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1. Basis of Presentation and Liquidity The accompanying interim condensed financial statements of Reed’s, Inc. (the “Company”, “we”, “us”, or “our”), are unaudited, but in the opinion of management contain all adjustments, including normal recurring adjustments, necessary to present fairly our financial position at June 30, 2020 and the results of operations and cash flows for the three and six months ended June 30, 2020 and 2019. The balance sheet as of December 31, 2019 is derived from the Company’s audited financial statements. Certain information and footnote disclosures normally included in financial statements that have been prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission regarding interim financial reporting. We believe that the disclosures contained in these condensed financial statements are adequate to make the information presented herein not misleading. For further information, refer to the financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019, as filed with the Securities and Exchange Commission on March 18, 2020 and amended on April 8, 2020. The results of operations for the six months ended June 30, 2020 are not necessarily indicative of the results of operations to be expected for the full fiscal year ending December 31, 2020. COVID-19 Considerations In the quarter ended June 30, 2020, the COVID-19 pandemic did not have a material net impact on our operating results. In the future, the pandemic may cause reduced demand for our products if, for example, the pandemic results in a recessionary economic environment which negatively effects the consumers who purchase our products. Based on the recent increase in demand for our products, we believe that over the long term, there will continue to be strong demand for our products. Our ability to operate without significant negative operational impact from the COVID-19 pandemic will in part depend on our ability to protect our employees and our supply chain. The Company has endeavored to follow the recommended actions of government and health authorities to protect our employees. For the three months ended June 30, 2020, we maintained the consistency of our operations during the onset of the COVID-19 pandemic. We will continue to innovate in managing our business, coordinating with our employees and suppliers to do our part in the infection prevention and remain flexible in responding to our customers and suppliers. However, the uncertainty resulting from the pandemic could result in an unforeseen disruption to our workforce and supply chain (for example an inability of a key supplier or transportation supplier to source and transport materials) that could negatively impact our operations. Through June 30, 2020, the COVID-19 pandemic has not negatively impacted the Company’s liquidity position as of such date. Shipments to customers in the second quarter were up 16% from the first quarter of the year. Through June 30, 2020, we continue to generate cash flows to meet our short-term liquidity needs, and we expect to maintain access to the capital markets. We have also not observed any material impairments of our assets or a significant change in the fair value of our assets due to the COVID-19 pandemic. For additional information on risk factors related to the pandemic or other risks that could impact our results, please refer to “Risk Factors” in Part II, Item 1A of this Form 10-Q. Liquidity The accompanying financial statements have been prepared under the assumption that the Company will continue as a going concern. Such assumption contemplates the realization of assets and satisfaction of liabilities in the normal course of business. For the six months ended June 30, 2020, the Company recorded a net loss of $4,330 and used cash in operations of $5,028. As of June 30, 2020, we had a cash balance of $1,112 with borrowing capacity of $6,704, a stockholder’s equity of $2,866 and a working capital of $2,257, compared to a cash balance of $913 with borrowing capacity of $3,235, stockholders’ equity of $1,147 and a working capital of $4,885 at December 31, 2019. In April 2020, the Company conducted a public offering of 15,333,334 shares of its common stock at $0.375 per share, resulting in net proceeds to the Company of $5,310. On April 20, 2020, the Company received loan proceeds in the amount of $770 pursuant to the Paycheck Protection Program under the Coronavirus Aid, Relief and Economic Security Act (the “Cares Act”) (see Note 8). Historically, we have financed our operations through public and private sales of common stock, issuance of preferred and common stock, convertible debt instruments, term loans and credit lines from financial institutions, and cash generated from operations. We have taken decisive action to improve our margins, including fully outsourcing our manufacturing process, streamlining our product portfolio, negotiating improved vendor contracts and restructuring our selling prices.

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2. Significant Accounting Policies Use of estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Those estimates and assumptions include estimates for reserves of uncollectible accounts, inventory obsolescence, depreciable lives of property and equipment, analysis of impairments of recorded long-term tangible and intangible assets, realization of deferred tax assets, accruals for potential liabilities and assumptions made in valuing stock instruments issued for services. Revenue Recognition The Company recognizes revenue in accordance with ASU 2014-09, Revenue from Contracts with Customers (Topic 606), (“ASC 606”). The underlying principle of ASC 606 is to recognize revenue to depict the transfer of goods or services to customers at the amount expected to be collected. ASC 606 creates a five-step model that requires entities to exercise judgment when considering the terms of contract(s), which include (1) identifying the contract or agreement with a customer, (2) identifying our performance obligations in the contract or agreement, (3) determining the transaction price, (4) allocating the transaction price to the separate performance obligations, and (5) recognizing revenue as each performance obligation is satisfied. The Company does not have any significant contracts with customers requiring performance beyond delivery, and contracts with customers contain no incentives or discounts that could cause revenue to be allocated or adjusted over time. Shipping and handling activities are performed before the customer obtains control of the goods and therefore represent a fulfillment activity rather than a promised service to the customer. Revenue and costs of sales are recognized when control of the products transfers to our customer, which generally occurs upon shipment from our facilities. The Company’s performance obligations are satisfied at that time. All of the Company’s products are offered for sale as finished goods only, and there are no performance obligations required post-shipment for customers to derive the expected value from them. The Company does not allow for returns, except for damaged products when the damage occurred pre-fulfillment. Damaged product returns have historically been insignificant. Because of this, the stand-alone nature of our products, and our assessment of performance obligations and transaction pricing for our sales contracts, we do not currently maintain a contract asset or liability balance for obligations. We assess our contracts and the reasonableness of our conclusions on a quarterly basis. Loss per Common Share Basic earnings (loss) per share is computed by dividing the net income (loss) applicable to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted earnings (loss) per share is computed by dividing the net income applicable to common stockholders by the weighted average number of common shares outstanding plus the number of additional common shares that would have been outstanding if all dilutive potential common shares had been issued, using the treasury stock method. Potential common shares are excluded from the computation when their effect is antidilutive. For the periods ended June 30, 2020 and 2019, the calculations of basic and diluted loss per share are the same because potential dilutive securities would have had an anti-dilutive effect. The potentially dilutive securities consisted of the following: Schedule of Potentially Dilutive Securities <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-left: auto; border-collapse: collapse; width: 90%; margin-right: auto"> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">June 30, 2020</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">June 30, 2019</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 68%">Convertible note to a related party</td> <td style="width: 2%"> </td> <td style="width: 1%"> </td> <td id="xdx_98F_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pii_c20200101__20200630__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__custom--ConvertibleNoteToARelatedPartyMember_zjFU74qp0ESk" style="width: 12%; text-align: right" title="Potentially dilutive securities">2,266,667</td> <td style="width: 1%"> </td> <td style="width: 2%"> </td> <td style="width: 1%"> </td> <td id="xdx_985_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pii_c20190101__20190630__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__custom--ConvertibleNoteToARelatedPartyMember_z69U5HegZW7h" style="width: 12%; text-align: right">2,266,667</td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td>Warrants</td> <td> </td> <td> </td> <td id="xdx_982_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pii_c20200101__20200630__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_zddZmQxve5Jh" style="text-align: right" title="Potentially dilutive securities">6,413,782</td> <td> </td> <td> </td> <td> </td> <td id="xdx_98A_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pii_c20190101__20190630__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_zoqrVG6VRXjb" style="text-align: right">6,620,282</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td>Common stock equivalent of Series A Convertible Preferred stock</td> <td> </td> <td> </td> <td id="xdx_98E_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pii_c20200101__20200630__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--SeriesAPreferredStockMember_zbjrM4rccR1g" style="text-align: right" title="Potentially dilutive securities">37,644</td> <td> </td> <td> </td> <td> </td> <td id="xdx_98C_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pii_c20190101__20190630__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--SeriesAPreferredStockMember_ztTOs3rVBFF5" style="text-align: right">37,644</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td>Common stock issuable</td> <td> </td> <td> </td> <td id="xdx_984_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pii_c20200101__20200630__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__custom--CommonStockIssuableMember_zpyEhBumiNF1" style="text-align: right" title="Potentially dilutive securities">350,000</td> <td> </td> <td> </td> <td> </td> <td id="xdx_988_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_c20190101__20190630__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__custom--CommonStockIssuableMember_zweHGLKnpHmg" style="text-align: right">-</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td>Unvested restricted common stock</td> <td> </td> <td> </td> <td id="xdx_98B_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pii_c20200101__20200630__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__custom--UnvestedRestrictedCommonStockMember_zIwXBNL8Bjil" style="text-align: right" title="Potentially dilutive securities">150,000</td> <td> </td> <td> </td> <td> </td> <td id="xdx_98C_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pii_c20190101__20190630__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__custom--UnvestedRestrictedCommonStockMember_z6JqLsDR5QXg" style="text-align: right">614,514</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-bottom: 1.5pt">Options</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td id="xdx_98C_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pii_c20200101__20200630__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--StockOptionMember_z5h03udjuyUk" style="border-bottom: black 1.5pt solid; text-align: right" title="Potentially dilutive securities">4,777,907</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td id="xdx_983_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pii_c20190101__20190630__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--StockOptionMember_zsFW0cukVqp7" style="border-bottom: black 1.5pt solid; text-align: right">4,365,566</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-bottom: 2.5pt">Total</td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: black 2.25pt double"> </td> <td id="xdx_983_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pii_c20200101__20200630_z20x7OhsJeU5" style="border-bottom: black 2.25pt double; text-align: right" title="Potentially dilutive securities">13,996,000</td> <td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: black 2.25pt double"> </td> <td id="xdx_98E_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pii_c20190101__20190630_zOwradhEkfK" style="border-bottom: black 2.25pt double; text-align: right">13,904,673</td> <td style="padding-bottom: 2.5pt"> </td></tr> </table> The Series A Convertible Preferred Stock is convertible into Common shares at the rate of 1:4. Stock Compensation Expense The Company periodically issues stock options and restricted stock awards to employees and non-employees in non-capital raising transactions for services and for financing costs. The Company accounts for such grants issued and vesting based on ASC 718, whereby the value of the award is measured on the date of grant and recognized as compensation expense on the straight-line basis over the vesting period. The Company recognizes the fair value of stock-based compensation within its Statements of Operations with classification depending on the nature of the services rendered. The fair value of the Company’s stock options is estimated using the Black-Scholes-Merton Option Pricing model, which uses certain assumptions related to risk-free interest rates, expected volatility, expected life of the stock options or restricted stock, and future dividends. Compensation expense is recorded based upon the value derived from the Black-Scholes-Merton Option Pricing model and based on actual experience. The assumptions used in the Black-Scholes-Merton Option Pricing model could materially affect compensation expense recorded in future periods. Advertising Costs Advertising costs are expensed as incurred and are included in selling and marketing expense. Advertising costs for the three months ended June 30, 2020 and 2019, aggregated $303 and $1,227, respectively. Advertising costs for the six months ended June 30, 2020 and 2019, aggregated $606 and $1,533, respectively. Concentrations Gross sales. During the three months ended June 30, 2020, two customers accounted for <span id="xdx_906_eus-gaap--ConcentrationRiskPercentage1_pii_dp_uPercent_c20200401__20200630__srt--MajorCustomersAxis__custom--CustomerOneMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember_zibG2GcXZBkk" title="Percentage of sale accounted to customer">26% and <span id="xdx_90B_eus-gaap--ConcentrationRiskPercentage1_pii_dp_uPercent_c20200401__20200630__srt--MajorCustomersAxis__custom--CustomerTwoMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember_zL5CHK9oL2Uc" title="Percentage of sale accounted to customer">13% of gross sales, respectively, and during the six months ended June 30, 2020, two customers accounted for <span id="xdx_900_eus-gaap--ConcentrationRiskPercentage1_pii_dp_uPercent_c20200101__20200630__srt--MajorCustomersAxis__custom--CustomerOneMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember_zhR0bonP59u9" title="Percentage of sale accounted to customer">25% and <span id="xdx_909_eus-gaap--ConcentrationRiskPercentage1_pii_dp_uPercent_c20200101__20200630__srt--MajorCustomersAxis__custom--CustomerTwoMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember_zuf3GukwXFa2" title="Percentage of sale accounted to customer">14% of gross sales, respectively. During the three months ended June 30, 2019, two customers accounted for <span id="xdx_90B_eus-gaap--ConcentrationRiskPercentage1_pii_dp_uPercent_c20190401__20190630__srt--MajorCustomersAxis__custom--CustomerOneMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember_zR7u4A2entRf" title="Percentage of sale accounted to customer">29% and <span id="xdx_901_eus-gaap--ConcentrationRiskPercentage1_pii_dp_uPercent_c20190401__20190630__srt--MajorCustomersAxis__custom--CustomerTwoMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember_zx42z6RL9mcb" title="Percentage of sale accounted to customer">14% of gross sales, respectively, and during the six months ended June 30, 2019, two customers accounted for <span id="xdx_90B_eus-gaap--ConcentrationRiskPercentage1_pii_dp_uPercent_c20190101__20190630__srt--MajorCustomersAxis__custom--CustomerOneMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember_z33HUqLj4Ayd" title="Percentage of sale accounted to customer">28% and <span id="xdx_90E_eus-gaap--ConcentrationRiskPercentage1_pii_dp_uPercent_c20190101__20190630__srt--MajorCustomersAxis__custom--CustomerTwoMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember_zWA6R1y9viCg" title="Percentage of sale accounted to customer">12% of gross sales, respectively. No other customers exceeded <span id="xdx_90C_eus-gaap--ConcentrationRiskPercentage1_pii_dp_uPercent_c20200101__20200630__srt--RangeAxis__srt--MaximumMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember_zKW5MuCxfKe1" title="Percentage of sale accounted to customer">10% of sales in either period. Accounts receivable. As of June 30, 2020, the Company had accounts receivable from one customer which comprised <span id="xdx_90A_eus-gaap--ConcentrationRiskPercentage1_pii_dp_uPercent_c20200101__20200630__srt--MajorCustomersAxis__custom--CustomerOneMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember_zCJ19Cq957C7" title="Percentage of sale accounted to customer">23% of its gross accounts receivable. As of December 31, 2019, the Company had accounts receivable from one customer which comprised <span id="xdx_909_eus-gaap--ConcentrationRiskPercentage1_pii_dp_uPercent_c20190101__20191231__srt--MajorCustomersAxis__custom--CustomerOneMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember_zfRJcJwMupdk" title="Percentage of sale accounted to customer">14% of its gross accounts receivable. Purchases from vendors. During the three months ended June 30, 2020, no vendor exceeded <span id="xdx_90D_eus-gaap--ConcentrationRiskPercentage1_pii_dp_uPercent_c20200401__20200630__srt--RangeAxis__srt--MaximumMember__srt--MajorCustomersAxis__custom--VendorMember_zVGYWWgcaLwe" title="Percentage of sale accounted to customer">10% of all purchases. During the six months ended June 30, 2020, one vendor accounted for 11% of all purchases. During the three months ended June 30, 2019, each of the Company’s two largest vendors accounted for approximately 10% of all purchases. During the six months ended June 30, 2019, one vendor accounted for 13% of all purchases and another accounted for 10% of all purchases. No other vendors exceeded <span id="xdx_90E_eus-gaap--ConcentrationRiskPercentage1_pii_dp_uPercent_c20200101__20200630__srt--RangeAxis__srt--MaximumMember__srt--MajorCustomersAxis__custom--VendorMember_zswhr0dr1Ta8" title="Percentage of sale accounted to customer">10% of all purchases in either period. Accounts payable. As of June 30, 2020, of the Company’s three largest vendors, two each accounted for <span id="xdx_90F_eus-gaap--ConcentrationRiskPercentage1_pii_dp_uPercent_c20200101__20200630__srt--MajorCustomersAxis__custom--VendorOneMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsPayableMember_zi6eKpCgz7Wh" title="Percentage of sale accounted to customer"><span id="xdx_900_eus-gaap--ConcentrationRiskPercentage1_pii_dp_uPercent_c20200101__20200630__srt--MajorCustomersAxis__custom--VendorTwoMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsPayableMember_z64kGQXrbjYg" title="Percentage of sale accounted to customer">12%,of the total accounts payable and the third, <span id="xdx_90B_eus-gaap--ConcentrationRiskPercentage1_pii_dp_uPercent_c20200101__20200630__srt--MajorCustomersAxis__custom--VendorThreeMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsPayableMember_zXiTxS0Rzhvd" title="Percentage of sale accounted to customer">11%. As of December 31, 2019, of the Company’s largest three vendors, one accounted for <span id="xdx_908_eus-gaap--ConcentrationRiskPercentage1_pii_dp_uPercent_c20190101__20191231__srt--MajorCustomersAxis__custom--VendorOneMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsPayableMember_zqvl8kzwDog2" title="Percentage of sale accounted to customer">19% of the total accounts payable, the second, <span id="xdx_90E_eus-gaap--ConcentrationRiskPercentage1_pii_dp_uPercent_c20190101__20191231__srt--MajorCustomersAxis__custom--VendorTwoMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsPayableMember_zZCobUoHFAtl" title="Percentage of sale accounted to customer">15%, and the third, <span id="xdx_904_eus-gaap--ConcentrationRiskPercentage1_pii_dp_uPercent_c20190101__20191231__srt--MajorCustomersAxis__custom--VendorThreeMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsPayableMember_z04Vy9w1FdQc" title="Percentage of sale accounted to customer">14%. Fair Value of Financial Instruments The Company uses various inputs in determining the fair value of its financial assets and liabilities and measures these assets on a recurring basis. Financial assets recorded at fair value are categorized by the level of subjectivity associated with the inputs used to measure their fair value. ASC 820 defines the following levels of subjectivity associated with the inputs: Level 1—Quoted prices in active markets for identical assets or liabilities. Level 2—Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly. Level 3—Unobservable inputs based on the Company’s assumptions. The carrying amounts of financial assets and liabilities, such as cash and cash equivalents, accounts receivable, short-term bank loans, accounts payable, notes payable and other payables, approximate their fair values because of the short maturity of these instruments. The carrying values of capital lease obligations and long-term financing obligations approximate their fair values because interest rates on these obligations are based on prevailing market interest rates. As of June 30, 2020, and December 31, 2019, the Company’s balance sheets included Level 2 liabilities comprised of the fair value of warrant liabilities aggregating $15 and $8, respectively (see Note 10). Recent Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments. ASU 2016-13 requires entities to use a forward-looking approach based on current expected credit losses (“CECL”) to estimate credit losses on certain types of financial instruments, including trade receivables. This may result in the earlier recognition of allowances for losses. ASU 2016-13 is effective for the Company beginning January 1, 2023, and early adoption is permitted. The Company does not believe the potential impact of the new guidance and related codification improvements will be material to its financial position, results of operations and cash flows. Other recent accounting pronouncements issued by the FASB, its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future financial statements.

