', times, serif; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></td><td style="font: 10pt/normal 'times new roman', times, serif; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">ii.</font></td><td style="font: 10pt/normal 'times new roman', times, serif; text-align: justify; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">identify the performance obligations in the contract;</font></td></tr><tr style="font: 10pt/normal 'times new roman', times, serif; vertical-align: top; font-stretch: normal;"><td style="font: 10pt/normal 'times new roman', times, serif; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></td><td style="font: 10pt/normal 'times new roman', times, serif; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></td><td style="font: 10pt/normal 'times new roman', times, serif; text-align: justify; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></td></tr><tr style="font: 10pt/normal 'times new roman', times, serif; vertical-align: top;
font-stretch: normal;"><td
style="font: 10pt/normal 'times new roman', times, serif; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></td><td style="font: 10pt/normal 'times new roman', times, serif; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">iii.</font></td><td style="font: 10pt/normal 'times new roman', times, serif; text-align: justify; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">determine the transaction price;</font></td></tr><tr style="font: 10pt/normal 'times new roman', times, serif; vertical-align: top; font-stretch: normal;"><td style="font: 10pt/normal 'times new roman', times, serif; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></td><td style="font: 10pt/normal 'times new roman', times, serif; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></td><td style="font: 10pt/normal 'times new roman', times, serif; text-align: justify; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></td></tr><tr style="font: 10pt/normal 'times new roman', times, serif; vertical-align: top; font-stretch: normal;"><td style="font: 10pt/normal 'times new roman', times, serif; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></td><td style="font: 10pt/normal 'times new roman', times, serif; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">iv.</font></td><td style="font: 10pt/normal 'times new roman', times, serif; text-align: justify; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">allocate the transaction price to performance obligations in the contract; and</font></td></tr><tr style="font: 10pt/normal 'times new roman', times, serif; vertical-align: top; font-stretch: normal;"><td style="font: 10pt/normal 'times new roman', times, serif; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></td><td style="font: 10pt/normal 'times new roman', times, serif; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></td><td style="font: 10pt/normal 'times new roman', times, serif; text-align: justify; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></td></tr><tr style="font: 10pt/normal 'times new roman', times, serif; vertical-align: top; font-stretch: normal;"><td style="font: 10pt/normal 'times new roman', times, serif; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></td><td style="font: 10pt/normal 'times new roman', times, serif; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">v.</font></td><td style="font: 10pt/normal 'times new roman', times, serif; text-align: justify; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">recognize revenue as the performance obligation is satisfied.</font></td></tr></table><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; color: #000000; text-transform: none; text-indent: 0.5in; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-stretch: normal; -webkit-text-stroke-width: 0px;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-stretch: normal; -webkit-text-stroke-width: 0px;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">Revenue sources consist of commercial contracts, deferred subsidy revenue and government grants and contracts.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-stretch: normal; -webkit-text-stroke-width: 0px;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-stretch: normal; -webkit-text-stroke-width: 0px;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The Company enters into fixed fee commercial development contracts that are associated with the delivery of feasible research on drug candidates and the development of drug candidates. Revenue under such contracts is generally recognized upon delivery or as the development is performed.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-stretch: normal; -webkit-text-stroke-width: 0px;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-stretch: normal; -webkit-text-stroke-width: 0px;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">In the prior
year, the Company had received certain deferred subsidy
revenue which was utilized to support its operations, maintain the facilities that it operates in and continue the employment of certain employees to provide, if needed, resources to certain of its customers. This deferred subsidy revenue was amortized over a straight-line basis to match the expected expenses to be incurred over the period July 15, 2016 to December 31, 2017.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-stretch: normal; -webkit-text-stroke-width: 0px;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-stretch: normal; -webkit-text-stroke-width: 0px;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The Company received and will receive certain revenue in advance of services delivered. This revenue is deferred and only recognized when services have been performed in terms of master services agreements entered into with customers, together with their associated Statements of Work.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-stretch: normal; -webkit-text-stroke-width: 0px;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-stretch: normal; -webkit-text-stroke-width: 0px;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The Company accounts for its long-term Firm Fixed Price Government contracts and grants associated with the delivery of research on drug candidates and the development of drug candidates using the percentage-of-completion accounting method. Under this method, revenue is recognized based on the extent of progress towards completion of the long-term contract.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-stretch: normal; -webkit-text-stroke-width: 0px;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-stretch: normal; -webkit-text-stroke-width: 0px;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The Company generally uses the cost-to-cost measure of progress for all its long-term contracts, unless it believes another measure will produce a more reliable result. The Company believes that the cost-to-cost measure is the best and most reliable performance indicator of progress on its long-term contracts as all its contract estimates are based on costs that it expects to incur in performing its long-term contracts and it has not experienced any significant variations on estimated to actual costs to date. Under the cost-to-cost measure of progress, the extent of progress towards completion is based on the ratio of costs incurred-to-date to the total estimated costs at the completion of the long-term contract. Revenues, including estimated fees or profits are recorded as costs are incurred.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-stretch: normal; -webkit-text-stroke-width: 0px;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-stretch: normal; -webkit-text-stroke-width: 0px;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">When estimates of total costs to be incurred on a contract exceed total estimates of revenue to be earned, a provision for the entire loss on the contract is recorded in the period the loss is determined.</font></p></div>
<div><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>Net income (loss) per Share</b></font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b> </b></font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">Basic net income (loss) per share is computed on the basis of the weighted average number of common stock outstanding during the period.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">Diluted net income (loss) per share is computed on the basis of the weighted average number of common stock and common stock equivalents outstanding. Dilutive securities having an anti-dilutive effect on diluted net income (loss) per share are excluded from the calculation.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">Dilution is computed by applying the treasury stock method for options and warrants. Under this method, “in-the money” options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. Dilution is computed by applying the if-converted method for convertible preferred stocks. Under this method, convertible preferred stock is assumed to be converted at the beginning of the period (or at the time of issuance, if later), and preferred dividends (if any) will be added back to determine income applicable to common stock. The shares issuable upon conversion will be added to the weighted average number of common stock outstanding. Conversion will be assumed only if it reduces earnings per share (or increases loss per share).</font></p></div>
<div><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>Fair value of financial instruments</b></font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.75in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The Company adopted the guidance of Accounting Standards Codification (“ASC”) 820 for fair value measurements which clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.75in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">Level 1-Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.75in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">Level 2-Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.75in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">Level 3-Inputs are unobservable inputs which reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.75in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The carrying amounts reported in the balance sheets for cash, accounts receivable, other current assets, other assets, accounts payable, accrued liabilities, and notes payable, approximate fair value due to the relatively short period to maturity for these instruments. The Company identified derivative liabilities relating to convertible debt instruments and certain variably priced warrants which are required to be presented on the balance sheets at fair value in accordance with the accounting guidance.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.75in; text-align: justify; color:
#000000;
text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">ASC 825-10 “<i>Financial Instruments</i>” allows entities to voluntarily choose to measure certain financial assets and liabilities at fair value (fair value option). The fair value option may be elected on an instrument-by-instrument basis and is irrevocable, unless a new election date occurs. If the fair value option is elected for an instrument, unrealized gains and losses for that instrument should be reported in earnings at each subsequent reporting date. The Company elected to apply the fair value option to derivative liabilities arising on convertible debt instruments and certain variably priced warrants.</font></p></div>
<div><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>Beneficial conversion feature of convertible notes payable</b></font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The Company accounts for convertible notes payable in accordance with guidelines established by the FASB ASC Topic 470-20, “Debt with Conversion and Other Options”. The beneficial conversion feature of a convertible note is normally characterized as the convertible portion or feature of certain notes payable that provide a rate of conversion that is below market value or in-the-money when issued. The Company records a beneficial conversion feature related to the issuance of a convertible note when issued and also records the estimated fair value of any warrants issued with those convertible notes. The beneficial conversion features that are contingent upon the occurrence of a future event are recorded when the contingency is resolved.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The beneficial conversion feature of a convertible note is measured by first allocating a portion of the note’s proceeds to any warrants, if applicable, as a discount on the carrying amount of the convertible on a relative fair value basis. The discounted face value is then used to measure the effective conversion price of the note. The effective conversion price and the market price of the Company’s common stock are used to calculate the intrinsic value of the conversion feature. The intrinsic value is recorded in the financial statements as a debt discount from the face amount of the note and such discount is amortized over the expected term of the convertible note (or to the conversion date of the note, if sooner) and is charged to amortization of debt discount on the Company’s consolidated statement of operations. The Company also records, when necessary, deemed dividends for the intrinsic value of conversion options embedded in preferred shares based upon the differences between the fair value of the underlying common stock at the commitment date of the preferred shares transaction and the effective conversion price embedded in the preferred shares.</font></p></div>
<div><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>Derivative Liabilities</b></font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b> </b></font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The Company has derivative financial instruments as of September 30, 2018 and December 31, 2017.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">ASC 815 generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re- measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument subject to the requirements of ASC 815. ASC 815 also provides an exception to this rule when the host instrument is deemed to be conventional, as described.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The accounting treatment of derivative financial instruments requires that the Company record the embedded conversion option and warrants at their fair values as of the inception date of the agreement and at fair value as of each subsequent balance sheet date. Any change in fair value is recorded as non-operating, non-cash income or expense for each reporting period at each balance sheet date. The Company reassesses the classification of its derivative instruments at each balance sheet date. If the classification changes as a result of events during the period, the contract is reclassified as of the date of the event that caused the reclassification.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The Black-Scholes option valuation model was used to estimate the fair value of the conversion options. The model includes subjective input assumptions that can materially affect the fair value estimates. The expected volatility is estimated based on the most recent historical period of time, of other comparative securities, equal to the weighted average life of the options.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">Conversion options related to debt instruments are recorded as debt discount and are amortized as interest expense over the life of the underlying debt instrument using effective interest method.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing:
normal;
word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">Conversion options related to equity instruments are recorded as a deemed dividend at the grant date of the equity instrument.</font></p></div>
<p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; color: #000000; text-transform: none; text-indent: 0.5in; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>Research and Development</b></font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; color: #000000; text-transform: none; text-indent: 0.5in; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b> </b></font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The remuneration of the Company’s research and development staff, materials used in internal research and development activities, and payments made to third parties in connection with collaborative research and development arrangements, are all expensed as incurred. Where the Company makes a payment to a third party to acquire the right to use a product formula which has received regulatory approval, the payment is accounted for as the acquisition of a license or patent and is capitalized as an intangible asset and amortized over the shorter of the license period or the patent life.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;">The amount expensed for unrecovered research and development salaries, included in Selling, general and administrative expenses during the three and nine months ended September 30, 2018 was $696,823 and $2,232,601 and for the three and nine months ended September 30, 2017 was $925,533 and $2,412,153 respectively.</p>
<div><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; color: #000000; text-transform: none; text-indent: 0.5in; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>Related parties</b></font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; color: #000000; text-transform: none; text-indent: 0.5in; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b> </b></font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">Parties are considered to be related to the Company if the parties that, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, its board members and members of the immediate families of principal owners of the Company. Parties are also considered related parties if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. The Company discloses all related party transactions. All transactions are recorded at fair value of the goods or services exchanged.</font></p></div>
<p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; color: #000000; text-transform: none; text-indent: 0.5in; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>Recent accounting pronouncements</b></font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; color: #000000; text-transform: none; text-indent: 0.5in; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) Changes to the Disclosure Requirements for Fair Value Measurement.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.75in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The amendments in this Update modify the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.75in; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b> </b></font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>Removals</b></font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b> </b></font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The following disclosure requirements were removed from Topic 820:</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif;"> </font></p><table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; margin-top: 0pt; margin-bottom: 0pt; word-spacing: 0px; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;" cellspacing="0" cellpadding="0"><tr style="font: 10pt/normal 'times new roman', times, serif; vertical-align: top; font-size-adjust: none; font-stretch: normal;"><td style="font: 10pt/normal 'times new roman', times, serif; width: 0.5in; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"></td><td style="font: 10pt/normal 'times new roman', times, serif; width: 0.25in; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">1.</font></td><td style="font: 10pt/normal 'times new roman', times, serif; text-align: justify; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy</font></td></tr></table><p style="color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; font-family: 'times new roman', times, serif; font-size: 13.33px; font-style: normal; font-weight: 400; margin-top: 0px; margin-bottom: 0px; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-variant-ligatures: normal; font-variant-caps: normal;"><font
