CONVERTIBLE DEBT (PIK NOTES) (Tables)

12 Months Ended

Dec. 31, 2019

The key terms of the Series A and Series 2023 Notes, as amended, are highlighted in the table below:

Key Terms	Series 2023 Notes	Series A Notes
Inception Date	08/01/2013	11/03/2014
Cash Received	$10,500,000	$12,500,000
Principal (Initial Liability)	$10,500,000	$19,848,486
Maturity (Term)	Matures on August 1, 2023, but convertible into shares of the Company’s common stock at the discretion of the holder or by the Company based on the market price of the Company’s stock;	Matures on May 1, 2023 but extends to August 1, 2023 if the Series 2023 Notes are still outstanding. Convertible into shares of the Company’s common stock at the discretion of the holder or by the Company based on the market price of the Company’s stock;
Exercise Price	$0.59, adjusted downward based on anti-dilution provisions/downround protection	$0.40, adjusted downward based on anti-dilution provisions/down-round protection;
Stated Interest	10% per annum through December 14, 2017, 3% per annum thereafter, due semiannually;	10% per annum through December 14, 2017, 3% per annum thereafter, due semiannually;
Derivative Liability	$2,055,000 established at inception due to the existence of down-round protection; revalued every quarter using Monte Carlo model	$9,212,285 established at inception due to existence of down-round protection; revalued every quarter using a Monte Carlo model

As of December 31, 2019, the liability components of the PIK Notes on the Company’s balance sheet are listed in the following table:

	Series 2023 Notes		Series A Notes			Total
PIK Note Payable, Gross	$	16,901,447	$	28,265,165		$	45,166,612
Less: Discount		-		(1,464,311	)		(1,464,311	)
PIK Note Payable, Net	$	16,901,447	$	26,800,854		$	43,702,301

PIK Note Derivative Liability	$	-	$	-		$	-

As of December 31, 2018, the liability components of the PIK Notes on the Company’s balance sheet are listed in the following table:

	Series 2023 Notes			Series A Notes			Total
PIK Note Payable, Gross	$	16,394,688			27,622,913			44,017,601
Less: Discount		(1,297,416	)		(7,259,175	)		(8,556,591	)
Less: Deferred Financing Cost		(158,179	)		(266,511	)		(424,690	)
PIK Note Payable, Net	$	14,939,093			20,097,227			35,036,320

PIK Note Derivative Liability	$	253,215			1,526,857			1,780,072