Use of estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Those estimates and assumptions include estimates for reserves of uncollectible accounts, inventory obsolescence, depreciable lives of property and equipment, analysis of impairments of recorded long-term tangible and intangible assets, realization of deferred tax assets, accruals for potential liabilities and assumptions made in valuing stock instruments issued for services.

Revenue Recognition The Company recognizes revenue in accordance with ASU 2014-09, Revenue from Contracts with Customers (Topic 606), (“ASC 606”). The underlying principle of ASC 606 is to recognize revenue to depict the transfer of goods or services to customers at the amount expected to be collected. ASC 606 creates a five-step model that requires entities to exercise judgment when considering the terms of contract(s), which include (1) identifying the contract or agreement with a customer, (2) identifying our performance obligations in the contract or agreement, (3) determining the transaction price, (4) allocating the transaction price to the separate performance obligations, and (5) recognizing revenue as each performance obligation is satisfied. The Company does not have any significant contracts with customers requiring performance beyond delivery, and contracts with customers contain no incentives or discounts that could cause revenue to be allocated or adjusted over time. Shipping and handling activities are performed before the customer obtains control of the goods and therefore represent a fulfillment activity rather than a promised service to the customer. Revenue and costs of sales are recognized when control of the products transfers to our customer, which generally occurs upon shipment from our facilities. The Company’s performance obligations are satisfied at that time. All of the Company’s products are offered for sale as finished goods only, and there are no performance obligations required post-shipment for customers to derive the expected value from them. The Company does not allow for returns, except for damaged products when the damage occurred pre-fulfillment. Damaged product returns have historically been insignificant. Because of this, the stand-alone nature of our products, and our assessment of performance obligations and transaction pricing for our sales contracts, we do not currently maintain a contract asset or liability balance for obligations. We assess our contracts and the reasonableness of our conclusions on a quarterly basis.

Loss per Common Share Basic earnings (loss) per share is computed by dividing the net income (loss) applicable to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted earnings (loss) per share is computed by dividing the net income applicable to common stockholders by the weighted average number of common shares outstanding plus the number of additional common shares that would have been outstanding if all dilutive potential common shares had been issued, using the treasury stock method. Potential common shares are excluded from the computation when their effect is antidilutive. For the periods ended June 30, 2020 and 2019, the calculations of basic and diluted loss per share are the same because potential dilutive securities would have had an anti-dilutive effect. The potentially dilutive securities consisted of the following: Schedule of Potentially Dilutive Securities <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-left: auto; border-collapse: collapse; width: 90%; margin-right: auto"> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">June 30, 2020</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">June 30, 2019</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 68%">Convertible note to a related party</td> <td style="width: 2%"> </td> <td style="width: 1%"> </td> <td id="xdx_98F_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pii_c20200101__20200630__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__custom--ConvertibleNoteToARelatedPartyMember_zjFU74qp0ESk" style="width: 12%; text-align: right" title="Potentially dilutive securities">2,266,667</td> <td style="width: 1%"> </td> <td style="width: 2%"> </td> <td style="width: 1%"> </td> <td id="xdx_985_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pii_c20190101__20190630__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__custom--ConvertibleNoteToARelatedPartyMember_z69U5HegZW7h" style="width: 12%; text-align: right">2,266,667</td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td>Warrants</td> <td> </td> <td> </td> <td id="xdx_982_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pii_c20200101__20200630__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_zddZmQxve5Jh" style="text-align: right" title="Potentially dilutive securities">6,413,782</td> <td> </td> <td> </td> <td> </td> <td id="xdx_98A_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pii_c20190101__20190630__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_zoqrVG6VRXjb" style="text-align: right">6,620,282</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td>Common stock equivalent of Series A Convertible Preferred stock</td> <td> </td> <td> </td> <td id="xdx_98E_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pii_c20200101__20200630__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--SeriesAPreferredStockMember_zbjrM4rccR1g" style="text-align: right" title="Potentially dilutive securities">37,644</td> <td> </td> <td> </td> <td> </td> <td id="xdx_98C_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pii_c20190101__20190630__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--SeriesAPreferredStockMember_ztTOs3rVBFF5" style="text-align: right">37,644</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td>Common stock issuable</td> <td> </td> <td> </td> <td id="xdx_984_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pii_c20200101__20200630__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__custom--CommonStockIssuableMember_zpyEhBumiNF1" style="text-align: right" title="Potentially dilutive securities">350,000</td> <td> </td> <td> </td> <td> </td> <td id="xdx_988_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_c20190101__20190630__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__custom--CommonStockIssuableMember_zweHGLKnpHmg" style="text-align: right">-</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td>Unvested restricted common stock</td> <td> </td> <td> </td> <td id="xdx_98B_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pii_c20200101__20200630__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__custom--UnvestedRestrictedCommonStockMember_zIwXBNL8Bjil" style="text-align: right" title="Potentially dilutive securities">150,000</td> <td> </td> <td> </td> <td> </td> <td id="xdx_98C_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pii_c20190101__20190630__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__custom--UnvestedRestrictedCommonStockMember_z6JqLsDR5QXg" style="text-align: right">614,514</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-bottom: 1.5pt">Options</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td id="xdx_98C_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pii_c20200101__20200630__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--StockOptionMember_z5h03udjuyUk" style="border-bottom: black 1.5pt solid; text-align: right" title="Potentially dilutive securities">4,777,907</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td id="xdx_983_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pii_c20190101__20190630__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--StockOptionMember_zsFW0cukVqp7" style="border-bottom: black 1.5pt solid; text-align: right">4,365,566</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-bottom: 2.5pt">Total</td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: black 2.25pt double"> </td> <td id="xdx_983_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pii_c20200101__20200630_z20x7OhsJeU5" style="border-bottom: black 2.25pt double; text-align: right" title="Potentially dilutive securities">13,996,000</td> <td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: black 2.25pt double"> </td> <td id="xdx_98E_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pii_c20190101__20190630_zOwradhEkfK" style="border-bottom: black 2.25pt double; text-align: right">13,904,673</td> <td style="padding-bottom: 2.5pt"> </td></tr> </table> The Series A Convertible Preferred Stock is convertible into Common shares at the rate of 1:4.

For the periods ended June 30, 2020 and 2019, the calculations of basic and diluted loss per share are the same because potential dilutive securities would have had an anti-dilutive effect. The potentially dilutive securities consisted of the following: Schedule of Potentially Dilutive Securities <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-left: auto; border-collapse: collapse; width: 90%; margin-right: auto"> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">June 30, 2020</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">June 30, 2019</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 68%">Convertible note to a related party</td> <td style="width: 2%"> </td> <td style="width: 1%"> </td> <td id="xdx_98F_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pii_c20200101__20200630__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__custom--ConvertibleNoteToARelatedPartyMember_zjFU74qp0ESk" style="width: 12%; text-align: right" title="Potentially dilutive securities">2,266,667</td> <td style="width: 1%"> </td> <td style="width: 2%"> </td> <td style="width: 1%"> </td> <td id="xdx_985_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pii_c20190101__20190630__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__custom--ConvertibleNoteToARelatedPartyMember_z69U5HegZW7h" style="width: 12%; text-align: right">2,266,667</td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td>Warrants</td> <td> </td> <td> </td> <td id="xdx_982_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pii_c20200101__20200630__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_zddZmQxve5Jh" style="text-align: right" title="Potentially dilutive securities">6,413,782</td> <td> </td> <td> </td> <td> </td> <td id="xdx_98A_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pii_c20190101__20190630__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_zoqrVG6VRXjb" style="text-align: right">6,620,282</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td>Common stock equivalent of Series A Convertible Preferred stock</td> <td> </td> <td> </td> <td id="xdx_98E_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pii_c20200101__20200630__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--SeriesAPreferredStockMember_zbjrM4rccR1g" style="text-align: right" title="Potentially dilutive securities">37,644</td> <td> </td> <td> </td> <td> </td> <td id="xdx_98C_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pii_c20190101__20190630__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--SeriesAPreferredStockMember_ztTOs3rVBFF5" style="text-align: right">37,644</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td>Common stock issuable</td> <td> </td> <td> </td> <td id="xdx_984_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pii_c20200101__20200630__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__custom--CommonStockIssuableMember_zpyEhBumiNF1" style="text-align: right" title="Potentially dilutive securities">350,000</td> <td> </td> <td> </td> <td> </td> <td id="xdx_988_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_c20190101__20190630__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__custom--CommonStockIssuableMember_zweHGLKnpHmg" style="text-align: right">-</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td>Unvested restricted common stock</td> <td> </td> <td> </td> <td id="xdx_98B_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pii_c20200101__20200630__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__custom--UnvestedRestrictedCommonStockMember_zIwXBNL8Bjil" style="text-align: right" title="Potentially dilutive securities">150,000</td> <td> </td> <td> </td> <td> </td> <td id="xdx_98C_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pii_c20190101__20190630__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__custom--UnvestedRestrictedCommonStockMember_z6JqLsDR5QXg" style="text-align: right">614,514</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-bottom: 1.5pt">Options</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td id="xdx_98C_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pii_c20200101__20200630__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--StockOptionMember_z5h03udjuyUk" style="border-bottom: black 1.5pt solid; text-align: right" title="Potentially dilutive securities">4,777,907</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1.5pt solid"> </td> <td id="xdx_983_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pii_c20190101__20190630__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--StockOptionMember_zsFW0cukVqp7" style="border-bottom: black 1.5pt solid; text-align: right">4,365,566</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-bottom: 2.5pt">Total</td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: black 2.25pt double"> </td> <td id="xdx_983_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pii_c20200101__20200630_z20x7OhsJeU5" style="border-bottom: black 2.25pt double; text-align: right" title="Potentially dilutive securities">13,996,000</td> <td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: black 2.25pt double"> </td> <td id="xdx_98E_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pii_c20190101__20190630_zOwradhEkfK" style="border-bottom: black 2.25pt double; text-align: right">13,904,673</td> <td style="padding-bottom: 2.5pt"> </td></tr> </table>

2266667

6413782

6620282

37644

350000

150000

614514

4777907

4365566

13996000

13904673

Stock Compensation Expense The Company periodically issues stock options and restricted stock awards to employees and non-employees in non-capital raising transactions for services and for financing costs. The Company accounts for such grants issued and vesting based on ASC 718, whereby the value of the award is measured on the date of grant and recognized as compensation expense on the straight-line basis over the vesting period. The Company recognizes the fair value of stock-based compensation within its Statements of Operations with classification depending on the nature of the services rendered. The fair value of the Company’s stock options is estimated using the Black-Scholes-Merton Option Pricing model, which uses certain assumptions related to risk-free interest rates, expected volatility, expected life of the stock options or restricted stock, and future dividends. Compensation expense is recorded based upon the value derived from the Black-Scholes-Merton Option Pricing model and based on actual experience. The assumptions used in the Black-Scholes-Merton Option Pricing model could materially affect compensation expense recorded in future periods.

Advertising Costs Advertising costs are expensed as incurred and are included in selling and marketing expense. Advertising costs for the three months ended June 30, 2020 and 2019, aggregated $303 and $1,227, respectively. Advertising costs for the six months ended June 30, 2020 and 2019, aggregated $606 and $1,533, respectively.