style="font-family: 'times
new roman', times, serif;"> </font></p><table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; margin-top: 0pt; margin-bottom: 0pt; word-spacing: 0px; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;" cellspacing="0" cellpadding="0"><tr style="font: 10pt/normal 'times new roman', times, serif; vertical-align: top; font-size-adjust: none; font-stretch: normal;"><td style="font: 10pt/normal 'times new roman', times, serif; width: 0.5in; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"></td><td style="font: 10pt/normal 'times new roman', times, serif; width: 0.25in; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">2.</font></td><td style="font: 10pt/normal 'times new roman', times, serif; text-align: justify; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The policy for timing of transfers between levels</font></td></tr></table><p style="color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; font-family: 'times new roman', times, serif; font-size: 13.33px; font-style: normal; font-weight: 400; margin-top: 0px; margin-bottom: 0px; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-variant-ligatures: normal; font-variant-caps: normal;"><font style="font-family: 'times new roman', times, serif;"> </font></p><table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; margin-top: 0pt; margin-bottom: 0pt; word-spacing: 0px; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;" cellspacing="0" cellpadding="0"><tr style="font: 10pt/normal 'times new roman', times, serif; vertical-align: top; font-size-adjust: none; font-stretch: normal;"><td style="font: 10pt/normal 'times new roman', times, serif; width: 0.5in; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"></td><td style="font: 10pt/normal 'times new roman', times, serif; width: 0.25in; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">3.</font></td><td style="font: 10pt/normal 'times new roman', times, serif; text-align: justify; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The valuation processes for Level 3 fair value measurements</font></td></tr></table><p style="color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; font-family: 'times new roman', times, serif; font-size: 13.33px; font-style: normal; font-weight: 400; margin-top: 0px; margin-bottom: 0px; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-variant-ligatures: normal; font-variant-caps: normal;"><font style="font-family: 'times new roman', times, serif;"> </font></p><table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; margin-top: 0pt; margin-bottom: 0pt; word-spacing: 0px; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;" cellspacing="0" cellpadding="0"><tr style="font: 10pt/normal 'times new roman', times, serif; vertical-align: top; font-size-adjust: none; font-stretch: normal;"><td style="font: 10pt/normal 'times new roman', times, serif; width: 0.5in; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"></td><td style="font: 10pt/normal 'times new roman', times, serif; width: 0.25in; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">4.</font></td><td style="font: 10pt/normal 'times new roman', times, serif; text-align: justify; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">For nonpublic entities, the changes in unrealized gains and losses for the period included in earnings for recurring Level 3 fair value measurements held at the end of the reporting period.</font></td></tr></table><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b> </b></font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>Modifications</b></font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2;
font-size-adjust: none; font-stretch: normal;
-webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The following disclosure requirements were modified in Topic 820:</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif;"> </font></p><table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; margin-top: 0pt; margin-bottom: 0pt; word-spacing: 0px; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;" cellspacing="0" cellpadding="0"><tr style="font: 10pt/normal 'times new roman', times, serif; vertical-align: top; font-size-adjust: none; font-stretch: normal;"><td style="font: 10pt/normal 'times new roman', times, serif; width: 0.5in; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"></td><td style="font: 10pt/normal 'times new roman', times, serif; width: 0.25in; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">1.</font></td><td style="font: 10pt/normal 'times new roman', times, serif; text-align: justify; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">In lieu of a rollforward for Level 3 fair value measurements, a nonpublic entity is required to disclose transfers into and out of Level 3 of the fair value hierarchy and purchases and issues of Level 3 assets and liabilities.</font></td></tr></table><p style="color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; font-family: 'times new roman', times, serif; font-size: 13.33px; font-style: normal; font-weight: 400; margin-top: 0px; margin-bottom: 0px; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-variant-ligatures: normal; font-variant-caps: normal;"><font style="font-family: 'times new roman', times, serif;"> </font></p><table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; margin-top: 0pt; margin-bottom: 0pt; word-spacing: 0px; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;" cellspacing="0" cellpadding="0"><tr style="font: 10pt/normal 'times new roman', times, serif; vertical-align: top; font-size-adjust: none; font-stretch: normal;"><td style="font: 10pt/normal 'times new roman', times, serif; width: 0.5in; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"></td><td style="font: 10pt/normal 'times new roman', times, serif; width: 0.25in; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">2.</font></td><td style="font: 10pt/normal 'times new roman', times, serif; text-align: justify; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">For investments in certain entities that calculate net asset value, an entity is required to disclose the timing of liquidation of an investee’s assets and the date when restrictions from redemption might lapse <i>only </i>if the investee has communicated the timing to the entity or announced the timing publicly.</font></td></tr></table><p style="color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; font-family: 'times new roman', times, serif; font-size: 13.33px; font-style: normal; font-weight: 400; margin-top: 0px; margin-bottom: 0px; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; font-variant-ligatures: normal; font-variant-caps: normal;"><font style="font-family: 'times new roman', times, serif;"> </font></p><table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; margin-top: 0pt; margin-bottom: 0pt; word-spacing: 0px; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;" cellspacing="0" cellpadding="0"><tr style="font: 10pt/normal 'times new roman', times, serif; vertical-align: top; font-size-adjust: none; font-stretch: normal;"><td style="font: 10pt/normal 'times new roman', times, serif; width: 0.5in; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"></td><td style="font: 10pt/normal 'times new roman', times, serif; width: 0.25in; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">3.</font></td><td style="font: 10pt/normal 'times new roman', times, serif; text-align: justify; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The amendments clarify that the measurement uncertainty disclosure is to communicate information about the uncertainty in measurement as of the reporting date.</font></td></tr></table><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000;
text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px;
white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"><b>Additions</b></font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The following disclosure requirements were added to Topic 820; however, the disclosures are not required for nonpublic entities:</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif;"> </font></p><table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; margin-top: 0pt; margin-bottom: 0pt; word-spacing: 0px; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;" cellspacing="0" cellpadding="0"><tr style="font: 10pt/normal 'times new roman', times, serif; vertical-align: top; font-size-adjust: none; font-stretch: normal;"><td style="font: 10pt/normal 'times new roman', times, serif; width: 0.5in; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"></td><td style="font: 10pt/normal 'times new roman', times, serif; width: 0.25in; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">1.</font></td><td style="font: 10pt/normal 'times new roman', times, serif; text-align: justify; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period</font></td></tr><tr style="font: 10pt/normal 'times new roman', times, serif; vertical-align: top; font-size-adjust: none; font-stretch: normal;"><td style="font: 10pt/normal 'times new roman', times, serif; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="font: 10pt/normal 'times new roman', times, serif; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="font: 10pt/normal 'times new roman', times, serif; text-align: justify; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr></table><table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; margin-top: 0pt; margin-bottom: 0pt; word-spacing: 0px; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;" cellspacing="0" cellpadding="0"><tr style="font: 10pt/normal 'times new roman', times, serif; vertical-align: top; font-size-adjust: none; font-stretch: normal;"><td style="font: 10pt/normal 'times new roman', times, serif; width: 0.5in; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"></td><td style="font: 10pt/normal 'times new roman', times, serif; width: 0.25in; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">2.</font></td><td style="font: 10pt/normal 'times new roman', times, serif; text-align: justify; text-indent: 0px; padding-right: 0px; padding-left: 0px; font-size-adjust: none; font-stretch: normal;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. For certain unobservable inputs, an entity may disclose other quantitative information (such as the median or arithmetic average) in lieu of the weighted average if the entity determines that other quantitative information would be a more reasonable and rational method to reflect the distribution of unobservable inputs used to develop Level 3 fair value measurements.</font></td></tr></table><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size:
10pt;">In addition, the amendments eliminate <i>at a minimum </i>from the phrase <i>an entity
shall disclose at a minimum </i>to promote the appropriate exercise of discretion by entities when considering fair value measurement disclosures and to clarify that materiality is an appropriate consideration of entities and their auditors when evaluating disclosure requirements.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"> </p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;">The amendments in this Update are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. Early adoption is permitted upon issuance of this Update. An entity is permitted to early adopt any removed or modified disclosures upon issuance of this Update and delay adoption of the additional disclosures until their effective date.</p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"> </p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;">The impact of this ASU on the Company’s consolidated financial statements is not expected to be material.</p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;">In August 2018, the FASB issued ASU 2018-15, Intangibles – Goodwill and Other Internal – Use Software (Subtopic 350-40).</p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.75in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The amendments in this Update align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal use software license). The accounting for the service element of a hosting arrangement that is a service contract is not affected by the amendments in this Update.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;">The amendments in this Update require an entity (customer) in a hosting arrangement that is a service contract to follow the guidance in Subtopic 350-40 to determine which implementation costs to capitalize as an asset related to the service contract and which costs to expense. Costs to develop or obtain internal-use software that cannot be capitalized under Subtopic 350-40, such as training costs and certain data conversion costs, also cannot be capitalized for a hosting arrangement that is a service contract. Therefore, an entity (customer) in a hosting arrangement that is a service contract determines which project stage (that is,
preliminary project stage, application development stage, or post-implementation stage) an implementation activity
relates to. Costs for implementation activities in the application development stage are capitalized depending on the nature of the costs, while costs incurred during the preliminary project and post-implementation stages are expensed as the activities are performed.</p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The amendments in this Update also require the entity (customer) to expense the capitalized implementation costs of a hosting arrangement that is a service contract over the term of the hosting arrangement. The term of the hosting arrangement includes the non-cancellable period of the arrangement plus periods covered by (1) an option to extend the arrangement if the customer is reasonably certain to exercise that option, (2) an option to terminate the arrangement if the customer is reasonably certain not to exercise the termination option, and (3) an option to extend (or not to terminate) the arrangement in which exercise of the option is in the control of the vendor. The entity also is required to apply the existing impairment guidance in Subtopic 350-40 to the capitalized implementation costs as if the costs were long-lived assets. The amendments in this Update clarify that the capitalized implementation costs related to each module or component of a hosting arrangement that is a service contract are also subject to the guidance in Subtopic 360-10 on abandonment.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The amendments in this Update also require the entity to present the expense related to the capitalized implementation costs in the same line item in the statement of income as the fees associated with the hosting element (service) of the arrangement and classify payments for capitalized implementation costs in the statement of cash flows in the same manner as payments made for fees associated with the hosting element. The entity is also required to present the capitalized implementation costs in the statement of financial position in the same line item that a prepayment for the fees of the associated hosting arrangement would be presented.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. For all other entities, the amendments in this Update are effective for annual reporting periods beginning after December 15, 2020, and interim periods within annual periods beginning after December 15, 2021. Early adoption of the amendments in this Update is permitted, including adoption in any interim period, for all entities.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;">The amendments in this Update should be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption.</p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"> </p><p
style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000;
text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;">The impact of this ASU on the Company’s consolidated financial statements is not expected to be material.</p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"> </p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;">Any new accounting standards, not disclosed above, that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. </p>
<div><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"></p><table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; border-collapse: collapse; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;" cellspacing="0" cellpadding="0"><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="6"><font style="font-family: 'times new roman', times, serif;">Three months ended</font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="6"><font style="font-family: 'times new roman', times, serif;">Nine months ended</font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2"><font style="font-family: 'times new roman', times, serif;">September 30, 2018</font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2"><font style="font-family: 'times new roman', times, serif;">September 30, 2017</font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2"><font style="font-family: 'times new roman', times, serif;">September 30, 2018</font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2"><font style="font-family: 'times new roman', times, serif;">September 30, 2017</font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td colspan="2"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td colspan="2"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td colspan="2"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td colspan="2"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="width: 0.5in; background-color: white;"> </td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;">Services revenue</font></td><td style="width: 15px;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="width: 125px; text-align: right;"><font style="font-family: 'times new roman', times, serif;">3,007,928</font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="width: 15px;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="width: 125px; text-align: right;"><font style="font-family: 'times new roman', times, serif;">3,021,965</font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="width: 15px;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="width: 125px; text-align: right;"><font style="font-family: 'times new roman', times, serif;">10,465,046</font></td><td style="width: 15px;
text-align: left;"><font style="font-family: 'times new
roman', times, serif;"> </font></td><td style="width: 15px;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="width: 125px; text-align: right;"><font style="font-family: 'times new roman', times, serif;">9,495,718</font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;">Subsidy revenue</font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">-</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">2,400,000</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">-</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">7,200,000</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;">Government grants</font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">-</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">-</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">-</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">320,744</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; padding-bottom:
1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom;
background-color: #cceeff;"><td style="background-color: white;"> </td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">3,007,928</font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">5,421,965</font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">10,465,046</font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">17,016,462</font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr></table></div>
