Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | |
Dec. 31, 2014 | Jun. 30, 2014 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | CALMARE THERAPEUTICS Inc | |
Entity Central Index Key | 102,198 | |
Document Type | 10-K | |
Document Period End Date | Dec. 31, 2014 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity a Well-known Seasoned Issuer | No | |
Entity a Voluntary Filer | No | |
Entity's Reporting Status Current | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Public Float | $ 7,751,425 | |
Entity Common Stock, Shares Outstanding | 28,366,478 | |
Document Fiscal Period Focus | FY | |
Document Fiscal Year Focus | 2,014 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2014 | Dec. 31, 2013 |
Current Assets: | ||
Cash | $ 5,745 | $ 57,009 |
Receivables, net of allowance of $317,659 and $101,154 at December 31, 2014 and 2013 | 2,319 | 143,330 |
Inventory | 4,118,220 | 4,278,220 |
Prepaid expenses and other current assets | 253,102 | 65,167 |
Total current assets | 4,379,386 | 4,543,726 |
Security deposits | 15,000 | 15,000 |
Property and equipment, net | 35,640 | 7,606 |
TOTAL ASSETS | 4,430,026 | 4,566,332 |
Current Liabilities: | ||
Accounts payable | 1,346,138 | 692,251 |
Liabilities under claims purchase agreement | 1,995,320 | 2,093,303 |
Accounts payable, GEOMC | 4,182,380 | 4,183,535 |
Accrued expenses and other liabilities | 1,590,182 | 582,987 |
Deferred revenue | 19,686 | 6,400 |
Notes payable | 2,536,830 | 2,488,691 |
Warrant liability | 8,227 | |
Series C convertible preferred stock liability | 375,000 | 375,000 |
Series C convertible preferred stock derivative liability | 66,177 | 80,408 |
Total current liabilities | 12,111,713 | $ 10,510,802 |
Long term notes payable | 56,659 | |
Commitments and Contingencies | ||
Shareholders' deficit: | ||
Common stock, $.01 par value, 40,000,000 shares authorized, 25,908,978 shares issued and outstanding at December 31, 2014 and 19,952,907 shares issued and outstanding at December 31, 2013 | 259,089 | $ 199,529 |
Capital in excess of par value | 47,634,857 | 46,077,394 |
Accumulated deficit | (55,692,967) | (52,282,068) |
Total shareholders' deficit | (7,738,346) | (5,944,470) |
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT | $ 4,430,026 | $ 4,566,332 |
Series B Preferred Stock [Member] | ||
Shareholders' deficit: | ||
Preferred stock | ||
Series C Preferred Stock [Member] | ||
Shareholders' deficit: | ||
Preferred stock | ||
5% preferred stock [Member] | ||
Shareholders' deficit: | ||
Preferred stock | $ 60,675 | $ 60,675 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2014 | Dec. 31, 2013 |
Allowance for doubtful accounts | $ 317,659 | $ 101,154 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 40,000,000 | 40,000,000 |
Common stock, shares issued (in shares) | 25,908,978 | 19,952,907 |
Common stock, shares outstanding (in shares) | 25,908,978 | 19,952,907 |
5% preferred stock [Member] | ||
Preferred stock, par value (in dollars per share) | $ 25 | $ 25 |
Preferred stock, shares authorized (in shares) | 35,920 | 35,920 |
Preferred stock, shares issued (in shares) | 2,427 | 2,427 |
Preferred stock, shares outstanding (in shares) | 2,427 | 2,427 |
Series B Preferred Stock [Member] | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 20,000 | 20,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Series C Preferred Stock [Member] | ||
Preferred stock, par value (in dollars per share) | $ 1,000 | $ 1,000 |
Preferred stock, shares authorized (in shares) | 750 | 750 |
Preferred stock, shares issued (in shares) | 375 | 375 |
Preferred stock, shares outstanding (in shares) | 375 | 375 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Revenue | ||
Product sales | $ 1,045,080 | $ 652,792 |
Cost of product sales | 440,668 | 272,736 |
Gross profit from product sales | 604,412 | 380,056 |
Other Revenue | ||
Retained royalties | 27,782 | 37,007 |
Other income | 90,776 | 82,069 |
Total other revenue | 118,558 | 119,076 |
Operating expenses | ||
Selling expenses | 213,419 | 159,245 |
Personnel and consulting expenses | 1,368,299 | 1,100,041 |
General and administrative expenses | 1,371,035 | 1,760,585 |
Total operating expenses | 2,952,753 | 3,019,871 |
Operating loss | (2,229,783) | (2,520,739) |
Other expense (income) | ||
Interest expense | 964,070 | $ 209,953 |
Interest expense - accelerated upon conversion of OID notes | 35,109 | |
Loss on conversion of notes | 63,867 | |
Loss on settlement of note and warrant | 132,301 | |
Unrealized gain on derivative instruments | (14,231) | $ (58,538) |
Total other expense | 1,181,116 | 151,415 |
Loss before income taxes | $ (3,410,899) | $ (2,672,154) |
Provision (benefit) for income taxes | ||
Net loss | $ (3,410,899) | $ (2,672,154) |
Basic and diluted loss per share | $ (0.15) | $ (0.16) |
Basic and diluted weighted average number of common shares outstanding: | 23,513,870 | 16,977,027 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Deficit - USD ($) | 5% preferred stock [Member] | Common Stock | Capital in excess of par value | Accumulated Deficit | Total |
Balance at Dec. 31, 2012 | $ 60,675 | $ 152,373 | $ 45,367,796 | $ (49,609,914) | $ (4,029,070) |
Balance, shares at Dec. 31, 2012 | 2,427 | 15,237,304 | |||
Net loss | (2,672,154) | (2,672,154) | |||
Stock option compensation expense | 116,365 | 116,365 | |||
Common shares issued for legal services | $ 13,000 | 250,000 | $ 263,000 | ||
Common shares issued for legal services, shares | 1,300,000 | ||||
Common stock issued in accordance with escrow agreement | $ 10,000 | (10,000) | |||
Common stock issued in accordance with escrow agreement, shares | 1,000,000 | 1,000,000 | |||
Common stock issued in accordance with liability purchase agreement | $ 16,182 | (16,182) | |||
Common stock issued in accordance with liability purchase agreement, shares | 1,618,235 | 450,000 | |||
Common stock issued as part of equity purchase agreement and/or liability purchase agreement | $ 7,100 | 215,400 | |||
Common stock issued as part of equity purchase agreement and/or liability purchase agreement, shares | 710,000 | ||||
Common shares and warrants issued for consulting services | |||||
Common stock issued to directors | $ 874 | 33,228 | $ 34,102 | ||
Common stock issued to directors, shares | 87,368 | ||||
Warrants and beneficial conversion feature on notes payable | 120,787 | 120,787 | |||
Balance at Dec. 31, 2013 | $ 60,675 | $ 199,529 | 46,077,394 | (52,282,068) | (5,944,470) |
Balance, shares at Dec. 31, 2013 | 2,427 | 19,952,907 | |||
Net loss | (3,410,899) | (3,410,899) | |||
Stock option compensation expense | 57,291 | $ 57,291 | |||
Share based consulting fees, Common stock, shares | 60,000 | ||||
Common stock issued in accordance with escrow agreement, shares | 1,000,000 | ||||
Common stock issued as part of equity purchase agreement and/or liability purchase agreement | $ 222,500 | ||||
Common shares and warrants issued for consulting services | $ 600 | 84,600 | 85,200 | ||
Common shares and warrants issued for consulting services, shares | 60,000 | ||||
Common stock issued to directors | $ 106 | 3,932 | 4,038 | ||
Common stock issued to directors, shares | 10,625 | ||||
Common stock issued upon conversion of notes | $ 17,329 | 394,280 | $ 411,609 | ||
Common stock issued upon conversion of notes, shares | 1,732,946 | 1,732,946 | |||
Private offering of common stock and warrants | $ 41,525 | 788,975 | $ 830,500 | ||
Private offering of common stock and warrants, shares | 4,152,500 | ||||
Warrants and beneficial conversion feature on notes payable | 121,741 | 121,741 | |||
Liabilities settled under Liability Purchase Agreement | 106,644 | 106,644 | |||
Balance at Dec. 31, 2014 | $ 60,675 | $ 259,089 | $ 47,634,857 | $ (55,692,967) | $ (7,738,346) |
Balance, shares at Dec. 31, 2014 | 2,427 | 25,908,978 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Cash flows from operating activities: | ||
Net loss | $ (3,410,899) | $ (2,672,154) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 17,547 | 11,147 |
Stock option compensation expense | 57,291 | 116,365 |
Share-based compensation - common stock | 4,038 | $ 7,655 |
Common stock and warrants issued to consultants | 85,200 | |
Bad debt expense | 216,505 | $ 8,588 |
Unrealized gain on derivative instrument | (14,231) | (58,538) |
Debt discount amortization | 217,323 | 63,480 |
Noncash finance charges | 17,591 | $ 216,650 |
Loss on conversion of notes | 63,867 | |
Loss on settlement of note and warrant | 132,301 | |
Changes in assets and liabilities: | ||
Receivables | (75,494) | $ 64,447 |
Prepaid expenses and other current assets | (187,935) | 276,560 |
Inventory | 160,000 | 90,000 |
Accounts payable, accrued expenses and other liabilities | 1,641,927 | 312,587 |
Deferred revenue | 13,286 | (3,200) |
Net cash used in operating activities | (1,061,683) | $ (1,566,413) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (45,581) | |
Cash used in investing activities | (45,581) | |
Cash flows from financing activities: | ||
Proceeds from notes payable | 467,500 | $ 1,549,100 |
Repayment of note and warrant settlement | (242,000) | |
Proceeds from common stock and warrants | 830,500 | |
Net cash provided by financing activities | 1,056,000 | $ 1,549,100 |
Net increase (decrease) in cash | (51,264) | (17,313) |
Cash at beginning of year | 57,009 | 74,322 |
Cash at end of year | $ 5,745 | 57,009 |
Supplemental Cash Flow Information | ||
Cash Paid for interest | $ 15,304 |
BUSINESS AND BASIS OF PRESENTAT
BUSINESS AND BASIS OF PRESENTATION | 12 Months Ended |
Dec. 31, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BUSINESS AND BASIS OF PRESENTATION | 1. BUSINESS AND BASIS OF PRESENTATION Effective August 20, 2014, Competitive Technologies, Inc. changed its name to Calmare Therapeutics Incorporated. Calmare Therapeutics Incorporated ("CTI") and its majority-owned (56.1%) subsidiary, Vector Vision, Inc. ("VVI"), (collectively, the "Company", "we" or "us") is a biotechnology company developing and commercializing innovative products and technologies. The Company is the licensed distributor of the non-invasive Calmare® pain therapy medical device, which incorporates the biophysical “Scrambler Therapy”® technology developed to treat neuropathic and cancer-derived pain. The consolidated financial statements include the accounts of CTI, and VVI. Inter-company accounts and transactions have been eliminated in consolidation. The Company has incurred operating losses since fiscal 2006 and has a working capital and shareholders’ deficiency at December 31, 2014. During the years ended December 31, 2014 and December 31, 2013, we had a significant concentration of revenues from our pain therapy medical device technology. We continue to seek revenue from new technologies or products to mitigate the concentration of revenues, and replace revenues from expiring licenses. At current reduced spending levels, the Company may not have sufficient cash flow to fund operations through 2015. These conditions raise substantial doubt about the Company's ability to continue as a going concern. The financial statements do not include adjustments to reflect the possible future effect of the recoverability and classification of assets or amounts and classifications of liabilities that may result from the outcome of this uncertainty. The Company's continuation as a going concern is dependent upon its developing other recurring revenue streams sufficient to cover operating costs. If necessary, we will meet anticipated operating cash requirements by further reducing costs, issuing debt or equity, and/or pursuing sales of certain assets and technologies while we pursue licensing and distribution opportunities for our remaining portfolio of technologies. The Company does not have any significant capital requirements in the budget going forward. There can be no assurance that the Company will be successful in such efforts. Failure to develop a recurring revenue stream sufficient to cover operating expenses would negatively affect the Company’s financial position. Our liquidity requirements arise principally from our working capital needs, including funds needed to find and obtain new technologies or products, and protect and enforce our intellectual property rights, if necessary. We fund our liquidity requirements with a combination of cash on hand, debt and equity financing, and cash flows from operations, if any, including royalty legal awards. At December 31, 2014, we had outstanding debt, in the form of promissory notes with a total principal amount of $3,217,000 and a carrying value of $3,079,000. The Company acquired the exclusive, worldwide rights to the Scrambler Therapy Scrambler Therapy CTI’s Distribution Rights, Marineo and Delta |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2014 | |
Summary Of Significant Accounting Policies | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires that we make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and disclosure of contingent assets and liabilities. Actual results could differ significantly from our estimates. Revenue Recognition We earn revenue in two ways: retained royalties from licensing our clients' and our own technologies to our customer licensees, and sales of finished products. We record revenue when the terms of the sales arrangement are accepted by all parties including a fee that is fixed and determinable, delivery has occurred and our customer has taken title, and collectability is reasonably assured, net of sales tax. We are the primary obligor, responsible for delivering devices as well as for training our customers in the proper use of the device. We deal directly with customers, setting pricing and providing training; work directly with the inventor of the technology to develop specifications and any changes thereto and to select and contract with manufacturing partners; and retain significant credit risk for amounts billed to customers. Therefore, all product sales are recorded following a gross revenue methodology. Revenue from foreign sources was 13% of total revenue in 2014 and not significant compared to total revenue in 2013. Retained royalties or distribution fees earned are of the following types: Non-refundable, upfront license fee Royalty or per unit fees Royalty legal awards Legal awards in patent infringement cases usually include accrued interest through the date of payment, as determined by the court. The court awards interest for unpaid earned income. Interest may also be included in other settlements with customers. Interest included in an award or settlement is generally recorded as interest income when received. Unless otherwise specified, we record all other revenue, as earned. Concentration of Revenues Total revenue consists of revenue from product sales, retained royalties, and other income. During the year ended December 31, 2014, we derived approximately $1,045,000 or 90% of total revenue from sales of our Calmare pain therapy medical device technology. An additional 4% of revenue derived indirectly from that technology through sales of supplies and training, rental payments and the sale of rental assets. During the year ended December 31, 2013, we derived approximately $653,000 or 85% of total revenue from sales of our Calmare pain therapy medical device technology. An additional 4% of revenue derived indirectly from that technology through sales of supplies and training, rental payments and the sale of rental assets. Of these amounts $150,000 and $160,000 or 14% and 25% of total revenue from sales of our Calmare pain therapy medical device technology came from one customer in 2014 and 2013, respectively. Expenses We recognize expenses related to evaluating, patenting and licensing inventions, and enforcing intellectual property rights in the period incurred. Cost of product sales includes contractual payments to inventor and manufacturer relating to our Calmare pain therapy medical device. Expenses associated with shipping devices are also included in cost of product sales. Selling expenses include commission expenses related to