303000

1227000

606000

1533000

Concentrations Gross sales. During the three months ended June 30, 2020, two customers accounted for <span id="xdx_906_eus-gaap--ConcentrationRiskPercentage1_pii_dp_uPercent_c20200401__20200630__srt--MajorCustomersAxis__custom--CustomerOneMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember_zibG2GcXZBkk" title="Percentage of sale accounted to customer">26% and <span id="xdx_90B_eus-gaap--ConcentrationRiskPercentage1_pii_dp_uPercent_c20200401__20200630__srt--MajorCustomersAxis__custom--CustomerTwoMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember_zL5CHK9oL2Uc" title="Percentage of sale accounted to customer">13% of gross sales, respectively, and during the six months ended June 30, 2020, two customers accounted for <span id="xdx_900_eus-gaap--ConcentrationRiskPercentage1_pii_dp_uPercent_c20200101__20200630__srt--MajorCustomersAxis__custom--CustomerOneMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember_zhR0bonP59u9" title="Percentage of sale accounted to customer">25% and <span id="xdx_909_eus-gaap--ConcentrationRiskPercentage1_pii_dp_uPercent_c20200101__20200630__srt--MajorCustomersAxis__custom--CustomerTwoMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember_zuf3GukwXFa2" title="Percentage of sale accounted to customer">14% of gross sales, respectively. During the three months ended June 30, 2019, two customers accounted for <span id="xdx_90B_eus-gaap--ConcentrationRiskPercentage1_pii_dp_uPercent_c20190401__20190630__srt--MajorCustomersAxis__custom--CustomerOneMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember_zR7u4A2entRf" title="Percentage of sale accounted to customer">29% and <span id="xdx_901_eus-gaap--ConcentrationRiskPercentage1_pii_dp_uPercent_c20190401__20190630__srt--MajorCustomersAxis__custom--CustomerTwoMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember_zx42z6RL9mcb" title="Percentage of sale accounted to customer">14% of gross sales, respectively, and during the six months ended June 30, 2019, two customers accounted for <span id="xdx_90B_eus-gaap--ConcentrationRiskPercentage1_pii_dp_uPercent_c20190101__20190630__srt--MajorCustomersAxis__custom--CustomerOneMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember_z33HUqLj4Ayd" title="Percentage of sale accounted to customer">28% and <span id="xdx_90E_eus-gaap--ConcentrationRiskPercentage1_pii_dp_uPercent_c20190101__20190630__srt--MajorCustomersAxis__custom--CustomerTwoMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember_zWA6R1y9viCg" title="Percentage of sale accounted to customer">12% of gross sales, respectively. No other customers exceeded <span id="xdx_90C_eus-gaap--ConcentrationRiskPercentage1_pii_dp_uPercent_c20200101__20200630__srt--RangeAxis__srt--MaximumMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember_zKW5MuCxfKe1" title="Percentage of sale accounted to customer">10% of sales in either period. Accounts receivable. As of June 30, 2020, the Company had accounts receivable from one customer which comprised <span id="xdx_90A_eus-gaap--ConcentrationRiskPercentage1_pii_dp_uPercent_c20200101__20200630__srt--MajorCustomersAxis__custom--CustomerOneMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember_zCJ19Cq957C7" title="Percentage of sale accounted to customer">23% of its gross accounts receivable. As of December 31, 2019, the Company had accounts receivable from one customer which comprised <span id="xdx_909_eus-gaap--ConcentrationRiskPercentage1_pii_dp_uPercent_c20190101__20191231__srt--MajorCustomersAxis__custom--CustomerOneMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember_zfRJcJwMupdk" title="Percentage of sale accounted to customer">14% of its gross accounts receivable. Purchases from vendors. During the three months ended June 30, 2020, no vendor exceeded <span id="xdx_90D_eus-gaap--ConcentrationRiskPercentage1_pii_dp_uPercent_c20200401__20200630__srt--RangeAxis__srt--MaximumMember__srt--MajorCustomersAxis__custom--VendorMember_zVGYWWgcaLwe" title="Percentage of sale accounted to customer">10% of all purchases. During the six months ended June 30, 2020, one vendor accounted for 11% of all purchases. During the three months ended June 30, 2019, each of the Company’s two largest vendors accounted for approximately 10% of all purchases. During the six months ended June 30, 2019, one vendor accounted for 13% of all purchases and another accounted for 10% of all purchases. No other vendors exceeded <span id="xdx_90E_eus-gaap--ConcentrationRiskPercentage1_pii_dp_uPercent_c20200101__20200630__srt--RangeAxis__srt--MaximumMember__srt--MajorCustomersAxis__custom--VendorMember_zswhr0dr1Ta8" title="Percentage of sale accounted to customer">10% of all purchases in either period. Accounts payable. As of June 30, 2020, of the Company’s three largest vendors, two each accounted for <span id="xdx_90F_eus-gaap--ConcentrationRiskPercentage1_pii_dp_uPercent_c20200101__20200630__srt--MajorCustomersAxis__custom--VendorOneMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsPayableMember_zi6eKpCgz7Wh" title="Percentage of sale accounted to customer"><span id="xdx_900_eus-gaap--ConcentrationRiskPercentage1_pii_dp_uPercent_c20200101__20200630__srt--MajorCustomersAxis__custom--VendorTwoMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsPayableMember_z64kGQXrbjYg" title="Percentage of sale accounted to customer">12%,of the total accounts payable and the third, <span id="xdx_90B_eus-gaap--ConcentrationRiskPercentage1_pii_dp_uPercent_c20200101__20200630__srt--MajorCustomersAxis__custom--VendorThreeMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsPayableMember_zXiTxS0Rzhvd" title="Percentage of sale accounted to customer">11%. As of December 31, 2019, of the Company’s largest three vendors, one accounted for <span id="xdx_908_eus-gaap--ConcentrationRiskPercentage1_pii_dp_uPercent_c20190101__20191231__srt--MajorCustomersAxis__custom--VendorOneMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsPayableMember_zqvl8kzwDog2" title="Percentage of sale accounted to customer">19% of the total accounts payable, the second, <span id="xdx_90E_eus-gaap--ConcentrationRiskPercentage1_pii_dp_uPercent_c20190101__20191231__srt--MajorCustomersAxis__custom--VendorTwoMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsPayableMember_zZCobUoHFAtl" title="Percentage of sale accounted to customer">15%, and the third, <span id="xdx_904_eus-gaap--ConcentrationRiskPercentage1_pii_dp_uPercent_c20190101__20191231__srt--MajorCustomersAxis__custom--VendorThreeMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsPayableMember_z04Vy9w1FdQc" title="Percentage of sale accounted to customer">14%.

0.26

0.13

0.25

0.14

0.29

0.14

0.28

0.12

0.10

0.23

0.14

0.10

0.11

0.10

0.13

0.10

0.12

0.11

0.19

0.15

0.14

Fair Value of Financial Instruments The Company uses various inputs in determining the fair value of its financial assets and liabilities and measures these assets on a recurring basis. Financial assets recorded at fair value are categorized by the level of subjectivity associated with the inputs used to measure their fair value. ASC 820 defines the following levels of subjectivity associated with the inputs: Level 1—Quoted prices in active markets for identical assets or liabilities. Level 2—Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly. Level 3—Unobservable inputs based on the Company’s assumptions. The carrying amounts of financial assets and liabilities, such as cash and cash equivalents, accounts receivable, short-term bank loans, accounts payable, notes payable and other payables, approximate their fair values because of the short maturity of these instruments. The carrying values of capital lease obligations and long-term financing obligations approximate their fair values because interest rates on these obligations are based on prevailing market interest rates. As of June 30, 2020, and December 31, 2019, the Company’s balance sheets included Level 2 liabilities comprised of the fair value of warrant liabilities aggregating $15 and $8, respectively (see Note 10).

15000 8000

Recent Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments. ASU 2016-13 requires entities to use a forward-looking approach based on current expected credit losses (“CECL”) to estimate credit losses on certain types of financial instruments, including trade receivables. This may result in the earlier recognition of allowances for losses. ASU 2016-13 is effective for the Company beginning January 1, 2023, and early adoption is permitted. The Company does not believe the potential impact of the new guidance and related codification improvements will be material to its financial position, results of operations and cash flows. Other recent accounting pronouncements issued by the FASB, its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future financial statements.

3. Inventory Inventory is valued at the lower of cost (first-in, first-out) or net realizable value, and net of reserves is comprised of the following (in thousands): Schedule of Inventory <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_491_20200630_zXbzffXQ2rnb" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">June 30, 2020</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_49E_20191231_zzJmXZ6x5CNe" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31, 2019</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr id="xdx_406_eus-gaap--InventoryRawMaterials_iI_pn3n3_maINzOY8_zKMBDRQO0Wa1" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 64%; text-align: left">Raw materials and packaging</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 14%; text-align: right">4,576</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 14%; text-align: right">4,261</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_40B_eus-gaap--InventoryFinishedGoods_iI_pn3n3_maINzOY8_zsL3jiKtXJ93" style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt">Finished products</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">3,835</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">6,247</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_409_eus-gaap--InventoryNet_iTI_pn3n3_mtINzOY8_z6WCKzRANeAi" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt">Total</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">8,411</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">10,508</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> The Company has recorded a reserve for slow moving and potentially obsolete inventory. The reserve at June 30, 2020, and December 31, 2019, was $437 and $646, respectively.

Inventory is valued at the lower of cost (first-in, first-out) or net realizable value, and net of reserves is comprised of the following (in thousands): Schedule of Inventory <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_491_20200630_zXbzffXQ2rnb" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">June 30, 2020</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_49E_20191231_zzJmXZ6x5CNe" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31, 2019</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr id="xdx_406_eus-gaap--InventoryRawMaterials_iI_pn3n3_maINzOY8_zKMBDRQO0Wa1" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 64%; text-align: left">Raw materials and packaging</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 14%; text-align: right">4,576</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 14%; text-align: right">4,261</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_40B_eus-gaap--InventoryFinishedGoods_iI_pn3n3_maINzOY8_zsL3jiKtXJ93" style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt">Finished products</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">3,835</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">6,247</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_409_eus-gaap--InventoryNet_iTI_pn3n3_mtINzOY8_z6WCKzRANeAi" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt">Total</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">8,411</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">10,508</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

4576000

4261000

3835000

6247000

8411000

10508000

437000

646000

4. Property and Equipment Property and equipment is comprised of the following (in thousands): Schedule of Property and Equipment <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">June 30, 2020</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31, 2019</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 64%; text-align: left">Right-of-use assets under operating leases</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_98C_eus-gaap--PropertyPlantAndEquipmentGross_iI_pn3n3_c20200630__us-gaap--PropertyPlantAndEquipmentByTypeAxis__custom--RightOfUseAssetsUnderOperatingLeasesMember_zV8PQgP7JVe3" style="width: 14%; text-align: right" title="Total cost">730</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_988_eus-gaap--PropertyPlantAndEquipmentGross_iI_pn3n3_c20191231__us-gaap--PropertyPlantAndEquipmentByTypeAxis__custom--RightOfUseAssetsUnderOperatingLeasesMember_zN9c8N8iO8Z2" style="width: 14%; text-align: right">730</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Right-of-use assets under finance leases</td><td> </td> <td style="text-align: left"> </td><td id="xdx_980_eus-gaap--PropertyPlantAndEquipmentGross_iI_pn3n3_c20200630__us-gaap--PropertyPlantAndEquipmentByTypeAxis__custom--RightOfUseAssetsUnderFinanceLeasesMember_zShWfAZ0M6si" style="text-align: right" title="Total cost">66</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_98D_eus-gaap--PropertyPlantAndEquipmentGross_iI_pn3n3_c20191231__us-gaap--PropertyPlantAndEquipmentByTypeAxis__custom--RightOfUseAssetsUnderFinanceLeasesMember_z9vjzD94UJZ8" style="text-align: right">179</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Computer hardware and software</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98C_eus-gaap--PropertyPlantAndEquipmentGross_iI_pn3n3_c20200630__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--ComputerEquipmentMember_z1g1GJ9ub37b" style="text-align: right" title="Total cost">637</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_98C_eus-gaap--PropertyPlantAndEquipmentGross_iI_pn3n3_c20191231__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--ComputerEquipmentMember_zFeL09Fluljd" style="text-align: right">543</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt">Machinery and equipment</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td id="xdx_982_eus-gaap--PropertyPlantAndEquipmentGross_iI_pn3n3_c20200630__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--MachineryAndEquipmentMember_z7cypG8dLdkb" style="border-bottom: Black 1.5pt solid; text-align: right" title="Total cost">91</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td id="xdx_981_eus-gaap--PropertyPlantAndEquipmentGross_iI_pn3n3_c20191231__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--MachineryAndEquipmentMember_zxh3No1DBTT9" style="border-bottom: Black 1.5pt solid; text-align: right">83</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Total cost</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98E_eus-gaap--PropertyPlantAndEquipmentGross_iI_pn3n3_c20200630_zZoj5ZRw0yml" style="text-align: right" title="Total cost">1,524</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_98C_eus-gaap--PropertyPlantAndEquipmentGross_iI_pn3n3_c20191231_z13RirfPJsql" style="text-align: right">1,535</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt">Accumulated depreciation and amortization</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td id="xdx_982_eus-gaap--AccumulatedDepreciationDepletionAndAmortizationPropertyPlantAndEquipment_iNI_pn3n3_di_c20200630_z4MWNlFPxvZe" style="border-bottom: Black 1.5pt solid; text-align: right" title="Total cost">(501</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td id="xdx_987_eus-gaap--AccumulatedDepreciationDepletionAndAmortizationPropertyPlantAndEquipment_iNI_pn3n3_di_c20191231_zdXb6XPC6BGk" style="border-bottom: Black 1.5pt solid; text-align: right">(482</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt">Net book value</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_986_eus-gaap--PropertyPlantAndEquipmentNet_iI_pn3n3_c20200630_zUTfbNyOq5H4" style="border-bottom: Black 2.5pt double; text-align: right" title="Total cost">1,023</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_984_eus-gaap--PropertyPlantAndEquipmentNet_iI_pn3n3_c20191231_zPc11PvR9tq8" style="border-bottom: Black 2.5pt double; text-align: right">1,053</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> Depreciation expense for the three months ended June 30, 2020 and 2019 was $12 and $12, respectively. Depreciation expense for the six months then June 30, 2020 and 2019 was $24 and $25, respectively. During the six months ended June 30, 2020, the Company disposed of right-of-use assets under finance leases with a net book value of $<span id="xdx_908_eus-gaap--PropertyPlantAndEquipmentDisposals_c20200101__20200630__us-gaap--PropertyPlantAndEquipmentByTypeAxis__custom--RightOfUseAssetsUnderFinanceLeasesMember_pn3n3" title="Net book value of disposed right-of-use assets under finance leases">45, and terminated $<span id="xdx_900_eus-gaap--PropertyPlantAndEquipmentTransfersAndChanges_c20200101__20200630__us-gaap--PropertyPlantAndEquipmentByTypeAxis__custom--RightOfUseAssetsUnderFinanceLeasesMember_pn3n3" title="Amount terminated related to finance leases">51 of related finance leases (see Note 9), resulting in a gain on sale of assets of $<span id="xdx_903_eus-gaap--GainsLossesOnSalesOfAssets_c20200101__20200630__us-gaap--PropertyPlantAndEquipmentByTypeAxis__custom--RightOfUseAssetsUnderFinanceLeasesMember_pn3n3" title="Gain on sale of assets">6. Equipment held for sale consists of the following (in thousands): Schedule of Equipment Held for Sale <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_49E_20200630_zYE8eKnXL2W9" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">June 30, 2020</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_499_20191231_zNBvx0QQQ8Rl" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31, 2019</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr id="xdx_40A_ecustom--EquipmentHeldForSale_iI_pn3n3_maEHFSNzCEe_z1Mbm07n6S6b" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 64%; text-align: left">Equipment held for sale</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 14%; text-align: right">163</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 14%; text-align: right">163</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_405_ecustom--Reserve_iNI_pn3n3_di_msEHFSNzCEe_zTV9NGsktcX7" style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1.5pt">Reserve</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(96</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(96</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr id="xdx_404_ecustom--EquipmentHeldForSaleNetOfReserve_iTI_pn3n3_mtEHFSNzCEe_zxxoz7SJa2u3" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt">Net book value</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">67</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">67</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> The balance as of June 30, 2020, and December 31, 2019, consists of residual manufacturing equipment, at estimated net realizable value, which management anticipates selling during 2020.

Property and equipment is comprised of the following (in thousands): Schedule of Property and Equipment <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">June 30, 2020</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31, 2019</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 64%; text-align: left">Right-of-use assets under operating leases</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_98C_eus-gaap--PropertyPlantAndEquipmentGross_iI_pn3n3_c20200630__us-gaap--PropertyPlantAndEquipmentByTypeAxis__custom--RightOfUseAssetsUnderOperatingLeasesMember_zV8PQgP7JVe3" style="width: 14%; text-align: right" title="Total cost">730</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_988_eus-gaap--PropertyPlantAndEquipmentGross_iI_pn3n3_c20191231__us-gaap--PropertyPlantAndEquipmentByTypeAxis__custom--RightOfUseAssetsUnderOperatingLeasesMember_zN9c8N8iO8Z2" style="width: 14%; text-align: right">730</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Right-of-use assets under finance leases</td><td> </td> <td style="text-align: left"> </td><td id="xdx_980_eus-gaap--PropertyPlantAndEquipmentGross_iI_pn3n3_c20200630__us-gaap--PropertyPlantAndEquipmentByTypeAxis__custom--RightOfUseAssetsUnderFinanceLeasesMember_zShWfAZ0M6si" style="text-align: right" title="Total cost">66</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_98D_eus-gaap--PropertyPlantAndEquipmentGross_iI_pn3n3_c20191231__us-gaap--PropertyPlantAndEquipmentByTypeAxis__custom--RightOfUseAssetsUnderFinanceLeasesMember_z9vjzD94UJZ8" style="text-align: right">179</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Computer hardware and software</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98C_eus-gaap--PropertyPlantAndEquipmentGross_iI_pn3n3_c20200630__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--ComputerEquipmentMember_z1g1GJ9ub37b" style="text-align: right" title="Total cost">637</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_98C_eus-gaap--PropertyPlantAndEquipmentGross_iI_pn3n3_c20191231__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--ComputerEquipmentMember_zFeL09Fluljd" style="text-align: right">543</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt">Machinery and equipment</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td id="xdx_982_eus-gaap--PropertyPlantAndEquipmentGross_iI_pn3n3_c20200630__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--MachineryAndEquipmentMember_z7cypG8dLdkb" style="border-bottom: Black 1.5pt solid; text-align: right" title="Total cost">91</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td id="xdx_981_eus-gaap--PropertyPlantAndEquipmentGross_iI_pn3n3_c20191231__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--MachineryAndEquipmentMember_zxh3No1DBTT9" style="border-bottom: Black 1.5pt solid; text-align: right">83</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Total cost</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98E_eus-gaap--PropertyPlantAndEquipmentGross_iI_pn3n3_c20200630_zZoj5ZRw0yml" style="text-align: right" title="Total cost">1,524</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_98C_eus-gaap--PropertyPlantAndEquipmentGross_iI_pn3n3_c20191231_z13RirfPJsql" style="text-align: right">1,535</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt">Accumulated depreciation and amortization</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td id="xdx_982_eus-gaap--AccumulatedDepreciationDepletionAndAmortizationPropertyPlantAndEquipment_iNI_pn3n3_di_c20200630_z4MWNlFPxvZe" style="border-bottom: Black 1.5pt solid; text-align: right" title="Total cost">(501</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td id="xdx_987_eus-gaap--AccumulatedDepreciationDepletionAndAmortizationPropertyPlantAndEquipment_iNI_pn3n3_di_c20191231_zdXb6XPC6BGk" style="border-bottom: Black 1.5pt solid; text-align: right">(482</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt">Net book value</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_986_eus-gaap--PropertyPlantAndEquipmentNet_iI_pn3n3_c20200630_zUTfbNyOq5H4" style="border-bottom: Black 2.5pt double; text-align: right" title="Total cost">1,023</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_984_eus-gaap--PropertyPlantAndEquipmentNet_iI_pn3n3_c20191231_zPc11PvR9tq8" style="border-bottom: Black 2.5pt double; text-align: right">1,053</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