<div><table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; border-collapse: collapse; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;" cellspacing="0" cellpadding="0"><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">September 30,<br />2018</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">December 31,<br />2017</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td></tr><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="width: 0.5in; background-color: white;"> </td><td style="text-align: left;">Prepaid insurance</td><td style="width: 15px;"> </td><td style="width: 15px; text-align: left;">$</td><td style="width: 125px; text-align: right;">60,061</td><td style="width: 15px; text-align: left;"> </td><td style="width: 15px;"> </td><td style="width: 15px; text-align: left;">$</td><td style="width: 125px; text-align: right;">75,774</td><td style="width: 15px; text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="text-align: left;">Prepaid maintenance</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">90,036</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">129,260</td><td style="text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="text-align: left;">Prepaid property tax</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">62,237</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">-</td><td style="text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="text-align: left;">Prepaid rent</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">-</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">2,500</td><td style="text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="text-align: left; padding-bottom: 1.5pt;">Prepaid subscriptions</td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">3,750</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">5,833</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">$</td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">216,084</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">$</td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">213,367</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td></tr></table></div>
<div><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;"> </font></p><table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; border-collapse: collapse; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;" cellspacing="0" cellpadding="0"><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="10"><font style="font-family: 'times new roman', times, serif;">September  30, <br />2018</font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2"><font style="font-family: 'times new roman', times, serif;">December 31, <br />2017</font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2"><font style="font-family: 'times new roman', times, serif;">Cost</font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2"><font style="font-family: 'times new roman', times, serif;">Amortization and Impairment</font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2"><font style="font-family: 'times new roman', times, serif;">Net book value</font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2"><font style="font-family: 'times new roman', times, serif;">Net book value</font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td colspan="2"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td colspan="2"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td colspan="2"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td colspan="2"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="width: 0.5in; background-color: white;"> </td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;">Cell lines</font></td><td style="width: 15px;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="width: 125px; text-align: right;"><font style="font-family: 'times new roman', times, serif;">5,153,664</font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="width: 15px;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="width: 125px; text-align: right;"><font style="font-family: 'times new roman', times, serif;">-</font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="width: 15px;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="width: 125px; text-align: right;"><font style="font-family: 'times new roman', times,
serif;">5,153,664</font></td><td style="width: 15px;
text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="width: 15px;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="width: 125px; text-align: right;"><font style="font-family: 'times new roman', times, serif;">5,153,664</font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;">Discovery platform</font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">1,450,500</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">(471,412</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;">)</font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">979,088</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">1,087,875</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;">Trade names and trademarks</font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">637,500</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">-</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">637,500</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">637,500</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;">Assembled workforce</font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">282,500</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">(91,812</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;">)</font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">190,688</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">211,875</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td><font style="font-family: 'times new roman', times, serif;">Patents</font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">972,000</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td
style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font
style="font-family: 'times new roman', times, serif;">(674,607</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;">)</font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">297,393</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">336,157</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="text-align: right; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">8,496,164</font></td><td style="text-align: left; padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">$<font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">(1,237,831</font></td><td style="text-align: left; padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;">)</font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="text-align: right; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">7,258,333</font></td><td style="text-align: left; padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="text-align: right; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">7,427,071</font></td><td style="text-align: left; padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr></table></div>
<div><table style="font: 10pt/normal 'times new roman', times, serif; width: 1557px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; border-collapse: collapse; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;" cellspacing="0" cellpadding="0"><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2"><font style="font-family: 'times new roman', times, serif;">Amount</font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td colspan="2"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="width: 0.5in; background-color: white;"> </td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;">2018</font></td><td style="width: 15px;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="width: 124px; text-align: right;"><font style="font-family: 'times new roman', times, serif;">56,246</font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;">2019</font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">224,984</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;">2020</font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">224,984</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;">2021</font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">224,984</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;">2022 and thereafter</font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">735,971</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="text-align: left; padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;">Total</font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="text-align: right; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">1,467,169</font></td><td style="text-align: left; padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr></table></div>
<div><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"></p><table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; border-collapse: collapse; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;" cellspacing="0" cellpadding="0"><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="10"><font style="font-family: 'times new roman', times, serif;">September 30, <br />2018</font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2"><font style="font-family: 'times new roman', times, serif;">December 31, <br />2017</font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2"><font style="font-family: 'times new roman', times, serif;">Cost</font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2"><font style="font-family: 'times new roman', times, serif;">Amortization and Impairment</font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2"><font style="font-family: 'times new roman', times, serif;">Net book value</font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2"><font style="font-family: 'times new roman', times, serif;">Net book value</font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td colspan="2"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td colspan="2"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td colspan="2"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td colspan="2"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="width: 0.5in; background-color: white;"> </td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;">Laboratory equipment</font></td><td style="width: 15px;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="width: 125px; text-align: right;"><font style="font-family: 'times new roman', times, serif;">2,612,194</font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="width: 15px;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="width: 125px; text-align: right;"><font style="font-family: 'times new roman', times, serif;">(1,296,841</font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;">)</font></td><td style="width: 15px;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="width: 125px; text-align: right;"><font style="font-family: 'times new roman', times, serif;">1,315,353</font></td><td style="width: 15px; text-align: left;"><font
style="font-family: 'times new roman', times,
serif;"> </font></td><td style="width: 15px;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="width: 125px; text-align: right;"><font style="font-family: 'times new roman', times, serif;">1,396,617</font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;">Computer software</font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">1,860,305</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">(1,518,489</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;">)</font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">341,816</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">716,860</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;">Computer equipment</font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">96,673</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">(58,965</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;">)</font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">37,708</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">43,816</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;">Leasehold improvements</font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">38,974</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">(27,074</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;">)</font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">11,900</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">24,460</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font
style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt;"><font
style="font-family:
'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="text-align: right; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">4,608,146</font></td><td style="text-align: left; padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">$<font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">(2,901,369</font></td><td style="text-align: left; padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;">)</font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="text-align: right; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">1,706,777</font></td><td style="text-align: left; padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="text-align: right; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">2,181,753</font></td><td style="text-align: left; padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr></table></div>
<div><table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; border-collapse: collapse; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;" cellspacing="0" cellpadding="0"><tr style="vertical-align: bottom;"><td style="white-space: nowrap; background-color: white;"> </td><td style="white-space: nowrap;"> </td><td style="padding-bottom: 1.5pt; font-weight: bold; white-space: nowrap;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid; white-space: nowrap;" colspan="2">September 30,<br />2018</td><td style="padding-bottom: 1.5pt; font-weight: bold; white-space: nowrap;"> </td><td style="padding-bottom: 1.5pt; font-weight: bold; white-space: nowrap;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid; white-space: nowrap;" colspan="2">December 31,<br />2017</td><td style="padding-bottom: 1.5pt; font-weight: bold; white-space: nowrap;"> </td></tr><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="width: 0.5in; background-color: white;"> </td><td style="text-align: left;">Bonus and vacation accrual</td><td style="width: 15px;"> </td><td style="width: 15px; text-align: left;">$</td><td style="width: 125px; text-align: right;">910,471</td><td style="width: 15px; text-align: left;"> </td><td style="width: 15px;"> </td><td style="width: 15px; text-align: left;">$</td><td style="width: 125px; text-align: right;">1,871,488</td><td style="width: 15px; text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="text-align: left;">Payroll liabilities</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">42,159</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">44,858</td><td style="text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="text-align: left;">Severance cost accrual</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">417,208</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">262,966</td><td style="text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="text-align: left;">Interest accrual</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">176,823</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">108,333</td><td style="text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="padding-bottom: 1.5pt; background-color: white;"> </td><td style="padding-bottom: 1.5pt;">Other</td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">377,166</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">152,797</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;"> </td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;"> </td><td style="text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: left; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">$</td><td style="text-align: right; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">1,923,827</td><td style="text-align: left; padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: left; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">$</td><td style="text-align: right; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">2,440,442</td><td style="text-align: left; padding-bottom: 1.5pt; font-weight: bold;"> </td></tr></table></div>
<div><table style="font: 10pt/normal 'times new roman', times, serif; width: 1557px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; border-collapse: collapse; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;" cellspacing="0" cellpadding="0"><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2"><font style="font-family: 'times new roman', times, serif;">September 30,<br />2018</font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2"><font style="font-family: 'times new roman', times, serif;">December 31,<br />2017</font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td colspan="2"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td colspan="2"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td style="font-weight: bold;"><font style="font-family: 'times new roman', times, serif;">Settlement liability accruals</font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td colspan="2"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td colspan="2"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="width: 0.5in; background-color: white;"> </td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;">Dentons dispute</font></td><td style="width: 15px;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="width: 124px; text-align: right;"><font style="font-family: 'times new roman', times, serif;">-</font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="width: 15px;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="width: 124px; text-align: right;"><font style="font-family: 'times new roman', times, serif;">400,000</font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;">Eisenschenk matter</font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">-</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">83,333</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;">Other</font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">10,000</font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">10,000</font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times,
serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font
style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">10,000</font></td><td style="text-align: left; padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">493,333</font></td><td style="text-align: left; padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="font-weight: bold;"><font style="font-family: 'times new roman', times, serif;">Disclosed as follows:</font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;">Short-term portion</font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">10,000</font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">493,333</font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="text-align: right; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">10,000</font></td><td style="text-align: left; padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="text-align: right; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">493,333</font></td><td style="text-align: left; padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr></table></div>
<div><table style="font: 10pt/normal 'times new roman', times, serif; width: 1557px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; border-collapse: collapse; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;" cellspacing="0" cellpadding="0"><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2"><font style="font-family: 'times new roman', times, serif;">September 30, <br />2018</font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2"><font style="font-family: 'times new roman', times, serif;">December 31, <br />2017</font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td style="font-weight: bold;"><font style="font-family: 'times new roman', times, serif;">Deferred purchase consideration</font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td colspan="2"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td colspan="2"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="width: 0.5in; background-color: white;"> </td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;">Opening balance</font></td><td style="width: 15px;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="width: 124px; text-align: right;"><font style="font-family: 'times new roman', times, serif;">9,856,458</font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="width: 15px;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="width: 124px; text-align: right;"><font style="font-family: 'times new roman', times, serif;">10,500,000</font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;">Reversal of unearned purchase consideration</font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">-</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">(500,000</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;">)</font></td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;">Interest due on deferred purchase consideration</font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">85,005</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">25,578</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;">Repayment</font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">(228,963</font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;">)</font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style:
