Document and Entity Information
Document and Entity Information | 3 Months Ended |
Mar. 31, 2016shares | |
Document and Entity Information [Abstract] | |
Entity Registrant Name | CALMARE THERAPEUTICS Inc |
Entity Central Index Key | 102,198 |
Document Type | 10-Q |
Document Period End Date | Mar. 31, 2016 |
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 Common Stock, Shares Outstanding | 28,525,888 |
Document Fiscal Period Focus | Q1 |
Document Fiscal Year Focus | 2,016 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Current Assets: | ||
Cash | $ 125,931 | $ 49,801 |
Receivables, net of allowance of $317,659 at March 31, 2016 and December 31, 2015 | 74,327 | 33,081 |
Inventory | 4,018,220 | 4,028,220 |
Prepaid expenses and other current assets | 39,537 | 58,034 |
Total current assets | 4,258,015 | 4,169,136 |
Property and equipment, net | 19,594 | 23,726 |
Security Deposits | 15,000 | 15,000 |
TOTAL ASSETS | 4,292,609 | 4,207,862 |
Current Liabilities: | ||
Accounts payable | 1,929,063 | 1,895,382 |
Liabilities under claims purchase agreement | 1,995,320 | 1,995,320 |
Accounts payable, GEOMC | 4,182,380 | 4,182,380 |
Accrued expenses and other liabilities | 2,423,262 | 2,248,024 |
Notes payable | 4,381,458 | 3,785,063 |
Deferred revenue | 6,400 | 6,400 |
Series C convertible preferred stock derivative liability | 66,177 | 66,177 |
Series C convertible preferred stock liability | 375,000 | 375,000 |
Total current liabilities | 15,359,060 | 14,553,746 |
Note payable - long-term | $ 70,734 | $ 67,919 |
Commitments and Contingencies | ||
Shareholders' deficit: | ||
Common stock, $.01 par value, 100,000,000 shares authorized, 28,525,888 shares issued and outstanding at March 31, 2016 and 28,515,888 shares issued and outstanding at December 31, 2015 | $ 285,258 | $ 285,158 |
Capital in excess of par value | 48,765,848 | 48,611,413 |
Accumulated deficit | (60,248,966) | (59,371,049) |
Total shareholders' deficit | (11,137,185) | (10,413,803) |
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT | 4,292,609 | 4,207,862 |
Preferred Stock [Member] | ||
Shareholders' deficit: | ||
Preferred stock | $ 60,675 | $ 60,675 |
Series B Preferred Stock [Member] | ||
Shareholders' deficit: | ||
Preferred stock | ||
Series C Preferred Stock [Member] | ||
Shareholders' deficit: | ||
Preferred stock |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Allowance for doubtful accounts | $ 317,659 | $ 317,659 |
Common stock, par value (in dollars per share) | $ .01 | $ .01 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 28,525,888 | 28,515,888 |
Common stock, shares outstanding (in shares) | 28,525,888 | 28,515,888 |
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 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Revenue | ||
Product sales | $ 56,250 | $ 7,950 |
Cost of product sales | 24,446 | 2,297 |
Gross profit from product sales | 31,804 | 5,653 |
Other Revenue | ||
Retained royalties | 69 | 2,392 |
Other income | 13,287 | 8,507 |
Total other revenue | 13,356 | 10,899 |
Operating expenses | ||
Selling expenses | 6,557 | 1,236 |
Personnel and consulting expenses | 449,056 | 507,478 |
General and administrative expenses | 174,898 | 323,639 |
Total operating expenses | 630,511 | 832,353 |
Operating loss | (585,351) | (815,801) |
Other expense | ||
Interest expense | $ 292,566 | 185,862 |
Loss on conversion of notes | 2,588 | |
Total other expense | $ 292,566 | 188,450 |
Loss before income taxes | $ (877,917) | $ (1,004,251) |
Provision (benefit) for income taxes | ||
Net loss | $ (877,917) | $ (1,004,251) |
Basic and diluted loss per share | $ (0.03) | $ (0.04) |
Basic and diluted weighted average number of common shares outstanding: | 28,525,558 | 26,767,978 |
Condensed Consolidated Stateme5
Condensed Consolidated Statement of Changes in Shareholders' Deficit (Unaudited) - 3 months ended Mar. 31, 2016 - USD ($) | Preferred Stock [Member] | Common Stock | Additional Paid-in Capital [Member] | Accumulated deficit | Total |
Beginning Balance, Amount at Dec. 31, 2015 | $ 60,675 | $ 285,158 | $ 48,611,413 | $ (59,371,049) | $ (10,413,803) |
Beginning Balance, Shares at Dec. 31, 2015 | 2,427 | 28,515,888 | |||
Net loss | $ (877,917) | (877,917) | |||
Common stock issued to directors, Amount | $ 100 | $ 1,800 | 1,900 | ||
Common stock issued to directors, Shares | 10,000 | ||||
Stock option compensation expense | 7,180 | 7,180 | |||
Warrant and beneficial conversion feature on notes payable | 145,455 | 145,455 | |||
Ending Balance, Amount at Mar. 31, 2016 | $ 60,675 | $ 285,258 | $ 48,765,848 | $ (60,248,966) | $ (11,137,185) |
Ending Balance, Shares at Mar. 31, 2016 | 2,427 | 28,525,888 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Cash flows from operating activities: | ||
Net loss | $ (877,917) | $ (1,004,251) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 4,132 | 4,459 |
Stock option compensation expense | 7,180 | 16,069 |
Share-based compensation - common stock | $ 1,900 | 2,125 |
Common stock and warrants issued to consultants | 182,600 | |
Debt discount amortization | $ 144,665 | 49,720 |
Loss on conversion of notes | 2,588 | |
Changes in assets and liabilities: | ||
Receivables | $ (41,246) | (1,072) |
Prepaid expenses and other current assets | 18,497 | $ 73,466 |
Inventory | 10,000 | |
Accounts payable, accrued expenses and other liabilities | $ 208,919 | $ 385,457 |
Deferred revenue | (5,905) | |
Net cash used in operating activities | $ (523,870) | (294,744) |
Cash flows from financing activities: | ||
Proceeds from notes payable | $ 600,000 | 257,000 |
Repayment of note and warrant settlement | (42,500) | |
Proceeds from common stock and warrants | 75,000 | |
Net cash provided by financing activities | $ 600,000 | 289,500 |
Net increase (decrease) in cash | 76,130 | (5,244) |
Cash at beginning of period | 49,801 | 5,742 |
Cash at end of period | $ 125,931 | $ 501 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | 1. BASIS OF PRESENTATION The interim condensed consolidated financial information presented in the accompanying condensed consolidated financial statements and notes hereto is unaudited. Calmare Therapeutics Incorporated and its majority-owned (56.1%) subsidiary, Vector Vision, Inc., (collectively, the Company, "we, our, or us), is a medical device company developing and commercializing innovative products and technologies for chronic neuropathic pain and wound care affliction patients. The Companys flagship medical device, the Calmare ® The consolidated financial statements include the accounts of the Company and its majority-owned subsidiary, Vector Vision, Inc. Inter-company accounts and transactions have been eliminated in consolidation. We believe we have made all adjustments necessary, consisting only of normal recurring adjustments, to present the unaudited condensed consolidated financial statements in conformity with accounting principles generally accepted in the U.S. The results for the three ended March 31, 2016 are not necessarily indicative of the results that can be expected for the full year ending December 31, 2016. The interim unaudited condensed consolidated