sales of inventory (Calmare devices) technologies, domestic and foreign patent legal filing, prosecution and maintenance expenses, net of reimbursements, royalty audits, and other direct costs. Personnel and consulting expenses include employee salaries and benefits, marketing and consulting expenses related to technologies and specific revenue initiatives, and other direct costs. General and administrative expenses include directors' fees and expenses, public company related expenses, professional services, including financing, audit and legal services, rent and other general business and operating expenses. Fair Value of Financial Instruments The Company believes the carrying amounts of cash, accounts receivable, deferred revenue, preferred stock liability and notes payable approximate fair value due to their short-term maturity. Inventory Inventory consists of finished product of our pain therapy device. Inventory is stated at lower of cost (first in, first out) or market. Property and Equipment Property and equipment are carried at cost net of accumulated depreciation. Expenditures for normal maintenance and repair are charged to expense as incurred. The costs of depreciable assets are charged to operations on a straight-line basis over their estimated useful lives, three to five years for equipment, or the terms of the related lease for leasehold improvements. The cost and related accumulated depreciation or amortization of property and equipment are removed from the accounts upon retirement or other disposition, and any resulting gain or loss is reflected in earnings. Impairment of Long-lived Assets We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. If the estimated fair value is less than the carrying amount of the asset, we record an impairment loss. If a quoted market price is available for the asset or a similar asset, we use it to determine estimated fair value. We re-evaluate the remaining useful life of the asset and adjust the useful life accordingly. There were no impairment indicators identified during the years ended December 31, 2014 and 2013. Income Taxes Income taxes are accounted for under an asset and a liability approach that requires recognition of deferred income tax assets and liabilities for the expected future consequences of events that have been recognized in the Company's consolidated financial statements and income tax returns. The Company provides a valuation allowance for deferred income tax assets when it is considered more likely than not that all or a portion of such deferred income tax assets will not be realized. Net Income (Loss) Per Share We calculate basic net income (loss) per share based on the weighted average number of common shares outstanding during the period without giving any effect to potentially dilutive securities. Net income (loss) per share, assuming dilution, is calculated giving effect to all potentially dilutive securities outstanding during the period. Share-Based Compensation The Company accounts for its share-based compensation in accordance with the Financial Accounting Standards Board's ("FASB") Accounting Standards Codification ("ASC") 718 – "Compensation – Stock Compensation." Accordingly, the Company recognizes compensation expense equal to the fair value of the stock awards at the time of the grant over the requisite service period. Our accounting for share-based compensation has resulted in our recognizing non-cash compensation expense related to stock options granted to employees, which is included in personnel and consulting expenses, and stock options granted to our directors, which is included in general and administrative expenses. Recent Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue From Contracts With Customers In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements – Going Concern, |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 3. INCOME TAXES In current and prior years, we generated significant federal and state income tax and alternative minimum tax losses, and these net operating losses ("NOLs") were carried forward for income tax purposes to be used against future taxable income. A reconciliation of our effective income tax rate compared to the U.S. federal statutory rate is as follows: Year ended December 31, 2014 Year ended December 31, 2013 Provision (benefit) at U.S. federal statutory rate (35.0 )% (35.0 )% State provision (benefit), net of U.S. federal tax (4.9 ) (4.9 ) Permanent differences 0.9 (0.3 ) Other items 2.5 5.0 Deferred tax valuation allowance (36.5 ) (35.2 ) Effective income tax rate 0.0 % 0.0 % Net deferred tax assets consist of the following: December 31, 2014 December 31, 2013 Net federal and state operating loss carryforwards $ 16,912,223 $ 15,748,253 Impairment of investments 531,470 531,470 Other, net 767,266 687,426 Deferred tax assets 18,210,959 16,967,149 Valuation allowance (18,210,959 ) (16,967,149 ) Net deferred tax assets $ - $ - At December 31, 2014, we had aggregate federal net operating loss carryforwards of approximately $42,281,000, which expire at various times from 2017 through 2034. A majority of our federal NOLs can be used to reduce taxable income used in calculating our alternative minimum tax liability. We also have state net operating loss carryforwards of approximately $40,791,000 that expire at various times through 2034. Approximately $4,196,000 of our NOL carryforward remaining at December 31, 2014 was derived from income tax deductions related to the exercise of stock options. The tax effect of these deductions will be credited against capital in excess of par value at the time they are utilized for book purposes, and not credited to income. We will never receive a benefit for these NOLs in our statement of operations. Changes in the valuation allowance were as follows: Year ended December 31, 2014 Year ended December 31, 2013 Balance, beginning of year $ 16,967,149 $ 15,997,757 Change in temporary differences 79,840 6,789 Change in net operating and capital losses 1,163,970 962,603 Balance, end of year $ 18,210,959 $ 16,967,149 Our ability to derive future tax benefits from the net deferred tax assets is uncertain and therefore we continue to provide a full valuation allowance against the assets, reducing the carrying value to zero. We will reverse the valuation allowance if future financial results are sufficient to support a carrying value for the deferred tax assets. At December 31, 2014 and December 31, 2013, we had no uncertain tax positions. We include interest and penalties on the underpayment of income taxes in income tax expense. We file income tax returns in the United States and Connecticut. The Internal Revenue Service has completed audits for the periods through the fiscal year ended July 31, 2005. Our open tax years for review are fiscal years ended December 31, 2011 through year ended December 31, 2014. The Company's returns filed with Connecticut are subject to audit as determined by the statute of limitations. |
NET LOSS PER COMMON SHARE
NET LOSS PER COMMON SHARE | 12 Months Ended |
Dec. 31, 2014 | |
Earnings Per Share [Abstract] | |
NET LOSS PER COMMON SHARE | 4. NET LOSS PER COMMON SHARE The following sets forth the denominator used in the calculations of basic net loss per share and net loss per share assuming dilution: Year ended December 31, 2014 Year ended December 31, 2013 Denominator for basic net loss per share, weighted average shares outstanding 23,513,870 16,977,027 Dilutive effect of common stock options N/A N/A Dilutive effect of Series C convertible preferred stock and convertible debt and warrants N/A N/A Denominator for net loss per share, assuming dilution 23,513,870 16,977,027 Due to the net loss incurred for the years ended December 31, 2014, and December 31, 2013, the denominator used in the calculation of basic net loss per share was the same as that used for net loss per share, assuming dilution, since the effect of any options, convertible preferred shares, convertible debt or warrants would have been anti-dilutive. Potentially dilutive securities outstanding are summarized as follows: December 31, 2014 December 31, 2013 Exercise of common stock options 1,692,500 1,372,000 Exercise of common stock warrants 4,450,536 1,313,679 Conversion of Series C convertible preferred stock 2,828,054 1,423,150 Conversion of convertible debt 4,783,272 4,321,385 Total 13,754,362 8,430,214 |
SHAREHOLDERS' INTEREST
SHAREHOLDERS' INTEREST | 12 Months Ended |
Dec. 31, 2014 | |
Stockholders' Equity Note [Abstract] | |
SHAREHOLDERS' INTEREST | 5. SHAREHOLDERS’ INTEREST Common Stock During 2013, the Company entered into an Equity Purchase Agreement (“EPA”) with Southridge Partners II, L.P. (“Southridge”). Under the terms of the EPA, which was filed with the SEC on February 26, 2013, Southridge will purchase, at the Company's election, up to $10,000,000 of the Company's registered common stock (the "Shares"). During the two year term of the EPA, the Company may at any time in its sole discretion deliver a "put notice" to Southridge thereby requiring Southridge to purchase a certain dollar amount of the Shares. Simultaneous with the delivery of such Shares, Southridge shall deliver payment for the Shares. Subject to certain restrictions, the purchase price for the Shares shall be equal to ninety percent of the lowest closing bid price for the Company's common stock during the ten-day trading period immediately after the Shares specified in the Put Notice are delivered to Southridge. The number of Shares sold to Southridge shall not exceed the number of such shares that, when aggregated with all other shares of common stock of the Company then beneficially owned by Southridge, would result in Southridge owning more than 9.99% of all of the Company's common stock then outstanding. Additionally, Southridge may not execute any short sales of the Company's common stock. Under the terms of the EPA, the Company had issued a convertible promissory note in the amount of $65,000 to Southridge which, during 2013 Southridge converted to 260,000 shares of common stock. In addition, during 2013, the Company negotiated a liabilities purchase agreement (“LPA”) with Southridge (see Note 11). Under the terms of the LPA, the Company issued 200,000 shares of its common stock at $0.35, or $70,000, and a convertible note in the amount of $12,000 Southridge as a fee. Additionally, under the terms of the EPA and LPA, the Company issued 250,000 shares of its common stock at $0.35 or $87,500, to Southridge for expenses associated with the EPA and LPA. During 2013 the Company issued 1,000,000 shares of its common stock into escrow, pending the completion of potential financing with a European investment group. On August 14, 2014, the shareholders approved an amendment to the Company’s certificate of incorporation to effect up to a one-for-ten reverse stock split (the “Reverse Stock Split”) of the Company’s issued and outstanding common stock. The Board of Directors, in its sole discretion, has discretion to implement the Reverse Stock Split. As of June 23, 2015, the Board of Directors has not implemented the Reverse Stock Split. During 2014, the Company did a series of private offerings of its common stock and warrants, for consideration of $830,500. 4,152,500 shares of common stock were issued at a per share price of $0.20. The common stock holders were also issued warrants to purchase 2,076,250 shares of common stock. The warrants have an exercise price of $0.60 and a 3-year term. The warrants were recorded to additional paid-in-capital. During 2014, the Company issued 60,000 shares to a consulting firm for marketing services performed and recorded consulting expense of $10,200 for the fair value of the stock. During 2014, the Company issued 333,333 stock warrants with a fair value of $75,000 for consulting services. The Company is amortizing the $75,000 over the service period and recorded $37,500 of expense in 2014. The Company issued 10,625 and 21,250 shares of its common stock to non-employee directors under its Director Compensation Plan in 2014 and 2013, respectively. The Company recorded expense of $4,038 and $7,655 for director stock compensation expense in 2014 and 2013, respectively. Preferred Stock Holders of 5% preferred stock are entitled to receive, if, as, and when declared by the Board of Directors, out of funds legally available therefore, preferential non-cumulative dividends at the rate of $1.25 per share per annum, payable quarterly, before any dividends may be declared or paid upon or other distribution made in respect of any share of common stock. The 5% preferred stock is redeemable, in whole at any time or in part from time to time, on 30 days' notice, at the option of the Company, at a redemption price of $25. In the event of voluntary or involuntary liquidation, the holders of preferred stock are entitled to $25 per share in cash before any distribution of assets can be made to holders of common stock. Each share of 5% preferred stock is entitled to one vote. Holders of 5% preferred stock have no preemptive or conversion rights. The preferred stock is not registered to be publicly traded. At its December 2, 2010 meeting, the CTI Board of Directors declared a dividend distribution of one right (each, a “Right”) for each outstanding share of common stock, par value $0.01, of the Company (the “Common Shares”). The dividend was payable to holders of record as of the close of business on December 2, 2010 (the “Record Date”). Issuance of the dividend may be triggered by an investor purchasing more than 20% of the outstanding shares of common stock. On December 15, 2010 the Company issued a $400,000 promissory note. The promissory note was scheduled to mature on December 31, 2012 with an annual interest rate of 5%. On December 15, 2010, the Company's Board of Directors authorized the issuance of 750 shares of Series C Convertible Preferred Stock ($1,000 par value) with a 5% cumulative dividend to William R. Waters, Ltd. of Canada. On December 30, 2010, 750 shares were issued. The Company converted the above $400,000 promissory note into 400 shares and received cash of $350,000 for the remaining 350 shares. Effective June 16, 2011, William R. Waters, Ltd. of Canada converted one half of its Series C Convertible Preferred Stock, or 375 shares, to 315,126 shares of common stock. The rights of the Series C Convertible Preferred Stock are as follows: a) Dividend rights b) Voting rights c) Liquidation rights d) Redemption rights e) Conversion rights On the date of conversion of the 375 shares of Series C Convertible Preferred Stock the Company calculated the value of the derivative liability to be $81,933. Upon conversion, the $81,933 derivative liability was reclassified to equity. The Company recorded a convertible preferred stock derivative liability of $66,177 and $80,408, associated with the 375 shares of Series C Convertible Preferred Stock outstanding at December 31, 2014 and, 2013, respectively. The Company has classified the Series C Convertible Preferred Stock as a liability at December 31, 2014 and 2013 because the variable conversion feature may require the Company to settle the conversion in a variable number of its common shares. |
RECEIVABLES
RECEIVABLES | 12 Months Ended |
Dec. 31, 2014 | |
Receivables [Abstract] | |
RECEIVABLES | 6. RECEIVABLES Receivables consist of the following: December 31, 2014 December 31, 2013 Calmare device sales receivable, net of allowance of $209,533 and $0 at December 31, 2014 and 2013, respectively $ - $ 132,850 Royalties, net of allowance of $101,154 at December 31, 2014 and 2013 - 10,086 Other, net of allowance of $6,972 and $0 at December 31, 2014 and 2013, respectively 2,319 394 Total $ 2,319 $ 143,330 |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2014 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | 7. PROPERTY AND EQUIPMENT, NET Property and equipment, net, consist of the following: December 31, 2014 December 31, 2013 Property and equipment, gross $ 215,491 $ 177,537 Accumulated depreciation and amortization (179,851 ) (169,931 ) Property and equipment, net $ 35,640 $ 7,606 Depreciation and amortization expense was $17,547 and $11,147 for the years ended December 31, 2014 and 2013, respectively. |