solid;"><font style="font-family: 'times new roman', times,
serif;">(169,120</font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;">)</font></td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;">Closing balance</font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">9,712,500</font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">9,856,458</font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="text-align: left; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;">Present value discount on future payments</font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;">Opening balance</font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">(1,417,336</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;">)</font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">(1,712,689</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;">)</font></td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;">Imputed interest expense</font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">224,307</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">300,511</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;">Fair value adjustments</font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">-</font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td
style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family:
'times new roman', times, serif;"> </font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">(5,158</font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;">)</font></td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;">Closing balance</font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">(1,193,029</font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;">)</font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">(1,417,336</font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;">)</font></td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="text-align: left; padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;">Deferred purchase consideration, net</font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">8,519,471</font></td><td style="text-align: left; padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">8,439,122</font></td><td style="text-align: left; padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="font-weight: bold;"><font style="font-family: 'times new roman', times, serif;">Disclosed as follows:</font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td
style="text-align: left;"><font style="font-family: 'times new roman', times, serif;">Short-term portion</font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td
style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">2,200,000</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">206,458</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;">Interest disclosed under other payables</font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">12,500</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">-</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;">Long-term portion</font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">6,306,971</font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">8,232,664</font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="text-align: left; padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;">Deferred purchase consideration, net</font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="text-align: right; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">8,519,471</font></td><td style="text-align: left; padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="text-align: right; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">8,439,122</font></td><td style="text-align: left; padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr></table></div>
<div><table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; border-collapse: collapse; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;" cellspacing="0" cellpadding="0"><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2"><font style="font-family: 'times new roman', times, serif;">September 30,<br />2018</font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2"><font style="font-family: 'times new roman', times, serif;">December 31,<br />2017</font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td style="font-weight: bold;"><font style="font-family: 'times new roman', times, serif;">Bridge note liability</font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td colspan="2"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td colspan="2"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="width: 0.5in; background-color: white;"> </td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;">Bridge notes raised</font></td><td style="width: 15px;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="width: 125px; text-align: right;"><font style="font-family: 'times new roman', times, serif;">500,000</font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="width: 15px;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="width: 125px; text-align: right;"><font style="font-family: 'times new roman', times, serif;">1,500,000</font></td><td style="width: 15px; text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;">Repayment</font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">-</font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">(1,500,000</font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;">)</font></td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;">Closing balance</font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">500,000</font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">-</font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align:
left;"><font style="font-family: 'times new roman', times,
serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="text-align: left; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;">Discount on bridge notes</font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td><font style="font-family: 'times new roman', times, serif;">Fair value of warrants issued</font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">(116,485</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;">)</font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;">(330,353</font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;">)</font></td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;">Amortization of bridge note discount</font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">15,318</font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">330,353</font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;">Closing balance</font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">(101,167</font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;">)</font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">-</font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="text-align: left; padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;">Bridge notes, net</font></td><td
style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times,
serif;"> </font></td><td
style="text-align: left; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="text-align: right; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">398,833</font></td><td style="text-align: left; padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="text-align: right; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">-</font></td><td style="text-align: left; padding-bottom: 1.5pt; font-weight: bold;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="font-weight: bold;"><font style="font-family: 'times new roman', times, serif;">Disclosed as follows:</font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: right;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="padding-bottom: 1.5pt; background-color: white;"> </td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;">Short-term portion</font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">398,833</font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">$</font></td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"><font style="font-family: 'times new roman', times, serif;">-</font></td><td style="text-align: left; padding-bottom: 1.5pt;"><font style="font-family: 'times new roman', times, serif;"> </font></td></tr></table></div>
<div><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"></p><table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; border-collapse: collapse; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;" cellspacing="0" cellpadding="0"><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td> </td><td style="font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">September 30,<br />2018</td><td style="font-weight: bold;"> </td><td style="font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">December 31,<br />2017</td><td style="font-weight: bold;"> </td></tr><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="width: 0.5in; background-color: white;"> </td><td style="text-align: left;">Asset purchase arrangements</td><td style="width: 15px;"> </td><td style="width: 15px; text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">$</td><td style="width: 141px; text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">83,176</td><td style="width: 15px; text-align: left;"> </td><td style="width: 15px;"> </td><td style="width: 15px; text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">$</td><td style="width: 141px; text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">210,690</td><td style="width: 15px; text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;"> </td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;"> </td><td style="text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="font-weight: bold;">Disclosed as follows:</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;"> </td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;"> </td><td style="text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="text-align: left;">Short-term portion</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">56,436</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">139,394</td><td style="text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="text-align: left;">Long-term portion</td><td> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">26,740</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">71,296</td><td style="text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td> </td><td> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">$</td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">83,176</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">$</td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">210,690</td><td style="text-align: left;"> </td></tr></table></div>
<div><table style="font: 10pt/normal 'times new roman', times, serif; width: 1557px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; border-collapse: collapse; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;" cellspacing="0" cellpadding="0"><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">Amount</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td></tr><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="width: 0.5in; background-color: white;"> </td><td style="text-align: left;">Within 1 year</td><td style="width: 15px;"> </td><td style="width: 15px; text-align: left;">$</td><td style="width: 140px; text-align: right;">56,436</td><td style="width: 15px; text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="text-align: left; padding-bottom: 1.5pt;">Within 1 - 2 years</td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">26,740</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="padding-bottom: 1.5pt; background-color: white;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: left; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">$</td><td style="text-align: right; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">83,176</td><td style="text-align: left; padding-bottom: 1.5pt; font-weight: bold;"> </td></tr></table></div>
<div><table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; border-collapse: collapse; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;" cellspacing="0" cellpadding="0"><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">September 30,<br />2018</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">December 31,<br />2017</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td></tr><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td></tr><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td style="font-weight: bold;">Convertible debt</td><td> </td><td colspan="2"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="width: 0.5in; background-color: white;"> </td><td style="text-align: left;">Opening balance</td><td style="width: 15px;"> </td><td style="width: 15px; text-align: left;">$</td><td style="width: 141px; text-align: right;">10,000,000</td><td style="width: 15px; text-align: left;"> </td><td style="width: 15px;"> </td><td style="width: 15px; text-align: left;">$</td><td style="width: 141px; text-align: right;">-</td><td style="width: 15px; text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="text-align: left;">Convertible debt issued</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">-</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">10,000,000</td><td style="text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="padding-bottom: 1.5pt;">Repayment</td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">(10,000,000</td><td style="text-align: left; padding-bottom: 1.5pt;">)</td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">-</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="text-align: left; padding-bottom: 1.5pt;">Closing balance</td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">-</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">10,000,000</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;"> </td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;"> </td><td style="text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="text-align: left; font-weight: bold;">Debt discount</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;"> </td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;"> </td><td style="text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="text-align: left;">Opening balance</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">(4,138,206</td><td style="text-align: left;">)</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">-</td><td style="text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="text-align: left;">Original issue discount</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">-</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">(400,000</td><td style="text-align: left;">)</td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="text-align: left;">Fair value of warrants and beneficial conversion feature of notes</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">-</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">(4,518,277</td><td style="text-align: left;">)</td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="text-align: left;">Amortization of debt discount</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">950,163</td><td style="text-align:
left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">780,071</td><td style="text-align:
left;"> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="text-align: left; padding-bottom: 1.5pt;">Extinguishment of debt discount</td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">3,188,043</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">-</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="text-align: left; padding-bottom: 1.5pt;">Closing balance</td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">-</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">(4,138,206</td><td style="text-align: left; padding-bottom: 1.5pt;">)</td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;"> </td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;"> </td><td style="text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="text-align: left; padding-bottom: 1.5pt; font-weight: bold;">Convertible debt, net</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: left; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">$</td><td style="text-align: right; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">-</td><td style="text-align: left; padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: left; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">$</td><td style="text-align: right; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">5,861,794</td><td style="text-align: left; padding-bottom: 1.5pt; font-weight: bold;"> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;"> </td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;"> </td><td style="text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="font-weight: bold;">Disclosed as follows:</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;"> </td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;"> </td><td style="text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="padding-bottom: 1.5pt; background-color: white;"> </td><td style="text-align: left; padding-bottom: 1.5pt;">Long-term portion</td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">$</td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">-</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">$</td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">5,861,794</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td></tr></table></div>
<div><table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; border-collapse: collapse; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;" cellspacing="0" cellpadding="0"><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">Nine months ended<br />September 30,<br />2018</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td></tr><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="width: 0.5in; background-color: white;"> </td><td>Calculated stock price</td><td style="width: 15px;"> </td><td style="width: 15px; text-align: left;">$</td><td style="width: 141px; text-align: right; white-space: nowrap;">3.50</td><td style="width: 15px; text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="text-align: left;">Risk free interest rate</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right; white-space: nowrap;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">2.39 to 3.01</font></td><td style="text-align: left;">%</td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td>Valuation period</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right; white-space: nowrap;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">1.7 to 7 years</font></td><td style="text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="text-align: left;">expected volatility of underlying stock</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right; white-space: nowrap;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">44.6 to 74.9</font></td><td style="text-align: left;">%</td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="text-align: left;">Expected dividend rate</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right; white-space: nowrap;">0</td><td style="text-align: left;">%</td></tr></table></div>
<div>