financial statements and notes thereto, should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2015 filed with the Securities and Exchange Commission (SEC) on April 14, 2016. During the three months ended March 31, 2016, we had a significant concentration of revenues from the Calmare ® The Company has incurred operating losses since fiscal 2006 and has a working capital deficiency and shareholders deficiency at March 31, 2016. The Company has taken steps to reduce its operating expenses as well as increase revenue from sales of Calmare Devices and related sales. However, even at the reduced spending levels, should the anticipated increase in revenue from sales of Calmare Devices and related sales not occur the Company may not have sufficient cash flow to fund operations through 2016 and into 2017. These conditions raise substantial doubt about the Companys 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 recurring revenue streams sufficient to cover operating costs. The Company does not have any significant individual cash or capital requirements in the budget going forward. If necessary, the Company will attempt to meet anticipated operating cash requirements by further reducing costs, issuing debt and/or equity, and/or pursuing sales of certain assets and technologies while we pursue licensing and distribution opportunities for our remaining legacy portfolio of technologies. 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 could negatively affect the Companys financial position. Our liquidity requirements arise principally from our working capital needs, including funds needed to sell our current technologies 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, sales of common stock and cash flows from operations, if any, including royalty legal awards. At March 31, 2016, the Company had outstanding debt in the form of promissory notes with a total principal amount of $5,353,000 and a carrying value of $4,938,000. |
NET LOSS PER COMMON SHARE
NET LOSS PER COMMON SHARE | 3 Months Ended |
Mar. 31, 2016 | |
Earnings Per Share [Abstract] | |
NET LOSS PER COMMON SHARE | 2. 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: Three months ended Three months ended March 31, 2016 March 31, 2015 Denominator for basic net loss per share, weighted average shares outstanding 28,525,558 26,767,978 Dilutive effect of common stock options N/A N/A Dilutive effect of Series C convertible preferred stock, convertible debt and warrants N/A N/A Denominator for diluted net loss per share, weighted average shares outstanding 28,525,558 26,797,978 Due to the net loss incurred for the three months ended March 31, 2016, and March 31, 2015, 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: March 31,2016 March 31, 2015 Exercise of common stock options 1,738,500 1,742,500 Exercise of common stock warrants 12,569,898 5,727,251 Conversion of Series C convertible preferred stock 1,918,159 1,470,588 Conversion of convertible debt 14,971,505 6,306,802 Total 31,198,062 15,247,141 |
RECENTLY ISSUED ACCOUNTING PRON
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Changes and Error Corrections [Abstract] | |
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | 3. RECENTLY ISSUED 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, In July 2015, the FASB issued ASU No. 2015-11, Inventory Simplifying the Measurement of Inventory, In February 2016, the FASB issued ASU No. 2016-02, Leases In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation Improvements to Employee Share-Based Payment Accounting |
RECEIVABLES
RECEIVABLES | 3 Months Ended |
Mar. 31, 2016 | |
Receivables [Abstract] | |
RECEIVABLES | 4. RECEIVABLES Receivables consist of the following: March 31, 2016 December 31, 2015 Calmare device sales receivable, net of allowance of $210,284 at March 31, 2016 and December 31, 2015 $ 71,200 $ 31,827 Royalties, net of allowance of $101,154 at March 31, 2016 and December 31, 2015 - - Other, net of allowance of $6,221 at March 31, 2016 and December 31, 2015 3,127 1,254 Total $ 74,327 $ 33,081 |
AVAILABLE-FOR-SALE AND EQUITY S
AVAILABLE-FOR-SALE AND EQUITY SECURITIES | 3 Months Ended |
Mar. 31, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |
AVAILABLE-FOR-SALE AND EQUITY SECURITIES | 5. AVAILABLE-FOR-SALE AND EQUITY SECURITIES The fair value of the equity securities we held were categorized as available-for-sale securities, which were carried at a fair value of zero, consisted of shares in Security Innovation and Xion Pharmaceutical Corporation (Xion). The Company owns 223,317 shares of stock in the privately held Security Innovation, an independent provider of secure software located in Wilmington, MA. In September 2009 we announced the formation of a joint venture with Xion for the commercialization of our patented melanocortin analogues for treating sexual dysfunction and obesity. The Company received 60 shares of privately held Xion Pharmaceutical Corporation common stock in June 2010. The Company currently owns 30% of the outstanding stock of Xion Pharmaceutical Corporation. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | 6. FAIR VALUE MEASUREMEMENTS 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 12) 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 approximately $66,000 at both March 31, 2016 and December 31, 2015, in Level 2 of the fair value hierarchy. 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. The carrying amounts reported in our Condensed Consolidated Balance Sheet for cash, accounts receivable, liabilities under the claims purchase agreement, accounts payable, GEOMC, notes payable, deferred revenue, and preferred stock liability approximate fair value due to the short-term maturity of those financial instruments. |
PREPAID EXPENSES AND OTHER CURR
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 3 Months Ended |
Mar. 31, 2016 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 7. PREPAID EXPENSES AND OTHER CURRENT ASSETS Prepaid expenses and other current assets consist of the following: March 31, 2016 December 31, 2015 Prepaid insurance $ 17,907 $ 47,931 Other 21,630 10,103 Prepaid expenses and other current assets $ 39,537 $ 58,034 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 3 Months Ended |
Mar. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | 8. PROPERTY AND EQUIPMENT Property and equipment, net, consist of the following: March 31, 2016 December 31, 2015 Property and equipment, gross $ 220,051 $ 220,051 Accumulated depreciation and amortization (200,457 ) (196,325 ) Property and equipment, net $ 19,594 $ 23,726 Depreciation and amortization expense was $4,132 during the three months ended March 31, 2016, and $4,459 for the three months ended March 31, 2015. |
ACCRUED EXPENSES AND OTHER LIAB
ACCRUED EXPENSES AND OTHER LIABILITIES | 3 Months Ended |