AVAILABLE-FOR-SALE AND EQUITY S
AVAILABLE-FOR-SALE AND EQUITY SECURITIES | 12 Months Ended |
Dec. 31, 2014 | |
Investments, Debt and Equity Securities [Abstract] | |
AVAILABLE-FOR-SALE AND EQUITY SECURITIES | 8. AVAILABLE-FOR-SALE AND EQUITY SECURITIES December 31, 2014 December 31, 2013 Number of shares Type Security Innovation, Inc. — — 223,317 Common stock Xion Pharmaceutical Corporation — — 60 Common stock In prior years, we acquired 3,129,509 shares of NTRU Cryptosystems, Inc. ("NTRU") common stock, and certain preferred stock that later was redeemed, in exchange for cash and a reduction in our future royalty rate on sales of NTRU's products. NTRU was a privately held company that sold encryption software for security purposes, principally in wireless markets. There was no public market for NTRU shares. In 2003, we wrote down the value of NTRU to $0, but we continued to own the shares. On July 22, 2009, all NTRU assets were acquired by Security Innovation, an independent provider of secure software located in Wilmington, MA. We received 223,317 shares of stock in the privately held Security Innovation for our shares of NTRU. In September 2009 we announced the formation of a joint venture with Xion Corporation for the commercialization of our patented melanocortin analogues for treating sexual dysfunction and obesity. We received 60 shares of privately held Xion Pharmaceutical Corporation common stock in June 2010. CTI currently owns 30% of the outstanding stock of Xion Pharmaceutical Corporation. The Company has been notified that Xion Pharmaceutical Corporation will be dissolved in 2015 with no financial impact to the Company. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2014 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | 9. FAIR VALUE MEASUREMENTS The Company measures fair value in accordance with Topic 820 of the FASB Accounting Standards Codification (“ASC”), Fair Value Measurement (“ASC 820”), which provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under ASC 820 are described as follows: Level 1 - Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Company has the ability to access. Level 2 - Inputs to the valuation methodology include: • Quoted prices for similar assets or liabilities in active markets; • Quoted prices for identical or similar assets or liabilities in inactive markets; • Inputs other than quoted prices that are observable for the asset or liability; • Inputs that are derived principally from or corroborated by observable market data by correlation or other means. If the asset or liability has a specified (contractual) term, the Level 2 input must be observable for substantially the full term of the asset or liability. Level 3 - Inputs to the valuation methodology are unobservable and significant to the fair value measurement. The asset's or liability's fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs. The Company values its derivative liability associated with the variable conversion feature on its Series C Convertible Preferred Stock (Note 5) based on the market price of its common stock. For each reporting period the Company calculates the amount of potential common stock that the Series C Preferred Stock could convert into based on the conversion formula (incorporating market value of our common stock) and multiplies those converted shares by the market price of its common stock on that reporting date. The total converted value is subtracted by the consideration paid to determine the fair value of the derivative liability. The Company classified the derivative liability of $66,000 and $80,000 at December 31, 2014 and December 31, 2013, respectively, in Level 2 of the fair value hierarchy. The warrants issued in connection with the Tonaquint Note (the “Tonaquint Warrants,” see Note 13) were measured at fair value and liability-classified because the Tonaquint Warrants contain “down-round” protection and therefore did not meet the scope exception under FASB ASC 815, Derivatives and Hedging (“ASC 815”). Since “down-round” protection is not an input to the fair value of the warrants, the warrants could not be considered indexed to the Company’s own stock which is a requirement for the scope exception as outlined under ASC 815. The Company valued the warrants at $8,000 at December 31, 2013, and $26,076 upon issuance July 16, 2013, in Level 3 of the fair value hierarchy. During the first quarter of 2014 the Company executed a debt settlement agreement with Tonaquint related to the note and warrant (see Note 13). Similarly, the conversion feature of the Tonaquint Note (Note 13) also contained “down-round” protection and therefore did not meet the scope exception under FASB ASC 815. The Company classified the derivative liability of $0 at December 31, 2013, and $19,024 upon issuance at July 16, 2013, in Level 3 of the fair value hierarchy. During the first quarter of 2014 the Company executed a debt settlement agreement with Tonaquint related to the note and warrant (see Note 13). The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Company believes its valuation method is appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value could result in a different fair value measurement at the reporting date. |
PREPAID EXPENSES AND OTHER CURR
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 12 Months Ended |
Dec. 31, 2014 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 10. PREPAID EXPENSES AND OTHER CURRENT ASSETS Prepaid expenses and other current assets consist of the following: December 31, 2014 December 31, 2013 Prepaid insurance $ 71,651 $ 16,802 Clinical trial 109,119 - Other 72,332 48,365 Prepaid expenses and other current assets $ 253,102 $ 65,167 |
LIABILITIES ASSIGNED TO LIABILI
LIABILITIES ASSIGNED TO LIABILITY PURCHASE AGREEMENT | 12 Months Ended |
Dec. 31, 2014 | |
Liabilities Assigned To Liability Purchase Agreement [Abstract] | |
LIABILITIES ASSIGNED TO LIABILITY PURCHASE AGREEMENT | 11. LIABILITIES ASSIGNED TO LIABILITY PURCHASE AGREEMENT During the third quarter of 2013, the Company negotiated a LPA with Southridge. The LPA takes advantage of a provision in the Securities Act of 1933, Section 3(a)(10), that allows the exchange of claims, securities, or property for stock when the arrangement is approved for fairness by a court proceeding. The process, approved by the court in August 2013, has the potential to eliminate nearly $2.1 million of our financial obligations to existing creditors who agreed to participate and executed claims purchase agreements with SouthridgeÂ’s affiliate ASC Recap accounting for $2,093,303 of existing payables, accrued expenses and other current liabilities, and notes payable. The process began with the issuance in September 2013 of 1,618,235 shares of the CompanyÂ’s common stock to ASC Recap. During September and October 2013, ASC Recap sold the CompanyÂ’s common stock and during the three months ended March 31, 2014 paid creditors approximately $80,000 from the proceeds and retained a service fee of approximately $27,000. During 2014, the Company also made cash payments of $18,000 for accrued expenses previously included in the LPA amount. As of June 23, 2015, no further shares of the CompanyÂ’s common stock had been issued to ASC Recap to settle creditorsÂ’ balances. There can be no assurance that the Company will be successful in completing this process with Southridge, and the Company retains ultimate responsibility for this debt, until fully paid. |
ACCRUED EXPENSES AND OTHER LIAB
ACCRUED EXPENSES AND OTHER LIABILITIES | 12 Months Ended |
Dec. 31, 2014 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES AND OTHER LIABILITIES | 12. ACCRUED EXPENSES AND OTHER LIABILITIES Accrued expenses and other liabilities consist of the following: December 31, 2014 December 31, 2013 Royalties payable $ 314,787 $ 127,708 Accrued audit fee - 82,141 Commissions payable 15,900 21,975 Accrued interest payable 987,659 216,518 Other 271,836 134,645 Accrued expenses and other liabilities, net $ 1,590,182 $ 582,987 Excluded above is approximately $217,000 and $244,000 of accrued expenses and other liabilities at December 31, 2014 and 2013, respectively, that fall under the LPA with ASC Recap, and are expected to be repaid using the process as described in Note 11. Because there can be no assurance that the Company will be successful in completing this process, the Company retains ultimate responsibility for these liabilities, until fully paid down. |
NOTES PAYABLE
NOTES PAYABLE | 12 Months Ended |
Dec. 31, 2014 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE | 13. NOTES PAYABLE Notes payable consist of the following: December 31, 2014 December 31, 2013 90 day Convertible Notes (Chairman of the Board) $ 2,498,980 $ 2,518,000 24 month Convertible Notes ($100,000 to Board member) 225,000 225,000 10 day Note (Board member) 42,500 - Tonaquint 9% OID Convertible Notes and Warrants - 87,705 Southridge Convertible Note - 12,000 Series A1 15% OID Convertible Notes and Warrants - 81,415 Series A2 15% OID Convertible Notes and Warrants - 69,571 Series A3 15% OID Convertible Notes and Warrants 11,765 - Series B OID Convertible Notes and Warrants 56,659 - 1 Year 15% OID Convertible Notes and Warrants 244,565 - Notes Payable, gross 3,079,469 2,933,691 Less LPA amount (485,980 ) (505,000 ) Notes Payable, net $ 2,593,489 $ 2,488,691 Details of notes payable as of December 31, 2014 are as follows: Principal Amount Carrying Value Cash Interest Rate Common Stock Conversion Price Maturity Date 90 day Convertible Notes (Chairman of the Board) $ 2,498,980 $ 2,498,980 6 % $ 1.05 Various 2014 24 month Convertible Notes ($100,000 to Board member) 225,000 225,000 6 % 1.05 March 2014 – June 2014 10 day Note (Board member) 42,500 42,500 None None January 2015 Series A3 15% OID Convertible Notes and Warrants 11,765 11,765 None 0.25 January 2015 Series B OID Convertible Notes and Warrants 80,000 56,659 None 0.23 March 2017 1 Year 15% OID Convertible Notes and Warrants 358,824 244,565 None 0.20 Aug. 2015 – Nov. 2015 Notes Payable, gross $ 3,217,069 3,079,469 Less LPA amount (485,980 ) Notes Payable, net $ 2,593,489 90 day Convertible Notes The Company has issued 90-day notes payable to borrow funds from a director, now the chairman of our Board, as follows: 2013 $ 1,188,900 2012 1,210,000 2011 100,000 Total $ 2,498,980 These notes have been extended several times and all bear 6.00% simple interest. A conversion feature was added to the Notes when they were extended, which allows for conversion of the eligible principal amounts to common stock at any time after the six month anniversary of the effective date – the date the funds are received – at a rate of $1.05 per share. Additional terms have been added to all Notes to include additional interest of 1% simple interest per month on all amounts outstanding for all Notes if extended beyond their original maturity dates and to provide the lender with a security interest in unencumbered inventory and intangible assets of the Company other than proceeds relating to the Calmare Device and accounts receivable. Due to the Board’s February 10, 2014 decision authorizing Management to nullify certain actions taken by prior management, the additional terms noted above were not approved and therefore, the additional interest for the extension of the Notes was not recorded. During 2014, Management has been in negotiations to modify the terms of the Notes. However, until those negotiations are resolved, the Company has agreed to honor the additional terms and as such, the Company recorded additional interest of approximately $510,000 during the three months ended September 30, 2014 and $602,000 for the year ended December 31, 2014. A total of $485,980 of the aforementioned notes issued between December 1, 2012 and March 31, 2013 fall under the LPA with ASC Recap, and are expected to be repaid using the process as described in Note 11. Because there can be no assurance that the Company will be successful in completing this process, the Company retains ultimate responsibility for this debt, until fully paid down. As a result, the Company continues to accrue interest on these notes and they remain convertible as described above. 24 month Convertible Notes In March 2012, the Company issued a 24-month convertible promissory note to borrow $100,000. Additional 24-month convertible promissory notes were issued in April 2012 ($25,000) and in June 2012 ($100,000). All of the notes bear 6.00% simple interest. Conversion of the eligible principal amounts to common stock is allowed at any time at a rate of $1.05 per share. As of June 23, 2015 the Company has not repaid the principal due on the March 2012 $100,000 note, the April 2012 $25,000 note or the June 2012 $100,000 note and is in default under the terms of the notes. There is also unpaid interest of $29,000 related to these notes. 10 day Note In late December 2014, the Company issued a 10 day non-interest bearing note to a Board member in the amount of $42,500. This note was repaid in early January 2015. Tonaquint 9% Original Issue Discount Convertible Notes and Warrants During the quarter ended September 30, 2013, the Company entered into a securities purchase agreement with Tonaquint, Inc., under which it was issued a $112,500 convertible promissory note in consideration for $100,000, the difference between the proceeds from the Note and the principal amount consisted of a $10,000 original issue discount and a carried transaction expense of $2,500. The original issue discount was being amortized over the life of the note. The note was convertible at an initial conversion price of $0.30 per share at any time, and contained a “down-round protection” feature that requires the valuation of a derivative liability associated with the note. The note bore interest at 7% and was due in May 2014. Tonaquint was also issued a market-related warrant for $112,500 in shares of common stock with a “cashless” exercise feature. The warrant had a $0.35 exercise price, a 5-year term and included a “down-round protection” feature that required it to be classified as a liability rather than as equity (see Note 9). During the first quarter of 2014 the Company executed a debt settlement agreement with Tonaquint related to the note and warrant. The warrant was settled during the first quarter of 2014 for a cash payment of $98,000, resulting in a loss of $98,000. The note was settled during the second quarter of 2014 for cash payments totaling $144,000 ($20,000 paid in the first quarter of 2014 and $124,000 paid in the second quarter of 2014). Because the execution of the debt settlement agreement in the first quarter of 2014 resulted in a significant modification of the original terms of the note agreement, the Company adjusted the carrying value of the note in the first quarter of 2014 and recorded a related loss of approximately $34,000. Southridge During 2013, the Company issued a six-month $12,000 convertible note payable to Southridge to cover legal expenses as part of the LPA (see Note 11). The convertible note was convertible into the Company’s common stock at the greater of $0.25 or 85% of the average closing bid price during the five (5) trading days prior to conversion and was due in June 2014. During the third quarter of 2014, the Company issued to Southridge 50,000 shares in exchange for and in full satisfaction for the note and recorded a $5,500 loss upon conversion of the note. Series A 15% Original Issue Discount Convertible Notes and Warrants During the quarter ended December 31, 2013, the Company did a private offering of two tranches of convertible notes and warrants, under which it issued $283,648 of convertible promissory notes for consideration of $241,100, the difference between the proceeds from the notes and the principal amount consists of $42,548 of original issue discount. During the quarter ended March 