<table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; border-collapse: collapse; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;" cellspacing="0" cellpadding="0">
<tr style="vertical-align: bottom;">
<td style="white-space: nowrap; background-color: white;"> </td>
<td style="text-indent: -0.125in; padding-left: 0.125in; white-space: nowrap;"> </td>
<td style="padding-bottom: 1.5pt; font-weight: bold; white-space: nowrap;"> </td>
<td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid; white-space: nowrap;" colspan="2">September 30,<br />2018</td>
<td style="padding-bottom: 1.5pt; font-weight: bold; white-space: nowrap;"> </td>
<td style="padding-bottom: 1.5pt; font-weight: bold; white-space: nowrap;"> </td>
<td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid; white-space: nowrap;" colspan="2">December 31,<br />2017</td>
<td style="padding-bottom: 1.5pt; font-weight: bold; white-space: nowrap;"> </td>
</tr>
<tr style="vertical-align: bottom;">
<td style="background-color: white;"> </td>
<td style="text-indent: -0.125in; padding-left: 0.125in;"> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td>
</tr>
<tr style="vertical-align: bottom; background-color: #cceeff;">
<td style="width: 0.5in; background-color: white;"> </td>
<td style="text-align: left; text-indent: -0.125in; padding-left: 0.125in;">Opening balance</td>
<td style="width: 15px;"> </td>
<td style="width: 15px; text-align: left;">$</td>
<td style="width: 141px; text-align: right;">4,168,964</td>
<td style="width: 15px; text-align: left;"> </td>
<td style="width: 15px;"> </td>
<td style="width: 15px; text-align: left;">$</td>
<td style="width: 141px; text-align: right;">-</td>
<td style="width: 15px; text-align: left;"> </td>
</tr>
<tr style="vertical-align: bottom; background-color: white;">
<td style="background-color: white;"> </td>
<td style="text-align: left; text-indent: -0.125in; padding-left: 0.125in;">Derivative liability on conversion option of convertible debt and warrants issued to note holders</td>
<td> </td>
<td style="text-align: left;"> </td>
<td style="text-align: right;">-</td>
<td style="text-align: left;"> </td>
<td> </td>
<td style="text-align: left;"> </td>
<td style="text-align: right;">4,518,277</td>
<td style="text-align: left;"> </td>
</tr>
<tr style="vertical-align: bottom; background-color: #cceeff;">
<td style="background-color: white;"> </td>
<td style="text-align: left; text-indent: -0.125in; padding-left: 0.125in;">Derivative liability on warrants issued to term loan note holders and series C preferred stock holders</td>
<td> </td>
<td style="text-align: left;"> </td>
<td style="text-align: right;">3,604,728</td>
<td style="text-align: left;"> </td>
<td> </td>
<td style="text-align: left;"> </td>
<td style="text-align: right;">-</td>
<td style="text-align: left;"> </td>
</tr>
<tr style="vertical-align: bottom; background-color: white;">
<td style="background-color: white;"> </td>
<td style="text-indent: -0.125in; padding-left: 0.125in;">Extinguishment of derivative liability on convertible debt</td>
<td> </td>
<td style="text-align: left;"> </td>
<td style="text-align: right;">(3,890,826</td>
<td style="text-align: left;">)</td>
<td> </td>
<td style="text-align: left;"> </td>
<td style="text-align: right;">-</td>
<td style="text-align: left;"> </td>
</tr>
<tr style="vertical-align: bottom; background-color: #cceeff;">
<td style="background-color: white;"> </td>
<td style="text-align: left; text-indent: -0.125in; padding-bottom: 1.5pt; padding-left: 0.125in;">Mark-to-market adjustment</td>
<td style="padding-bottom: 1.5pt;"> </td>
<td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td>
<td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">1,346,202</td>
<td style="text-align: left; padding-bottom: 1.5pt;"> </td>
<td style="padding-bottom: 1.5pt;"> </td>
<td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td>
<td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">(349,313</td>
<td style="text-align: left; padding-bottom: 1.5pt;">)</td>
</tr>
<tr style="vertical-align: bottom; background-color: white;">
<td style="background-color: white;"> </td>
<td style="text-align: left; text-indent: -0.125in; padding-bottom: 1.5pt; padding-left: 0.125in;">Closing balance</td>
<td style="padding-bottom: 1.5pt;"> </td>
<td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">$</td>
<td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">5,229,068</td>
<td style="text-align: left; padding-bottom: 1.5pt;"> </td>
<td style="padding-bottom: 1.5pt;"> </td>
<td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">$</td>
<td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">4,168,964</td>
<td style="text-align: left; padding-bottom: 1.5pt;"> </td>
</tr>
</table>
</div>
<div><table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; border-collapse: collapse; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;" cellspacing="0" cellpadding="0"><tr style="vertical-align: bottom;"><td style="white-space: nowrap; background-color: white;"> </td><td style="white-space: nowrap;"> </td><td style="padding-bottom: 1.5pt; font-weight: bold; white-space: nowrap;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid; white-space: nowrap;" colspan="2">September 30,<br />2018</td><td style="padding-bottom: 1.5pt; font-weight: bold; white-space: nowrap;"> </td></tr><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td></tr><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td style="font-weight: bold;">Term Loan</td><td> </td><td colspan="2"> </td><td> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="width: 0.5in; background-color: white;"> </td><td style="text-align: left; padding-bottom: 1.5pt;">Term loan issued</td><td style="width: 15px; padding-bottom: 1.5pt;"> </td><td style="width: 15px; text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">$</td><td style="width: 141px; text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">15,250,000</td><td style="width: 15px; text-align: left; padding-bottom: 1.5pt;"> </td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="text-align: left; padding-bottom: 1.5pt;">Closing balance</td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">15,250,000</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;"> </td><td style="text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="text-align: left; font-weight: bold;">Debt discount</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;"> </td><td style="text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="text-align: left;">Debt issuance costs</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">(962,162</td><td style="text-align: left;">)</td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="text-align: left;">Fair value of warrants</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">(1,746,065</td><td style="text-align: left;">)</td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="text-align: left; padding-bottom: 1.5pt;">Amortization of debt discount</td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">51,927</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="text-align: left; padding-bottom: 1.5pt;">Closing balance</td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">(2,656,300</td><td style="text-align: left; padding-bottom: 1.5pt;">)</td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;"> </td><td style="text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="text-align: left; padding-bottom: 1.5pt; font-weight: bold;">Term Loan, net</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: left; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">12,593,700</td><td style="text-align: left; padding-bottom: 1.5pt; font-weight: bold;"> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;"> </td><td style="text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="font-weight: bold;">Disclosed as follows:</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;"> </td><td style="text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="text-align: left; padding-bottom: 1.5pt;">Long-term portion</td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">$</td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">12,593,700</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td></tr></table></div>
<div><table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; border-collapse: collapse; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;" cellspacing="0" cellpadding="0"><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">No. of shares</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">Exercise<br />price <br />per share</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">Weighted<br />average<br />exercise <br />price</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td></tr><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="width: 0.5in; background-color: white;"> </td><td style="font-weight: bold;">Outstanding January 1, 2017</td><td style="width: 15px;"> </td><td style="width: 15px; text-align: left;"> </td><td style="width: 141px; text-align: right;">2,147,641</td><td style="width: 15px; text-align: left;"> </td><td style="width: 15px;"> </td><td style="width: 15px; text-align: left;">$</td><td style="width: 141px; text-align: right; white-space: nowrap;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">3.50 to $11.40</font></td><td style="width: 15px; text-align: left;"> </td><td style="width: 15px;"> </td><td style="width: 15px; text-align: left;">$</td><td style="width: 141px; text-align: right;">3.57</td><td style="width: 15px; text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td>Granted</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">1,107,143</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right; white-space: nowrap;">3.50</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">3.50</td><td style="text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td>Forfeited/cancelled</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">(75,000</td><td style="text-align: left;">)</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right; white-space: nowrap;">4.20</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">4.20</td><td style="text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="padding-bottom: 1.5pt;">Exercised</td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">-</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid; white-space: nowrap;">-</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">-</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="font-weight: bold;">Outstanding December 31, 2017</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">3,179,784</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;">$</td><td style="text-align: right; white-space: nowrap;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">3.50 to $4.20</font></td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">3.50</td><td style="text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td>Granted</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">1,598,539</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right; white-space: nowrap;">3.50</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">3.50</td><td style="text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td>Forfeited/cancelled</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">(75,000</td><td style="text-align: left;">)</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right; white-space: nowrap;">4.20</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">4.20</td><td style="text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: white;"><td
style="background-color: white;"> </td><td style="padding-bottom: 1.5pt;">Exercised</td><td style="padding-bottom: 1.5pt;"> </td><td
style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">-</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid; white-space: nowrap;">-</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">-</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="padding-bottom: 1.5pt; font-weight: bold;">Outstanding September 30, 2018</td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">4,703,323</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">$</td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid; white-space: nowrap;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">3.50 to $3.85</font></td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">$</td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">3.51</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td></tr></table></div>
<div><table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; border-collapse: collapse; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;" cellspacing="0" cellpadding="0"><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td style="text-align: left;" colspan="2"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="10">Warrants outstanding</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="6">Warrants exercisable</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td></tr><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td style="text-align: left; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">Exercise price</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">No. of shares</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">Weighted<br />average<br />remaining years</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">Weighted<br />average<br />exercise price</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">No. of shares</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">Weighted<br />average<br />exercise price</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td></tr><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td style="text-align: left;" colspan="2"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="width: 0.5in; background-color: white;"> </td><td style="width: 15px; text-align: left;">$</td><td style="text-align: right;">3.50</td><td style="width: 15px; text-align: left;"> </td><td style="width: 15px;"> </td><td style="width: 15px; text-align: left;"> </td><td style="width: 188px; text-align: right;">4,559,922</td><td style="width: 15px; text-align: left;"> </td><td style="width: 15px;"> </td><td style="width: 15px; text-align: left;"> </td><td style="width: 188px; text-align: right;">3.83</td><td style="width: 15px; text-align: left;"> </td><td style="width: 15px;"> </td><td style="width: 15px; text-align: left;"> </td><td style="width: 188px; text-align: right;"> </td><td style="width: 15px; text-align: left;"> </td><td style="width: 15px;"> </td><td style="width: 15px; text-align: left;"> </td><td style="width: 188px; text-align: right;">4,559,922</td><td style="width: 15px; text-align: left;"> </td><td style="width: 15px;"> </td><td style="width: 15px; text-align: left;"> </td><td style="width: 172px; text-align: right;"> </td><td style="width: 15px; text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="text-align: left; padding-bottom: 1.5pt;">$</td><td style="text-align: right; padding-bottom: 1.5pt;">3.85</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">143,401</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">1.75</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">143,401</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: left; padding-bottom: 1.5pt;"> </td></tr><tr style="vertical-align: bottom; background-color:
#cceeff;"><td style="background-color: white;"> </td><td style="text-align: left; padding-bottom:
1.5pt;"> </td><td style="text-align: right; padding-bottom: 1.5pt;"> </td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">4,703,323</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">3.77</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">$</td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">3.51</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">4,703,323</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">$</td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">3.51</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td></tr></table></div>
<div><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0pt 0px 0pt 0.5in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"></p><table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; border-collapse: collapse; orphans: 2; widows: 2; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;" cellspacing="0" cellpadding="0"><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">No. of shares</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">Exercise<br />price <br />per share</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">Weighted<br />average<br />exercise <br />price</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td></tr><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="width: 0.5in; background-color: white;"> </td><td style="font-weight: bold;">Outstanding January 1, 2017</td><td style="width: 15px;"> </td><td style="width: 15px; text-align: left;"> </td><td style="width: 141px; text-align: right;">1,333,291</td><td style="width: 15px; text-align: left;"> </td><td style="width: 15px;"> </td><td style="width: 15px; text-align: left;">$</td><td style="width: 141px; text-align: right; white-space: nowrap;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">0.40 to $11.42</font></td><td style="width: 15px; text-align: left;"> </td><td style="width: 15px;"> </td><td style="width: 15px; text-align: left;">$</td><td style="width: 141px; text-align: right;">3.59</td><td style="width: 15px; text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td>Granted</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">120,000</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right; white-space: nowrap;">3.50</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">3.50</td><td style="text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td>Forfeited/cancelled</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">(50,346</td><td style="text-align: left;">)</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right; white-space: nowrap;">3.50</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">3.50</td><td style="text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="padding-bottom: 1.5pt;">Exercised</td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">-</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid; white-space: nowrap;">-</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">-</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="font-weight: bold;">Outstanding December 31, 2017</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">1,402,945</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;">$</td><td style="text-align: right; white-space: nowrap;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">0.40 to $11.42</font></td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">3.59</td><td style="text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td>Granted</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">-</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right; white-space: nowrap;">-</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">-</td><td style="text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td>Forfeited/cancelled</td><td> </td><td style="text-align:
left;"> </td><td style="text-align: right;">(80,264</td><td style="text-align: left;">)</td><td> </td><td style="text-align:
left;"> </td><td style="text-align: right; white-space: nowrap;">3.50</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">3.50</td><td style="text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="padding-bottom: 1.5pt;">Exercised</td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">-</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid; white-space: nowrap;">-</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">-</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="padding-bottom: 1.5pt; font-weight: bold;">Outstanding September 30, 2018</td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">1,322,681</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">$</td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid; white-space: nowrap;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">0.40 to $11.42</font></td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">$</td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">3.59</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td></tr></table></div>