Mar. 31, 2016 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES AND OTHER LIABILITIES | 9. ACCRUED EXPENSES AND OTHER LIABILITIES Accrued expenses and other liabilities consist of the following: March 31, 2016 December 31, 2015 Royalties payable $ 500,591 $ 487,739 Accrued compensation 49,769 49,769 Commissions payable 22,369 15,900 Accrued interest payable 1,712,187 1,589,256 Other 138,346 105,360 Accrued expenses and other liabilities, net $ 2,423,262 $ 2,248,024 Excluded above is approximately $217,000 of accrued expenses and other liabilities at March 31, 2016 and December 31, 2015, that fall under the Liability Purchase Agreement (LPA) with ASC Recap, LLC (ASC Recap), and are expected to be repaid using the process as described in Note 10. 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. |
LIABILITIES ASSIGNED TO LIABILI
LIABILITIES ASSIGNED TO LIABILITY PURCHASE AGREEMENT | 3 Months Ended |
Mar. 31, 2016 | |
Liabilities Assigned To Liability Purchase Agreement [Abstract] | |
LIABILITIES ASSIGNED TO LIABILITY PURCHASE AGREEMENT | 10. LIABILITIES ASSIGNED TO LIABILITY PURCHASE AGREEMENT During the third quarter of 2013, the Company negotiated a LPA with Southridge, Partners II, L.P. (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 Southridges 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 Companys common stock to ASC Recap. During September and October 2013, ASC Recap sold the Companys 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 May 16, 2016, no further shares of the Companys common stock had been issued to ASC Recap to settle creditors 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. |
NOTES PAYABLE
NOTES PAYABLE | 3 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE | 11. NOTES PAYABLE Notes payable consist of the following: Short term March 31, 2016 December 31, 2015 90 day Convertible Notes (Chairman of the Board) $ 2,498,980 $ 2,498,980 24 month Convertible Notes ($100,000 to Board member) 225,000 225,000 Series A-3 OID Convertible Notes and Warrants 14,353 14,353 Series B-2 OID Convertible Notes and Warrants 2,129,105 1,532,710 Short term notes payable, gross 4,867,438 4,271,043 Less LPA amount (485,980 ) (485,980 ) Short term notes payable, net $ 4,381,458 $ 3,785,063 Long term March 31, 2016 December 31, 2015 Series B-1 OID Convertible Notes and Warrants $ 70,734 $ 67,919 Details of notes payable as of March 31, 2016 are as follows: Short term 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 3/2014 6/2014 Series A-3 OID Convertible Notes and Warrants 11,765 14,353 (1) None $ 0.25 1/2015 Series B-2 OID Convertible Notes and Warrants 2,537,647 2,129,105 None $ 0.20 0.25 11/2015 12/2016 Short term notes payable, gross $ 5,273,392 4,867,438 Less LPA amount (485,980 ) Short term notes payable, net $ 4,381,458 Long term Series B-1 OID Convertible Notes and Warrants $ 80,000 $ 70,734 None $ 0.23 3/2017 (1) Includes $2,588 of accrued loss on conversion of OID note. 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 $ 1,188,980 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 Boards 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 $102,000 and $92,000 during the three months ended March 31, 2016 and March 31, 2015, respectively, and has recorded additional interest in total of $1,109,000. 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 10. 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 March 31, 2016, 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. As of March 31, 2016, there is also unpaid interest of $43,191 related to these notes. Series A-3 Original Issue Discount Convertible Notes and Warrants 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 an initial conversion price of $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 129,412 in shares of common stock. The warrants have an exercise price of $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 Expected term 2 years Volatility 184.88 % %%Risk Free Rate 0.32 % The proceeds of the Notes issued during the three months ended March 31, 2014 were allocated to the components as follows: Proceeds allocated at issue date Private Offering Notes $ 32,390 Private Offering Warrants 14,845 Beneficial Conversion feature 7,765 Total $ 55,000 During the quarter ended June 30, 2014, certain holders of Series A-3 OID convertible notes and warrants delivered to the Company a notice of conversion related to the Series A-3 OID convertible notes. Due to the timing of receipt of the notices by the Company, certain Note holders (Noteholders) received their shares during the quarter ended June 30, 2014, while other Noteholders received or are due to receive their shares after June 30, 2014. 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 and irrespective of whether the shares were delivered in the quarter ended June 30, 2014 or subsequent to June 30, 2014 to 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 $ 43,288 Accelerated interest expense $ 35,109 Balance Sheet Shares issued as of June 30, 2014 798,825 Shares to be issued subsequent to June 30, 2014 529,415 Principal amount of notes converted $ 265,648 During the quarter ended March 31, 2015, a holder of Series A-3 OID convertible notes and warrants delivered to the Company a notice of conversion related to the Series A-3 OID convertible notes. Additionally, the Company offered the Noteholder an inducement to convert his/her notes to shares. The inducement provided the Noteholder 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. As of March 31, 2016, the Company had not issued the shares due related to the conversion notice. Presented below is summary information related to the conversion: Statement of Operations Loss on conversion of notes $ 2,588 Accelerated interest expense $ - Balance Sheet Shares issued - Principal amount of notes converted $ 11,765 Series B-1 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 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-1 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-1 OID noteholder and the Company agreed that this anti-dilution provision had been triggered and the Series B-1 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 Total $ 65,000 Series B-2 OID Convertible Notes and Warrants During the quarter ended December 31, 2014, the Company did private offerings 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 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 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 During the quarter ended June 30, 2015, a holder of Series B-2 OID convertible notes and warrants delivered to the Company a notice of conversion related to the Series B-2 OID convertible notes, with a principal amount of $5,882. In the quarter ended September 30, 2015, the Company issued 29,410 shares due related to the conversion notice. As of March 31, 2016, the remaining notes have passed their maturity date. The Company has not repaid the amounts due on these notes and is in default under the terms of the notes. During the quarter ended March 31, 2015, the Company did an additional private offering of convertible notes and warrants, under which it issued $302,353 of convertible promissory notes for consideration of $257,000, the difference between the proceeds from the notes and principal amount consists of $45,353 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 755,882 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 