31, 2014, the Company did a private offering of a third tranche of convertible notes and warrants, under which it issued $64,706 of convertible promissory notes for consideration of $55,000, the difference between the proceeds from the notes and principal amount consists of $9,706 of original issue discount. The notes are convertible at initial conversion prices ranging from $0.20 to $0.25 per share any time after issuance thereby having an embedded beneficial conversion feature. The note holders were also issued market-related warrants for 958,179 in shares of common stock. The warrants have exercise prices that range from $0.40 to $0.60 and a term of 2 years. The beneficial conversion feature, if any, and the warrants were recorded to additional paid-in-capital. The Company allocated the proceeds received to the notes, the beneficial conversion feature and the warrants on a relative fair value basis at the time of issuance. The total debt discount is amortized over the life of the notes to interest expense. The beneficial conversion feature was valued at the intrinsic value on the issuance date. The intrinsic value represents the difference between the conversion price and the fair value of the common stock multiplied by the number of share into which the note is convertible. We estimated the fair value of the warrants on the issue date using a Black-Scholes pricing model with the following assumptions: Warrants (Tranche 1) November 15, 2013 Warrants (Tranche 2) December 30, 2013 Warrants (Tranche 3) February 14, 2014 Expected term 2 years 2 years 2 years Volatility 180.02 % 184.38 % 184.88 % Risk Free Rate 0.31 % 0.39 % 0.32 % The proceeds of the Notes were allocated to the components as follows: Proceeds allocated at issue date Private Offering Notes $ 152,703 Private Offering Warrants 91,274 Beneficial Conversion feature 52,123 Total $ 296,100 During 2014, certain holders of OID convertible notes and warrants delivered to the Company a notice of conversion related to the OID convertible notes. Additionally, the Company offered certain Noteholders an inducement to convert their notes to shares. The inducement, when offered, provided Noteholders a conversion price of $0.20. All other original terms, including the warrant terms, remained the same. Upon notice of conversion the Company: (i) accelerated and recognized as interest expense in the current period any remaining discount, and (ii) recognized a loss for the fair value of the additional shares offered as the conversion inducement. Presented below is summary information related to the conversion: Statement of Operations Loss on conversion of notes $ 58,366 Accelerated interest expense $ 35,109 Balance Sheet Shares issued 1,682,946 Principal amount of notes converted $ 336,588 Series B Original Issue Discount Convertible Notes and Warrants During the quarter ended March 31, 2014, the Company did a private offering of convertible notes and warrants, under which it issued $80,000 of convertible promissory notes for consideration of $65,000, the difference between the proceeds from the notes and principal amount consists of $15,000 of original issue discount. The notes are convertible at an initial conversion price of $0.35 per share any time after issuance thereby having an embedded beneficial conversion feature. The note holders were also issued market-related warrants for 185,714 in shares of common stock. The warrants have an exercise price of $0.45 and a 4-year term. The beneficial conversion feature and the warrants were recorded to additional paid-in-capital. The Company allocated the proceeds received to the notes, the beneficial conversion feature and the warrants on a relative fair value basis at the time of issuance. The total debt discount is amortized over the life of the notes to interest expense. The beneficial conversion feature was valued at the intrinsic value on the issuance date. The intrinsic value represents the difference between the conversion price and the fair value of the common stock multiplied by the number of share into which the note is convertible. We estimated the fair value of the warrants on the issue date using a Black-Scholes pricing model with the following assumptions: Warrants March 20, 2014 Expected term 4 years Volatility 151.52 % Risk Free Rate 1.32 % The proceeds of the Notes were allocated to the components as follows: Proceeds allocated at issue date Private Offering Notes $ 34,272 Private Offering Warrants 26,811 Beneficial Conversion feature 3,917 Total $ 65,000 The Series B OID notes include an anti-dilution provision that if the Company issues more than 20 million shares of its common stock, subject to certain exceptions, the conversion price of the notes and the conversion price of the warrants would be subject to an automatic pre-determined price adjustment. During the quarter ended December 31, 2014 the Series B OID noteholder and the Company agreed that this anti-dilution provision had been triggered and the OID note share conversion price was adjusted down to $0.23 per share, which increased the number of shares available upon conversion to 347,826. The anti-dilution provision in the Warrant changed the share purchase price downward to $0.33 per share but did not change the number of shares available under the Warrant. As a result of the triggering of the above noted one time anti-dilution provision, the Company reallocated the proceeds of the Notes during the quarter ended December 31, 2014 as follows: Proceeds allocated at issue date Private Offering Notes $ 46,222 Private Offering Warrants 18,778 Beneficial Conversion feature - Total $ 65,000 1 Year 15% OID Convertible Notes and Warrants During the quarter ended December 31, 2014, the Company did a private offering of convertible notes and warrants, under which it issued $358,824 of convertible promissory notes for consideration of $305,000, the difference between the proceeds from the notes and principal amount consists of $53,824 of original issue discount. The notes are convertible at an initial conversion price of $0.20 per share any time after issuance thereby having an embedded beneficial conversion feature. The note holders were also issued market-related warrants for 897,060 in shares of common stock. The warrants have an exercise price of $0.60 and a 1-year term. The beneficial conversion feature and the warrants were recorded to additional paid-in-capital. The Company allocated the proceeds received to the notes, the beneficial conversion feature and the warrants on a relative fair value basis at the time of issuance. The total debt discount is amortized over the life of the notes to interest expense. The beneficial conversion feature was valued at the intrinsic value on the issuance date. The intrinsic value represents the difference between the conversion price and the fair value of the common stock multiplied by the number of shares into which the note is convertible. We estimated the fair value of the warrants on the issue date using a Black-Scholes pricing model with the following assumptions: Warrants November 7, 2014 Expected term 1 year Volatility 188.31 % Risk Free Rate 0.11 % The proceeds of the Notes were allocated to the components as follows: Proceeds allocated at issue date Private Offering Notes $ 224,679 Private Offering Warrants 57,854 Beneficial Conversion feature 22,467 Total $ 305,000 |
STOCK-BASED COMPENSATION PLANS
STOCK-BASED COMPENSATION PLANS | 12 Months Ended |
Dec. 31, 2014 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK-BASED COMPENSATION PLANS | 14. STOCK-BASED COMPENSATION PLANS 2011 Employees', Directors' and Consultants' Stock Option Plan – The following information relates to the 2011 Option Plan: December 31, 2014 December 31, 2013 Common shares reserved for issuance on exercise of options 1,517,500 1,165,000 Shares available for future option grants 482,500 335,000 1997 Employee Stock Option Plan The following information relates to the 1997 Option Plan: December 31, 2014 December 31, 2013 Common shares reserved for issuance on exercise of options 55,000 87,000 Shares available for future option grants - - 2000 Director's Stock Option Plan The following information relates to the 2000 Directors' Stock Option Plan: December 31, 2014 December 31, 2013 Common shares reserved for issuance on exercise of options 120,000 120,000 Shares available for future option grants - - Summary of Common Stock Options Also $11,178 and $14,895 of noncash compensation expense was included in general and administrative expenses, from stock options granted to directors pursuant to the Directors Option Plan in the years ended December 31, 2014 and 2013, respectively. Since these stock options are fully vested upon grant, the full fair value of the stock options is recorded as expense at the date of grant. During the year ended December 31, 2013, the Company granted 50,000 options to non-employee directors which were fully vested upon issuance, and 5,000 options which were fully vested upon issuance to two non-employee directors who had served as chairman, as approved by the Board of Directors. During the year ended December 31, 2013, the Board of Directors extended the expiration dates for all options previously granted to one departing Board member in recognition for service. Those options will expire per their original term specified in each individual option agreement, typically either 5 or 10 years from the date of granting, rather than expiring within the specified time period, typically 90 or 180 days following the Board member’s termination dates. The Company considered the extension as a modification to the option agreements recording incremental compensation expense of $16,920 for the year ended December 31, 2013. During the quarter ended March 31, 2013, the Company granted 1,000,000 options to the then-CEO. As approved by the Board of Directors, these options granted were expected to vest over a four (4) year period, with 200,000 options vesting upon issuance. Since his resignation on September 26, 2013, expense for the quarters ended March 31, 2013 and June 30, 2013 has been reversed. The 200,000 vested options all expired 90 days from the then-CEO’s resignation date, per the Option Agreement. During the quarter ended December 31, 2013, the Company granted 1,000,000 options to the current CEO. As approved by the Board of Directors, these options vest over a four (4) year period, with 200,000 options vested upon issuance. During the quarter ended June 30, 2014, the Company granted 320,000 options to employees. As approved by the Board of Directors, these options vest over a four (4) year period, with 20% of the options vested upon issuance. We estimated the fair value of each option on the grant date using a Black-Scholes option-pricing model with the following weighted average assumptions: Year ended December 31, 2014 Year ended December 31, 2013 Dividend yield (1) 0.0 % 0.0 % Expected volatility (2) 118.5% - 122.24 % 99.2% - 110.2 % Risk-free interest rates (3) 1.19-1.72 % 1.02 % Expected lives (2) 4-5 years 2-5 years (1) We have not paid cash dividends on our common stock since 1981, and currently do not have plans to pay or declare cash dividends. Consequently, we used an expected dividend rate of zero for the valuations. (2) Estimated based on our historical experience. Volatility was based on historical experience over a period equivalent to the expected life in years. (3) Based on the U.S. Treasury constant maturity interest rate with a term consistent with the expected life of the options granted. A summary of the status of all our common stock options as of December 31, 2014 and 2013, and changes during the periods then ended is presented below. Year ended December 31, 2014 Year ended December 31, 2013 Shares Weighted Average Exercise Price Aggregate Intrinsic Values Shares Weighted Average Exercise Price Aggregate Intrinsic Values Outstanding at beginning of period 1,372,000 $ 0.50 $ 317,000 $ 1.85 Granted 362,500 0.39 2,055,000 0.29 Forfeited (30,500 ) 2.03 (1,000,000 ) 0.50 Exercised - - Expired or terminated (11,500 ) 2.87 - Outstanding at end of year 1,692,500 $ 0.44 $ 80,000 1,372,000 $ 0.50 $ 240,750 Vested at end of year 844,500 $ 0.70 $ 32,000 572,000 $ 1.10 $ 48,750 Nonvested at end of year 848,000 $ 0.18 $ 48,000 800,000 $ 0.08 $ 192,000 Weighted average fair value per share of options issued during the year $ 0.26 $ 0.21 Generally, we issue new shares of common stock to satisfy stock option exercises. |
401(k) PLAN
401(k) PLAN | 12 Months Ended |
Dec. 31, 2014 | |
Pension and Other Postretirement Benefit Contributions [Abstract] | |
401(k) PLAN | 15. 401(k) PLAN We have an employee-defined contribution plan qualified under section 401(k) of the Internal Revenue Code (the "Plan"), for all employees age 21 or over, and meeting certain service requirements. The Plan has been in effect since January 1, 1997. Participation in the Plan is voluntary. Employees may defer compensation up to a specific dollar amount determined by the Internal Revenue Service for each calendar year. We do not make matching contributions, and employees are not allowed to invest in our stock under the Plan. Our directors may authorize a discretionary contribution to the Plan, allocated according to the provisions of the Plan, and payable in shares of our common stock valued as of the date the shares are contributed. No contributions were accrued or made in the years ended December 31, 2014 and 2013. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 16. COMMITMENTS AND CONTINGENCIES Operating Leases Future minimum rental payments required under operating leases with remaining non-cancelable lease terms as of December 31, 2014 are as follows: More than 5 years $ - 3-5 years - 1-3 years 82,000 Within 1 year 68,000 Total $ 150,000 Total rental expense for all operating leases was: Year ended December 31, 2014 Year ended December 31, 2013 Minimum rental payments $ 56,615 $ 60,038 Less: Sublease rentals - 3,594 Net rent expense 56,615 56,444 Deferred rent charge 8,397 5,248 $ 65,012 $ 61,692 Contingencies – Revenue based As of December 31, 2014, CTI and its majority owned subsidiary, VVI, have remaining obligations, contingent upon receipt of certain revenues, to repay up to $165,788 and $199,334, respectively, in consideration of grant funding received in 1994 and 1995. CTI also is obligated to pay at the rate of 7.5% of its revenues, if any, from transferring rights to certain inventions supported by the grant funds. VVI is obligated to pay at rates of 1.5% of its net sales of supported products or 15% of its revenues from licensing supported products, if any. Contingencies – Litigation Tim Conley GEOMC Summary An unfavorable resolution of any or all matters, and/or our incurrence of significant legal fees and other costs to defend or prosecute any of these actions and proceedings may, depending on the amount and timing, have a material adverse effect on our consolidated financial position, results of operations or cash flows in a particular period. Authorized shares As of June 23, 2015, in the event that all of the outstanding securities issued by the Company were converted into shares of common stock at one time (the “Fully Diluted Shares”), whether exercisable or otherwise, the number of Fully Diluted Shares of common stock would exceed the number of currently authorized shares of the Company. If such an event were to happen, the Company could either (a) immediately effectuate a reverse stock split, which was approved by the Board of Directors and a majority of stockholders on August 14, 2014 or (b) call for a special general meeting of shareholders and request shareholder consent to increase the number of authorized shares of the Company. In either case, such actions would cure the common stock shortfall and return the Company to compliance with the common stock share count threshold as so delineated in the supporting financing agreements. Notwithstanding the foregoing, the Company currently expects to request shareholder consent at the next Annual