<div><table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; border-collapse: collapse; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;" cellspacing="0" cellpadding="0"><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td colspan="2"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="10">Options outstanding</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="6">Options exercisable</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="background-color: white;"> </td></tr><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td style="font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">Exercise price</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">No. of shares</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">Weighted<br />average<br />remaining <br />years</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">Weighted<br />average<br />exercise <br />price</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">No. of shares</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">Weighted<br />average<br />exercise <br />price</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="background-color: white;"> </td></tr><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td colspan="2"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td><td style="background-color: white;"> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="width: 0.5in; background-color: white;"> </td><td style="width: 15px; text-align: left;">$</td><td style="text-align: right;">0.40</td><td style="width: 15px; text-align: left;"> </td><td style="width: 15px;"> </td><td style="width: 15px; text-align: left;"> </td><td style="width: 188px; text-align: right;">15,000</td><td style="width: 15px; text-align: left;"> </td><td style="width: 15px;"> </td><td style="width: 15px; text-align: left;"> </td><td style="width: 188px; text-align: right;">3.58</td><td style="width: 15px; text-align: left;"> </td><td style="width: 15px;"> </td><td style="width: 15px; text-align: left;"> </td><td style="width: 188px; text-align: right;">          </td><td style="width: 15px; text-align: left;"> </td><td style="width: 15px;"> </td><td style="width: 15px; text-align: left;"> </td><td style="width: 188px; text-align: right;">15,000</td><td style="width: 15px; text-align: left;"> </td><td style="width: 15px;"> </td><td style="width: 15px; text-align: left;"> </td><td style="width: 172px; text-align: right;"> </td><td style="width: 15px; text-align: left;"> </td><td style="width: 141px; background-color: white;"> </td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="text-align: left;">$</td><td style="text-align: right;">3.00</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">312,500</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">4.45</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;"> </td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">312,500</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;"> </td><td style="text-align: left;"> </td><td style="background-color: white;"> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="text-align: left;">$</td><td style="text-align: right;">3.50</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">841,890</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">7.12</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;"> </td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">576,704</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;"> </td><td style="text-align: left;"> </td><td style="background-color:
white;"> </td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td
style="text-align: left;">$</td><td style="text-align: right;">4.00</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">8,791</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">1.28</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;"> </td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">8,791</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;"> </td><td style="text-align: left;"> </td><td style="background-color: white;"> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="text-align: left;">$</td><td style="text-align: right;">5.00</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">128,500</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">2.24</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;"> </td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">128,500</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;"> </td><td style="text-align: left;"> </td><td style="background-color: white;"> </td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="padding-bottom: 1.5pt; background-color: white;"> </td><td style="text-align: left; padding-bottom: 1.5pt;">$</td><td style="text-align: right; padding-bottom: 1.5pt;">11.42</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">16,000</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">2.92</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">16,000</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt; background-color: white;"> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="text-align: left;"> </td><td style="text-align: right;"> </td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;"> </td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;"> </td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;"> </td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;"> </td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;"> </td><td style="text-align: left;"> </td><td style="background-color: white;"> </td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="text-align: right; padding-bottom: 1.5pt;"> </td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">1,322,681</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">5.89</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">$</td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">3.59</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">1,057,495</td><td style="text-align: left;
padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">$</td><td style="text-align: right; border-bottom-color: black;
border-bottom-width: 1.5pt; border-bottom-style: solid;">3.61</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="background-color: white;"> </td></tr></table></div>
<div><table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; border-collapse: collapse; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;" cellspacing="0" cellpadding="0"><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td style="text-indent: -0.125in; padding-left: 0.125in;"> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">Three months<br />ended<br />September 30, <br />2018</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">Three months<br />ended <br />September 30,<br />2017</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">Nine months<br />ended<br />September 30, <br />2018</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">Nine months<br />ended <br />September 30,<br />2017</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td></tr><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td style="text-indent: -0.125in; padding-left: 0.125in;"> </td><td> </td><td colspan="2"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="width: 0.5in; background-color: white;"> </td><td style="text-align: left; text-indent: -0.125in; padding-left: 0.125in;">Unamortized debt discount on convertible debt</td><td style="width: 15px;"> </td><td style="width: 15px; text-align: left;">$</td><td style="width: 141px; text-align: right;">(3,188,043</td><td style="width: 15px; text-align: left;">)</td><td style="width: 15px;"> </td><td style="width: 15px; text-align: left;">$</td><td style="width: 141px; text-align: right;">              -</td><td style="width: 15px; text-align: left;"> </td><td style="width: 15px;"> </td><td style="width: 15px; text-align: left;">$</td><td style="width: 141px; text-align: right;">(3,188,043</td><td style="width: 15px; text-align: left;">)</td><td style="width: 15px;"> </td><td style="width: 15px; text-align: left;">$</td><td style="width: 141px; text-align: right;">              -</td><td style="width: 15px; text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="text-align: left; text-indent: -0.125in; padding-left: 0.125in;">Expenses directly related to debt extinguishment</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">(207,000</td><td style="text-align: left;">)</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">-</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">(207,000</td><td style="text-align: left;">)</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">-</td><td style="text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="padding-bottom: 1.5pt; background-color: white;"> </td><td style="text-align: left; text-indent: -0.125in; padding-bottom: 1.5pt; padding-left: 0.125in;">Derivative liability related to convertible debt on extinguishment date</td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">3,890,826</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">-</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">3,890,826</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">-</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="text-indent: -0.125in; padding-bottom: 1.5pt; padding-left: 0.125in;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">$</td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">495,783</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">$</td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">-</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td
style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black;
border-bottom-width: 1.5pt; border-bottom-style: solid;">$</td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">495,783</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">$</td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">-</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td></tr></table></div>
<div><table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; border-collapse: collapse; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;" cellspacing="0" cellpadding="0"><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">Three months <br />ended <br />September 30,<br />2018</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">Three months<br />ended<br />September 30,<br />2017</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">Nine months<br />ended<br />September 30,<br />2018</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">Nine months<br />ended<br />September 30,<br />2017</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td></tr><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="width: 0.5in; background-color: white;"> </td><td style="text-align: left; padding-bottom: 1.5pt;">Severance costs</td><td style="width: 15px; padding-bottom: 1.5pt;"> </td><td style="width: 15px; text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">$</td><td style="width: 141px; text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">(572,524</td><td style="width: 15px; text-align: left; padding-bottom: 1.5pt;">)</td><td style="width: 15px; padding-bottom: 1.5pt;"> </td><td style="width: 15px; text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="width: 141px; text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">              -</td><td style="width: 15px; text-align: left; padding-bottom: 1.5pt;"> </td><td style="width: 15px; padding-bottom: 1.5pt;"> </td><td style="width: 15px; text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">$</td><td style="width: 141px; text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">(572,524</td><td style="width: 15px; text-align: left; padding-bottom: 1.5pt;">)</td><td style="width: 15px; padding-bottom: 1.5pt;"> </td><td style="width: 15px; text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="width: 141px; text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">              -</td><td style="width: 15px; text-align: left; padding-bottom: 1.5pt;"></td></tr></table></div>
<div><table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; border-collapse: collapse; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;" cellspacing="0" cellpadding="0"><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">Three months <br />ended <br />September 30, <br />2018</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">Three months<br />ended<br />September 30, <br />2017</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">Nine months<br />ended<br />September 30, <br />2018</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">Nine months<br />ended<br />September 30, <br />2017</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td></tr><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="width: 0.5in; background-color: white;"> </td><td style="text-align: left;">Imputed interest</td><td style="width: 15px;"> </td><td style="width: 15px; text-align: left;">$</td><td style="width: 141px; text-align: right;">(74,769</td><td style="width: 15px; text-align: left;">)</td><td style="width: 15px;"> </td><td style="width: 15px; text-align: left;">$</td><td style="width: 141px; text-align: right;">(139,809</td><td style="width: 15px; text-align: left;">)</td><td style="width: 15px;"> </td><td style="width: 15px; text-align: left;">$</td><td style="width: 141px; text-align: right;">(224,307</td><td style="width: 15px; text-align: left;">)</td><td style="width: 15px;"> </td><td style="width: 15px; text-align: left;">$</td><td style="width: 141px; text-align: right;">(432,326</td><td style="width: 15px; text-align: left;">)</td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="text-align: left;">Amortization of debt discount</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">(323,398</td><td style="text-align: left;">)</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">(251,057</td><td style="text-align: left;">)</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">(1,017,408</td><td style="text-align: left;">)</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">(786,339</td><td style="text-align: left;">)</td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="text-align: left;">Interest expense</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">(417,071</td><td style="text-align: left;">)</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">(339,811</td><td style="text-align: left;">)</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">(1,123,916</td><td style="text-align: left;">)</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">(515,078</td><td style="text-align: left;">)</td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="padding-bottom: 1.5pt;">Other</td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">-</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">-</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">(539</td><td style="text-align: left; padding-bottom: 1.5pt;">)</td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">(1,813</td><td style="text-align: left; padding-bottom: 1.5pt;">)</td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">$</td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">(815,238</td><td style="text-align: left; padding-bottom: 1.5pt;">)</td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">$</td><td style="text-align: right; border-bottom-color: black; border-bottom-width:
1.5pt; border-bottom-style: solid;">(730,677</td><td style="text-align: left; padding-bottom: 1.5pt;">)</td><td
style="padding-bottom:
1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">$</td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">(2,366,170</td><td style="text-align: left; padding-bottom: 1.5pt;">)</td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">$</td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">(1,735,556</td><td style="text-align: left; padding-bottom: 1.5pt;">)</td></tr></table></div>
<div><table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; border-collapse: collapse; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;" cellspacing="0" cellpadding="0"><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">Three months <br />and <br />nine months <br />ended<br />September 30,<br />2018</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">Three months <br />and <br />nine months<br />ended<br />September 30,<br />2017</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td></tr><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td><td> </td><td colspan="2"> </td><td> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="width: 0.5in; background-color: white;"> </td><td style="text-align: left;">Stock options</td><td style="width: 15px;"> </td><td style="width: 15px; text-align: left;"> </td><td style="width: 141px; text-align: right;">1,322,681</td><td style="width: 15px; text-align: left;"> </td><td style="width: 15px;"> </td><td style="width: 15px; text-align: left;"> </td><td style="width: 141px; text-align: right;">1,453,291</td><td style="width: 15px; text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td>Warrants</td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">4,703,323</td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;">3,254,784</td><td style="text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="text-align: left; padding-bottom: 1.5pt;">Convertible securities</td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">799,988</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">-</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">6,825,992</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">4,708,075</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td></tr></table></div>
<div><table style="font: 10pt/normal 'times new roman', times, serif; width: 1567px; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; border-collapse: collapse; widows: 1; font-size-adjust: none; font-stretch: normal; -webkit-text-stroke-width: 0px;" cellspacing="0" cellpadding="0"><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td style="text-align: left;"> </td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: center; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;" colspan="2">Amount</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td></tr><tr style="vertical-align: bottom;"><td style="background-color: white;"> </td><td style="text-align: left;"> </td><td> </td><td colspan="2"> </td><td> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="width: 0.5in; background-color: white;"> </td><td style="text-align: left;">2018</td><td style="width: 15px;"> </td><td style="width: 15px; text-align: left;"> </td><td style="width: 141px; text-align: right;">48,326</td><td style="width: 15px; text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="padding-bottom: 1.5pt; background-color: white;"> </td><td style="text-align: left; padding-bottom: 1.5pt;">2019</td><td style="padding-bottom: 1.5pt;"> </td><td style="text-align: left; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;"> </td><td style="text-align: right; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">66,949</td><td style="text-align: left; padding-bottom: 1.5pt;"> </td></tr><tr style="vertical-align: bottom; background-color: #cceeff;"><td style="background-color: white;"> </td><td style="text-align: left;"> </td><td> </td><td style="text-align: left;"> </td><td style="text-align: right;"> </td><td style="text-align: left;"> </td></tr><tr style="vertical-align: bottom; background-color: white;"><td style="background-color: white;"> </td><td style="text-align: left; padding-bottom: 1.5pt; font-weight: bold;">Total</td><td style="padding-bottom: 1.5pt; font-weight: bold;"> </td><td style="text-align: left; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">$</td><td style="text-align: right; font-weight: bold; border-bottom-color: black; border-bottom-width: 1.5pt; border-bottom-style: solid;">115,275</td><td style="text-align: left; padding-bottom: 1.5pt; font-weight: bold;"> </td></tr></table></div>
250000
2290537
0
0
0
0
0
0
2232601
2412153
696823
925533
0.775
0.710
3
4
-1819953
-180357
2800000
The first tranche of its best efforts offering of fifty units, each unit consisting of a note in the principal amount of $10,000 and a warrant to purchase 1,500 shares of common stock at an exercise price of $3.50 per share, raising an additional $500,000.