Expected term 1 year Volatility 180.15-185.71 % Risk Free Rate 0.18-0.22 % The proceeds of the Notes were allocated to the components as follows: Proceeds allocated at issue date Private Offering Notes $ 197,521 Private Offering Warrants 46,097 Beneficial Conversion feature 13,382 Total $ 257,000 As of March 31, 2016, the remaining notes have passed their maturity date. The Company has not repaid the amounts due on these notes and is in default under the terms of the notes. During the quarter ended September 30, 2015, the Company did an additional private offering of convertible notes and warrants, under which it issued $705,882 of convertible promissory notes for consideration of $600,000, the difference between the proceeds from the notes and principal amount consists of $105,882 of original issue discount. The notes are convertible at an initial conversion price of $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 1,411,764 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 Expected term 1 year Volatility 171.36 % Risk Free Rate 0.28 % The proceeds of the Notes were allocated to the components as follows: Proceeds allocated at issue date Private Offering Notes $ 342,857 Private Offering Warrants 120,000 Beneficial Conversion feature 137,143 Total $ 600,000 During the quarter ended December 31, 2015, the Company did an additional private offering of convertible notes and warrants, under which it issued $470,588 of convertible promissory notes for consideration of $400,000, the difference between the proceeds from the notes and principal amount consists of $70,588 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 1,176,470 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 Expected term 1 year Volatility 132.44 % Risk Free Rate 0.66 % The proceeds of the Notes were allocated to the components as follows: Proceeds allocated at issue date Private Offering Notes $ 361,991 Private Offering Warrants 38,009 Beneficial Conversion feature Total $ 400,000 During the quarter ended March 31, 2016, the Company did an additional private offering of convertible notes and warrants, under which it issued $705,882 of convertible promissory notes for consideration of $600,000, the difference between the proceeds from the notes and principal amount consists of $105,882 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 3,529,412 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 Expected term 1 year Volatility 136.24 % Risk Free Rate 0.62 % The proceeds of the Notes were allocated to the components as follows: Proceeds allocated at issue date Private Offering Notes $ 454,545 Private Offering Warrants 122,727 Beneficial Conversion feature 22,728 Total $ 600,000 |
SHAREHOLDERS' DEFICIENCY
SHAREHOLDERS' DEFICIENCY | 3 Months Ended |
Mar. 31, 2016 | |
Stockholders' Equity Note [Abstract] | |
SHAREHOLDERS' DEFICIENCY | 12. SHAREHOLDERS DEFICIENCY Stock Option Plan On May 2, 2011 the Company adopted and executed the Employees Directors and Consultants Stock Option Plan (the Plan). During the three months ended March 31, 2015, the Company granted 50,000 options to non-employee directors which were fully 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: Three months ended March 31, 2015 Dividend yield (1) 0.00 % Expected volatility (2) 164.5 % Risk-free interest rates (3) 1.61 % Expected lives (2) 5.0 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. During the three months ended March 31, 2016, the Company recognized expense of $7,180 for stock options issued to employees. During the three months ended March 31, 2015, the Company recognized expense of $7,963 for stock options issued to directors and recognized expense of $8,106 for stock options issued to employees. 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. The rights of the Series C Convertible Preferred Stock are as follows: a) Dividend rights b) Voting rights c) Liquidation rights d) Conversion rights The Company recorded a convertible preferred stock derivative liability associated with the 375 shares of Series C Convertible Preferred Stock outstanding of $66,177 at both March 31, 2016 and December 31, 2015. The Company has classified the Series C Convertible Preferred Stock as a liability at March 31, 2016 and December 31, 2015 because the variable conversion feature may require the Company to settle the conversion in a variable number of its common shares. Common Stock 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 August 14, 2014 the shareholders approved an amendment to the Companys certification of incorporation to effect up to a one-for-ten reverse stock split (the reverse Stock Split of the Companys issued and authorized outstanding common stock. The Board of Directors, in its sole discretion, has discretion to implement the Reverse Stock Split. As of March 31, 2016, the Board of Directors has not implemented the Reverse Stock Split. During the quarter ended March 31, 2015, the Company did a private offering of its common stock and warrants, for consideration of $75,000. 375,000 shares of common stock were issued at a per share price of $0.20. The common stock holders were also issued warrants to purchase 187,500 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 the quarter ended March 31, 2015, the Company did a private offering of its common stock and warrants, for consideration of $500,000. 2,500,000 shares of common stock were issued at a per share price of $0.20. The common stock holders were also issued warrants to purchase 1,250,000 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 the quarter ended March 31, 2015, the Company issued 500,000 shares with a fair value of $80,000 to an advisory firm for consulting services. The Company is amortizing the $80,000 over the service period and recorded $20,000 of expense in the quarter ended March 31, 2015. During the quarter ended March 31, 2015, the Company issued 120,000 shares to an advisory firm for consulting services. The shares vested in two tranches, with 60,000 shares vesting in the quarter ended December 31, 2014 and remaining 60,000 shares vesting in the quarter ended March 31, 2015. The Company recorded consulting expenses of $10,800 in the quarter ended December 31, 2014 and $27,600 of consulting expenses in the quarter ended March 31, 2015. In each instance, the expense was based on the fair value on the vesting date. During the quarter ended March 31, 2015, the Company issued 333,333 stock warrants with a five year term for consulting services performed and recorded consulting expense of $75,000 for the fair value of the warrants. On October 15, 2015 the shareholders approved an increase in the number of authorized shares of common stock from 40 million to 100 million. The Company issued 10,000 and 12,500 shares of its common stock to non-employee directors under its Director Compensation Plan during the three months ended March 31, 2016 and 2015, respectively. The Company recorded expense of $1,900 and $2,125 for director stock compensation expense in the three months ended March 31, 2016 and 2015. |
CONTRACTUAL OBLIGATIONS AND CON