General Meeting of Shareholders, to increase the number of authorized shares of the Company, and, if received in either of the aforementioned cases, shall file a Certificate of Amendment to the Certificate of Incorporation to increase the number of authorized shares to a value larger than the number of Fully Diluted Shares. Unsigned Agreements The Company uses two unrelated firms to provide marketing and investor relations services, CME Acuity (“CMEA”) and Legend Capital Management (“LCM”), respectively. The LCM and CMEA agreements were not signed due to an inability to come to final terms due to certain nuances in either agreement that included but were not limited to assignment of human capital and allowable performance based bonus(es). However, from the start date until December 31, 2014, the respective firms were compensated for services rendered on a “pay-as-we go” basis (the “Arrangement”). The aforementioned Arrangement is expected to continue for the next few consecutive quarters until such time as their agreements can be consummated. CTI’s Distribution Rights, Marineo and Delta On April 8, 2014, Mr. Giuseppe Marineo, an inventor of the Calmare® pain therapy device, and Delta Research and Development (“Delta”), Mr. Marineo’s research company, and Delta International Services and Logistics (“DIS&L”), Delta’s commercial arm in which Mr. Marineo is the sole beneficiary of all proceeds as its founder and sole owner (collectively the “Group”), issued a press release (the “Group’s Press Release”) regarding CTI stating that the Company did not have authority to sell, distribute and manufacture the Calmare Device as an exclusive agent of the Group. CTI issued a corporate response in a press release dated April 11, 2014 stating that the Group’s Press Release was inaccurate and has since been purged by the overseeing body of wire services. This issue between the Company and the Group is over the validity of a 2012 Amendment to a Sales and Representation Agreement (the “Amendment”) which, if valid and enforceable, may have compromised its rights to sell, distribute and manufacture the Calmare Device as an exclusive agent of the Group in the global marketplace, especially in the European, Middle Eastern and North African (“EMENA”) territory which was responsible for approximately 70% of gross Calmare Device sales in 2011. However, the Company believes that the Amendment is neither valid nor enforceable as it was never duly signed or authorized and subsequently deemed null and void. Therefore, the parties’ rights are determined by an earlier agreement whereby the Company possesses the authority to sell, distribute and manufacture the Calmare Device as a world-wide exclusive agent of the Group. On April 16, 2014, counsel for the Group (“Group Counsel”) sent a cease and desist letter (“Cease and Desist Letter”) to the Company, requesting a confirmation that the Company would no longer hold itself out as an agent of the Group permitted to sell, distribute and manufacture the Calmare Device world-wide including the EMENA territory. The Company responded on April 25, 2014 to the Cease and Desist Letter, disputing Group Counsel’s interpretation of the events surrounding the execution of the Amendment. At this time, the Company continues to work to find a reasonable and amicable resolution to the situation. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2014 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | 17. RELATED PARTY TRANSACTIONS Our board of directors determined that when a director's services are outside the normal duties of a director, we compensate the director at the rate of $1,000 per day, plus expenses, which is the same amount we pay a director for attending a one-day Board meeting. We classify these amounts as consulting expenses, included in personnel and consulting expenses. At December 31, 2014, $2,642,000 of the outstanding Notes were payable to related parties; $2,499,000 to the chairman of our Board, Peter Brennan, and $143,000 to another director, Stan Yarbro. |
SUBSEQUENT EVENT
SUBSEQUENT EVENT | 12 Months Ended |
Dec. 31, 2014 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENT | 18. SUBSEQUENT EVENT From January 1, 2015 to June 23, 2015 the Company obtained additional funding, including $365,000 of equity funding and $257,000 of hybrid debt funding. From January 1, 2015 to June 23, 2015, the Company did a series of private offerings of its common stock and warrants, for consideration of $365,000. 1,825,000 shares of common stock were issued at a per share price of $0.20. The common stock holders were also issued warrants to purchase 912,500 shares of common stock. The warrants have an exercise price of $0.60 and a 3-year term. From January 1, 2015 to June 23, 2015, the Company did a series of private offerings of convertible notes and warrants, under which it issued $302,000 of convertible promissory notes for consideration of $257,000, the difference between the proceeds from the notes and principal amount consists of $45,000 of original issue discount. The notes are convertible at a conversion price of $0.20 per share. The note holders were also issued market-related warrants for 756,000 in shares of common stock. The warrants have an exercise price of $0.60 and a 1-year term. |
SUMMARY OF SIGNIFICANT ACCOUN25
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2014 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires that we make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and disclosure of contingent assets and liabilities. Actual results could differ significantly from our estimates. |
Revenue Recognition | Revenue Recognition We earn revenue in two ways: retained royalties from licensing our clients' and our own technologies to our customer licensees, and sales of finished products. We record revenue when the terms of the sales arrangement are accepted by all parties including a fee that is fixed and determinable, delivery has occurred and our customer has taken title, and collectability is reasonably assured, net of sales tax. We are the primary obligor, responsible for delivering devices as well as for training our customers in the proper use of the device. We deal directly with customers, setting pricing and providing training; work directly with the inventor of the technology to develop specifications and any changes thereto and to select and contract with manufacturing partners; and retain significant credit risk for amounts billed to customers. Therefore, all product sales are recorded following a gross revenue methodology. Revenue from foreign sources was 13% of total revenue in 2014 and not significant compared to total revenue in 2013. Retained royalties or distribution fees earned are of the following types: Non-refundable, upfront license fee Royalty or per unit fees Royalty legal awards Legal awards in patent infringement cases usually include accrued interest through the date of payment, as determined by the court. The court awards interest for unpaid earned income. Interest may also be included in other settlements with customers. Interest included in an award or settlement is generally recorded as interest income when received. Unless otherwise specified, we record all other revenue, as earned. |
Concentration of Revenues | Concentration of Revenues Total revenue consists of revenue from product sales, retained royalties, and other income. During the year ended December 31, 2014, we derived approximately $1,045,000 or 90% of total revenue from sales of our Calmare pain therapy medical device technology. An additional 4% of revenue derived indirectly from that technology through sales of supplies and training, rental payments and the sale of rental assets. During the year ended December 31, 2013, we derived approximately $653,000 or 85% of total revenue from sales of our Calmare pain therapy medical device technology. An additional 4% of revenue derived indirectly from that technology through sales of supplies and training, rental payments and the sale of rental assets. Of these amounts $150,000 and $160,000 or 14% and 25% of total revenue from sales of our Calmare pain therapy medical device technology came from one customer in 2014 and 2013, respectively. |
Expenses | Expenses We recognize expenses related to evaluating, patenting and licensing inventions, and enforcing intellectual property rights in the period incurred. Cost of product sales includes contractual payments to inventor and manufacturer relating to our Calmare pain therapy medical device. Expenses associated with shipping devices are also included in cost of product sales. Selling expenses include commission expenses related to sales of inventory (Calmare devices) technologies, domestic and foreign patent legal filing, prosecution and maintenance expenses, net of reimbursements, royalty audits, and other direct costs. Personnel and consulting expenses include employee salaries and benefits, marketing and consulting expenses related to technologies and specific revenue initiatives, and other direct costs. General and administrative expenses include directors' fees and expenses, public company related expenses, professional services, including financing, audit and legal services, rent and other general business and operating expenses. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company believes the carrying amounts of cash, accounts receivable, deferred revenue, preferred stock liability and notes payable approximate fair value due to their short-term maturity. |
Inventory | Inventory Inventory consists of finished product of our pain therapy device. Inventory is stated at lower of cost (first in, first out) or market. |
Property and Equipment | Property and Equipment Property and equipment are carried at cost net of accumulated depreciation. Expenditures for normal maintenance and repair are charged to expense as incurred. The costs of depreciable assets are charged to operations on a straight-line basis over their estimated useful lives, three to five years for equipment, or the terms of the related lease for leasehold improvements. The cost and related accumulated depreciation or amortization of property and equipment are removed from the accounts upon retirement or other disposition, and any resulting gain or loss is reflected in earnings. |
Impairment of Long-lived Assets | Impairment of Long-lived Assets We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. If the estimated fair value is less than the carrying amount of the asset, we record an impairment loss. If a quoted market price is available for the asset or a similar asset, we use it to determine estimated fair value. We re-evaluate the remaining useful life of the asset and adjust the useful life accordingly. There were no impairment indicators identified during the years ended December 31, 2014 and 2013. |
Income Taxes | Income Taxes Income taxes are accounted for under an asset and a liability approach that requires recognition of deferred income tax assets and liabilities for the expected future consequences of events that have been recognized in the Company's consolidated financial statements and income tax returns. The Company provides a valuation allowance for deferred income tax assets when it is considered more likely than not that all or a portion of such deferred income tax assets will not be realized. |
Net Income (Loss) Per Share | Net Income (Loss) Per Share We calculate basic net income (loss) per share based on the weighted average number of common shares outstanding during the period without giving any effect to potentially dilutive securities. Net income (loss) per share, assuming dilution, is calculated giving effect to all potentially dilutive securities outstanding during the period. |
Share-Based Compensation | Share-Based Compensation The Company accounts for its share-based compensation in accordance with the Financial Accounting Standards Board's ("FASB") Accounting Standards Codification ("ASC") 718 – "Compensation – Stock Compensation." Accordingly, the Company recognizes compensation expense equal to the fair value of the stock awards at the time of the grant over the requisite service period. Our accounting for share-based compensation has resulted in our recognizing non-cash compensation expense related to stock options granted to employees, which is included in personnel and consulting expenses, and stock options granted to our directors, which is included in general and administrative expenses. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue From Contracts With Customers In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements – Going Concern, |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |
Reconciliation of Tax Rate | A reconciliation of our effective income tax rate compared to the U.S. federal statutory rate is as follows: Year ended December 31, 2014 Year ended December 31, 2013 Provision (benefit) at U.S. federal statutory rate (35.0 )% (35.0 )% State provision (benefit), net of U.S. federal tax (4.9 ) (4.9 ) Permanent differences 0.9 (0.3 ) Other items 2.5 5.0 Deferred tax valuation allowance (36.5 ) (35.2 ) Effective income tax rate 0.0 % 0.0 % |
Schedule of Deferred Tax Assets | Net deferred tax assets consist of the following: December 31, 2014 December 31, 2013 Net federal and state operating loss carryforwards $ 16,912,223 $ 15,748,253 Impairment of investments 531,470 531,470 Other, net 767,266 687,426 Deferred tax assets 18,210,959 16,967,149 Valuation allowance (18,210,959 ) (16,967,149 ) Net deferred tax assets $ - $ - |
Changes in the Valuation Allowance | Changes in the valuation allowance were as follows: Year ended December 31, 2014 Year ended December 31, 2013 Balance, beginning of year $ 16,967,149 $ 15,997,757 Change in temporary differences 79,840 6,789 Change in net operating and capital losses 1,163,970 962,603 Balance, end of year $ 18,210,959 $ 16,967,149 |
NET LOSS PER COMMON SHARE (Tabl
NET LOSS PER COMMON SHARE (Tables) | 12 Months Ended |
Dec. 31, 2014 | |
Earnings Per Share [Abstract] | |
Calculation of Net Earnings Per Share | The following sets forth the denominator used in the calculations of basic net loss per share and net loss per share assuming dilution: Year ended December 31, 2014 Year ended December 31, 2013 Denominator for basic net loss per share, weighted average shares outstanding 23,513,870 16,977,027 Dilutive effect of common stock options N/A N/A Dilutive effect of Series C convertible preferred stock and convertible debt and warrants N/A N/A Denominator for net loss per share, assuming dilution 23,513,870 16,977,027 |
Potentially dilutive securities | Potentially dilutive securities outstanding are summarized as follows: December 31, 2014 December 31, 2013 Exercise of common stock options 1,692,500 1,372,000 Exercise of common stock warrants 4,450,536 1,313,679 Conversion of Series C convertible preferred stock 2,828,054 1,423,150 Conversion of convertible debt 4,783,272 4,321,385 Total 13,754,362 8,430,214 |
RECEIVABLES (Tables)
RECEIVABLES (Tables) | 12 Months Ended |
Dec. 31, 2014 | |
Receivables [Abstract] | |
Schedule of Receivables | Receivables consist of the following: December 31, 2014 December 31, 2013 Calmare device sales receivable, net of allowance of $209,533 and $0 at December 31, 2014 and 2013, respectively $ - $ 132,850 Royalties, net of allowance of $101,154 at December 31, 2014 and 2013 - 10,086 Other, net of allowance of $6,972 and $0 at December 31, 2014 and 2013, respectively 2,319 394 Total $ 2,319 $ 143,330 |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2014 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment, Net | Property and equipment, net, consist of the following: December 31, 2014 December 31, 2013 Property and equipment, gross $ 215,491 $ 177,537 Accumulated depreciation and amortization (179,851 ) (169,931 ) Property and equipment, net $ 35,640 $ 7,606 |
AVAILABLE-FOR-SALE AND EQUITY30
AVAILABLE-FOR-SALE AND EQUITY SECURITIES (Tables) | 12 Months Ended |