The Company and its wholly owned subsidiary, Icagen-T, Inc., each entered into a Credit Agreement with Perceptive Credit Holdings II, LP whereby aggregate gross proceeds of $15,250,000 were advanced to the Company. The proceeds were used for general working capital purposes and to repay the convertible notes in the aggregate principal amount of $10,000,000 advanced to the Company and Icagen-T on May 15, 2017.
75774
60061
129260
90036
62237
2500
5833
3750
8496164
5153664
282500
637500
1450500
972000
1237831
91812
471412
674607
56246
224984
224984
224984
735971
1467169
4608146
96673
2612194
38974
1860305
2901369
58965
1296841
27074
1518489
1871488
910471
44858
42159
262966
417208
108333
176823
152797
377166
493333
400000
83333
10000
10000
10000
493333
493333
10000
10000
10500000
9856458
9712500
-500000
25578
85005
-169120
-228963
-1712689
-1417336
-1193029
300511
224307
-5158
8439122
8519471
206458
2200000
12500
8232664
6306971
The $500,000 deferred purchase consideration due on July 1, 2017, was not earned by Pfizer due to Pfizer not meeting its $4,000,000 revenue target. This liability of $500,000 was reversed as other income during the year ended December 31, 2017.
Commencing May 30, 2017, the Company is obligated to pay additional purchase price consideration calculated ("Earn Out Payment") at the greater of (i) 10% (ten percent) of gross revenues per quarter (exclusive of revenue paid by Sanofi to Icagen-T) and (ii) $250,000 per quarter up to an aggregate maximum of $10,000,000 (the "Maximum Earn Out Payment"), subject to the next paragraph. These earn out payments are payable quarterly, 60 days after the completion of each calendar quarter. There are no indications that the Company will not meet the maximum earn out payment.
The Company amended its agreement with Pfizer Research (NC), Inc. (the "Second Amendment"), whereby the Company, at its option, may defer payment of any amount exceeding $50,000 of the minimum additional purchase price consideration of $250,000 per quarter until March 31, 2019 such that the Company is only required to pay $50,000 per quarter for the quarters ending March 2017 to December 2018. Deferred purchase consideration bears interest at a rate of 12.5% per annum, which interest is payable quarterly. The deferred purchase consideration in terms of this agreement is payable, together with the deferred purchase consideration for the quarter ended March 31, 2019, as one lump sum. The Second Amendment also provides that if there is an Insolvency Event (as such term is defined in the Second Amendment) prior to the time that Pfizer Research (NC), Inc. has received the Maximum Earn Out Payment, then upon such Insolvency Event, the full amount of any Earn Out Shortfall (the difference between the Maximum Earn Out Payment and the amount of all Earn Out Payments paid to date) shall be due and payable without further notice, demand or presentment for payment.
1500000
500000
-1500000
500000
-330353
-116485
330353
15318
-101167
398833
398833
The Company closed the first tranche of its note and warrant offering of a maximum of one hundred fifty (150) units and entered into a Securities Purchase Agreement (the "Purchase Agreement") with four accredited investors, which included a trust of which one member of the Company's Board of Directors is the trustee and two other members of the Board of Directors (the "Purchasers"), pursuant to which the Company issued to the Purchasers an aggregate of fifty (50) units, at a purchase price of $10,000 per unit, each unit consisting of: (i) the Company's 10% Subordinated Promissory Note in the principal amount of $10,000 due on the earlier of: (x) the date that is twelve (12) months after its issue date or (y) the Company's receipt of the proceeds of funding from its next collaboration/partnership (the "Note") and (ii) a five year warrant to purchase 1,500 shares of common stock of the Company for each $10,000 Note investment of the Company at an exercise price of $3.50 per share (the "Warrant"). An aggregate of $500,000 in principal amount of Notes and Warrants to purchase an aggregate of 75,000 shares of common stock were sold at the closing. The gross cash proceeds to the Company from the sale of the fifty (50) units was $500,000.
The Securities Act of 1933, as amended (the "Securities Act"), pursuant to a registration statement on Form S-3 (or any successor form), then upon the request of the holder(s) of at least 51% of the Warrants and/or shares of Common Stock issuable thereunder (the "Majority Holders"), the Company is obligated, among other things, to (i) file a registration statement on Form S-1 with the U.S. Securities and Exchange Commission (the "SEC") within 90 days following the date on which the request is given for purposes of registering the shares of Common Stock issuable upon exercise of the Warrants, (ii) use its commercially reasonable efforts to have the registration statement declared effective by the SEC as soon as practicable after filing, subject to any cut backs requested by the SEC, and (iii) maintain the registration until all registrable securities may be sold pursuant to Rule 144 under the Securities Act, without restriction as to volume. In addition, at all times after a Qualifying PO, the Company shall use its commercially reasonable efforts to qualify and remain qualified to register securities under the Securities Act pursuant to a registration statement on Form S-3 or any successor form thereto. At any time commencing nine (9) months after such time as the Company shall have qualified for the use of a registration statement on Form S-3, the Majority Holder(s) shall have the right to request registration on Form S-3 or any similar short-form registration.
210690
210690
139394
71296
83176
83176
56436
26740
56436
26740
83176
On August 11, 2017 for a purchase consideration of $59,320 in terms of a deferred purchase arrangement whereby a deposit of $5,932 was paid and twenty-four monthly installments of $2,472 will be paid commencing on September 11, 2017. The installments bear interest at an effective rate of 10.33% per annum.
During September 2017 for a purchase consideration of $98,446 in terms of a deferred purchase arrangement whereby a deposit of $10,546 was paid and the balance payable in thirty-five monthly installments of $2,750 each, which commenced on September 30, 2017. The installments bear interest at an effective rate of 6.15% per annum.
26103
57073
10000000
10000000
-10000000
-4138206
400000
4518277
780071
950163
3188043
5861794
(i) the Company issued to the Purchaser a three year Senior Secured Convertible Note ("Company Note"), maturing on May 15, 2020, bearing interest at the rate of 13% per annum (which interest rate increases to 18% per annum upon the occurrence of an event of default, as defined in the Company Note), in the aggregate principal amount of $2,000,000 for cash proceeds of $1,920,000 after an original issue discount of 4% or $80,000, before deal related expenses; and (ii) Icagen-T issued to the Purchaser a three year Senior Secured Convertible Note ("Icagen-T Note"), maturing on May 15, 2020, bearing interest at the rate of 13% per annum, in the aggregate principal amount of $8,000,000 for cash proceeds of $7,680,000 after an original issue discount of 4% or $320,000, before transaction related expenses.
0.13
0.13
0.13
0.10
2020-05-15
2020-05-15
2020-05-15
2022-05-15
2022-08-31
3.50
3.50
The Company and Icagen-T, had the right to redeem all or part of each Convertible Note then outstanding, with a minimum prepayment amount of $500,000, at any time upon five (5) business days' notice to the Purchaser by paying an amount in cash equal to: a range between 101% and 103% of the Conversion Amount being redeemed if paid in full and if an Event of Default has occurred and is continuing the Purchaser has the right to require the Company to redeem the Conversion Amount for an amount of cash equal to a range between 116% and 118% of the Conversion Amount being redeemed. The "Conversion Amount" is defined as the sum of (a) the portion of the principal to be converted, redeemed or otherwise with respect to which this determination is being made, (b) all accrued and unpaid Interest with respect to such portion of such principal, (c) all accrued and unpaid late charges with respect to such portion of such principal and such Interest, if any, and (d) all other amounts due thereunder.
A holder of the Purchaser Warrant will not have the right to exercise any portion of the Purchaser Warrant if such holder, together with its affiliates, would beneficially own in excess of 4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to its conversion (the "Beneficial Ownership Limitation"). A holder of the Purchaser Warrant may adjust the Beneficial Ownership Limitation upon not less than 61 days' prior notice to the Company, provided that such Beneficial Ownership Limitation in no event shall exceed 9.99%.
108333
1920000
857143
15250000
2000000
2000000
8000000
8000000
7250000
10000000
200000
10000000
0.001
3.50
0.0301
0.0239
P7Y0M0D
P1Y8M12D
0.749
0.446
0.00
4168964
5229068
4518277
3604728
3890826
349313
-1346202
3069649
1448629
1346202
Between April 2018 and August 2018 the Company closed four tranches of the Series C Preferred units, discussed in note 17 below. Each Preferred Series C unit includes warrants exercisable over 28,571 shares of common stock at an initial exercise price of $3.50 per share subject to anti-dilution pricing adjustments. The anti-dilution pricing adjustments give rise to a derivative financial liability which was initially valued using a Black Scholes valuation model at $1,858,663.
1746065
1858663
723550
10000
3.50
3.50
3.85
15250000
15250000
962162
-1746065
51927
2656300
12593700
12593700
0.010
(i) the London Interbank Offered Rate (LIBOR) for one month periods and (ii) two and one-quarter percent (2.25%), plus an applicable margin rate of 9.75% per annum (the "Interest Rate").
0.02
305000
(i) on or prior to the first anniversary of the Closing Date, 12% of the aggregate outstanding principal amount of the Term Loan being prepaid, (ii) following the first anniversary or the Closing Date, but on or prior to the second anniversary of the Closing Date, 8% of the aggregate outstanding principal amount of the Term Loan being prepaid, and (iii) at any time after the second anniversary of the Closing Date and on or prior to the third anniversary of the Closing Date, 3% of the aggregate outstanding principal amount of the Term Loan being prepaid.
Pursuant to the terms and conditions of the Security Agreement, dated August 31, 2018, among the Company, the Subsidiaries and Perceptive (the "Icagen Security Agreement"), the Company's and the Subsidiaries' obligations under the Icagen Credit Agreement are secured by (i) a first priority lien on all of the existing and after acquired tangible and intangible assets, including intellectual property, of the Company and the Subsidiaries, and (ii) a pledge of 100% of the Company's equity interests in the Subsidiaries.