CONTRACTUAL OBLIGATIONS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
CONTRACTUAL OBLIGATIONS AND CONTINGENCIES | 13 CONTRACTUAL OBLIGATIONS AND CONTINGENCIES As of March 31, 2016, the Company 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. The Company 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 (case pending) GEOMC (case pending) - On August 22, 2014, GEOMC filed a complaint against the Company in the United States District Court for the District of Connecticut. The complaint alleges that the Company and GEOMC entered into a security agreement whereby in exchange for GEOMCs sale and delivery of the Scrambler Therapy devices (the Devices), the Company would grant GEOMC a security interest in the Devices. Among other allegations, GEOMC claims that the Company has failed to comply with the terms of the security agreement and seeks an order to the Court to replevy the Devices or collect damages. The Company believes it has meritorious defenses to the allegations and the Company intends to vigorously defend against the litigation. On February 4, 2016, the Company announced that it is discussing a settlement with GEOMC, however, to date, no settlement has been reached. Summary We may be a party to other legal actions and proceedings from time to time. We are unable to estimate legal expenses or losses we may incur, if any, or possible damages we may recover, and we have not recorded any potential judgment losses or proceeds in our financial statements to date. We record expenses in connection with these suits as incurred. 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. The Companys Distribution Rights, Marineo and Delta On April 8, 2014, Mr. Giuseppe Marineo, Delta Research and Development (Delta), Mr. Marineos research company, and Delta International Services and Logistics (DIS&L), Deltas 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 Groups Press Release) regarding the Company, stating that the Company did not have authority to sell, distribute and manufacture the Calmare Device as an exclusive agent of the Group. The Company issued a corporate response in a press release dated April 11, 2014 stating that the Groups 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 still possesses the authority to sell, distribute and manufacture Calmare Devices 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 Calmare Devices world-wide including the EMENA territory. The Company responded on April 25, 2014 to the Cease and Desist Letter, disputing Group Counsels 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. 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 March 31, 2016, the respective firms were being 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. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2016 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | 14. 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 March 31, 2016, $2,598,980 of the outstanding Notes payable were Notes payable to related parties; $2,498,980 to the Chairman of the Board and $100,000 to another director. Dr. Stephen J. DAmato, the Companys chief medical officer is also one of the managing members of Calmar Pain Relief, LLC. During 2010, Calmar Pain Relief, LLC, purchased 10 Calmare devices from the Company for an aggregate purchase price of $550,000. Additionally, during 2015 and 2014, Calmar Pain Relief purchased from the Company electrodes for use with the devices. Since October 15, 2015, the Company has a consulting agreement with VADM Robert T. Conway, Jr., U.S. Navy, (Ret) (the Admiral), a member of the Companys Board of Directors. The agreement is for one year and includes compensation of a monthly retainer fee of $7,500 and a five year warrant to purchase 167,000 shares of common stock of the Company, fully vested on the date of issuance, at a strike price of $.60 per share with an aggregate estimate fair value of $33,734. As a result of this agreement, the Board of Directors has determined that the Admiral is no longer an independent director of the Company. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2016 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 15. SUBSEQUENT EVENTS During April, 2016, the Company did two additional private offerings of convertible notes and warrants, under which it issued in the aggregate $705,882 of convertible promissory notes for consideration of $600,000, the difference between the proceeds from the notes and principal amount consists of $105,882 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 in the aggregate market-related warrants for 3,000,000 in shares of common stock. The warrants have an exercise price of $0.60 and a 1-year term. The warrants were recorded to additional paid-in-capital. During April, 2016, the Company issued 261,943 shares of common stock to Conrad Mir, its President & CEO, as payment for unpaid bonus and unused vacation amounts from 2015, per the Board of Directors. 100% of the stock vested immediately. In May, 2016, the Company announced that it had received final signatures on its supply order contract with the U.S. Government. The Company may now receive and fulfill medical product orders, as per terms of the contract. |
NET LOSS PER COMMON SHARE (Tabl
NET LOSS PER COMMON SHARE (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
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: Three months ended Three months ended March 31, 2016 March 31, 2015 Denominator for basic net loss per share, weighted average shares outstanding 28,525,558 26,767,978 Dilutive effect of common stock options N/A N/A Dilutive effect of Series C convertible preferred stock, convertible debt and warrants N/A N/A Denominator for diluted net loss per share, weighted average shares outstanding 28,525,558 26,797,978 |
Potentially dilutive securities | Potentially dilutive securities outstanding are summarized as follows: March 31,2016 March 31, 2015 Exercise of common stock options 1,738,500 1,742,500 Exercise of common stock warrants 12,569,898 5,727,251 Conversion of Series C convertible preferred stock 1,918,159 1,470,588 Conversion of convertible debt 14,971,505 6,306,802 Total 31,198,062 15,247,141 |
RECEIVABLES (Tables)
RECEIVABLES (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Receivables [Abstract] | |
Schedule of Receivables | Receivables consist of the following: March 31, 2016 December 31, 2015 Calmare device sales receivable, net of allowance of $210,284 at March 31, 2016 and December 31, 2015 $ 71,200 $ 31,827 Royalties, net of allowance of $101,154 at March 31, 2016 and December 31, 2015 - - Other, net of allowance of $6,221 at March 31, 2016 and December 31, 2015 3,127 1,254 Total $ 74,327 $ 33,081 |
PREPAID EXPENSES AND OTHER CU24
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
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: March 31, 2016 December 31, 2015 Prepaid insurance $ 17,907 $ 47,931 Other 21,630 10,103 Prepaid expenses and other current assets $ 39,537 $ 58,034 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment, Net | Property and equipment, net, consist of the following: March 31, 2016 December 31, 2015 Property and equipment, gross $ 220,051 $ 220,051 Accumulated depreciation and amortization (200,457 ) (196,325 ) Property and equipment, net $ 19,594 $ 23,726 |