730000

66000

179000

637000

543000

91000

83000

1524000

1535000

501000

482000

1023000

1053000

12000

24000

25000

45000

51000

6000

Equipment held for sale consists of the following (in thousands): Schedule of Equipment Held for Sale <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_49E_20200630_zYE8eKnXL2W9" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">June 30, 2020</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_499_20191231_zNBvx0QQQ8Rl" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31, 2019</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr id="xdx_40A_ecustom--EquipmentHeldForSale_iI_pn3n3_maEHFSNzCEe_z1Mbm07n6S6b" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 64%; text-align: left">Equipment held for sale</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 14%; text-align: right">163</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 14%; text-align: right">163</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_405_ecustom--Reserve_iNI_pn3n3_di_msEHFSNzCEe_zTV9NGsktcX7" style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1.5pt">Reserve</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(96</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(96</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr id="xdx_404_ecustom--EquipmentHeldForSaleNetOfReserve_iTI_pn3n3_mtEHFSNzCEe_zxxoz7SJa2u3" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt">Net book value</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">67</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">67</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> 163000 163000 96000 96000 67000 67000

5. Intangible Assets Intangible assets are comprised of brand names acquired, specifically Virgil’s, and costs related to trademarks. They have been assigned an indefinite life, as we currently anticipate that they will contribute cash flows to the Company perpetually. These indefinite-lived intangible assets are not amortized but are assessed for impairment annually and evaluated annually to determine whether the indefinite useful life remains appropriate. We first assess qualitative factors to determine whether it is more likely than not that the asset is impaired. If further testing is necessary, we compare the estimated fair value of our asset with its book value. If the carrying amount of the asset exceeds its fair value, as determined by the discounted cash flows expected to be generated by the asset, an impairment loss is recognized in an amount equal to that excess. Based on management’s measurement, there were no indications of impairment at June 30, 2020. Intangible assets consists of the following (in thousands): Summary of Intangible Assets <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_496_20200630_zlxfp3l64PF5" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">June 30, 2020</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_498_20191231_zs2NRrpjHEFe" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31, 2019</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr id="xdx_405_eus-gaap--IndefiniteLivedTradeNames_iI_pn3n3_maILIAEzUQl_zEp0tCnXl74g" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 64%; text-align: left">Brand names</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 14%; text-align: right">576</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 14%; text-align: right">576</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_40A_eus-gaap--IndefiniteLivedTrademarks_iI_pn3n3_maILIAEzUQl_zT6dZDwSQeUh" style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1.5pt">Trademarks</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">14</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_405_eus-gaap--IndefiniteLivedIntangibleAssetsExcludingGoodwill_iTI_pn3n3_mtILIAEzUQl_zv990IULj34j" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt">Total</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">590</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">576</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

Intangible assets consists of the following (in thousands): Summary of Intangible Assets <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_496_20200630_zlxfp3l64PF5" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">June 30, 2020</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_498_20191231_zs2NRrpjHEFe" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31, 2019</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr id="xdx_405_eus-gaap--IndefiniteLivedTradeNames_iI_pn3n3_maILIAEzUQl_zEp0tCnXl74g" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 64%; text-align: left">Brand names</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 14%; text-align: right">576</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 14%; text-align: right">576</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_40A_eus-gaap--IndefiniteLivedTrademarks_iI_pn3n3_maILIAEzUQl_zT6dZDwSQeUh" style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1.5pt">Trademarks</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">14</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_405_eus-gaap--IndefiniteLivedIntangibleAssetsExcludingGoodwill_iTI_pn3n3_mtILIAEzUQl_zv990IULj34j" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt">Total</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">590</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">576</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

576000

14000

590000

576000

6. Line of Credit Amounts outstanding under the Company’s credit facilities are as follows (in thousands): Schedule of Amount Outstanding Under Credit Facilities <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_49D_20200630_zn3XPvPDUDF4" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">June 30, 2020</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_496_20191231_zZbZL88zIaLd" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31, 2019</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr id="xdx_401_ecustom--LineOfCreditIncludingCapitalizedFinanceCosts_iI_pn3n3_maLOCCzB7W_zBpOXJWLeu3k" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 64%">Line of Credit</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 14%; text-align: right">2,929</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 14%; text-align: right">3,661</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_403_ecustom--CapitalizedFinanceCosts_iNI_pn3n3_di_msLOCCzB7W_zTbV1ofzsFUf" style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt">Capitalized finance costs</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(291</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(484</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr id="xdx_40E_eus-gaap--LinesOfCreditCurrent_iTI_pn3n3_mtLOCCzB7W_zIQ5dnePJSoi" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 2.5pt">Net balance</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">2,638</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">3,177</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> On October 4, 2018, the Company entered into a financing agreement with Rosenthal & Rosenthal, Inc. The financing agreement provides a maximum borrowing capacity of $<span id="xdx_90B_eus-gaap--LineOfCreditFacilityMaximumBorrowingCapacity_c20181004__us-gaap--TypeOfArrangementAxis__custom--FinancingAgreementMember__dei--LegalEntityAxis__custom--RosenthalAndRosenthalIncMember_pn3n3">13,000. Borrowings are based on a formula of eligible accounts receivable and inventories (the “permitted borrowings”) plus advances (an “over-advance” of up to $<span id="xdx_908_ecustom--LineOfCreditFacilityExcessOfPermittedBorrwingAmount_c20181004__us-gaap--TypeOfArrangementAxis__custom--FinancingAgreementMember__dei--LegalEntityAxis__custom--RosenthalAndRosenthalIncMember_pn3n3">4,000) in excess of permitted borrowings. At June 30, 2020, the unused borrowing capacity under the financing agreement was $<span id="xdx_90D_eus-gaap--LineOfCreditFacilityRemainingBorrowingCapacity_c20200630__us-gaap--TypeOfArrangementAxis__custom--FinancingAgreementMember__dei--LegalEntityAxis__custom--RosenthalAndRosenthalIncMember_pn3n3">6,704. The line of credit matures on <span id="xdx_90F_eus-gaap--LineOfCreditFacilityExpirationDate1_dd_c20181003__20181004__us-gaap--TypeOfArrangementAxis__custom--FinancingAgreementMember__dei--LegalEntityAxis__custom--RosenthalAndRosenthalIncMember_zPuAhMkupFPe">March 30, 2021. Borrowings under the Rosenthal financing agreement bear interest at the greater of prime or <span id="xdx_90F_eus-gaap--LineOfCreditFacilityInterestRateDuringPeriod_pii_dp_uPercent_c20181003__20181004__us-gaap--TypeOfArrangementAxis__custom--FinancingAgreementMember__dei--LegalEntityAxis__custom--RosenthalAndRosenthalIncMember_zfyzRdsf1RIe" title="Line of credit, interest rate">4.75%, plus an additional <span id="xdx_909_eus-gaap--LineOfCreditFacilityInterestRateDuringPeriod_pii_dp_uPercent_c20181003__20181004__us-gaap--TypeOfArrangementAxis__custom--FinancingAgreementMember__dei--LegalEntityAxis__custom--RosenthalAndRosenthalIncMember__srt--RangeAxis__srt--MinimumMember_zDgvmSuY5RQi" title="Line of credit, interest rate">2% to <span id="xdx_90F_eus-gaap--LineOfCreditFacilityInterestRateDuringPeriod_pii_dp_uPercent_c20181003__20181004__us-gaap--TypeOfArrangementAxis__custom--FinancingAgreementMember__dei--LegalEntityAxis__custom--RosenthalAndRosenthalIncMember__srt--RangeAxis__srt--MaximumMember_z4ix54aR5XWg" title="Line of credit, interest rate">3.5% depending on whether the borrowing is based upon receivables, inventory or is an over-advance. The effective interest rate as of June 30, 2020 on outstanding borrowings was <span id="xdx_908_eus-gaap--LineOfCreditFacilityInterestRateDuringPeriod_pii_dp_uPercent_c20200101__20200630__us-gaap--TypeOfArrangementAxis__custom--FinancingAgreementMember__dei--LegalEntityAxis__custom--RosenthalAndRosenthalIncMember_znkwZQtKukbh" title="Line of credit, interest rate">6.8%. Additionally, the line of credit is subject to monthly facility and administration fees, and aggregate minimum monthly fees (including interest) of $<span id="xdx_906_ecustom--MinimumMonthlyFees_c20200101__20200630__us-gaap--TypeOfArrangementAxis__custom--FinancingAgreementMember__dei--LegalEntityAxis__custom--RosenthalAndRosenthalIncMember_pn3n3" title="Minimum monthly fees">4. The line of credit is secured by substantially all of the assets excluding intellectual property of the Company. The over-advance is secured by all of Reed’s intellectual property collateral. Additionally, any over-advance is guaranteed by an irrevocable stand-by letter of credit in the amount of $1,500, issued by Daniel J. Doherty III and the Daniel J. Doherty, III 2002 Family Trust, affiliates of Raptor/Harbor Reeds SPV LLC (“Raptor”). As of June 30, 2020, Raptor beneficially owns <span id="xdx_904_eus-gaap--MinorityInterestOwnershipPercentageByNoncontrollingOwners_iI_pii_dp_uPercent_c20200630__srt--TitleOfIndividualAxis__custom--DanielJDohertyMember__srt--OwnershipAxis__custom--ReedsIncMember_z6NpMbWYKM42" title="Ownership percentage">11.6% of the Company’s outstanding common stock and Mr. Doherty is a member of the Company’s Board of Directors. In the event of a default under the financing agreement, Raptor has a put option to purchase from Rosenthal the entire amount of any outstanding over-advance plus accrued interest, prior to Rosenthal declaring an event of default under the financing agreement. The financing agreement with Rosenthal includes customary restrictions that limit our ability to engage in certain types of transactions, including our ability to utilize tangible and intangible assets as collateral for other indebtedness. Additionally, the agreement contains a financial covenant that requires us to meet certain minimum working capital and tangible net worth thresholds as of the end of each quarter. We were in compliance with the terms of our agreement with Rosenthal as of June 30, 2020. Amortization of debt discount was $193 and $150 for the six months ended June 30, 2020 and 2019, respectively.

Amounts outstanding under the Company’s credit facilities are as follows (in thousands): Schedule of Amount Outstanding Under Credit Facilities <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_49D_20200630_zn3XPvPDUDF4" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">June 30, 2020</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_496_20191231_zZbZL88zIaLd" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31, 2019</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr id="xdx_401_ecustom--LineOfCreditIncludingCapitalizedFinanceCosts_iI_pn3n3_maLOCCzB7W_zBpOXJWLeu3k" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 64%">Line of Credit</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 14%; text-align: right">2,929</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 14%; text-align: right">3,661</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_403_ecustom--CapitalizedFinanceCosts_iNI_pn3n3_di_msLOCCzB7W_zTbV1ofzsFUf" style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt">Capitalized finance costs</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(291</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(484</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr id="xdx_40E_eus-gaap--LinesOfCreditCurrent_iTI_pn3n3_mtLOCCzB7W_zIQ5dnePJSoi" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 2.5pt">Net balance</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">2,638</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">3,177</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

2929000 3661000 291000 484000

2638000

3177000

13000000

4000000

6704000

2021-03-30

0.0475

0.02

0.035

0.068

4000 1500000

0.116

193000

150000

7. Convertible Note to a Related Party The Convertible Note to a Related Party consists of the following (in thousands): Schedule of Convertible Notes <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_497_20200630_zs85pjIBY0Nb" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">June 30, 2020</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_497_20191231_zN7xNbeDwKfc" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31, 2019</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr id="xdx_40A_eus-gaap--ConvertibleNotesPayableCurrent_iI_pn3n3_maCDNzsCO_maCDzw7d_zSD0GAHpnc0g" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 64%; text-align: left"><span id="xdx_905_eus-gaap--DebtInstrumentInterestRateStatedPercentage_iI_pii_dp_uPercent_c20200630__us-gaap--DebtInstrumentAxis__custom--ConvertibleNotesMember_zIn6nVBrjnp" title="Convertible note interest rate percentage"><span id="xdx_905_eus-gaap--DebtInstrumentInterestRateStatedPercentage_iI_pii_dp_uPercent_c20191231__us-gaap--DebtInstrumentAxis__custom--ConvertibleNotesMember_zkSjhWuhuPQ6" title="Convertible note interest rate percentage">12% Convertible Note Payable</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 14%; text-align: right">3,400</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 14%; text-align: right">3,400</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_40C_eus-gaap--InterestPayableCurrent_iI_pn3n3_maCDNzsCO_maCDzw7d_zoGydvhxHK51" style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt">Accrued Interest</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">1,577</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">1,289</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_40C_eus-gaap--ConvertibleDebt_iI_pn3n3_mtCDzw7d_zKOIIUvNc4L7" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 2.5pt">Total obligation</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">4,977</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">4,689</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> On April 21, 2017, the Company issued a secured, convertible, subordinated, non-redeemable note in the principal amount of $<span id="xdx_900_eus-gaap--ConvertibleDebt_c20170421__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__us-gaap--DebtInstrumentAxis__custom--RaptorNoteMember_pn3n3" title="Secured convertible debt principal amount">3,400 and warrants to purchase <span id="xdx_900_eus-gaap--ClassOfWarrantOrRightNumberOfSecuritiesCalledByEachWarrantOrRight_c20170421__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember_pii" title="Number of warrants to purchase of common stock">1,416,667 shares of common stock to Raptor. Raptor beneficially owned approximately <span id="xdx_901_eus-gaap--EquityMethodInvestmentOwnershipPercentage_iI_pii_dp_uPercent_c20200630__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__dei--LegalEntityAxis__custom--RaptorHarborReedsSPVLLCMember_zQuyw2aevC7c" title="Ownership percentage">11.6% and <span id="xdx_90B_eus-gaap--EquityMethodInvestmentOwnershipPercentage_iI_pii_dp_uPercent_c20191231__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__dei--LegalEntityAxis__custom--RaptorHarborReedsSPVLLCMember_zcV3WwHNrsSj" title="Ownership percentage">14.9% of the Company’s common stock at June 30, 2020 and December 31, 2019, respectively. The Raptor Note bears interest at a rate of <span id="xdx_90D_eus-gaap--DebtInstrumentInterestRateStatedPercentage_iI_pii_dp_uPercent_c20170421__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__us-gaap--DebtInstrumentAxis__custom--RaptorNoteMember_zaxcazqX5Yd3" title="Convertible note interest rate percentage">12% per annum, compounded monthly, and is secured by the Company’s assets, subordinate to the first priority security interest of Rosenthal & Rosenthal (see Note 6). The note may not be prepaid and matures on <span id="xdx_901_eus-gaap--DebtInstrumentMaturityDate_dd_c20170420__20170421__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__us-gaap--DebtInstrumentAxis__custom--RaptorNoteMember_zwz4vS4efhhb" title="Debt maturity date">April 21, 2021. It may be converted, at any time and from time to time, into shares of common stock of the Company, at a revised conversion price of $<span id="xdx_902_eus-gaap--DebtInstrumentConvertibleConversionPrice1_c20170421__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__us-gaap--DebtInstrumentAxis__custom--RaptorNoteMember_pii" title="Note conversion price per share">1.50. The warrants expire on April 21, 2022, and have an adjusted exercise price of $1.50 per share. The note and warrants contain customary anti-dilution provisions, and the shares of common stock issuable upon conversion of the note and exercise of the warrants have been registered on Form S-3.