The Credit Agreements also contain covenants requiring that the Company and its subsidiaries maintain cash and cash equivalents held in one or more accounts subject to the first priority perfected security interests of the lenders under the Credit Agreements of not less than (a) $1,000,000 following the Closing Date until March 31, 2019, and (b) $1,500,000 at all times thereafter. In addition, the Credit Agreements provide for specified quarterly minimum consolidated net revenue covenants of the Company and its subsidiaries for the trailing twelve month period ended on each such calculation date during the term of the Credit Agreements.
(i) each holder of the Company's Series C Convertible Redeemable Preferred Stock entered into a Subordination Agreement with the lenders under the Credit Agreement and Perceptive prohibiting declaration of and payment of accrued dividends on the Company's Series C Convertible Redeemable Preferred Stock until payment in full of all amounts owing under the Credit Agreements and (ii) holders of a majority of the Company's Series C Convertible Redeemable Preferred Stock effected an amendment to the Securities Purchase Agreements executed by the holders of the Company's Series C Convertible Redeemable Preferred Stock that clarified that references in the Securities Purchase Agreements to the prior lender now included Perceptive and that the registration rights of such holders was subject to approval of each of the prior lender and Perceptive until the shares underlying the warrants to each had been sold or registered on a registration statement that had been declared effective by the Securities and Exchange Commission.
10308333
1500
857143
723550
723550
P7Y
3.50
3.50
3.50
3.50
0.12
The Company has offered on a best efforts basis up to a maximum of forty (40) units and a minimum of ten (10) units, at a purchase price of $100,000 per unit, each unit consisting of 28,571 shares of Series C Convertible Preferred Stock, par value $0.001 per share (the "Series C Preferred Stock") and a seven year Warrant to acquire 28,571 shares of the Company's common stock, par value, $0.001 per share, at an exercise price of $3.50 per share.
2000000
100000
400000
400000
300000
2800000
The Series C Preferred Stock is convertible at the option of the holders at any time into such number of shares of common stock as shall be equal to the $3.50 plus any accrued and unpaid dividends on such share of Series C Preferred Stock (the "Accreted Value") divided by the conversion price, which initially is $3.50 per share, subject to certain customary anti-dilution adjustments.
(i) closing of a sale of shares of common stock to the public in a Qualifying Public Offering (as defined below) or a reverse merger into a publicly reporting company that has its common stock listed or quoted and traded on a Trading Market (as such term is defined in the Certificate of Designation) or (ii) the date and time, or the occurrence of an event, specified by vote or written consent of the holders of at least seventy-five percent (75%) of the outstanding shares of Series C Preferred Stock (the "Requisite Holders") (the time of such closing or the date and time specified of the event specified in such vote or written consent is referred to herein as the "Mandatory Conversion Date").
In the event of any liquidation, dissolution or winding-up of the Company, holders of the Series C Preferred Stock shall be entitled to a preference on liquidation equal to $5.25 per share of Series C Preferred Stock plus all accrued and unpaid dividends.
Sale of biological assets or other upfront payments, resulting in aggregate gross proceeds received by us at closing or closings in a transaction or transactions during any twelve (12) month period in excess of $40,000,000.
80548
80548
1333291
2147641
1402945
3179784
1322681
4703323
8791
15000
312500
128500
16000
3561374
143401
902154
120000
1107143
1598539
50346
75000
80264
75000
0.40
11.42
3.50
11.40
0.40
11.42
3.50
4.20
0.40
11.42
3.50
4.20
4.00
0.40
3.00
5.00
11.42
3.50
3.50
3.50
3.50
3.50
4.20
3.50
4.20
3.50
4.20
3.50
3.85
3.59
3.57
3.59
3.50
3.59
3.51
3.50
4.20
3.50
4.20
3.50
3.50
3.50
P5Y10M21D
P3Y9M7D
P1Y3M11D
P3Y6M29D
P4Y5M12D
P2Y2M27D
P2Y11M1D
P3Y9M29D
P1Y9M0D
P7Y1M13D
75000
799989
1057495
4703323
8791
15000
312500
128500
16000
4559922
143401
576704
3.61
3.51
In addition, subject to limited exceptions, a holder of the Warrant will not have the right to exercise any portion of the Warrant if such holder, together with its affiliates, would beneficially own in excess of 9.99% of the shares of common stock outstanding immediately after giving effect to such exercise. A holder of the Warrant may adjust this limitation upon not less than 61 days' prior notice to the Company, provided that such limitation in no event shall exceed 9.99%.
Each unit consisting of 28,571 shares of Series C Preferred Stock and warrants exercisable over 28,571 shares of common stock. The Warrant expires seven years after the issuance date.
50
P5Y
P7Y
265186
511716
P33M
202750
-3188043
-3188043
3890826
3890826
572524
572524
139809
432326
74769
224307
251057
786339
323398
1017408
339811
515078
417071
1123916
1813
539
4708075
3254784
1453291
4708075
3254784
1453291
6825992
4703323
1322681
799988
6825992
4703323
1322681
799988
The Company entered into a Securities Purchase Agreement whereby a trust of which Mr. Tyson is a trustee, acquired a total of twenty four (24) Series C Preferred Stock units for $100,000 each, each unit consisting of 28,571 Series C Preferred shares and a seven year warrant exercisable over 28,571 shares of common stock, at an exercise price of $3.50 per share. Mr. Tyson acquired a total of 685,704 Series C Preferred shares and warrants exercisable over 685,704 shares of common stock.
The Company entered into a Securities Purchase Agreement whereby Mr. Kabatznik acquired one (1) Series C Preferred Stock unit for $100,000 each, each unit consisting of 28,571 Series C Preferred shares and a seven year warrant exercisable over 28,571 shares of common stock, at an exercise price of $3.50 per share. Mr. Kabatznik acquired a total of 28,571 Series C Preferred shares and warrants exercisable over 28,571 shares of common stock.
The Company entered into a Securities Purchase Agreement whereby a trust of which Mr. Tyson is a trustee, acquired a total of twenty four (24) Series C Preferred Stock units for $100,000 each, each unit consisting of 28,571 Series C Preferred shares and a seven year warrant exercisable over 28,571 shares of common stock, at an exercise price of $3.50 per share. Mr. Tyson acquired a total of 685,704 Series C Preferred shares and warrants exercisable over 685,704 shares of common stock.
The Company entered into a Securities Purchase Agreement whereby Mr. Tyson acquired thirty (30) bridge note units of $10,000 each for gross proceeds of $300,000, each unit consisting of a 10% Subordinated Promissory Note in the principal amount of $10,000 due on the earlier of: (x) the date that is twelve (12) months after its issue date or (y) the Company's receipt of the proceeds of funding from its next collaboration/partnership (the "Note") and (ii) a five year warrant to purchase 45,000 shares of common stock of the Company at an exercise price of $3.50 per share.
The Company entered into a Securities Purchase Agreement whereby Mr. Kabatznik acquired fifteen (15) bridge note units of $10,000 each for gross proceeds of $150,000, each unit consisting of a 10% Subordinated Promissory Note in the principal amount of $10,000 due on the earlier of: (x) the date that is twelve (12) months after its issue date or (y) the Company's receipt of the proceeds of funding from its next collaboration/partnership (the "Note") and (ii) a five year warrant to purchase 22,500 shares of common stock of the Company at an exercise price of $3.50 per share.
The Company entered into a Securities Purchase Agreement whereby Mr. Taglich acquired two and a half (2.5) bridge note units of $10,000 each for gross proceeds of $25,000, each unit consisting of a 10% Subordinated Promissory Note in the principal amount of $10,000 due on the earlier of: (x) the date that is twelve (12) months after its issue date or (y) the Company's receipt of the proceeds of funding from its next collaboration/partnership (the "Note") and (ii) a five year warrant to purchase 3,750 shares of common stock of the Company at an exercise price of $3.50 per share.
The Company entered into a Securities Purchase Agreement whereby Mr. Taglich acquired two and a half (2.5) bridge note units of $10,000 each for gross proceeds of $25,000, each unit consisting of a 10% Subordinated Promissory Note in the principal amount of $10,000 due on the earlier of: (x) the date that is twelve (12) months after its issue date or (y) the Company's receipt of the proceeds of funding from its next collaboration/partnership (the "Note") and (ii) a five year warrant to purchase 3,750 shares of common stock of the Company at an exercise price of $3.50 per share.
The Company entered into a Securities Purchase Agreement whereby Mr. Taglich acquired one and a half (1.5) Series C Preferred Stock unit for $100,000 each, for gross proceeds of $150,000, each unit consisting of 28,571 Series C Preferred shares and a seven year warrant exercisable over 28,571 shares of common stock, at an exercise price of $3.50 per share. Mr. Taglich acquired a total of 42,857 Series C Preferred shares and warrants exercisable over 42,857 shares of common stock.
The Company entered into a Securities Purchase Agreement whereby Mr. Taglich acquired one and a half (1.5) Series C Preferred Stock unit for $100,000 each, for gross proceeds of $150,000, each unit consisting of 28,571 Series C Preferred shares and a seven year warrant exercisable over 28,571 shares of common stock, at an exercise price of $3.50 per share. Mr. Taglich acquired a total of 42,857 Series C Preferred shares and warrants exercisable over 42,857 shares of common stock.
48326
66949
115275
48341
150479
55329
154244
2019-04-30
Pursuant to which the purchaser advanced to the Company and Icagen-T, Inc., the aggregate principal sum of $15,250,000 pursuant to four year senior secured term loans, maturing on August 31, 2022, bearing interest at the rate of one month Libor plus 9.75%, with a minimum rate of 12% per annum (the "Term Loans"). The Term Loans amortize at commencing on the last day of each month after August 31, 2020, the Term Loans amortize in an amount equal to 1.0% of the aggregate principal amount of the Term Loans borrowed on the Closing Date.
(i) make additional payments in terms of the Asset Purchase and Collaboration Agreement that it entered into on June 26, 2015 with Pfizer including beginning in 2017, a quarterly earn out payment (the "Earn Out Payment") of 10% of revenue earned during the quarter, with a minimum payment of $250,000 per quarter, up to a maximum aggregate payment of $10,000,000, such minimum being reduced to $50,000 for the quarters ending March 2017 to December 2018 and the difference between $250,000 or the quarterly amount paid and the actual calculation of deferred purchase consideration at 10% of gross revenue per quarter is being deferred and paid as one lump sum with the payment being made the quarter ended March 31, 2019, bearing interest at 12.5% per annum, which interest is payable quarterly; (ii) make minimum lease payments in terms of a sub-lease agreement entered into with Pfizer for the period July l, 2015 to April 30, 2019 with annual escalations of 3.5%, estimated to be $115,275.
285000
0.35
P4Y
375000
295000
The Company's 2015 Stock Incentive Plan the following: (i) options to each of the Company's five non-executive members of the Board to purchase 25,000 shares of common stock, par value $0.001 per share of the Company, of which 12,500 options vest immediately and 12,500 options vest on the one year anniversary of the date of grant,; (ii) an additional option to the Company's Chairman of the Board to purchase 100,000 shares of Common Stock, which vests immediately; (iii) an option to the Company's Chief Executive Officer to purchase 535,000 shares of Common Stock, which vests pro rata on a monthly basis over a three year period; (iv) an option to the Company's Chief Scientific Officer to purchase 120,000 shares of Common Stock, which vests pro rata on a monthly basis over a three year period; and (v) an option to the Company's Chief Financial Officer to purchase 100,000 shares of Common Stock, which vests immediately. All of the stock options granted have an exercise price of $3.50 per share and, subject to early expiration, expire ten years after their date of grant.