Dec. 31, 2014 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Available-for-Sale Securities | December 31, 2014 December 31, 2013 Number of shares Type Security Innovation, Inc. — — 223,317 Common stock Xion Pharmaceutical Corporation — — 60 Common stock |
PREPAID EXPENSES AND OTHER CU31
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2014 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Prepaid Expenses and Other Assets | Prepaid expenses and other current assets consist of the following: December 31, 2014 December 31, 2013 Prepaid insurance $ 71,651 $ 16,802 Clinical trial 109,119 - Other 72,332 48,365 Prepaid expenses and other current assets $ 253,102 $ 65,167 |
ACCRUED EXPENSES AND OTHER LI32
ACCRUED EXPENSES AND OTHER LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2014 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses and Other Liabilities | Accrued expenses and other liabilities consist of the following: December 31, 2014 December 31, 2013 Royalties payable $ 314,787 $ 127,708 Accrued audit fee - 82,141 Commissions payable 15,900 21,975 Accrued interest payable 987,659 216,518 Other 271,836 134,645 Accrued expenses and other liabilities, net $ 1,590,182 $ 582,987 |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) - Dec. 31, 2014 | Total | Total |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Schedule of Notes Payable | Notes payable consist of the following: December 31, 2014 December 31, 2013 90 day Convertible Notes (Chairman of the Board) $ 2,498,980 $ 2,518,000 24 month Convertible Notes ($100,000 to Board member) 225,000 225,000 10 day Note (Board member) 42,500 - Tonaquint 9% OID Convertible Notes and Warrants - 87,705 Southridge Convertible Note - 12,000 Series A1 15% OID Convertible Notes and Warrants - 81,415 Series A2 15% OID Convertible Notes and Warrants - 69,571 Series A3 15% OID Convertible Notes and Warrants 11,765 - Series B OID Convertible Notes and Warrants 56,659 - 1 Year 15% OID Convertible Notes and Warrants 244,565 - Notes Payable, gross 3,079,469 2,933,691 Less LPA amount (485,980 ) (505,000 ) Notes Payable, net $ 2,593,489 $ 2,488,691 Details of notes payable as of December 31, 2014 are as follows: Principal Amount Carrying Value Cash Interest Rate Common Stock Conversion Price Maturity Date 90 day Convertible Notes (Chairman of the Board) $ 2,498,980 $ 2,498,980 6 % $ 1.05 Various 2014 24 month Convertible Notes ($100,000 to Board member) 225,000 225,000 6 % 1.05 March 2014 – June 2014 10 day Note (Board member) 42,500 42,500 None None January 2015 Series A3 15% OID Convertible Notes and Warrants 11,765 11,765 None 0.25 January 2015 Series B OID Convertible Notes and Warrants 80,000 56,659 None 0.23 March 2017 1 Year 15% OID Convertible Notes and Warrants 358,824 244,565 None 0.20 Aug. 2015 – Nov. 2015 Notes Payable, gross $ 3,217,069 3,079,469 Less LPA amount (485,980 ) Notes Payable, net $ 2,593,489 | |
Schedule of 90 day Convertible Notes | The Company has issued 90-day notes payable to borrow funds from a director, now the chairman of our Board, as follows: 2013 $ 1,188,900 2012 1,210,000 2011 100,000 Total $ 2,498,980 | |
Series A 15% Original Issue Discount Convertible Notes and Warrants [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Schedule of Estimated Fair Value of Notes Assumptions | We estimated the fair value of the warrants on the issue date using a Black-Scholes pricing model with the following assumptions: Warrants (Tranche 1) November 15, 2013 Warrants (Tranche 2) December 30, 2013 Warrants (Tranche 3) February 14, 2014 Expected term 2 years 2 years 2 years Volatility 180.02 % 184.38 % 184.88 % Risk Free Rate 0.31 % 0.39 % 0.32 % | |
Schedule of Proceeds of Notes Allocation | The proceeds of the Notes were allocated to the components as follows: Proceeds allocated at issue date Private Offering Notes $ 152,703 Private Offering Warrants 91,274 Beneficial Conversion feature 52,123 Total $ 296,100 | |
Schedule of Debt Conversion | Presented below is summary information related to the conversion: Statement of Operations Loss on conversion of notes $ 58,366 Accelerated interest expense $ 35,109 Balance Sheet Shares issued 1,682,946 Principal amount of notes converted $ 336,588 | |
1 Year 15% OID Convertible Notes and Warrants [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Schedule of Estimated Fair Value of Notes Assumptions | We estimated the fair value of the warrants on the issue date using a Black-Scholes pricing model with the following assumptions: Warrants November 7, 2014 Expected term 1 year Volatility 188.31 % Risk Free Rate 0.11 % | |
Schedule of Proceeds of Notes Allocation | The proceeds of the Notes were allocated to the components as follows: Proceeds allocated at issue date Private Offering Notes $ 224,679 Private Offering Warrants 57,854 Beneficial Conversion feature 22,467 Total $ 305,000 | |
Series B Original Issue Discount Convertible Notes And Warrants [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Schedule of Estimated Fair Value of Notes Assumptions | We estimated the fair value of the warrants on the issue date using a Black-Scholes pricing model with the following assumptions: Warrants March 20, 2014 Expected term 4 years Volatility 151.52 % Risk Free Rate 1.32 % | |
Schedule of Proceeds of Notes Allocation | The proceeds of the Notes were allocated to the components as follows: Proceeds allocated at issue date Private Offering Notes $ 34,272 Private Offering Warrants 26,811 Beneficial Conversion feature 3,917 Total $ 65,000 | |
Schedule of Debt Conversion | As a result of the triggering of the above noted one time anti-dilution provision, the Company reallocated the proceeds of the Notes during the quarter ended December 31, 2014 as follows: Proceeds allocated at issue date Private Offering Notes $ 46,222 Private Offering Warrants 18,778 Beneficial Conversion feature - Total $ 65,000 |
STOCK-BASED COMPENSATION PLANS
STOCK-BASED COMPENSATION PLANS (Tables) | 12 Months Ended |
Dec. 31, 2014 | |
Schedule of Assumptions used to Estimate Fair Value of Share Options | We estimated the fair value of each option on the grant date using a Black-Scholes option-pricing model with the following weighted average assumptions: Year ended December 31, 2014 Year ended December 31, 2013 Dividend yield (1) 0.0 % 0.0 % Expected volatility (2) 118.5% - 122.24 % 99.2% - 110.2 % Risk-free interest rates (3) 1.19-1.72 % 1.02 % Expected lives (2) 4-5 years 2-5 years (1) We have not paid cash dividends on our common stock since 1981, and currently do not have plans to pay or declare cash dividends. Consequently, we used an expected dividend rate of zero for the valuations. (2) Estimated based on our historical experience. Volatility was based on historical experience over a period equivalent to the expected life in years. (3) Based on the U.S. Treasury constant maturity interest rate with a term consistent with the expected life of the options granted. |
Summary of Stock Option Activity under Stock Options | A summary of the status of all our common stock options as of December 31, 2014 and 2013, and changes during the periods then ended is presented below. Year ended December 31, 2014 Year ended December 31, 2013 Shares Weighted Average Exercise Price Aggregate Intrinsic Values Shares Weighted Average Exercise Price Aggregate Intrinsic Values Outstanding at beginning of period 1,372,000 $ 0.50 $ 317,000 $ 1.85 Granted 362,500 0.39 2,055,000 0.29 Forfeited (30,500 ) 2.03 (1,000,000 ) 0.50 Exercised - - Expired or terminated (11,500 ) 2.87 - Outstanding at end of year 1,692,500 $ 0.44 $ 80,000 1,372,000 $ 0.50 $ 240,750 Vested at end of year 844,500 $ 0.70 $ 32,000 572,000 $ 1.10 $ 48,750 Nonvested at end of year 848,000 $ 0.18 $ 48,000 800,000 $ 0.08 $ 192,000 Weighted average fair value per share of options issued during the year $ 0.26 $ 0.21 |
2011 Option Plan [Member] | |
Schedule of Stock Option Plan | The following information relates to the 2011 Option Plan: December 31, 2014 December 31, 2013 Common shares reserved for issuance on exercise of options 1,517,500 1,165,000 Shares available for future option grants 482,500 335,000 |
1997 Employee Stock Option Plan [Member] | |
Schedule of Stock Option Plan | The following information relates to the 1997 Option Plan: December 31, 2014 December 31, 2013 Common shares reserved for issuance on exercise of options 55,000 87,000 Shares available for future option grants - - |
2000 Directors' Stock Option Plan [Member] | |
Schedule of Stock Option Plan | The following information relates to the 2000 Directors' Stock Option Plan: December 31, 2014 December 31, 2013 Common shares reserved for issuance on exercise of options 120,000 120,000 Shares available for future option grants - - |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Rental Payments | Future minimum rental payments required under operating leases with remaining non-cancelable lease terms as of December 31, 2014 are as follows: More than 5 years $ - 3-5 years - 1-3 years 82,000 Within 1 year 68,000 Total $ 150,000 |
Schedule of Total Rental Expenses | Total rental expense for all operating leases was: Year ended December 31, 2014 Year ended December 31, 2013 Minimum rental payments $ 56,615 $ 60,038 Less: Sublease rentals - 3,594 Net rent expense 56,615 56,444 Deferred rent charge 8,397 5,248 $ 65,012 $ 61,692 |
Supplemental Disclosure of Non-
Supplemental Disclosure of Non-cash Transactions (Details) - USD ($) | 1 Months Ended | 2 Months Ended | 3 Months Ended | 12 Months Ended | ||||
Nov. 30, 2013 | Sep. 30, 2013 | Jul. 31, 2013 | Mar. 31, 2013 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | |
Common stock issued upon conversion of notes, shares | 1,732,946 | |||||||
Common stock issued upon conversion of notes, values | $ 411,609 | |||||||
Common stock issued for consulting services | 60,000 | |||||||
Common stock issued for consulting services, price per share | $ 0.17 | |||||||
Common stock issued to directors | 66,118 | |||||||
Common stock issued to directors, settlement of accrued liabilities | $ 26,447 | |||||||
Debt conversion, shares issued | 1,618,235 | |||||||
Common stock issued in accordance with liability purchase agreement, shares | 450,000 | |||||||
Common stock issued in accordance with liability purchase agreement, value | $ 157,500 | |||||||
Allocation of proceeds from convertible note for the fair value of warrants and beneficial conversion feature to additional paid-in capital | $ 120,787 | $ 121,741 | 120,787 | |||||
Transfer of rental asset to inventory | $ 8,000 | |||||||
Common stock issued in accordance with escrow agreement, shares | 1,000,000 | 1,000,000 | ||||||
Common shares issued for legal services, shares | 200,000 | 100,000 | ||||||
Shares issued, price per share | $ 0.18 | $ 0.20 | $ 0.43 | $ 0.20 | ||||
Warrant [Member] | ||||||||
Common stock issued for consulting services | 333,333 | |||||||
Common stock issued for consulting services, value | $ 75,000 | |||||||
Cutler Law Group [Member] | ||||||||
Common shares issued for legal services, shares | 1,000,000 | |||||||
Southridge Partners Ii Lp [Member] | ||||||||
Debt conversion, value of note converted | $ 65,000 | |||||||
Debt conversion, shares issued | 260,000 | |||||||
Liabilities Purchase Agreement [Member] | ||||||||
Payment to creditors | $ 80,000 | |||||||
Service fee retained | $ 27,000 | |||||||
Liabilities Purchase Agreement [Member] | Southridge Partners Ii Lp [Member] | ||||||||
Common stock issued in accordance with liability purchase agreement, shares | 200,000 | |||||||
Shares issued, price per share | $ 0.35 | $ 0.35 | ||||||
Tonaquint, Inc. [Member] | ||||||||
Proceeds from Note Payable Allocated to Warrants and Conversion Feature Derivative Liability | $ 45,100 |
BUSINESS AND BASIS OF PRESENT37
BUSINESS AND BASIS OF PRESENTATION (Details) - USD ($) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 15, 2010 |
Organization Consolidation And Presentation Of Financial Statements [Line Items] | |||
Principal amount | $ 3,217,069 | ||
Carrying amount | $ 3,079,469 | $ 2,933,691 | |
Vector Vision, Inc. [Member] | |||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | |||
Ownership percentage | 56.10% | ||
Promissory Notes [Member] | |||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | |||
Principal amount | $ 3,217,000 | $ 400,000 | |
Carrying amount | $ 3,079,000 |
SUMMARY OF SIGNIFICANT ACCOUN38
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Equipment [Member] | Minimum [Member] | ||
Accounting Policies [Line Items] | ||
Estimated useful life | 3 years | |
Equipment [Member] | Maximum [Member] | ||
Accounting Policies [Line Items] | ||
Estimated useful life | 5 years | |
Sales Revenue, Net [Member] | ||
Accounting Policies [Line Items] | ||
Percentage of revenue | 13.00% | |
Sales Revenue, Net [Member] | Calmare Pain Therapy Medical Device Technology [Member] | ||
Accounting Policies [Line Items] | ||
Revenue | $ 1,045,000 | $ 653,000 |
Percentage of revenue | 90.00% | 85.00% |
Sales Revenue, Net [Member] | Customer One [Member] | Calmare Pain Therapy Medical Device Technology [Member] | ||
Accounting Policies [Line Items] | ||
Revenue | $ 150,000 | $ 160,000 |
Percentage of revenue | 14.00% | 25.00% |
Sales Of Supplies And Training Rental Payments And Sale Of Rental Assets [Member] | Calmare Pain Therapy Medical Device Technology [Member] | ||
Accounting Policies [Line Items] | ||
Percentage of revenue | 4.00% | 4.00% |
INCOME TAXES (Reconciliation of
INCOME TAXES (Reconciliation of Tax Rate) (Details) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax Disclosure [Abstract] | ||
Provision (benefit) at U.S. federal statutory rate | (35.00%) | (35.00%) |
State provision (benefit), net of U.S. federal tax | (4.90%) | (4.90%) |
Permanent differences | 0.90% | (0.30%) |
Other items | 2.50% | 5.00% |
Deferred tax valuation allowance | (36.50%) | (35.20%) |
Effective income tax rate | 0.00% | 0.00% |
INCOME TAXES (Net Deferred Tax
INCOME TAXES (Net Deferred Tax Assets) (Details) - USD ($) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Income Tax Disclosure [Abstract] | |||
Net federal and state operating loss carryforwards | $ 16,912,223 | $ 15,748,253 | |
Impairment of investments | 531,470 | 531,470 | |
Other, net | 767,266 | 687,426 | |
Deferred tax assets | 18,210,959 | 16,967,149 | |
Valuation allowance | (18,210,959) | (16,967,149) | $ (15,997,757) |
Net deferred tax assets | $ 0 | $ 0 |
INCOME TAXES (Changes in Valuat
INCOME TAXES (Changes in Valuation Allowance) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Changes in valuation allowance: | ||
Balance, beginning of year | $ 16,967,149 | $ 15,997,757 |
Change in temporary differences | 79,840 | 6,789 |
Change in net operating and capital losses | 1,163,970 | 962,603 |
Balance, end of year | $ 18,210,959 | $ 16,967,149 |
INCOME TAXES (Details)
INCOME TAXES (Details) - Dec. 31, 2014 - USD ($) | Total |
Income Tax Disclosure [Abstract] | |
Federal net operating loss carryforwards | $ 42,281,000 |
Federal net operating loss carryforwards, expiration period | 2017 through 2034 |
State net operating loss carryforwards | $ 40,791,000 |
State net operating loss carryforwards, expiration dates | Dec. 31, 2034 |
NOL carryforward remaining | $ 4,196,000 |
NET LOSS PER COMMON SHARE (Calc
NET LOSS PER COMMON SHARE (Calculation of Net Income (Loss) Per Common Share) (Details) - shares | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Earnings Per Share [Abstract] | ||
Denominator for basic net loss per share, weighted average shares outstanding | 23,513,870 | 16,977,027 |
Dilutive effect of common stock options | 0 | 0 |
Dilutive effect of Series C convertible preferred stock and convertible debt and warrants | 0 | 0 |
Denominator for net loss per share, assuming dilution | 23,513,870 | 16,977,027 |
NET LOSS PER COMMON SHARE (Pote
NET LOSS PER COMMON SHARE (Potentially dilutive securities) (Details) - shares | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Anti-dilutive securities excluded from computation of earnings per share | 13,754,362 | 8,430,214 |