The Convertible Note to a Related Party consists of the following (in thousands): Schedule of Convertible Notes <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_497_20200630_zs85pjIBY0Nb" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">June 30, 2020</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_497_20191231_zN7xNbeDwKfc" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31, 2019</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr id="xdx_40A_eus-gaap--ConvertibleNotesPayableCurrent_iI_pn3n3_maCDNzsCO_maCDzw7d_zSD0GAHpnc0g" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 64%; text-align: left"><span id="xdx_905_eus-gaap--DebtInstrumentInterestRateStatedPercentage_iI_pii_dp_uPercent_c20200630__us-gaap--DebtInstrumentAxis__custom--ConvertibleNotesMember_zIn6nVBrjnp" title="Convertible note interest rate percentage"><span id="xdx_905_eus-gaap--DebtInstrumentInterestRateStatedPercentage_iI_pii_dp_uPercent_c20191231__us-gaap--DebtInstrumentAxis__custom--ConvertibleNotesMember_zkSjhWuhuPQ6" title="Convertible note interest rate percentage">12% Convertible Note Payable</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 14%; text-align: right">3,400</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 14%; text-align: right">3,400</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_40C_eus-gaap--InterestPayableCurrent_iI_pn3n3_maCDNzsCO_maCDzw7d_zoGydvhxHK51" style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt">Accrued Interest</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">1,577</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">1,289</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_40C_eus-gaap--ConvertibleDebt_iI_pn3n3_mtCDzw7d_zKOIIUvNc4L7" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 2.5pt">Total obligation</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">4,977</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">4,689</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

0.12

3400000

1577000

1289000

4977000

4689000

3400000

1416667

0.116

0.149

0.12

2021-04-21

1.50

2022-04-21

1.50

8. Note Payable On April 20, 2020, the Company was granted a loan (the “PPP loan”) from City National Bank in the aggregate amount of $<span id="xdx_90B_eus-gaap--DebtInstrumentFaceAmount_iI_pn3n3_c20200420__srt--TitleOfIndividualAxis__custom--PaycheckProtectionProgramMember__us-gaap--TypeOfArrangementAxis__custom--CityNationalBankMember_zh5uuG5hSeA" title="Aggregate amount">770, pursuant to the Paycheck Protection Program (the “PPP”) under the CARES Act. The PPP loan agreement is dated April 20, 2020, matures on April 20, 2022, bears interest at a rate of 1% per annum, with the first six months of interest deferred, is payable monthly commencing on November 2020, and is unsecured and guaranteed by the U.S. Small Business Administration. The loan term may be extended to April 20, 2025, if mutually agreed to by the Company and lender. We applied ASC 470, Debt, to account for the PPP loan. The PPP loan may be prepaid at any time prior to maturity with no prepayment penalties. Funds from the PPP loan may only be used for qualifying expenses as described in the CARES Act, including qualifying payroll costs, qualifying group health care benefits, qualifying rent and debt obligations, and qualifying utilities. The Company intends to use the entire loan amount for qualifying expenses. Under the terms of the PPP, certain amounts of the loan may be forgiven if they are used for qualifying expenses. The Company intends to apply for forgiveness of the PPP loan with respect to these qualifying expenses, however, we cannot assure that such forgiveness of any portion of the PPP loan will occur. As for the potential loan forgiveness, once the PPP loan is, in part or wholly, forgiven and a legal release is received, the liability would be reduced by the amount forgiven and a gain on extinguishment would be recorded. The terms of the PPP loan provide for customary events of default including, among other things, payment defaults, breach of representations and warranties, and insolvency events. The Company was in compliance with the terms of the PPP loan as of June 30, 2020.

770000

2022-04-20

0.01

9. Leases Payable The Company adopted ASU 2016-02, Leases, effective October 1, 2018. The standard requires a lessee to record a right-of-use asset and a corresponding lease liability at the inception of the lease, initially measured at the present value of the lease payments. The Company leases its Norwalk office, and certain office equipment and automobiles. The Company analyzes all leases at inception to determine if a right-of-use asset and lease liability should be recognized. Leases with an initial term of 12 months or less are not included on the condensed consolidated balance sheets. The lease liability is measured at the present value of future lease payments as of the lease commencement date. ASU 2016-02 requires recognition in the statement of operations of a single lease cost, calculated so that the cost of the lease is allocated over the lease term, generally on a straight-line basis. During the six months ended June 30, 2020, the Company disposed of right-of-use assets of $45, and reflected amortization of right of use asset of $62 related to these leases, resulting in a net asset balance of $590 as of June 30, 2020. As of December 31, 2019, liabilities recorded under finance leases and operating leases were $89 and $697, respectively. During the six months ended June 30, 2020, the Company terminated $51 of finance leases, and made payments of $5 towards finance lease liability and $13 towards operating lease liability. As of June 30, 2020, liability under finance lease amounted to $33 and liability under operating lease amounted to $684, of which $56 and $33 were reflected as current due, under finance leases and operating leases, respectively. As of June 30, 2020, the weighted average remaining lease terms for operating lease and finance lease are 4.51 years and 0.50 years, respectively. The weighted average discount rate for operating lease is 12.6% and 9.0% for finance lease.

45000

62000

590000

89000

697000

51000

5000

13000

33000

684000

56000

33000

P4Y6M3D

P0Y6M

0.126

0.090

10. Warrant Liability Various sales of common stock made by the Company to finance operations have been accompanied by the issuance of warrants. Some of these warrant agreements contain fundamental transaction provisions which may give rise to an obligation of the Company to pay cash to the warrant holders. For accounting purposes, in accordance with ASC 480, Distinguishing Liabilities from Equity, those warrants with fundamental transaction terms are accounted for as liabilities given the terms may give rise to an obligation of the Company to the warrant holders. These liabilities are measured at fair value at each reporting period and the change in the fair value is recognized in earnings in the accompanying Statements of Operations. The fair value of the warrant liability was determined using the Black-Scholes-Merton option pricing model at June 30, 2020 and December 31, 2019, using the following assumptions: Schedule of Warrant Liability Using Assumptions <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">June 30, 2020</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31, 2019</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold"> </td> <td colspan="2" style="font-weight: bold; text-align: center"> </td><td style="font-weight: bold"> </td><td style="font-weight: bold"> </td> <td colspan="2" style="font-weight: bold; text-align: center"> </td><td style="font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 64%">Stock Price</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_980_eus-gaap--SharePrice_iI_pii_c20200630_zwG3lEPIuUzg" style="width: 14%; text-align: right" title="Stock Price">0.96</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_988_eus-gaap--SharePrice_iI_pii_c20191231_z5Qrf0xbZRL2" style="width: 14%; text-align: right">0.91</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Risk free interest rate</td><td> </td> <td style="text-align: left"> </td><td id="xdx_981_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsRiskFreeInterestRate_pii_dp_uPercent_c20200101__20200630_zgQQvjrMeGeh" style="text-align: right" title="Stock Price">1.16%</td><td style="text-align: left"></td><td> </td> <td style="text-align: left"> </td><td id="xdx_984_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsRiskFreeInterestRate_pii_dp_uPercent_c20190101__20191231_zdvAL941KGpj" style="text-align: right">1.95%</td><td style="text-align: left"></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Expected volatility</td><td> </td> <td style="text-align: left"> </td><td id="xdx_985_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsExpectedVolatilityRate_pii_dp_uPercent_c20200101__20200630_zjCRO4unKCvg" style="text-align: right" title="Stock Price">119.25%</td><td style="text-align: left"></td><td> </td> <td style="text-align: left"> </td><td id="xdx_984_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsExpectedVolatilityRate_pii_dp_uPercent_c20190101__20191231_zVXeQJuJshF" style="text-align: right">83.36%</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Expected life in years</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right" title="Stock Price">0.92</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">1.42</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Expected dividend yield</td><td> </td> <td style="text-align: left"> </td><td id="xdx_984_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsExpectedDividendRate_pii_dp_uPercent_c20200101__20200630_zmuU3ef2Alj6" style="text-align: right" title="Stock Price">0%</td><td style="text-align: left"></td><td> </td> <td style="text-align: left"> </td><td id="xdx_989_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsExpectedDividendRate_pii_dp_uPercent_c20190101__20191231_zrZSBm26Xo53" style="text-align: right">0%</td><td style="text-align: left"></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Number of Warrants containing fundamental transaction provisions</td><td> </td> <td style="text-align: left"> </td><td id="xdx_985_eus-gaap--ClassOfWarrantOrRightNumberOfSecuritiesCalledByEachWarrantOrRight_iI_pii_c20200630_zHmBtmsBEAJi" style="text-align: right" title="Stock Price">138,762</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_980_eus-gaap--ClassOfWarrantOrRightNumberOfSecuritiesCalledByEachWarrantOrRight_iI_pii_c20191231_zmwhOxY66Dy7" style="text-align: right">138,762</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Fair Value of Warrants</td><td> </td> <td style="text-align: left">$</td><td id="xdx_98A_ecustom--FairValueAdjustmentOfWarrant_pn3n3_uUSD_c20200101__20200630_z6M8y0Y6UcOc" style="text-align: right" title="Stock Price">15</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td id="xdx_98F_ecustom--FairValueAdjustmentOfWarrant_pn3n3_uUSD_c20190101__20191231_zb5vpJikai76" style="text-align: right">8</td><td style="text-align: left"> </td></tr> </table> The risk-free interest rate is based on rates established by the Federal Reserve Bank. The Company uses the historical volatility of its common stock to estimate its future volatility. The expected life of the warrant is based upon its remaining contractual life. The expected dividend yield reflects that the Company has not paid dividends to its common stockholders in the past and does not expect to do so in the foreseeable future. The following table sets forth a summary of the changes in the estimated fair value of the warrant liability during the three months ended June 30, 2020 and 2019: Schedule of Warrant Liability <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_49E_20200101__20200630_zMHS5Rwp6pDi" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">June 30, 2020</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_49F_20190101__20190630_z7bDSmpHQEg7" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">June 30, 2019</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr id="xdx_406_ecustom--WarrantLiabilityCurrentAndNoncurrent_iS_pn3n3_zrUSF9FCzRx3" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 64%; text-align: left">Beginning Balance</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 14%; text-align: right" title="Beginning Balance">8</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 14%; text-align: right">38</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_405_ecustom--ChangeInFairValueOfWarrant_pn3n3_z0yKKBfdwaH9" style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt">Change in fair value</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right" title="Beginning Balance">7</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">108</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_408_ecustom--WarrantLiabilityCurrentAndNoncurrent_iE_pn3n3_zYr58LCKoeK4" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt">Ending balance</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right" title="Beginning Balance">15</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">146</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

The fair value of the warrant liability was determined using the Black-Scholes-Merton option pricing model at June 30, 2020 and December 31, 2019, using the following assumptions: Schedule of Warrant Liability Using Assumptions <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">June 30, 2020</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31, 2019</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold"> </td> <td colspan="2" style="font-weight: bold; text-align: center"> </td><td style="font-weight: bold"> </td><td style="font-weight: bold"> </td> <td colspan="2" style="font-weight: bold; text-align: center"> </td><td style="font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 64%">Stock Price</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_980_eus-gaap--SharePrice_iI_pii_c20200630_zwG3lEPIuUzg" style="width: 14%; text-align: right" title="Stock Price">0.96</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_988_eus-gaap--SharePrice_iI_pii_c20191231_z5Qrf0xbZRL2" style="width: 14%; text-align: right">0.91</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Risk free interest rate</td><td> </td> <td style="text-align: left"> </td><td id="xdx_981_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsRiskFreeInterestRate_pii_dp_uPercent_c20200101__20200630_zgQQvjrMeGeh" style="text-align: right" title="Stock Price">1.16%</td><td style="text-align: left"></td><td> </td> <td style="text-align: left"> </td><td id="xdx_984_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsRiskFreeInterestRate_pii_dp_uPercent_c20190101__20191231_zdvAL941KGpj" style="text-align: right">1.95%</td><td style="text-align: left"></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Expected volatility</td><td> </td> <td style="text-align: left"> </td><td id="xdx_985_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsExpectedVolatilityRate_pii_dp_uPercent_c20200101__20200630_zjCRO4unKCvg" style="text-align: right" title="Stock Price">119.25%</td><td style="text-align: left"></td><td> </td> <td style="text-align: left"> </td><td id="xdx_984_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsExpectedVolatilityRate_pii_dp_uPercent_c20190101__20191231_zVXeQJuJshF" style="text-align: right">83.36%</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Expected life in years</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right" title="Stock Price">0.92</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">1.42</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Expected dividend yield</td><td> </td> <td style="text-align: left"> </td><td id="xdx_984_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsExpectedDividendRate_pii_dp_uPercent_c20200101__20200630_zmuU3ef2Alj6" style="text-align: right" title="Stock Price">0%</td><td style="text-align: left"></td><td> </td> <td style="text-align: left"> </td><td id="xdx_989_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsExpectedDividendRate_pii_dp_uPercent_c20190101__20191231_zrZSBm26Xo53" style="text-align: right">0%</td><td style="text-align: left"></td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Number of Warrants containing fundamental transaction provisions</td><td> </td> <td style="text-align: left"> </td><td id="xdx_985_eus-gaap--ClassOfWarrantOrRightNumberOfSecuritiesCalledByEachWarrantOrRight_iI_pii_c20200630_zHmBtmsBEAJi" style="text-align: right" title="Stock Price">138,762</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_980_eus-gaap--ClassOfWarrantOrRightNumberOfSecuritiesCalledByEachWarrantOrRight_iI_pii_c20191231_zmwhOxY66Dy7" style="text-align: right">138,762</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Fair Value of Warrants</td><td> </td> <td style="text-align: left">$</td><td id="xdx_98A_ecustom--FairValueAdjustmentOfWarrant_pn3n3_uUSD_c20200101__20200630_z6M8y0Y6UcOc" style="text-align: right" title="Stock Price">15</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td id="xdx_98F_ecustom--FairValueAdjustmentOfWarrant_pn3n3_uUSD_c20190101__20191231_zb5vpJikai76" style="text-align: right">8</td><td style="text-align: left"> </td></tr> </table>

0.96

0.91

0.0116

0.0195

1.1925

0.8336

P0Y11M1D

P1Y5M1D

138762

15000 8000 The following table sets forth a summary of the changes in the estimated fair value of the warrant liability during the three months ended June 30, 2020 and 2019: Schedule of Warrant Liability <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_49E_20200101__20200630_zMHS5Rwp6pDi" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">June 30, 2020</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_49F_20190101__20190630_z7bDSmpHQEg7" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">June 30, 2019</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr id="xdx_406_ecustom--WarrantLiabilityCurrentAndNoncurrent_iS_pn3n3_zrUSF9FCzRx3" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 64%; text-align: left">Beginning Balance</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 14%; text-align: right" title="Beginning Balance">8</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 14%; text-align: right">38</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_405_ecustom--ChangeInFairValueOfWarrant_pn3n3_z0yKKBfdwaH9" style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt">Change in fair value</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right" title="Beginning Balance">7</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">108</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_408_ecustom--WarrantLiabilityCurrentAndNoncurrent_iE_pn3n3_zYr58LCKoeK4" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt">Ending balance</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right" title="Beginning Balance">15</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">146</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> 8000 38000 7000 108000 15000 146000

11. Common Stock Common stock issuance In April 2020, the Company conducted a public offering of <span id="xdx_90D_eus-gaap--StockIssuedDuringPeriodSharesNewIssues_pii_c20200401__20200430__us-gaap--SubsidiarySaleOfStockAxis__custom--PublicOfferingMember_zXq2e6SX8Wbl" title="Company issued public offering">15,333,334 shares of its common shares at a public offering price of $0.375 per share. The net proceeds to the Company from this offering are $<span id="xdx_906_eus-gaap--ProceedsFromIssuanceInitialPublicOffering_pn3n3_c20200401__20200430__us-gaap--SubsidiarySaleOfStockAxis__custom--PublicOfferingMember_zjs6H8QWNU1l" title="Common shares at public offering">5,310, after deducting underwriting discounts and commissions and other offering expenses. Proceeds from the offering will provide capital for working capital, and general corporate purposes.