ACCRUED EXPENSES AND OTHER LI26
ACCRUED EXPENSES AND OTHER LIABILITIES (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses and Other Liabilities | Accrued expenses and other liabilities consist of the following: March 31, 2016 December 31, 2015 Royalties payable $ 500,591 $ 487,739 Accrued compensation 49,769 49,769 Commissions payable 22,369 15,900 Accrued interest payable 1,712,187 1,589,256 Other 138,346 105,360 Accrued expenses and other liabilities, net $ 2,423,262 $ 2,248,024 |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Schedule of Notes Payable | Notes payable consist of the following: Short term March 31, 2016 December 31, 2015 90 day Convertible Notes (Chairman of the Board) $ 2,498,980 $ 2,498,980 24 month Convertible Notes ($100,000 to Board member) 225,000 225,000 Series A-3 OID Convertible Notes and Warrants 14,353 14,353 Series B-2 OID Convertible Notes and Warrants 2,129,105 1,532,710 Short term notes payable, gross 4,867,438 4,271,043 Less LPA amount (485,980 ) (485,980 ) Short term notes payable, net $ 4,381,458 $ 3,785,063 Long term March 31, 2016 December 31, 2015 Series B-1 OID Convertible Notes and Warrants $ 70,734 $ 67,919 Details of notes payable as of March 31, 2016 are as follows: Short term 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 3/2014 6/2014 Series A-3 OID Convertible Notes and Warrants 11,765 14,353 (1) None $ 0.25 1/2015 Series B-2 OID Convertible Notes and Warrants 2,537,647 2,129,105 None $ 0.20 0.25 11/2015 12/2016 Short term notes payable, gross $ 5,273,392 4,867,438 Less LPA amount (485,980 ) Short term notes payable, net $ 4,381,458 Long term Series B-1 OID Convertible Notes and Warrants $ 80,000 $ 70,734 None $ 0.23 3/2017 (1) Includes $2,588 of accrued loss on conversion of OID note. |
ScheduleOfDebtTableTextBlock | The Company has issued 90-day notes payable to borrow funds from a director, now the chairman of our Board, as follows: 2013 $ 1,188,980 2012 1,210,000 2011 100,000 Total $ 2,498,980 |
Series B-2 Original Issue Discount Convertible Notes and Warrants [Member] | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Schedule of Valuation techniques | We estimated the fair value of the warrants on the issue date using a Black-Scholes pricing model with the following assumptions: Warrants Expected term 1 year Volatility 188.31 % Risk Free Rate 0.11 % We estimated the fair value of the warrants on the issue date using a Black-Scholes pricing model with the following assumptions: Warrants Expected term 1 year Volatility 180.15-185.71 % Risk Free Rate 0.18-0.22 % We estimated the fair value of the warrants on the issue date using a Black-Scholes pricing model with the following assumptions: Warrants Expected term 1 year Volatility 171.36 % Risk Free Rate 0.28 % We estimated the fair value of the warrants on the issue date using a Black-Scholes pricing model with the following assumptions: Warrants Expected term 1 year Volatility 132.44 % Risk Free Rate 0.66 % We estimated the fair value of the warrants on the issue date using a Black-Scholes pricing model with the following assumptions: Warrants Expected term 1 year Volatility 136.24 % Risk Free Rate 0.62 % |
Schedule of proceeds from debt | 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 The proceeds of the Notes were allocated to the components as follows: Proceeds allocated at issue date Private Offering Notes $ 197,521 Private Offering Warrants 46,097 Beneficial Conversion feature 13,382 Total $ 257,000 The proceeds of the Notes were allocated to the components as follows: Proceeds allocated at issue date Private Offering Notes $ 342,857 Private Offering Warrants 120,000 Beneficial Conversion feature 137,143 Total $ 600,000 The proceeds of the Notes were allocated to the components as follows: Proceeds allocated at issue date Private Offering Notes $ 361,991 Private Offering Warrants 38,009 Beneficial Conversion feature Total $ 400,000 The proceeds of the Notes were allocated to the components as follows: Proceeds allocated at issue date Private Offering Notes $ 454,545 Private Offering Warrants 122,727 Beneficial Conversion feature 22,728 Total $ 600,000 |
Series A-3Original Issue Discount Convertible Notes and Warrants [Member] | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Schedule of Valuation techniques | We estimated the fair value of the warrants on the issue date using a Black-Scholes pricing model with the following assumptions: Warrants Expected term 2 years Volatility 184.88 % %%Risk Free Rate 0.32 % |
Schedule of proceeds from debt | The proceeds of the Notes issued during the three months ended March 31, 2014 were allocated to the components as follows: Proceeds allocated at issue date Private Offering Notes $ 32,390 Private Offering Warrants 14,845 Beneficial Conversion feature 7,765 Total $ 55,000 |
Schedule of debt conversion | Presented below is summary information related to the conversion: Statement of Operations Loss on conversion of notes $ 43,288 Accelerated interest expense $ 35,109 Balance Sheet Shares issued as of June 30, 2014 798,825 Shares to be issued subsequent to June 30, 2014 529,415 Principal amount of notes converted $ 265,648 Presented below is summary information related to the conversion: Statement of Operations Loss on conversion of notes $ 2,588 Accelerated interest expense $ - Balance Sheet Shares issued - Principal amount of notes converted $ 11,765 |
Series B-1 Original Issue Discount Convertible Notes and Warrants [Member] | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Schedule of Valuation techniques | We estimated the fair value of the warrants on the issue date using a Black-Scholes pricing model with the following assumptions: Warrants Expected term 4 years Volatility 151.52 % Risk Free Rate 1.32 % |
Schedule of proceeds from debt | 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 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 Total $ 65,000 |
SHAREHOLDERS' DEFICIENCY (Table
SHAREHOLDERS' DEFICIENCY (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Stockholders' Equity Note [Abstract] | |
Schedule of fair value of option weighted average assumptions | 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: Three months ended March 31, 2015 Dividend yield (1) 0.00 % Expected volatility (2) 164.5 % Risk-free interest rates (3) 1.61 % Expected lives (2) 5.0 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. |
Supplemental Disclosure of Non-
Supplemental Disclosure of Non-cash Transactions (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2014 | |
Common stock issued for consulting services | 500,000 | ||
Common stock issued for consulting services, value | $ 80,000 | ||
Consulting expense | 20,000 | ||
Allocation of proceeds from convertible note for the fair value of warrants and beneficial conversion feature to additional paid-in capital | $ 145,455 | 59,480 | |
Stock issuance amortized expense | $ 80,000 | ||
Vested In Two Tranches [Member] | |||