Exercise of common stock options [Member] | ||
Anti-dilutive securities excluded from computation of earnings per share | 1,692,500 | 1,372,000 |
Exercise of common stock warrants [Member] | ||
Anti-dilutive securities excluded from computation of earnings per share | 4,450,536 | 1,313,679 |
Conversion of Series C convertible preferred stock [Member] | ||
Anti-dilutive securities excluded from computation of earnings per share | 2,828,054 | 1,423,150 |
Conversion of convertible debt [Member] | ||
Anti-dilutive securities excluded from computation of earnings per share | 4,783,272 | 4,321,385 |
SHAREHOLDERS' INTEREST (Details
SHAREHOLDERS' INTEREST (Details) - USD ($) | Dec. 30, 2010 | Dec. 15, 2010 | Sep. 30, 2013 | Jun. 16, 2011 | Dec. 31, 2014 | Dec. 31, 2013 | Jul. 31, 2013 | Mar. 31, 2013 |
Stockholders Equity [Line Items] | ||||||||
Principal Amount | $ 3,217,069 | |||||||
Debt conversion, shares issued | 1,618,235 | |||||||
Common stock issued in accordance with liability purchase agreement, shares | 450,000 | |||||||
Shares issued, price per share | $ 0.18 | $ 0.20 | $ 0.20 | $ 0.43 | ||||
Common stock issued as part of equity purchase agreement and/or liability purchase agreement | $ 222,500 | |||||||
Common stock issued in accordance with escrow agreement, shares | 1,000,000 | 1,000,000 | ||||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | ||||||
Proceeds from private placement | $ 830,500 | |||||||
Common stock issued | 4,152,500 | |||||||
Common stock issued, price per share | $ 0.18 | $ 0.20 | $ 0.20 | $ 0.43 | ||||
Issued warrants to purchase shares of common stock | 2,076,250 | |||||||
Exercise price of warrants | $ 0.60 | |||||||
Warrants term | 3 years | |||||||
Shares issued for services | 60,000 | |||||||
Consulting expense | $ 10,200 | |||||||
Amortizing amount | 75,000 | |||||||
Stock warrant expense | $ 37,500 | |||||||
Shares issued under compensation plan to non employee directors | 10,625 | 21,250 | ||||||
Director stock compensation expense | $ 4,038 | $ 7,655 | ||||||
Promissory Notes [Member] | ||||||||
Stockholders Equity [Line Items] | ||||||||
Principal Amount | $ 400,000 | $ 3,217,000 | ||||||
Maturity date | Dec. 31, 2012 | |||||||
Interest rate | 5.00% | |||||||
Southridge Partners Ii Lp [Member] | ||||||||
Stockholders Equity [Line Items] | ||||||||
Debt conversion, shares issued | 260,000 | |||||||
Southridge Partners Ii Lp [Member] | Equity And Liabilities Purchase Agreement [Member] | ||||||||
Stockholders Equity [Line Items] | ||||||||
Common stock issued as part of equity purchase agreement and/or liability purchase agreement, shares | 250,000 | |||||||
Shares issued, price per share | $ 0.35 | |||||||
Common stock issued as part of equity purchase agreement and/or liability purchase agreement | $ 87,500 | |||||||
Common stock issued, price per share | $ 0.35 | |||||||
Southridge Partners Ii Lp [Member] | Liabilities Purchase Agreement [Member] | ||||||||
Stockholders Equity [Line Items] | ||||||||
Common stock issued in accordance with liability purchase agreement, shares | 200,000 | |||||||
Shares issued, price per share | $ 0.35 | |||||||
Common stock issued in accordance with liability purchase agreement | $ 70,000 | |||||||
Common stock issued, price per share | $ 0.35 | |||||||
Southridge Partners Ii Lp [Member] | Equity Purchase Agreement [Member] | ||||||||
Stockholders Equity [Line Items] | ||||||||
Amount of stock to be purchased, value | $ 10,000,000 | |||||||
Term of agreement | 2 years | |||||||
Percentage of shares outstanding owned | 9.99% | |||||||
Southridge Partners Ii Lp [Member] | Convertible Notes Payable Three [Member] | Liabilities Purchase Agreement [Member] | ||||||||
Stockholders Equity [Line Items] | ||||||||
Principal Amount | $ 12,000 | |||||||
Southridge Partners Ii Lp [Member] | Convertible Notes Payable Two [Member] | Equity Purchase Agreement [Member] | ||||||||
Stockholders Equity [Line Items] | ||||||||
Principal Amount | $ 65,000 | |||||||
Debt conversion, shares issued | 260,000 | |||||||
Series C Preferred Stock [Member] | ||||||||
Stockholders Equity [Line Items] | ||||||||
Preferred stock, shares authorized | 750 | 750 | ||||||
Preferred stock, par value (in dollars per shares) | $ 1,000 | $ 1,000 | ||||||
Preferred stock, shares issued | 350 | 375 | 375 | |||||
Proceeds from preferred stock issued | $ 350,000 | |||||||
Dividends declared | $ 84,450 | |||||||
Dividends declared during year | 18,750 | |||||||
Dividends declared and unpaid | $ 65,702 | |||||||
Preferred stock, voting rights | Holders of these shares of Series C Convertible Preferred Stock shall have voting rights equivalent to 1,000 votes per $1,000 par value Series C Convertible Preferred share voted together with the shares of Common Stock | |||||||
Amount held in escrow | $ 750,000 | |||||||
Preferred stock, threshold percentage of stock price trigger | 85.00% | |||||||
Derivative liability | $ 81,933 | $ 66,177 | $ 80,408 | |||||
Preferred stock, shares outstanding (in shares) | 375 | 375 | ||||||
Series C Preferred Stock [Member] | Convertible Notes Payable Four [Member] | ||||||||
Stockholders Equity [Line Items] | ||||||||
Principal Amount | $ 400,000 | |||||||
Debt conversion, shares issued | 400 | |||||||
Series C Preferred Stock [Member] | Williamr Walters Ltd Of Canada [Member] | ||||||||
Stockholders Equity [Line Items] | ||||||||
Preferred stock, shares issued | 750 | |||||||
Preferred stock converted | 375 | |||||||
Common stock issued upon preferred stock conversion | 315,126 | |||||||
Series C Preferred Stock [Member] | Southridge Partners Ii Lp [Member] | ||||||||
Stockholders Equity [Line Items] | ||||||||
Preferred stock, shares authorized | 750 | |||||||
Preferred stock, par value (in dollars per shares) | $ 1,000 | |||||||
5% preferred stock [Member] | ||||||||
Stockholders Equity [Line Items] | ||||||||
Percentage of cumulative dividend rate | 5.00% | |||||||
Preferential non-cumulative dividends (in dollars per share) | $ 1.25 | |||||||
Preferred stock redemption period | 30 days | |||||||
Dividend declared, date of record | Dec. 2, 2010 | |||||||
Trigger for issuance of dividends, percentage of outstanding common shares purchased | 20.00% | |||||||
Preferred stock, shares authorized | 35,920 | 35,920 | ||||||
Preferred stock, par value (in dollars per shares) | $ 25 | $ 25 | ||||||
Preferred stock, shares issued | 2,427 | 2,427 | ||||||
Preferred stock, shares outstanding (in shares) | 2,427 | 2,427 | ||||||
Warrant [Member] | ||||||||
Stockholders Equity [Line Items] | ||||||||
Shares issued for services | 333,333 | 75,000 |
RECEIVABLES (Details)
RECEIVABLES (Details) - USD ($) | Dec. 31, 2014 | Dec. 31, 2013 |
Receivables [Abstract] | ||
Calmare device sales receivable, net of allowance of $209,533 and $0 at December 31, 2014 and 2013, respectively | $ 0 | $ 132,850 |
Royalties, net of allowance of $101,154 at December 31, 2014 and 2013 | 0 | 10,086 |
Other, net of allowance of $6,972 and $0 at December 31, 2014 and 2013, respectively | 2,319 | 394 |
Total receivables | 2,319 | 143,330 |
Calmare sales receivable, allowance amount | 209,533 | 0 |
Allowance for doubtful accounts | 317,659 | 101,154 |
Other, net of allowance | $ 6,972 | $ 0 |
PROPERTY AND EQUIPMENT, NET (De
PROPERTY AND EQUIPMENT, NET (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Property, Plant and Equipment [Abstract] | ||
Property and equipment, gross | $ 215,491 | $ 177,537 |
Accumulated depreciation and amortization | (179,851) | (169,931) |
Property and equipment, net | 35,640 | 7,606 |
Depreciation and amortization expense | $ 17,547 | $ 11,147 |
AVAILABLE-FOR-SALE AND EQUITY48
AVAILABLE-FOR-SALE AND EQUITY SECURITIES (Details) - USD ($) | 12 Months Ended | ||||
Dec. 31, 2014 | Dec. 31, 2003 | Dec. 31, 2013 | Sep. 30, 2009 | Jul. 22, 2009 | |
NTRU Cryptosystems, Inc [Member] | |||||
Schedule of Available-for-sale Securities [Line Items] | |||||
Number of shares held | 223,317 | ||||
Number of shares acquired | 3,129,509 | ||||
Write down value | $ 0 | ||||
Security Innovation, Inc. [Member] | |||||
Schedule of Available-for-sale Securities [Line Items] | |||||
Available-for-sale securities, fair value | $ 0 | $ 0 | |||
Number of shares held | 223,317 | ||||
Xion Pharmaceutical Corporation [Member] | |||||
Schedule of Available-for-sale Securities [Line Items] | |||||
Available-for-sale securities, fair value | $ 0 | $ 0 | |||
Number of shares held | 60 | 60 | |||
Percentage of shares outstanding owned | 30.00% |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) | Dec. 31, 2014 | Dec. 31, 2013 | Jul. 16, 2013 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Warrant liability | $ 8,227 | ||
Fair Value, Inputs, Level 2 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivative liability | $ 66,000 | 80,000 | |
Fair Value, Inputs, Level 3 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivative liability | 0 | $ 19,024 | |
Warrant liability | $ 8,000 | $ 26,076 |
PREPAID EXPENSES AND OTHER CU50
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) - USD ($) | Dec. 31, 2014 | Dec. 31, 2013 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid insurance | $ 71,651 | $ 16,802 |
Clinical trial | 109,119 | 0 |
Other | 72,332 | 48,365 |
Prepaid expenses and other current assets | $ 253,102 | $ 65,167 |
LIABILITIES ASSIGNED TO LIABI51
LIABILITIES ASSIGNED TO LIABILITY PURCHASE AGREEMENT (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |
Sep. 30, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | |
Liabilities Assigned To Liability Purchase Agreement [Line Items] | ||||
Liabilities under claims purchase agreement | $ 2,093,303 | $ 1,995,320 | ||
Common stock issued in accordance with liability purchase agreement, shares | 450,000 | |||
Liabilities Purchase Agreement [Member] | ||||
Liabilities Assigned To Liability Purchase Agreement [Line Items] | ||||
Financial obligations to existing creditors | $ 2,100,000 | |||
Liabilities under claims purchase agreement | $ 2,093,303 | |||
Payment to creditors | $ 80,000 | |||
Service fee retained | 27,000 | |||
Cash payments for accrued expenses | $ 18,000 | |||
Common Stock Including Additional Paid in Capital [Member] | Liabilities Purchase Agreement [Member] | ||||
Liabilities Assigned To Liability Purchase Agreement [Line Items] | ||||
Common stock issued in accordance with liability purchase agreement, shares | 1,618,235 |
ACCRUED EXPENSES AND OTHER LI52
ACCRUED EXPENSES AND OTHER LIABILITIES (Details) - USD ($) | Dec. 31, 2014 | Dec. 31, 2013 |
Payables and Accruals [Abstract] | ||
Royalties payable | $ 314,787 | $ 127,708 |
Accrued audit fee | 0 | 82,141 |
Commissions payable | 15,900 | 21,975 |
Accrued interest payable | 987,659 | 216,518 |
Other | 271,836 | 134,645 |
Accrued expenses and other liabilities, net | 1,590,182 | 582,987 |
Accrued expenses and other liabilities - LPA | $ 217,000 | $ 244,000 |
NOTES PAYABLE (Schedule of Note
NOTES PAYABLE (Schedule of Notes Payable) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Composition of Notes Payable: | ||
Principal Amount | $ 3,217,069 | |
Notes Payable, gross | 3,079,469 | $ 2,933,691 |
Less LPA amount | (485,980) | (505,000) |
Notes Payable, net | 2,593,489 | 2,488,691 |
Ninety Day Convertible Notes Related Party [Member] | ||
Composition of Notes Payable: | ||
Principal Amount | 2,498,980 | |
Notes Payable, gross | 2,498,980 | 2,518,000 |
Notes Payable, net | $ 2,498,980 | |
Cash Interest Rate | 6.00% | |
Common Stock Conversion Price | $ 1.05 | |
Matruity Date | Various 2,014 | |
Notes Payable (Parenthetical): | ||
Due to Board Member | $ 100,000 | |
Twenty Four Month Convertible Notes [Member] | ||
Composition of Notes Payable: | ||
Principal Amount | 225,000 | |
Notes Payable, gross | 225,000 | 225,000 |
Notes Payable, net | $ 225,000 | |
Cash Interest Rate | 6.00% | |
Common Stock Conversion Price | $ 1.05 | |
Matruity Date | March 2014 - June 2014 | |
10 day Note (Board member) [Member] | ||
Composition of Notes Payable: | ||
Principal Amount | $ 42,500 | |
Notes Payable, gross | 42,500 | 0 |
Notes Payable, net | $ 42,500 | |
Matruity Date | January 2,015 | |
Seriesa Three Original Issue Discount Convertible Notes And Warrants [Member] | ||
Composition of Notes Payable: | ||
Principal Amount | $ 11,765 | |
Notes Payable, gross | 11,765 | 0 |
Notes Payable, net | $ 11,765 | |
Common Stock Conversion Price | $ 0.25 | |
Matruity Date | January 2,015 | |
Notes Payable (Parenthetical): | ||
OID, yield percentage | 15.00% | |
Series B OID Convertible Notes and Warrants [Member] | ||
Composition of Notes Payable: | ||
Principal Amount | $ 80,000 | |
Notes Payable, gross | 56,659 | 0 |
Notes Payable, net | $ 56,659 | |
Common Stock Conversion Price | $ 0.23 | |
Matruity Date | March 2,017 | |
1 Year 15% OID Convertible Notes and Warrants [Member] | ||
Composition of Notes Payable: | ||
Principal Amount | $ 358,824 | |
Notes Payable, gross | 244,565 | 0 |
Notes Payable, net | $ 244,565 | |
Common Stock Conversion Price | $ 0.20 | |
Matruity Date | Aug. 2015 - Nov. 2015 | |
Notes Payable (Parenthetical): | ||
OID, yield percentage | 15.00% | |
Tonaquint Original Issue Discount Convertible Notes And Warrants [Member] | ||
Composition of Notes Payable: | ||
Principal Amount | $ 112,500 | |
Notes Payable, gross | $ 0 | 87,705 |
Cash Interest Rate | 7.00% | |
Common Stock Conversion Price | $ 0.30 | |
Notes Payable (Parenthetical): | ||
OID, yield percentage | 9.00% | |
Southridge Convertible Note [Member] | ||
Composition of Notes Payable: | ||
Principal Amount | 12,000 | |
Notes Payable, gross | $ 0 | $ 12,000 |
Common Stock Conversion Price | $ 0.25 | |
Seriesa One Original Issue Discount Convertible Notes And Warrants [Member] | ||
Composition of Notes Payable: | ||
Notes Payable, gross | $ 0 | $ 81,415 |
Notes Payable (Parenthetical): | ||
OID, yield percentage | 15.00% | |
Seriesa Two Original Issue Discount Convertible Notes And Warrants [Member] | ||
Composition of Notes Payable: | ||
Notes Payable, gross | $ 0 | $ 69,571 |
Notes Payable (Parenthetical): | ||
OID, yield percentage | 15.00% |
NOTES PAYABLE (Summary of Issua
NOTES PAYABLE (Summary of Issuances of Notes Payable) (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Ninety Day Convertible Notes Related Party [Member] | ||||
Short-term Debt [Line Items] | ||||
Notes Payable, amount borrowed during period | $ 2,498,980 | $ 1,188,980 | $ 1,210,000 | $ 100,000 |
NOTES PAYABLE (Schedule of Debt
NOTES PAYABLE (Schedule of Debt Conversion) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Debt Instrument [Line Items] | ||
Loss on conversion of notes | $ 63,867 | |
Accelerated interest expense | $ 35,109 | |
Shares issued | 25,908,978 | 19,952,907 |
Series A 15% Original Issue Discount Convertible Notes and Warrants [Member] | ||
Debt Instrument [Line Items] | ||
Loss on conversion of notes | $ 58,366 | |
Accelerated interest expense | $ 35,109 | |
Shares issued | 1,682,946 | |
Principal amount of notes converted | $ 336,588 |
NOTES PAYABLE (Summary of Fair
NOTES PAYABLE (Summary of Fair Value Assumptions) (Details) | Nov. 07, 2014 | Mar. 20, 2014 | Feb. 14, 2014 | Dec. 31, 2013 | Nov. 15, 2013 |
Series A 15% Original Issue Discount Convertible Notes and Warrants [Member] | |||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||||
Expected term | 2 years | 2 years | 2 years | ||
Volatility | 184.88% | 184.38% | 180.02% | ||
Risk Free Rate | 0.32% | 0.39% | 0.31% | ||
Series B Original Issue Discount Convertible Notes And Warrants [Member] | |||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||||
Expected term | 4 years | ||||
Volatility | 151.52% | ||||
Risk Free Rate | 1.32% | ||||
1 Year 15% OID Convertible Notes and Warrants [Member] | |||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||||
Expected term | 1 year | ||||
Volatility | 188.31% | ||||
Risk Free Rate | 0.11% |
NOTES PAYABLE (Schedule of No57
NOTES PAYABLE (Schedule of Note Allocation) (Details) - USD ($) | Dec. 31, 2014 | Mar. 20, 2014 |
Series A 15% Original Issue Discount Convertible Notes and Warrants [Member] | ||
Proceeds allocated | ||