15333334

0.375

5310000

12. Share-based payments Restricted common stock The following table summarizes restricted stock activity during the six months ended June 30, 2020: Summary of Non-vested Restricted Stock Activity <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1.5pt"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Unvested Shares</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Issuable Shares</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Fair Value at Date of Issuance</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Weighted Average Grant Date Fair Value</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Balance, December 31, 2019</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_98D_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsNonvestedNumberOfShares_iS_pii_c20200101__20200630__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_zJwbomLDYiya" style="text-align: right" title="Unvested Shares, Beginning balance">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_988_ecustom--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsNonvestedNumberOfIssuableShares_iS_pii_c20200101__20200630__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_z0cY6IO0BQEg" style="text-align: right" title="Number of Issuable Shares, Beginning balance">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td id="xdx_98F_ecustom--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsNonvestedFairValue_iS_pn3n3_c20200101__20200630__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_zE6MzZ8Ltblb" style="text-align: right" title="Fair Value Unvested, Beginning balance">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_981_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsNonvestedWeightedAverageGrantDateFairValue_iS_pii_c20200101__20200630__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_zbXbNGvCgAKg" style="text-align: right" title="Weighted Average Grant Date Fair Value, Unvested, Beginning balance">-</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt; width: 27%; text-align: left">Granted</td><td style="width: 2%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td id="xdx_986_ecustom--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsNonvestedGrantsInPeriodGross_pii_c20200101__20200630__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_zNxxd5H3L2e7" style="width: 14%; text-align: right" title="Unvested Shares, Granted">500,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td id="xdx_987_ecustom--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsNonvestedIssuableSharesGrantsInPeriodGross_pii_c20200101__20200630__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_zRPwG6QLjUn4" style="width: 14%; text-align: right" title="Number of Issuable Shares, Granted">-</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td id="xdx_981_ecustom--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsNonvestedGranted_pn3n3_c20200101__20200630__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_zfoDF5QOsuXi" style="width: 14%; text-align: right" title="Fair Value, Granted">418</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td id="xdx_983_ecustom--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsNonvestedGrantsInPeriodWeightedAverageGrantDateFairValue_pii_c20200101__20200630__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_zPnAahnXR74d" style="width: 14%; text-align: right" title="Weighted Average Grant Date Fair Value, Granted">0.84</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 10pt; text-align: left">Vested</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_98B_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsVestedNumberOfShares_iN_pii_di_c20200101__20200630__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_zrXpiq1nUSvi" style="text-align: right" title="Unvested Shares, Vested">(350,000</td><td style="text-align: left">)</td><td> </td> <td style="text-align: left"> </td><td id="xdx_983_ecustom--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsVestedNumberOfIssuableShares_pii_c20200101__20200630__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_zrZEt5y3k3Be" style="text-align: right" title="Number of Issuable Shares, Vested">350,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_980_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsVestedInPeriodFairValue1_iN_pn3n3_di_c20200101__20200630__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_zVW4CVpRqIsk" style="text-align: right" title="Fair Value, Vested">(285</td><td style="text-align: left">)</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98F_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsVestedWeightedAverageGrantDateFairValue_pii_c20200101__20200630__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_z1rwa0qxsd4a" style="text-align: right" title="Weighted Average Grant Date Fair Value, Vested">-</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt; padding-bottom: 1.5pt; text-align: left">Issued</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td id="xdx_98A_ecustom--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsNonvestedIssuedInPeriodGross_pii_c20200101__20200630__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_zxGzxHkjBABg" style="border-bottom: Black 1.5pt solid; text-align: right" title="Unvested Shares, Issued">-</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td id="xdx_987_ecustom--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsNonvestedIssuableSharesIssuedInPeriodGross_pii_c20200101__20200630__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_zjkgPLF42aPa" style="border-bottom: Black 1.5pt solid; text-align: right" title="Number of Issuable Shares, Issued">-</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td id="xdx_98C_ecustom--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsNonvestedIssued_pn3n3_c20200101__20200630__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_zF9Y6IhuD1N9" style="border-bottom: Black 1.5pt solid; text-align: right" title="Fair Value, Issued">-</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td id="xdx_980_ecustom--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsNonvestedOptionsIssuedWeightedAverageGrantDateFairValue_pii_c20200101__20200630__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_z5wPexrcT363" style="border-bottom: Black 1.5pt solid; text-align: right" title="Weighted Average Grant Date Fair Value, Issued">-</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt; text-align: left">Balance, June 30, 2020</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td id="xdx_985_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsNonvestedNumberOfShares_iE_pii_c20200101__20200630__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_zIU2P0YBZoV7" style="border-bottom: Black 2.5pt double; text-align: right" title="Unvested Shares, Ending balance">150,000</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td id="xdx_98E_ecustom--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsNonvestedNumberOfIssuableShares_iE_pii_c20200101__20200630__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_zwAJl2791qK2" style="border-bottom: Black 2.5pt double; text-align: right" title="Number of Issuable Shares, Ending balance">350,000</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_980_ecustom--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsNonvestedFairValue_iE_pn3n3_c20200101__20200630__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_zxiyNdo18asg" style="border-bottom: Black 2.5pt double; text-align: right" title="Fair Value, Unvested, Ending balance">133</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_983_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsNonvestedWeightedAverageGrantDateFairValue_iE_pii_c20200101__20200630__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_zd7c541QxD6b" style="border-bottom: Black 2.5pt double; text-align: right" title="Weighted Average Grant Date Fair Value, Unvested, Ending balance">0.84</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> During the six months ended June 30, 2020, the Company issued <span id="xdx_90E_eus-gaap--StockIssuedDuringPeriodSharesRestrictedStockAwardGross_c20200101__20200630__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember__srt--TitleOfIndividualAxis__custom--DirectorAndTwoExecutiveEmployeesMember_pii" title="Number of restricted shares issued">500,000 shares of restricted stock to a director and two executive employees. <span id="xdx_904_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardAcceleratedVestingNumber_pii_c20200101__20200630__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_zOv7tke79He1" title="Number of shares vested immediately">350,000 of these shares vested immediately, 75,000 shares will vest in increments of <span id="xdx_900_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsVestedNumberOfShares_c20200101__20200630__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember__srt--StatementScenarioAxis__custom--FourYearsFromTheDateofGrantMember_pii" title="Number of options vested">18,750 each over four years from the date of grant, and 75,000 shares will vest over <span id="xdx_90F_ecustom--ShareBasedCompensationArrangementByShareBasedPaymentAwardAwardVestingPeriod_c20200101__20200630__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_zVYWajDinTQ6" title="Vesting period">four years based on performance criteria determined by the Board of Directors or Compensation Committee. Unvested shares remain subject to forfeiture if vesting conditions are not met. The aggregate fair value of the stock awards was $<span id="xdx_907_eus-gaap--StockIssuedDuringPeriodValueRestrictedStockAwardNetOfForfeitures_c20200101__20200630__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_pn3n3" title="Value of restricted shares issued">418 based on the market price of our common stock price which ranged from $<span id="xdx_909_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantsInPeriodWeightedAverageGrantDateFairValue_c20200101__20200630__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember__srt--RangeAxis__srt--MinimumMember_pii" title="Market price per share">0.81 to $<span id="xdx_90F_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantsInPeriodWeightedAverageGrantDateFairValue_c20200101__20200630__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember__srt--RangeAxis__srt--MaximumMember_pii" title="Market price per share">0.89 per share on the dates of grants and is amortized as shares vest. The total fair value of restricted common stock vesting during the six months ended June 30, 2020 and 2019 was $<span id="xdx_90E_eus-gaap--StockIssuedDuringPeriodValueRestrictedStockAwardGross_pn3n3_uUSD_c20200101__20200630__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_zV81DMyecbS5" title="Number of restricted shares, value">285 and $<span id="xdx_90D_eus-gaap--StockIssuedDuringPeriodValueRestrictedStockAwardGross_pn3n3_uUSD_c20190101__20190630__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_zPgNWLiT2pa9" title="Number of restricted shares, value">331, respectively, and is included in general and administrative expenses in the accompanying statements of operations. As of June 30, 2020, the amount of unvested compensation related to issuances of restricted common stock was $<span id="xdx_902_eus-gaap--EmployeeServiceShareBasedCompensationNonvestedAwardsTotalCompensationCostNotYetRecognizedStockOptions_c20200630__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_pn3n3" title="Aggregate value of unvested compensation">133, which will be recognized as an expense in future periods as the shares vest. When calculating basic loss per share, these shares are included in weighted average common shares outstanding from the time they vest. When calculating diluted net income per share, these shares are included in weighted average common shares outstanding as of their grant date. Stock options The following table summarizes stock option activity during the six months ended June 30, 2020: Schedule of Stock Option Activity <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Shares</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Weighted- Average Exercise Price</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Weighted- Average Remaining Contractual Terms (Years)</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Aggregate Intrinsic Value</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 36%">Outstanding at December 31, 2019</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td id="xdx_988_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber_iS_pii_c20200101__20200630__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_zHDOgjrIQ4oi" style="width: 12%; text-align: right" title="Shares Outstanding, Beginning balance">3,265,630</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_98A_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingWeightedAverageExercisePrice_iS_pii_c20200101__20200630__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_zVkYvNeEvRj" style="width: 12%; text-align: right" title="Weighted-Average Exercise Price, Outstanding, Beginning">2.19</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 12%; text-align: right"><span id="xdx_90B_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsOutstandingWeightedAverageRemainingContractualTerm2_pii_dtY_c20200101__20200630__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_ztvKJimgib54" title="Weighted-Average Remaining Contractual Terms (Years), Outstanding Beginning">7.09</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_986_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingIntrinsicValue_iS_pn3n3_c20200101__20200630__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_zUth9iJsa6i8" style="width: 12%; text-align: right" title="Aggregate Intrinsic Value, Shares Outstanding, Beginning Balance">6</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td>Granted</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98D_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantsInPeriodGross_pii_c20200101__20200630__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_zItfmdZsbStk" style="text-align: right" title="Shares, Granted">2,067,800</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td id="xdx_982_eus-gaap--ShareBasedCompensationArrangementsByShareBasedPaymentAwardOptionsGrantsInPeriodWeightedAverageExercisePrice_pii_c20200101__20200630__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_zKVeUjaWO6Qc" style="text-align: right" title="Weighted-Average Exercise Price, Granted">0.67</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></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Exercised</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98E_eus-gaap--StockIssuedDuringPeriodSharesStockOptionsExercised_pii_c20200101__20200630__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_zqXrElgKKzIj" style="text-align: right" title="Shares, Exercised">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td id="xdx_98F_eus-gaap--ShareBasedCompensationArrangementsByShareBasedPaymentAwardOptionsExercisesInPeriodWeightedAverageExercisePrice_pii_c20200101__20200630__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_zt13RV188Wyi" style="text-align: right" title="Weighted-Average Exercise Price, Exercised">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Unvested forfeited or expired</td><td> </td> <td style="text-align: left"> </td><td id="xdx_984_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsForfeitedInPeriod_iN_pii_di_c20200101__20200630__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_zQrDB1Sp3Btc" style="text-align: right" title="Shares, Unvested forfeited or expired">(367,480</td><td style="text-align: left">)</td><td> </td> <td style="text-align: left">$</td><td id="xdx_98E_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsForfeituresWeightedAverageGrantDateFairValue_pii_c20200101__20200630__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_zADVServ7gw5" style="text-align: right" title="Weighted-Average Exercise Price, Unvested forfeited or expired">2.02</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></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">Vested forfeited or expired</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td id="xdx_98C_ecustom--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsVestedForfeituresAndExpirationsInPeriod_iN_pii_di_c20200101__20200630__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_zcRmQK2c9cTi" style="border-bottom: Black 1.5pt solid; text-align: right" title="Shares, Vested forfeited or expired">(188,043</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td id="xdx_981_ecustom--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsVestedForfeituresAndExpirationsInPeriodWeightedAverageExercisePrice_pii_c20200101__20200630__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_z1NcpHbW2noj" style="border-bottom: Black 1.5pt solid; text-align: right" title="Weighted-Average Exercise Price, Vested forfeited or expired">4.20</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right"> </td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right"> </td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1.5pt">Outstanding at June 30, 2020</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td id="xdx_984_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber_iE_pii_c20200101__20200630__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_z90Ipe8vRW8k" style="border-bottom: Black 1.5pt solid; text-align: right" title="Shares Outstanding, Ending Balance">4,777,907</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td id="xdx_982_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingWeightedAverageExercisePrice_iE_pii_c20200101__20200630__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_zBPe5EsbQXwk" style="border-bottom: Black 1.5pt solid; text-align: right" title="Weighted-Average Exercise Price, Outstanding, Ending Balance">1.47</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span id="xdx_900_ecustom--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsOutstandingWeightedAverageRemainingContractualTermEnding_pii_dtY_c20200101__20200630__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_zM8vg9f1pSK7" title="Weighted-Average Remaining Contractual Terms (Years), Outstanding Ending Balance">8.44</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td id="xdx_98B_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingIntrinsicValue_iE_pn3n3_c20200101__20200630__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_zMpz0Xsp0Mgd" style="border-bottom: Black 1.5pt solid; text-align: right" title="Aggregate Intrinsic Value, Shares Outstanding, Ending Balance">588</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt">Exercisable at June 30, 2020</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td id="xdx_98C_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsExercisableNumber_iE_pii_c20200101__20200630__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_zX8Mc8zvvnkb" style="border-bottom: Black 2.5pt double; text-align: right" title="Shares Exercisable, Ending Balance">2,042,015</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_989_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsExercisableWeightedAverageExercisePrice_iE_pii_c20200101__20200630__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_z6rDIEtRNuwc" style="border-bottom: Black 2.5pt double; text-align: right" title="Weighted-Average Exercise Price, Exercisable Ending Balance">1.45</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right"><span id="xdx_90B_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsExercisableWeightedAverageRemainingContractualTerm1_pii_dtY_c20200101__20200630__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_zLabSM2ZMBCc" title="Weighted-Average Remaining Contractual Terms (Years), Exercisable Ending Balance">7.63</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_980_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsExercisableIntrinsicValue1_iE_pn3n3_c20200101__20200630__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_zEwqVIxtHnTk" style="border-bottom: Black 2.5pt double; text-align: right" title="Aggregate Intrinsic Value, Shares Exercisable Ending Balance">342</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> During the six months ended June 30, 2020, the Company approved options exercisable into <span id="xdx_908_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardNumberOfSharesAvailableForGrant_c20200630__us-gaap--PlanNameAxis__custom--TwoThousandSeventeenIncentiveCompensationPlanMember_pii" title="Number of options to be issued">2,067,800 shares to be issued pursuant to Reed’s 2017 Incentive Compensation Plan. <span id="xdx_904_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantsInPeriodGross_c20200101__20200630__srt--TitleOfIndividualAxis__custom--EmployeesMember_pii" title="Number of option issued">1,732,800 options were issued to employees including <span id="xdx_90C_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardAcceleratedVestingNumber_c20200101__20200630__us-gaap--AwardTypeAxis__us-gaap--EmployeeStockOptionMember_pii" title="Number of shares vested immediately">582,800 options that vested immediately, <span id="xdx_90D_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsVestedNumberOfShares_c20200101__20200630__us-gaap--AwardTypeAxis__us-gaap--EmployeeStockOptionMember_pii" title="Number of options vested">575,000 options vesting annually over a <span id="xdx_90D_ecustom--ShareBasedCompensationArrangementByShareBasedPaymentAwardAwardVestingPeriod_c20200101__20200630__us-gaap--AwardTypeAxis__us-gaap--EmployeeStockOptionMember_zEtqWtLm3sZb" title="Vesting period">four-year vesting period, and 575,000 options that will vest based on performance criteria to be established by the board. In addition, <span id="xdx_90B_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantsInPeriodGross_c20200101__20200630__srt--TitleOfIndividualAxis__custom--ConsultantsBoardMembersAndFormerEmployeesMember_pii" title="Number of option issued">335,000 options granted to consultants, board members, and former employees vest over various periods. The stock options are exercisable at a price ranging from $0.44 to $0.89 per share and expire in <span id="xdx_90C_ecustom--SharebasedCompensationArrangementBySharebasedPaymentAwardExpirationPeriods_c20200101__20200630__us-gaap--PlanNameAxis__custom--TwoThousandSeventeenIncentiveCompensationPlanMember_zJEFZV47PVB1" title="Stock options expiration period">ten years. The total fair value of these options at grant date was approximately $<span id="xdx_905_ecustom--ShareBasedCompensationArrangementByShareBasedPaymentAwardSharesIssuedAtFairValue_pn3n3_c20200101__20200630__us-gaap--PlanNameAxis__custom--TwoThousandSeventeenIncentiveCompensationPlanMember_zNvS31Oj7WFj" title="Fair value of options granted">1,168, which was determined using a Black-Scholes-Merton option pricing model with the following average assumption: stock price ranging from $0.44 to $0.89 per share, expected term of <span id="xdx_90C_ecustom--SharebasedCompensationArrangementBySharebasedPaymentAwardFairValueAssumptionsExpectedTerm_c20200101__20200630__us-gaap--PlanNameAxis__custom--TwoThousandSeventeenIncentiveCompensationPlanMember_z7oiKVp5xcle" title="Fair value assumptions, expected term">seven years, volatility of <span id="xdx_905_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsExpectedVolatilityRate_pii_dp_uPercent_c20200101__20200630__us-gaap--PlanNameAxis__custom--TwoThousandSeventeenIncentiveCompensationPlanMember_z9VXsRRoqp0k" title="Volatility">120%, dividend rate of <span id="xdx_905_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsExpectedDividendRate_pii_dp_uPercent_c20200101__20200630__us-gaap--PlanNameAxis__custom--TwoThousandSeventeenIncentiveCompensationPlanMember_zVYmtjTueMxa" title="Dividend rate">0%, and risk-free interest rate ranging from <span id="xdx_903_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsRiskFreeInterestRate_pii_dp_uPercent_c20200101__20200630__us-gaap--PlanNameAxis__custom--TwoThousandSeventeenIncentiveCompensationPlanMember__srt--RangeAxis__srt--MinimumMember_zHQMmiqiGPB5" title="Risk-free interest rate">0.56% to <span id="xdx_908_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsRiskFreeInterestRate_pii_dp_uPercent_c20200101__20200630__us-gaap--PlanNameAxis__custom--TwoThousandSeventeenIncentiveCompensationPlanMember__srt--RangeAxis__srt--MaximumMember_zIWK8LZrDbI6" title="Risk-free interest rate">1.63%. The expected term represents the weighted-average period of time that share option awards granted are expected to be outstanding giving consideration to vesting schedules and historical participant exercise behavior; the expected volatility is based upon historical volatility of the Company’s common stock; the expected dividend yield is based on the fact that the Company has not paid dividends in the past and does not expect to pay dividends in the future; and the risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of measurement corresponding with the expected term of the share option award. The fair value of the options of $1,168 will be amortized as the options vest in future periods through <span id="xdx_906_ecustom--AmortizationPeriodOfOptionFairValue_dd_c20200101__20200630__us-gaap--PlanNameAxis__custom--TwoThousandSeventeenIncentiveCompensationPlanMember_z4Yazvm21AC3" title="Amortized options, vesting at future date">May 20, 2024. During the six months ended June 30, 2020 and 2019, the Company recognized $<span id="xdx_907_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsVestedInPeriodFairValue1_pn3n3_c20200101__20200630__us-gaap--PlanNameAxis__custom--TwoThousandSeventeenIncentiveCompensationPlanMember_zri7uOB6i7D4" title="Fair value of vested stock option">459 and $<span id="xdx_90F_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsVestedInPeriodFairValue1_pn3n3_c20190101__20190630__us-gaap--PlanNameAxis__custom--TwoThousandSeventeenIncentiveCompensationPlanMember_z6LGfr9evfmk" title="Fair value of vested stock option">854 of compensation expense relating to vested stock options. As of June 30, 2020, the aggregate amount of unvested compensation related to stock options was approximately $<span id="xdx_900_eus-gaap--EmployeeServiceShareBasedCompensationNonvestedAwardsTotalCompensationCostNotYetRecognizedStockOptions_iI_pn3n3_c20200630__us-gaap--AwardTypeAxis__us-gaap--EmployeeStockOptionMember_zmYRnnEnvBR9" title="Aggregate value of unvested compensation">1,851 which will be recorded as an expense in future periods as the options vest. As of June 30, 2020, the outstanding options have an intrinsic value of $<span id="xdx_90E_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingIntrinsicValue_iI_pn3n3_c20200630__us-gaap--AwardTypeAxis__us-gaap--EmployeeStockOptionMember_zymCJBMmwr0h" title="Outstanding options, intrinsic value">588. The aggregate intrinsic value was calculated as the difference between the closing market price as of June 30, 2020, which was $0.96, and the exercise price of the outstanding stock options.