Common shares issued advisory services, shares | 60,000 | 60,000 | |
Additional Paid-in Capital [Member] | |||
Allocation of proceeds from convertible note for the fair value of warrants and beneficial conversion feature to additional paid-in capital | $ 145,455 | $ 59,480 | |
Warrant [Member] | |||
Common stock issued for consulting services | 333,333 | ||
Common stock issued for consulting services, value | $ 75,000 | ||
Advisory Firm [Member] | |||
Common stock issued for consulting services | 120,000 | ||
Consulting expense | $ 27,600 | $ 10,800 |
BASIS OF PRESENTATION (Details
BASIS OF PRESENTATION (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Organization Consolidation And Presentation Of Financial Statements [Line Items] | ||
Principal amount | $ 5,273,392 | |
Sales and Rentals [Member] | ||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | ||
Percentage of revenue | 89.00% | 74.00% |
Sales of Equipment and Training [Member] | ||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | ||
Percentage of revenue | 10.00% | 16.00% |
Promissory Notes [Member] | ||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | ||
Principal amount | $ 5,353,000 | |
Carrying amount | $ 4,938,000 | |
Vector Vision, Inc. [Member] | ||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | ||
Ownership percentage | 56.10% |
NET LOSS PER COMMON SHARE (Calc
NET LOSS PER COMMON SHARE (Calculation of Net Income (Loss) Per Common Share) (Details) - shares | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Earnings Per Share [Abstract] | ||
Denominator for basic net loss per share, weighted average shares outstanding | 28,525,558 | 26,767,978 |
Dilutive effect of common stock options | ||
Dilutive effect of Series C convertible preferred stock, convertible debt and warrants | ||
Denominator for diluted net loss per share, weighted average shares outstanding | 28,525,558 | 26,767,978 |
NET LOSS PER COMMON SHARE (Pote
NET LOSS PER COMMON SHARE (Potentially dilutive securities) (Details) - shares | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Anti-dilutive securities excluded from computation of earnings per share | 31,198,062 | 15,247,141 |
Exercise of common stock options [Member] | ||
Anti-dilutive securities excluded from computation of earnings per share | 1,738,500 | 1,742,500 |
Exercise of common stock warrants [Member] | ||
Anti-dilutive securities excluded from computation of earnings per share | 12,569,898 | 5,727,251 |
Conversion of Series C convertible preferred stock [Member] | ||
Anti-dilutive securities excluded from computation of earnings per share | 1,918,159 | 1,470,588 |
Conversion of convertible debt [Member] | ||
Anti-dilutive securities excluded from computation of earnings per share | 14,971,505 | 6,306,802 |
RECEIVABLES (Details)
RECEIVABLES (Details) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Receivables [Abstract] | ||
Calmare device sales receivable, net of allowance of $210,284 at March 31, 2016 and December 31, 2015 | $ 71,200 | $ 31,827 |
Royalties, net of allowance of $101,154 at March 31, 2016 and December 31, 2015 | ||
Other, net of allowance of $6,221 at March 31, 2016 and December 31, 2015 | $ 3,127 | $ 1,254 |
Total | $ 74,327 | $ 33,081 |
AVAILABLE-FOR-SALE AND EQUITY34
AVAILABLE-FOR-SALE AND EQUITY SECURITIES (Details) - USD ($) | Mar. 31, 2016 | Sep. 30, 2009 |
Xion Pharmaceutical Corporation [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Number of shares held | 60 | |
Percentage of shares outstanding owned | 30.00% | |
Security Innovation, Inc. [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, fair value | $ 0 | |
Number of shares held | 223,317 |
FAIR VALUE MEASUREMEMENTS (Deta
FAIR VALUE MEASUREMEMENTS (Details) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | $ 66,000 | $ 66,000 |
PREPAID EXPENSES AND OTHER CU36
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid insurance | $ 17,907 | $ 47,931 |
Other | 21,630 | 10,103 |
Prepaid expenses and other current assets | $ 39,537 | $ 58,034 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |||
Property and equipment, gross | $ 220,051 | $ 220,051 | |
Accumulated depreciation and amortization | (200,457) | (196,325) | |
Property and equipment, net | 19,594 | $ 23,726 | |
Depreciation and amortization expense | $ 4,132 | $ 4,459 |
ACCRUED EXPENSES AND OTHER LI38
ACCRUED EXPENSES AND OTHER LIABILITIES (Details) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Payables and Accruals [Abstract] | ||
Royalties payable | $ 500,591 | $ 487,739 |
Accrued compensation | 49,769 | 49,769 |
Commissions payable | 22,369 | 15,900 |
Accrued interest payable | 1,712,187 | 1,589,256 |
Other | 138,346 | 105,360 |
Accrued expenses and other liabilities, net | 2,423,262 | 2,248,024 |
Accrued expenses and other liabilities - LPA | $ 217,000 | $ 217,000 |
LIABILITIES ASSIGNED TO LIABI39
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, 2014 | Mar. 31, 2016 | Dec. 31, 2015 | Aug. 31, 2013 | |
Liabilities Assigned To Liability Purchase Agreement [Line Items] | ||||||
Liabilities under claims purchase agreement | $ 1,995,320 | $ 1,995,320 | ||||
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 |
NOTES PAYABLE (Notes payable) (
NOTES PAYABLE (Notes payable) (Details) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 | Mar. 31, 2013 |
Short term | |||
Short term notes payable, gross | $ 4,867,438 | $ 4,271,043 | |
Less LPA amount | (485,980) | (485,980) | |
Short term notes payable, net | 4,381,458 | 3,785,063 | |
Long term | |||
Long term, Notes payable | 70,734 | 67,919 | |
90 Day Convertible Notes [Member] | |||
Short term | |||
Less LPA amount | $ 485,980 | ||
90 Day Convertible Notes [Member] | Chairman of the Board [Member] | |||
Short term | |||
Short term notes payable, gross | 2,498,980 | 2,498,980 | |
24 Month Convertible Notes [Member] | Borad Members [Member] | |||
Short term | |||
Short term notes payable, gross | 225,000 | 225,000 | |
Notes Payable (Parenthetical): | |||
Due to Board Member | 100,000 | ||
Series A-3 OID Convertible Notes And Warrants [Member] | |||
Short term | |||
Short term notes payable, gross | 14,353 | 14,353 | |
Series B-2 OID Convertible Notes And Warrants [Member] | |||
Short term | |||
Short term notes payable, gross | 2,129,105 | 1,532,710 | |
Series B-1 OID Convertible Notes And Warrants [Member] | |||
Long term | |||
Long term, Notes payable | $ 70,734 | $ 67,919 |
NOTES PAYABLE (Schedule of Note
NOTES PAYABLE (Schedule of Notes Payable) (Details) - USD ($) | 3 Months Ended | |||||||
Mar. 31, 2016 | Dec. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2013 | Jun. 30, 2012 | Apr. 30, 2012 | Mar. 31, 2012 | ||
Principal Amount | $ 5,273,392 | |||||||
Carrying Value | 4,867,438 | |||||||
Short term notes payable, gross | 4,867,438 | $ 4,271,043 | ||||||
Less LPA amount | (485,980) | (485,980) | ||||||
Short term notes payable, net | $ 4,381,458 | 3,785,063 | ||||||
90 Day Convertible Notes [Member] | ||||||||
Cash Interest Rate | 6.00% | |||||||
Common Stock Conversion Price | $ 1.05 | |||||||
Less LPA amount | $ 485,980 | |||||||