Proceeds allocated, Note | $ 152,703 | |
Proceeds allocated, Warrants | 91,274 | |
Proceeds allocated, Benevicial Conversion Feature | 52,123 | |
Total | 296,100 | |
Series B Original Issue Discount Convertible Notes And Warrants [Member] | ||
Proceeds allocated | ||
Proceeds allocated, Note | 46,222 | $ 34,272 |
Proceeds allocated, Warrants | 18,778 | 26,811 |
Proceeds allocated, Benevicial Conversion Feature | 0 | 3,917 |
Total | 65,000 | $ 65,000 |
1 Year 15% OID Convertible Notes and Warrants [Member] | ||
Proceeds allocated | ||
Proceeds allocated, Note | 224,679 | |
Proceeds allocated, Warrants | 57,854 | |
Proceeds allocated, Benevicial Conversion Feature | 22,467 | |
Total | $ 305,000 |
NOTES PAYABLE (Details)
NOTES PAYABLE (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 4 Months Ended | 12 Months Ended | ||||||
Sep. 30, 2013 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Jun. 23, 2015 | |
Short-term Debt [Line Items] | ||||||||||
Principal amount | $ 3,217,069 | $ 3,217,069 | ||||||||
Proceeds from notes payable | 467,500 | $ 1,549,100 | ||||||||
Loss on settlement of debt | (132,301) | |||||||||
Debt conversion, shares issued | 1,618,235 | |||||||||
Loss on conversion of note | (63,867) | |||||||||
1 Year 15% OID Convertible Notes and Warrants [Member] | ||||||||||
Short-term Debt [Line Items] | ||||||||||
Principal amount | $ 358,824 | $ 358,824 | ||||||||
Conversion price | $ 0.20 | $ 0.20 | ||||||||
Proceeds from notes payable | $ 305,000 | |||||||||
Debt discount | $ 53,824 | $ 53,824 | ||||||||
Number of shares called by warrants | 897,060 | 897,060 | ||||||||
Exercise price of warrants | $ 0.60 | $ 0.60 | ||||||||
Term of warrant | 1 year | |||||||||
Series B Original Issue Discount Convertible Notes And Warrants [Member] | ||||||||||
Short-term Debt [Line Items] | ||||||||||
Principal amount | $ 80,000 | |||||||||
Conversion price | $ 0.23 | $ 0.35 | 0.23 | |||||||
Shares issued | 20,000,000 | |||||||||
Proceeds from notes payable | $ 65,000 | |||||||||
Debt discount | $ 15,000 | |||||||||
Number of shares called by warrants | 185,714 | |||||||||
Exercise price of warrants | 0.33 | $ 0.45 | $ 0.33 | |||||||
Term of warrant | 4 years | |||||||||
Seriesa Original Issue Discount Convertible Notes And Warrants [Member] | ||||||||||
Short-term Debt [Line Items] | ||||||||||
Principal amount | $ 64,706 | $ 283,648 | $ 283,648 | |||||||
Proceeds from notes payable | 55,000 | 241,100 | ||||||||
Debt discount | 9,706 | 42,548 | 42,548 | |||||||
Term of warrant | 2 years | |||||||||
Debt conversion, shares issued | 347,826 | |||||||||
Seriesa Original Issue Discount Convertible Notes And Warrants [Member] | Minimum [Member] | ||||||||||
Short-term Debt [Line Items] | ||||||||||
Conversion price | 0.20 | $ 0.20 | ||||||||
Exercise price of warrants | 0.40 | 0.40 | ||||||||
Seriesa Original Issue Discount Convertible Notes And Warrants [Member] | Maximum [Member] | ||||||||||
Short-term Debt [Line Items] | ||||||||||
Conversion price | 0.25 | 0.25 | ||||||||
Exercise price of warrants | $ 0.60 | $ 0.60 | ||||||||
Southridge Convertible Note [Member] | ||||||||||
Short-term Debt [Line Items] | ||||||||||
Notes payable, term | 6 months | |||||||||
Principal amount | $ 12,000 | $ 12,000 | ||||||||
Conversion price | $ 0.25 | $ 0.25 | ||||||||
Note maturity date | Jun. 30, 2014 | |||||||||
Debt conversion, shares issued | 50,000 | |||||||||
Loss on conversion of note | $ 5,500 | |||||||||
Southridge Convertible Note [Member] | Maximum [Member] | ||||||||||
Short-term Debt [Line Items] | ||||||||||
Debt conversion, Common Stock Conversion Price, percent of closing bid | 85.00% | 85.00% | ||||||||
Tonaquint Original Issue Discount Convertible Notes And Warrants [Member] | ||||||||||
Short-term Debt [Line Items] | ||||||||||
Note issuance date | Sep. 30, 2013 | |||||||||
Interest rate | 7.00% | 7.00% | ||||||||
Principal amount | $ 112,500 | $ 112,500 | ||||||||
Conversion price | $ 0.30 | $ 0.30 | ||||||||
Proceeds from notes payable | $ 100,000 | |||||||||
Debt discount | $ 10,000 | 10,000 | ||||||||
Transaction expenses | $ 2,500 | |||||||||
Note maturity date | May 31, 2014 | |||||||||
Frequency of periodic payment | monthly | |||||||||
Debt payments, start date | Jan. 31, 2014 | |||||||||
Value of common stock called by warrant | $ 112,500 | $ 112,500 | ||||||||
Exercise price of warrants | $ 0.35 | $ 0.35 | ||||||||
Term of warrant | 5 years | |||||||||
Cash payment for settlement of warrant | 98,000 | |||||||||
Loss on settlement of warrant | 98,000 | |||||||||
Cash payment for settlement of note | $ 124,000 | 20,000 | $ 144,000 | |||||||
Loss on settlement of debt | $ 34,000 | |||||||||
Twenty Four Month Convertible Notes [Member] | ||||||||||
Short-term Debt [Line Items] | ||||||||||
Interest rate | 6.00% | 6.00% | ||||||||
Principal amount | $ 225,000 | $ 225,000 | ||||||||
Conversion price | $ 1.05 | $ 1.05 | ||||||||
Additional Interest Expense | $ 29,000 | |||||||||
Twenty Four Month Convertible Notes [Member] | Debt Issuance Three [Member] | ||||||||||
Short-term Debt [Line Items] | ||||||||||
Interest rate | 6.00% | 6.00% | ||||||||
Principal amount | $ 100,000 | $ 100,000 | ||||||||
Conversion price | $ 1.05 | $ 1.05 | ||||||||
Twenty Four Month Convertible Notes [Member] | Debt Issuance Two [Member] | ||||||||||
Short-term Debt [Line Items] | ||||||||||
Interest rate | 6.00% | 6.00% | ||||||||
Principal amount | $ 25,000 | $ 25,000 | ||||||||
Conversion price | $ 1.05 | $ 1.05 | ||||||||
Twenty Four Month Convertible Notes [Member] | Debt Issuance One [Member] | ||||||||||
Short-term Debt [Line Items] | ||||||||||
Interest rate | 6.00% | 6.00% | ||||||||
Principal amount | $ 100,000 | $ 100,000 | ||||||||
Conversion price | $ 1.05 | $ 1.05 | ||||||||
24 Month March 2012 Convertible Notes [Member] | ||||||||||
Short-term Debt [Line Items] | ||||||||||
Principal amount | $ 100,000 | |||||||||
24 Month April 2012 Convertible Notes [Member] | ||||||||||
Short-term Debt [Line Items] | ||||||||||
Principal amount | 25,000 | |||||||||
24 Month June 2012 Convertible Notes [Member] | ||||||||||
Short-term Debt [Line Items] | ||||||||||
Principal amount | $ 100,000 | |||||||||
Ninety Day Convertible Notes Related Party [Member] | ||||||||||
Short-term Debt [Line Items] | ||||||||||
Notes payable, term | 90 days | |||||||||
Interest rate | 6.00% | 6.00% | ||||||||
Principal amount | $ 2,498,980 | $ 2,498,980 | ||||||||
Conversion price | $ 1.05 | $ 1.05 | ||||||||
Debt Instrument Interest Rate Per Month If Extended Original Maturity Dates | 1.00% | 1.00% | ||||||||
Additional Interest Expense | $ 510,000 | $ 602,000 | ||||||||
Proceeds from notes payable | $ 485,980 |
STOCK-BASED COMPENSATION PLAN59
STOCK-BASED COMPENSATION PLANS (Stock Option Plans) (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Jun. 30, 2014 | Dec. 31, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Maximum life of stock options | 3 years | ||||
Stock option compensation expense | $ 57,291 | $ 116,365 | |||
Employee Stock Option [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Options granted | 362,500 | 2,055,000 | |||
Fair value of shares vested | $ 57,291 | $ 116,365 | |||
Incremental non-cash compensation | $ 16,920 | ||||
Employee Stock Option [Member] | Two Thousand Directors' Stock Option Plan [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common shares reserved for issuance on exercise of options | 120,000 | 120,000 | 120,000 | ||
Shares available for future option grants | 0 | 0 | 0 | ||
Employee Stock Option [Member] | Twenty Eleven Option Plan [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common shares reserved for issuance on exercise of options | 1,165,000 | 1,517,500 | 1,165,000 | ||
Shares available for future option grants | 335,000 | 482,500 | 335,000 | ||
Employee Stock Option [Member] | Nineteen Ninety Seven Employee Stock Option Plan [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common shares reserved for issuance on exercise of options | 87,000 | 55,000 | 87,000 | ||
Shares available for future option grants | 0 | 0 | 0 | ||
Employee Stock Option [Member] | General and Administrative Expense [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock option compensation expense | $ 11,178 | $ 14,895 | |||
Employee Stock Option [Member] | Personnel And Consulting Expenses [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Fair value of shares vested | $ 46,113 | $ 84,550 | |||
Employee Stock Option [Member] | Maximum [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Maximum life of stock options | 10 years | ||||
Employee Stock Option [Member] | Minimum [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Maximum life of stock options | 5 years | ||||
Employee Stock Option [Member] | Minimum [Member] | Two Thousand Directors' Stock Option Plan [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Percentage of Fair Market Value | 100.00% | ||||
Maximum life of stock options | 10 years | ||||
Employee Stock Option [Member] | Minimum [Member] | Twenty Eleven Option Plan [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Percentage of Fair Market Value | 100.00% | ||||
Shares available for future option grants | 2,000,000 | ||||
Employee Stock Option [Member] | Minimum [Member] | Nineteen Ninety Seven Employee Stock Option Plan [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Percentage of Fair Market Value | 100.00% | ||||
Vesting period of stock options | 3 years | ||||
Maximum life of stock options | 10 years | ||||
Employee Stock Option [Member] | Employees [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Options granted | 320,000 | ||||
Vesting period of stock options | 4 years | ||||
Options vested, percentage | 20.00% | ||||
Employee Stock Option [Member] | Chief Executive Officer [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Options granted | 1,000,000 | 1,000,000 | |||
Vesting period of stock options | 4 years | 4 years | |||
Options vested | 200,000 | 200,000 | |||
Employee Stock Option [Member] | Director [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Options granted | 50,000 | ||||
Options vested | 50,000 | ||||
Employee Stock Option [Member] | Director [Member] | Two Thousand Directors' Stock Option Plan [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares issuable when director is first elected | 10,000 | ||||
Shares issuable to director on first business day of January | 10,000 |
STOCK-BASED COMPENSATION PLAN60
STOCK-BASED COMPENSATION PLANS (Weighted Average Assumptions) (Details) - Employee Stock Option [Member] | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Dividend yield | [1] | 0.00% | 0.00% |
Expected volatility, minimum | [2] | 118.50% | 99.20% |
Expected volatility, maximum | [2] | 122.24% | 110.20% |
Risk-free interest rate | [3] | 1.02% | |
Risk-free interest rate, minimum | [3] | 1.19% | |
Risk-free interest rate, maximum | [3] | 1.72% | |
Minimum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected lives | [2] | 4 years | 2 years |
Maximum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected lives | [2] | 5 years | 5 years |
[1] | We have not paid cash dividends on our common stock since 1981, and currently do not have plans to pay or declare cash dividends. Consequently, we used an expected dividend rate of zero for the valuations. | ||
[2] | Estimated based on our historical experience. Volatility was based on historical experience over a period equivalent to the expected life in years. | ||
[3] | Based on the U.S. Treasury constant maturity interest rate with a term consistent with the expected life of the options granted. |
STOCK-BASED COMPENSATION PLAN61
STOCK-BASED COMPENSATION PLANS (Summary of Stock Option Activity) (Details) - Employee Stock Option [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Shares | ||
Outstanding at beginning of period | 1,372,000 | 317,000 |
Granted | 362,500 | 2,055,000 |
Forfeited | (30,500) | (1,000,000) |
Exercised | 0 | 0 |
Expired or terminated | (11,500) | 0 |
Outstanding at end of year | 1,692,500 | 1,372,000 |
Vested at end of year | 844,500 | 572,000 |
Nonvested at end of year | 848,000 | 800,000 |
Weighted Average Exercise Price | ||
Outstanding at beginning of period | $ 0.50 | $ 1.85 |
Granted | 0.39 | 0.29 |
Forfeited | 2.03 | 0.50 |
Expired or terminated | 2.87 | |
Outstanding at end of year | 0.44 | 0.50 |
Vested at end of year | 0.70 | 1.10 |
Nonvested at end of year | 0.18 | 0.08 |
Weighted average fair value per share of options issued during the year | $ 0.26 | $ 0.21 |
Aggregate Intrinsic Values | ||
Outstanding at end of year | $ 80,000 | $ 240,750 |
Vested at end of year | 32,000 | 48,750 |
Nonvested at end of year | $ 48,000 | $ 192,000 |
COMMITMENTS AND CONTINGENCIES62
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2011 | |
Loss Contingencies [Line Items] | ||
Percentage of revenues obligation | 7.50% | |
Gross Calmare Device sales, percentage | 70.00% | |
Grant Funding Received In Nineteen Ninety Four [Member] | ||
Loss Contingencies [Line Items] | ||
Funding repayment obligation | $ 165,788 | |
Grant Funding Received In Nineteen Ninety Five [Member] | ||
Loss Contingencies [Line Items] | ||
Funding repayment obligation | $ 199,334 | |
Licensing Supported Products [Member] | Vector Vision, Inc. [Member] | ||
Loss Contingencies [Line Items] | ||
Percentage of revenues obligation | 15.00% | |
Supported Products [Member] | Vector Vision, Inc. [Member] | ||
Loss Contingencies [Line Items] | ||
Percentage of revenues obligation | 1.50% |
COMMITMENTS AND CONTINGENCIES63
COMMITMENTS AND CONTINGENCIES (Future Minimum Rental Payments) (Details) | Dec. 31, 2014USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
More than 5 years | $ 0 |
3-5 years | 0 |
1-3 years | 82,000 |
Within 1 year | 68,000 |
Total | $ 150,000 |
COMMITMENTS AND CONTINGENCIES64
COMMITMENTS AND CONTINGENCIES (Total Rental Expense) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Minimum rental payments | $ 56,615 | $ 60,038 |
Less: Sublease rentals | 0 | 3,594 |
Net rent expense | 56,615 | 56,444 |
Deferred rent charge | 8,397 | 5,248 |
Total rent expense | $ 65,012 | $ 61,692 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - Dec. 31, 2014 - USD ($) | Total |
Related Party Transaction [Line Items] | |
Director's service charges per day | $ 1,000 |
Notes payable to related parties | 2,642,000 |
Board of Directors Chairman [Member] | |
Related Party Transaction [Line Items] | |
Notes payable to related parties | 2,499,000 |
Director [Member] | |
Related Party Transaction [Line Items] | |
Notes payable to related parties | $ 143,000 |
SUBSEQUENT EVENT (Details)
SUBSEQUENT EVENT (Details) - USD ($) | 6 Months Ended | 12 Months Ended | ||||
Jun. 23, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jul. 31, 2013 | Mar. 31, 2013 | |
Subsequent Event [Line Items] | ||||||
Proceeds from equity issuance | $ 830,500 | |||||
Proceeds from issuance of private placement | $ 830,500 | |||||
Common stock issued | 25,908,978 | 19,952,907 | ||||
Common stock issued, price per share | $ 0.20 | $ 0.18 | $ 0.20 | $ 0.43 | ||
Issued warrants to purchase shares of common stock | 2,076,250 | |||||
Exercise price of warrants | $ 0.60 | |||||
Warrants term | 3 years | |||||
Subsequent Event [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Proceeds from equity issuance | $ 365,000 | |||||
Procedds from issuance of debt | 257,000 | |||||
Proceeds from issuance of private placement | $ 365,000 | |||||
Common stock issued | 1,825,000 | |||||
Common stock issued, price per share | $ 0.20 | |||||
Issued warrants to purchase shares of common stock | 912,500 | |||||
Exercise price of warrants | $ 0.60 | |||||
Warrants term | 3 years | |||||
Proceeds from convertible debt | $ 302,000 | |||||
Proceeds from issuance of warrants | 257,000 | |||||
Proceeds from notes and principal amount | $ 45,000 | |||||
Debt conversion price per share | $ 0.20 | |||||
Warrants issued | 756,000 | |||||
Subsequent Event [Member] | Transaction One [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Warrants term | 1 year |