The following table summarizes restricted stock activity during the six months ended June 30, 2020: Summary of Non-vested Restricted Stock Activity <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1.5pt"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Unvested Shares</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Issuable Shares</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Fair Value at Date of Issuance</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Weighted Average Grant Date Fair Value</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Balance, December 31, 2019</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_98D_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsNonvestedNumberOfShares_iS_pii_c20200101__20200630__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_zJwbomLDYiya" style="text-align: right" title="Unvested Shares, Beginning balance">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_988_ecustom--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsNonvestedNumberOfIssuableShares_iS_pii_c20200101__20200630__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_z0cY6IO0BQEg" style="text-align: right" title="Number of Issuable Shares, Beginning balance">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td id="xdx_98F_ecustom--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsNonvestedFairValue_iS_pn3n3_c20200101__20200630__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_zE6MzZ8Ltblb" style="text-align: right" title="Fair Value Unvested, Beginning balance">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_981_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsNonvestedWeightedAverageGrantDateFairValue_iS_pii_c20200101__20200630__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_zbXbNGvCgAKg" style="text-align: right" title="Weighted Average Grant Date Fair Value, Unvested, Beginning balance">-</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt; width: 27%; text-align: left">Granted</td><td style="width: 2%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td id="xdx_986_ecustom--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsNonvestedGrantsInPeriodGross_pii_c20200101__20200630__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_zNxxd5H3L2e7" style="width: 14%; text-align: right" title="Unvested Shares, Granted">500,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td id="xdx_987_ecustom--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsNonvestedIssuableSharesGrantsInPeriodGross_pii_c20200101__20200630__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_zRPwG6QLjUn4" style="width: 14%; text-align: right" title="Number of Issuable Shares, Granted">-</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td id="xdx_981_ecustom--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsNonvestedGranted_pn3n3_c20200101__20200630__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_zfoDF5QOsuXi" style="width: 14%; text-align: right" title="Fair Value, Granted">418</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td id="xdx_983_ecustom--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsNonvestedGrantsInPeriodWeightedAverageGrantDateFairValue_pii_c20200101__20200630__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_zPnAahnXR74d" style="width: 14%; text-align: right" title="Weighted Average Grant Date Fair Value, Granted">0.84</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 10pt; text-align: left">Vested</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_98B_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsVestedNumberOfShares_iN_pii_di_c20200101__20200630__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_zrXpiq1nUSvi" style="text-align: right" title="Unvested Shares, Vested">(350,000</td><td style="text-align: left">)</td><td> </td> <td style="text-align: left"> </td><td id="xdx_983_ecustom--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsVestedNumberOfIssuableShares_pii_c20200101__20200630__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_zrZEt5y3k3Be" style="text-align: right" title="Number of Issuable Shares, Vested">350,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_980_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsVestedInPeriodFairValue1_iN_pn3n3_di_c20200101__20200630__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_zVW4CVpRqIsk" style="text-align: right" title="Fair Value, Vested">(285</td><td style="text-align: left">)</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98F_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsVestedWeightedAverageGrantDateFairValue_pii_c20200101__20200630__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_z1rwa0qxsd4a" style="text-align: right" title="Weighted Average Grant Date Fair Value, Vested">-</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt; padding-bottom: 1.5pt; text-align: left">Issued</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td id="xdx_98A_ecustom--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsNonvestedIssuedInPeriodGross_pii_c20200101__20200630__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_zxGzxHkjBABg" style="border-bottom: Black 1.5pt solid; text-align: right" title="Unvested Shares, Issued">-</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td id="xdx_987_ecustom--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsNonvestedIssuableSharesIssuedInPeriodGross_pii_c20200101__20200630__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_zjkgPLF42aPa" style="border-bottom: Black 1.5pt solid; text-align: right" title="Number of Issuable Shares, Issued">-</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td id="xdx_98C_ecustom--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsNonvestedIssued_pn3n3_c20200101__20200630__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_zF9Y6IhuD1N9" style="border-bottom: Black 1.5pt solid; text-align: right" title="Fair Value, Issued">-</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td id="xdx_980_ecustom--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsNonvestedOptionsIssuedWeightedAverageGrantDateFairValue_pii_c20200101__20200630__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_z5wPexrcT363" style="border-bottom: Black 1.5pt solid; text-align: right" title="Weighted Average Grant Date Fair Value, Issued">-</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt; text-align: left">Balance, June 30, 2020</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td id="xdx_985_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsNonvestedNumberOfShares_iE_pii_c20200101__20200630__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_zIU2P0YBZoV7" style="border-bottom: Black 2.5pt double; text-align: right" title="Unvested Shares, Ending balance">150,000</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td id="xdx_98E_ecustom--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsNonvestedNumberOfIssuableShares_iE_pii_c20200101__20200630__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_zwAJl2791qK2" style="border-bottom: Black 2.5pt double; text-align: right" title="Number of Issuable Shares, Ending balance">350,000</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_980_ecustom--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsNonvestedFairValue_iE_pn3n3_c20200101__20200630__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_zxiyNdo18asg" style="border-bottom: Black 2.5pt double; text-align: right" title="Fair Value, Unvested, Ending balance">133</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_983_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsNonvestedWeightedAverageGrantDateFairValue_iE_pii_c20200101__20200630__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_zd7c541QxD6b" style="border-bottom: Black 2.5pt double; text-align: right" title="Weighted Average Grant Date Fair Value, Unvested, Ending balance">0.84</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

500000 418000 0.84

350000

285000

150000

350000 133000

0.84

500000

350000

75000

18750

four years

418000

0.81

0.89

285000

331000

133000

The following table summarizes stock option activity during the six months ended June 30, 2020: Schedule of Stock Option Activity <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Shares</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Weighted- Average Exercise Price</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Weighted- Average Remaining Contractual Terms (Years)</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Aggregate Intrinsic Value</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 36%">Outstanding at December 31, 2019</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td id="xdx_988_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber_iS_pii_c20200101__20200630__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_zHDOgjrIQ4oi" style="width: 12%; text-align: right" title="Shares Outstanding, Beginning balance">3,265,630</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_98A_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingWeightedAverageExercisePrice_iS_pii_c20200101__20200630__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_zVkYvNeEvRj" style="width: 12%; text-align: right" title="Weighted-Average Exercise Price, Outstanding, Beginning">2.19</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 12%; text-align: right"><span id="xdx_90B_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsOutstandingWeightedAverageRemainingContractualTerm2_pii_dtY_c20200101__20200630__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_ztvKJimgib54" title="Weighted-Average Remaining Contractual Terms (Years), Outstanding Beginning">7.09</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_986_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingIntrinsicValue_iS_pn3n3_c20200101__20200630__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_zUth9iJsa6i8" style="width: 12%; text-align: right" title="Aggregate Intrinsic Value, Shares Outstanding, Beginning Balance">6</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td>Granted</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98D_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantsInPeriodGross_pii_c20200101__20200630__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_zItfmdZsbStk" style="text-align: right" title="Shares, Granted">2,067,800</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td id="xdx_982_eus-gaap--ShareBasedCompensationArrangementsByShareBasedPaymentAwardOptionsGrantsInPeriodWeightedAverageExercisePrice_pii_c20200101__20200630__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_zKVeUjaWO6Qc" style="text-align: right" title="Weighted-Average Exercise Price, Granted">0.67</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Exercised</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98E_eus-gaap--StockIssuedDuringPeriodSharesStockOptionsExercised_pii_c20200101__20200630__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_zqXrElgKKzIj" style="text-align: right" title="Shares, Exercised">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td id="xdx_98F_eus-gaap--ShareBasedCompensationArrangementsByShareBasedPaymentAwardOptionsExercisesInPeriodWeightedAverageExercisePrice_pii_c20200101__20200630__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_zt13RV188Wyi" style="text-align: right" title="Weighted-Average Exercise Price, Exercised">-</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></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Unvested forfeited or expired</td><td> </td> <td style="text-align: left"> </td><td id="xdx_984_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsForfeitedInPeriod_iN_pii_di_c20200101__20200630__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_zQrDB1Sp3Btc" style="text-align: right" title="Shares, Unvested forfeited or expired">(367,480</td><td style="text-align: left">)</td><td> </td> <td style="text-align: left">$</td><td id="xdx_98E_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsForfeituresWeightedAverageGrantDateFairValue_pii_c20200101__20200630__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_zADVServ7gw5" style="text-align: right" title="Weighted-Average Exercise Price, Unvested forfeited or expired">2.02</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">Vested forfeited or expired</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td id="xdx_98C_ecustom--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsVestedForfeituresAndExpirationsInPeriod_iN_pii_di_c20200101__20200630__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_zcRmQK2c9cTi" style="border-bottom: Black 1.5pt solid; text-align: right" title="Shares, Vested forfeited or expired">(188,043</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td id="xdx_981_ecustom--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsVestedForfeituresAndExpirationsInPeriodWeightedAverageExercisePrice_pii_c20200101__20200630__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_z1NcpHbW2noj" style="border-bottom: Black 1.5pt solid; text-align: right" title="Weighted-Average Exercise Price, Vested forfeited or expired">4.20</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right"> </td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right"> </td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1.5pt">Outstanding at June 30, 2020</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td id="xdx_984_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber_iE_pii_c20200101__20200630__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_z90Ipe8vRW8k" style="border-bottom: Black 1.5pt solid; text-align: right" title="Shares Outstanding, Ending Balance">4,777,907</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td id="xdx_982_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingWeightedAverageExercisePrice_iE_pii_c20200101__20200630__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_zBPe5EsbQXwk" style="border-bottom: Black 1.5pt solid; text-align: right" title="Weighted-Average Exercise Price, Outstanding, Ending Balance">1.47</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span id="xdx_900_ecustom--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsOutstandingWeightedAverageRemainingContractualTermEnding_pii_dtY_c20200101__20200630__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_zM8vg9f1pSK7" title="Weighted-Average Remaining Contractual Terms (Years), Outstanding Ending Balance">8.44</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td id="xdx_98B_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingIntrinsicValue_iE_pn3n3_c20200101__20200630__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_zMpz0Xsp0Mgd" style="border-bottom: Black 1.5pt solid; text-align: right" title="Aggregate Intrinsic Value, Shares Outstanding, Ending Balance">588</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt">Exercisable at June 30, 2020</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td id="xdx_98C_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsExercisableNumber_iE_pii_c20200101__20200630__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_zX8Mc8zvvnkb" style="border-bottom: Black 2.5pt double; text-align: right" title="Shares Exercisable, Ending Balance">2,042,015</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_989_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsExercisableWeightedAverageExercisePrice_iE_pii_c20200101__20200630__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_z6rDIEtRNuwc" style="border-bottom: Black 2.5pt double; text-align: right" title="Weighted-Average Exercise Price, Exercisable Ending Balance">1.45</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right"><span id="xdx_90B_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsExercisableWeightedAverageRemainingContractualTerm1_pii_dtY_c20200101__20200630__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_zLabSM2ZMBCc" title="Weighted-Average Remaining Contractual Terms (Years), Exercisable Ending Balance">7.63</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_980_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsExercisableIntrinsicValue1_iE_pn3n3_c20200101__20200630__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_zEwqVIxtHnTk" style="border-bottom: Black 2.5pt double; text-align: right" title="Aggregate Intrinsic Value, Shares Exercisable Ending Balance">342</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

3265630

2.19

P7Y1M2D

6000

2067800

0.67

367480

2.02

188043 4.20

4777907

1.47

P8Y5M8D

588000

2042015

1.45

P7Y7M17D

342000

2067800

1732800

582800

575000

four-year vesting period 575000

335000

0.44

0.89

ten years 1168000 seven years

1.20

0.0056

0.0163

2024-05-20

459000

854000

1851000

588000

0.96

13. Stock Warrants As of June 30, 2020, the Company has issued warrants to purchase an aggregate of <span id="xdx_903_eus-gaap--ClassOfWarrantOrRightNumberOfSecuritiesCalledByWarrantsOrRights_c20200630__us-gaap--StatementEquityComponentsAxis__custom--StockWarrantsMember_pii" title="Warrant to purchase common stock">6,413,782 shares of common stock. The Company’s warrant activity during the six months ended June 30, 2020 is as follows: Schedule of Warrant Activity <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-left: auto; border-collapse: collapse; width: 90%; margin-right: auto"> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Shares</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Weighted- Average Exercise Price</td><td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Weighted- Average Remaining Contractual Terms (Years)</td><td style="padding-bottom: 1.5pt"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Aggregate Intrinsic Value</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom"> <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: rgb(204,238,255)"> <td style="width: 36%">Outstanding at December 31, 2019</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td id="xdx_98F_eus-gaap--ClassOfWarrantOrRightNumberOfSecuritiesCalledByEachWarrantOrRight_iS_pii_c20200101__20200630__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_zwuSCV6yrxJ4" style="width: 12%; text-align: right" title="Shares Outstanding, Beginning Balance">6,413,782</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_98E_ecustom--ClassOfWarrantOrRightNumberOfSecuritiesOutstandingWeightedAverageExercisePrice_iS_pii_c20200101__20200630__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_zaijnYPlEHre" style="width: 12%; text-align: right" title="Weighted-Average Exercise Price, Outstanding Beginning Balance">2.06</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 12%; text-align: right"><span id="xdx_90B_ecustom--ClassOfWarrantOrRightNumberOfSecuritieOutstandingWeightedAverageRemainingContractualTerms_dtY_c20200101__20200630__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_zMzR1kNuscUh" title="Weighted-Average Remaining Contractual Terms (Years), Outstanding Beginning Balance">1.52</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_98C_ecustom--ClassOfWarrantOrRightNumberOfSecuritieOutstandingAggregateIntrinsicValue_iS_pn3n3_c20200101__20200630__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_zZobGZ9OTJT1" style="width: 12%; text-align: right" title="Aggregate Intrinsic Value Shares Outstanding Beginning">-</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td>Exercised</td><td> </td> <td style="text-align: left"> </td><td id="xdx_986_ecustom--ClassOfWarrantOrRightNumberOfSecuritiesExercised_pii_c20200101__20200630__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_zh581XYQcUA5" style="text-align: right" title="Shares, Exercised">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_987_ecustom--ClassOfWarrantOrRightNumberOfSecuritiesExercisedWeightedAverageExercisePrice_pii_c20200101__20200630__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_zzzphpOqGvS7" style="text-align: right" title="Weighted-Average Exercise Price, Exercised">-</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></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">Forfeited or expired</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td id="xdx_982_ecustom--ClassOfWarrantOrRightNumberOfSecuritiesForfitedOrExpired_pii_c20200101__20200630__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_zypUAzCRgvJ1" style="border-bottom: Black 1.5pt solid; text-align: right" title="Shares, Forfeited or expired">-</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: left"> </td><td id="xdx_980_ecustom--ClassOfWarrantOrRightNumberOfSecuritiesForfeitedWeightedAverageExercisePrice_pii_c20200101__20200630__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_zCWt1rpWj3fk" style="padding-bottom: 1.5pt; text-align: right" title="Weighted-Average Exercise Price, Forfeited or expired">-</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt; text-align: right"> </td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt; text-align: right"> </td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1.5pt">Outstanding at June 30, 2020</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td id="xdx_983_eus-gaap--ClassOfWarrantOrRightNumberOfSecuritiesCalledByEachWarrantOrRight_iE_pii_c20200101__20200630__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_zXJsl476JuDc" style="border-bottom: Black 1.5pt solid; text-align: right" title="Shares Outstanding, Ending Balance">6,413,782</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: left">$</td><td id="xdx_98C_ecustom--ClassOfWarrantOrRightNumberOfSecuritiesOutstandingWeightedAverageExercisePrice_iE_pii_c20200101__20200630__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_z687nTjW1RV8" style="padding-bottom: 1.5pt; text-align: right" title="Weighted-Average Exercise Price, Outstanding Ending Balance">2.06</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt; text-align: right"><span id="xdx_90D_ecustom--ClassOfWarrantOrRightNumberOfSecuritieOutstandingWeightedAverageRemainingContractualTerms1_dtY_c20200101__20200630__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_zkuiMDM1b1ji" title="Weighted-Average Remaining Contractual Terms (Years), Outstanding Ending Balance">1.02</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: left">$</td><td id="xdx_988_ecustom--ClassOfWarrantOrRightNumberOfSecuritieOutstandingAggregateIntrinsicValue_iE_pn3n3_c20200101__20200630__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_z3qfBOSNNlp9" style="padding-bottom: 1.5pt; text-align: right" title="Aggregate Intrinsic Value Shares Outstanding Ending">-</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 1.5pt">Exercisable at June 30, 2020</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td id="xdx_980_ecustom--ClassOfWarrantOrRightNumberOfSecuritieExercisable_iE_pii_c20200101__20200630__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_zEojTEhy1hk9" style="border-bottom: Black 1.5pt solid; text-align: right" title="Shares Exercisable, Ending Balance">6,413,782</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: left">$</td><td id="xdx_980_ecustom--ClassOfWarrantOrRightNumberOfSecuritiesExercisableWeightedAverageExercisePrice_iE_pii_c20200101__20200630__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_zvgeZYVgHMb5" style="padding-bottom: 1.5pt; text-align: right" title="Weighted-Average Exercise Price, Exercisable Ending Balance">2.06</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt; text-align: right"><span id="xdx_90D_ecustom--ClassOfWarrantOrRightNumberOfExercisableWeightedAverageRemainingContractualTerms_dtY_c20200101__20200630__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_z0ES82qu3Sjc" title="Weighted-Average Remaining Contractual Terms (Years), Exercisable Ending Balance">1.02</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: left">$</td><td id="xdx_98A_ecustom--ClassOfWarrantOrRightNumberOfSecuritieExercisableAggregateIntrinsicValue_iE_pn3n3_c20200101__20200630__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_zHtAw6FmBG4c" style="padding-bottom: 1.5pt; text-align: right" title="Aggregate Intrinsic Value Shares Exercisable Ending">-</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> </table> There were <span id="xdx_90A_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingIntrinsicValue_iI_pn3n3_do_c20200630__us-gaap--StatementEquityComponentsAxis__custom--StockWarrantsMember_zqOWksVJQfPb" title="Number of warrants outstanding, intrinsic value">no warrant transactions during the six months ended June 30, 2020. As of June 30, 2020, the outstanding warrants have <span id="xdx_907_ecustom--ClassOfWarrantsOrRightNumberOfSecuritieOutstandingAggregateIntrinsicValue_iI_pn3n3_do_uUSD_c20200630__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_zuiAtc4EGPl1" title="Aggregate intrinsic value">no intrinsic value. The intrinsic value was calculated as the difference between the closing market price as of June 30, 2020, which was $0.96, and the exercise price of the Company’s warrants to purchase common stock.

6413782

Schedule of Warrant Activity <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-left: auto; border-collapse: collapse; width: 90%; margin-right: auto"> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Shares</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Weighted- Average Exercise Price</td><td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Weighted- Average Remaining Contractual Terms (Years)</td><td style="padding-bottom: 1.5pt"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Aggregate Intrinsic Value</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom"> <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: rgb(204,238,255)"> <td style="width: 36%">Outstanding at December 31, 2019</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td id="xdx_98F_eus-gaap--ClassOfWarrantOrRightNumberOfSecuritiesCalledByEachWarrantOrRight_iS_pii_c20200101__20200630__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_zwuSCV6yrxJ4" style="width: 12%; text-align: right" title="Shares Outstanding, Beginning Balance">6,413,782</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_98E_ecustom--ClassOfWarrantOrRightNumberOfSecuritiesOutstandingWeightedAverageExercisePrice_iS_pii_c20200101__20200630__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_zaijnYPlEHre" style="width: 12%; text-align: right" title="Weighted-Average Exercise Price, Outstanding Beginning Balance">2.06</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 12%; text-align: right"><span id="xdx_90B_ecustom--ClassOfWarrantOrRightNumberOfSecuritieOutstandingWeightedAverageRemainingContractualTerms_dtY_c20200101__20200630__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_zMzR1kNuscUh" title="Weighted-Average Remaining Contractual Terms (Years), Outstanding Beginning Balance">1.52</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_98C_ecustom--ClassOfWarrantOrRightNumberOfSecuritieOutstandingAggregateIntrinsicValue_iS_pn3n3_c20200101__20200630__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_zZobGZ9OTJT1" style="width: 12%; text-align: right" title="Aggregate Intrinsic Value Shares Outstanding Beginning">-</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td>Exercised</td><td> </td> <td style="text-align: left"> </td><td id="xdx_986_ecustom--ClassOfWarrantOrRightNumberOfSecuritiesExercised_pii_c20200101__20200630__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_zh581XYQcUA5" style="text-align: right" title="Shares, Exercised">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_987_ecustom--ClassOfWarrantOrRightNumberOfSecuritiesExercisedWeightedAverageExercisePrice_pii_c20200101__20200630__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_zzzphpOqGvS7" style="text-align: right" title="Weighted-Average Exercise Price, Exercised">-</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></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">Forfeited or expired</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td id="xdx_982_ecustom--ClassOfWarrantOrRightNumberOfSecuritiesForfitedOrExpired_pii_c20200101__20200630__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_zypUAzCRgvJ1" style="border-bottom: Black 1.5pt solid; text-align: right" title="Shares, Forfeited or expired">-</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: left"> </td><td id="xdx_980_ecustom--ClassOfWarrantOrRightNumberOfSecuritiesForfeitedWeightedAverageExercisePrice_pii_c20200101__20200630__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_zCWt1rpWj3fk" style="padding-bottom: 1.5pt; text-align: right" title="Weighted-Average Exercise Price, Forfeited or expired">-</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt; text-align: right"> </td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt; text-align: right"> </td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1.5pt">Outstanding at June 30, 2020</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td id="xdx_983_eus-gaap--ClassOfWarrantOrRightNumberOfSecuritiesCalledByEachWarrantOrRight_iE_pii_c20200101__20200630__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_zXJsl476JuDc" style="border-bottom: Black 1.5pt solid; text-align: right" title="Shares Outstanding, Ending Balance">6,413,782</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: left">$</td><td id="xdx_98C_ecustom--ClassOfWarrantOrRightNumberOfSecuritiesOutstandingWeightedAverageExercisePrice_iE_pii_c20200101__20200630__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_z687nTjW1RV8" style="padding-bottom: 1.5pt; text-align: right" title="Weighted-Average Exercise Price, Outstanding Ending Balance">2.06</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt; text-align: right"><span id="xdx_90D_ecustom--ClassOfWarrantOrRightNumberOfSecuritieOutstandingWeightedAverageRemainingContractualTerms1_dtY_c20200101__20200630__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_zkuiMDM1b1ji" title="Weighted-Average Remaining Contractual Terms (Years), Outstanding Ending Balance">1.02</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: left">$</td><td id="xdx_988_ecustom--ClassOfWarrantOrRightNumberOfSecuritieOutstandingAggregateIntrinsicValue_iE_pn3n3_c20200101__20200630__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_z3qfBOSNNlp9" style="padding-bottom: 1.5pt; text-align: right" title="Aggregate Intrinsic Value Shares Outstanding Ending">-</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 1.5pt">Exercisable at June 30, 2020</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td id="xdx_980_ecustom--ClassOfWarrantOrRightNumberOfSecuritieExercisable_iE_pii_c20200101__20200630__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_zEojTEhy1hk9" style="border-bottom: Black 1.5pt solid; text-align: right" title="Shares Exercisable, Ending Balance">6,413,782</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: left">$</td><td id="xdx_980_ecustom--ClassOfWarrantOrRightNumberOfSecuritiesExercisableWeightedAverageExercisePrice_iE_pii_c20200101__20200630__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_zvgeZYVgHMb5" style="padding-bottom: 1.5pt; text-align: right" title="Weighted-Average Exercise Price, Exercisable Ending Balance">2.06</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt; text-align: right"><span id="xdx_90D_ecustom--ClassOfWarrantOrRightNumberOfExercisableWeightedAverageRemainingContractualTerms_dtY_c20200101__20200630__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_z0ES82qu3Sjc" title="Weighted-Average Remaining Contractual Terms (Years), Exercisable Ending Balance">1.02</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: left">$</td><td id="xdx_98A_ecustom--ClassOfWarrantOrRightNumberOfSecuritieExercisableAggregateIntrinsicValue_iE_pn3n3_c20200101__20200630__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_zHtAw6FmBG4c" style="padding-bottom: 1.5pt; text-align: right" title="Aggregate Intrinsic Value Shares Exercisable Ending">-</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> </table>

6413782

2.06 P1Y6M7D

6413782

2.06 P1Y7D 6413782 2.06 P1Y7D

0.96

14. Related Party Activities On December 31, 2018, the Company completed the sale of its Los Angeles manufacturing plant to CCB, an entity owned by Chris Reed, a related party, and CCB assumed the monthly payments on our lease obligation for the Los Angeles manufacturing plant. Our release from the obligation by the lessor, however, is dependent upon CCB’s deposit of $<span id="xdx_90D_eus-gaap--SecurityDeposit_c20181231__dei--LegalEntityAxis__custom--CaliforniaCustomBeverageLLCMember__srt--TitleOfIndividualAxis__custom--ChrisReedMember_pn3n3" title="Deposit of security with lessor">1,200 of security with the lessor. As of June 30, 2020, $800 has been deposited with the lessor and Mr. Reed has placed approximately 363,000 shares of the Company’s common stock valued at $348 that he owns into escrow with the lessor. Mr. Reed expects to deposit the proceeds from the sale of the shares with the lessor in 2020, at which time we expect to be released from the lease obligation. Beginning in 2019, we are to receive a <span id="xdx_90D_ecustom--RoyaltyPercentage_iI_pii_dp_uPercent_c20191231__dei--LegalEntityAxis__custom--CaliforniaCustomBeverageLLCMember__srt--TitleOfIndividualAxis__custom--ChrisReedMember_zQo4bkRsnhIj" title="Royalty percentage">5% royalty on CCB’s private label sales to existing customers for three years and a <span id="xdx_90F_ecustom--ReferralFeePercentage_iI_pii_dp_uPercent_c20191231__dei--LegalEntityAxis__custom--CaliforniaCustomBeverageLLCMember__srt--TitleOfIndividualAxis__custom--ChrisReedMember_z3edY1sdrywf" title="Referral fee percentage">5% referral fee on CCB’s private label sales to referred customers for three years. During the six months ended June 30, 2020, the Company recorded royalty revenue from CCB of $5. During the six months ended June 30, 2019, the Company did not record any royalty revenue from CCB. At December 31, 2019, the Company had royalty revenue receivable from CCB of $<span id="xdx_907_ecustom--RoyaltyRevenueReceivable_iI_pn3n3_c20191231__dei--LegalEntityAxis__custom--CaliforniaCustomBeverageLLCMember__srt--TitleOfIndividualAxis__custom--ChrisReedMember_zO4il8sfll6a" title="Royalty revenue receivable">128. In addition, at December 31, 2019, the Company has outstanding receivable from CCB of $<span id="xdx_906_ecustom--InventoryAdvances_c20190101__20191231__dei--LegalEntityAxis__custom--CaliforniaCustomBeverageLLCMember__srt--TitleOfIndividualAxis__custom--ChrisReedMember_pn3n3" title="Inventory advances">228 consisting of inventory advances to CCB. The aggregate receivable from CCB at December 31, 2019 was $356. During the six months ended June 30, 2020, the Company received payment of $126, leaving an aggregate receivable balance of $230 at June 30, 2020.

1200000

800000

363000

348000

0.05 0.05

5000

128000 228000

356000

126000

230000

15. Subsequent Events On July 2, 2020, the Company issued <span id="xdx_90A_eus-gaap--CommonStockDividendsShares_pii_c20200701__20200702__us-gaap--SubsequentEventTypeAxis__us-gaap--SubsequentEventMember__us-gaap--StatementEquityComponentsAxis__us-gaap--PreferredStockMember_zAPF8jekcYg1" title="Issued common stock as dividend to preference shareholder">4,530 shares of common stock as a dividend to preferred shareholders. The aggregate fair value of the common stock issued was $5 based on an average market price of $1.04 per share.

4530

5000

1.04