90 Day Convertible Notes [Member] | Board of Directors Chairman [Member] | ||||||||
Principal Amount | $ 2,498,980 | |||||||
Carrying Value | $ 2,498,980 | |||||||
Cash Interest Rate | 6.00% | |||||||
Common Stock Conversion Price | $ 1.05 | |||||||
Maturity Date | Various 2,014 | |||||||
Short term notes payable, gross | $ 2,498,980 | 2,498,980 | ||||||
24 Month Convertible Notes [Member] | ||||||||
Principal Amount | $ 100,000 | $ 25,000 | $ 100,000 | |||||
Cash Interest Rate | 6.00% | |||||||
Common Stock Conversion Price | $ 1.05 | |||||||
24 Month Convertible Notes [Member] | Borad Members [Member] | ||||||||
Principal Amount | $ 225,000 | |||||||
Carrying Value | $ 225,000 | |||||||
Cash Interest Rate | 6.00% | |||||||
Common Stock Conversion Price | $ 1.05 | |||||||
Maturity Date | 3/2014 6/2014 | |||||||
Short term notes payable, gross | $ 225,000 | 225,000 | ||||||
Notes Payable (Parenthetical): | ||||||||
Due to Board Member | 100,000 | |||||||
Series A-3 OID Convertible Notes And Warrants [Member] | ||||||||
Principal Amount | 11,765 | |||||||
Carrying Value | [1] | $ 14,353 | ||||||
Cash Interest Rate | 0.00% | |||||||
Common Stock Conversion Price | $ 0.25 | |||||||
Maturity Date | 1/2015 | |||||||
Short term notes payable, gross | $ 14,353 | 14,353 | ||||||
Accrued loss on conversion | 2,588 | |||||||
Series B-2 OID Convertible Notes And Warrants [Member] | ||||||||
Principal Amount | 2,537,647 | |||||||
Carrying Value | $ 2,129,105 | |||||||
Cash Interest Rate | 0.00% | |||||||
Maturity Date | 1/2015 12/2016 | |||||||
Short term notes payable, gross | $ 2,129,105 | $ 1,532,710 | ||||||
Series B-2 OID Convertible Notes And Warrants [Member] | Minimum [Member] | ||||||||
Common Stock Conversion Price | $ 0.20 | |||||||
Series B-2 OID Convertible Notes And Warrants [Member] | Maximum [Member] | ||||||||
Common Stock Conversion Price | $ 0.25 | |||||||
Series B-1 OID Convertible Notes And Warrants [Member] | ||||||||
Principal Amount | $ 80,000 | |||||||
Carrying Value | $ 70,734 | |||||||
Cash Interest Rate | 0.00% | |||||||
Common Stock Conversion Price | $ 0.23 | $ 0.23 | ||||||
Maturity Date | 3/2017 | |||||||
[1] | Includes $2,588 of accrued loss on conversion of OID note. |
NOTES PAYABLE (Summary of Issua
NOTES PAYABLE (Summary of Issuances of Notes Payable) (Details) - USD ($) | Mar. 31, 2016 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
90 Day Convertible Notes [Member] | Board of Directors Chairman [Member] | ||||
Total | $ 2,498,980 | $ 1,188,980 | $ 1,210,000 | $ 100,000 |
NOTES PAYABLE (Summary of Fair
NOTES PAYABLE (Summary of Fair Value Assumptions) (Details) - Private Placement [Member] - Warrant [Member] | 3 Months Ended | ||||||
Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | |
Series A-3 OID Convertible Notes And Warrants [Member] | |||||||
Expected term | 2 years | ||||||
Volatility | 184.88% | ||||||
Risk Free Rate | 0.32% | ||||||
Series B-1 OID Convertible Notes And Warrants [Member] | |||||||
Expected term | 4 years | ||||||
Volatility | 151.52% | ||||||
Risk Free Rate | 1.32% | ||||||
Series B-2 OID Convertible Notes And Warrants [Member] | |||||||
Expected term | 1 year | 1 year | 1 year | 1 year | 1 year | ||
Volatility | 136.24% | 132.44% | 171.36% | 188.31% | |||
Risk Free Rate | 0.62% | 0.66% | 0.28% | 0.11% | |||
Series B-2 OID Convertible Notes And Warrants [Member] | Minimum [Member] | |||||||
Volatility | 180.15% | ||||||
Risk Free Rate | 0.18% | ||||||
Series B-2 OID Convertible Notes And Warrants [Member] | Maximum [Member] | |||||||
Volatility | 185.71% | ||||||
Risk Free Rate | 0.22% |
NOTES PAYABLE (Schedule of No44
NOTES PAYABLE (Schedule of Note Allocation) (Details) - USD ($) | 3 Months Ended | |||||
Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2014 | |
Private Offering Notes | $ 600,000 | $ 257,000 | ||||
Private Placement [Member] | Series A-3 OID Convertible Notes And Warrants [Member] | ||||||
Private Offering Notes | $ 32,390 | |||||
Private Offering Warrants | 14,845 | |||||
Beneficial Conversion feature | 7,765 | |||||
Total | 55,000 | |||||
Private Placement [Member] | Series B-1 OID Convertible Notes And Warrants [Member] | ||||||
Private Offering Notes | 34,272 | |||||
Private Offering Warrants | 26,811 | |||||
Beneficial Conversion feature | 3,917 | |||||
Total | $ 65,000 | |||||
Private Placement [Member] | Series B-2 OID Convertible Notes And Warrants [Member] | ||||||
Private Offering Notes | 454,545 | $ 361,991 | $ 342,857 | 197,521 | $ 224,679 | |
Private Offering Warrants | 122,727 | $ 38,009 | 120,000 | 46,097 | 57,854 | |
Beneficial Conversion feature | 22,728 | 137,143 | 13,382 | 22,467 | ||
Total | $ 600,000 | $ 400,000 | $ 600,000 | $ 257,000 | $ 305,000 |
NOTES PAYABLE (Schedule of Debt
NOTES PAYABLE (Schedule of Debt Conversion) (Details) - PrivatePlacement1Member - Series A-3 OID Convertible Notes And Warrants [Member] - USD ($) | 3 Months Ended | |
Mar. 31, 2015 | Jun. 30, 2014 | |
Statement of Operations | ||
Loss on conversion of notes | $ 2,588 | $ 43,288 |
Accelerated interest expense | $ 35,109 | |
Balance Sheet | ||
Shares issued as of June 30, 2014 | 798,825 | |
Shares to be issued subsequent to June 30, 2014 | 529,415 | |
Principal amount of notes converted | $ 11,765 | $ 265,648 |
NOTES PAYABLE (Details Narrativ
NOTES PAYABLE (Details Narrative) | 3 Months Ended | |||||||||||
Mar. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2015USD ($)$ / sharesshares | Sep. 30, 2015USD ($)$ / sharesshares | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($)$ / sharesshares | Dec. 31, 2014USD ($)$ / sharesshares | Jun. 30, 2014USD ($)$ / sharesshares | Mar. 31, 2014USD ($)$ / sharesshares | Mar. 31, 2013USD ($) | Jun. 30, 2012USD ($) | Apr. 30, 2012USD ($) | Mar. 31, 2012USD ($) | |
Liability purchase agreement amount | $ (485,980) | $ (485,980) | ||||||||||
Principal amount | $ 5,273,392 | |||||||||||
Number of anti diluted securities | shares | 31,198,062 | 15,247,141 | ||||||||||
Warrant [Member] | Private Placement [Member] | ||||||||||||
Warrant exercise price (in dollars per share) | $ / shares | $ 0.60 | |||||||||||
Number of shares issued | shares | 187,500 | |||||||||||
Warrant term | 3 years | |||||||||||
90 Day Convertible Notes [Member] | ||||||||||||
Interest rate | 6.00% | |||||||||||
Conversion price (in dollars per share) | $ / shares | $ 1.05 | |||||||||||
Additional interest rate per month | 1.00% | |||||||||||
Liability purchase agreement amount | $ 485,980 | |||||||||||
90 Day Convertible Notes [Member] | Board of Directors Chairman [Member] | ||||||||||||
Interest rate | 6.00% | |||||||||||
Conversion price (in dollars per share) | $ / shares | $ 1.05 | |||||||||||
Additonal interest expenses | $ 102,000 | $ 92,000 | ||||||||||
Total additonal interest expenses | 1,109,000 | $ 1,109,000 | ||||||||||
Principal amount | $ 2,498,980 | |||||||||||
24 Month Convertible Notes [Member] | ||||||||||||
Interest rate | 6.00% | |||||||||||
Conversion price (in dollars per share) | $ / shares | $ 1.05 | |||||||||||
Principal amount | $ 100,000 | $ 25,000 | $ 100,000 | |||||||||
Accrued interest payable | $ 43,191 | |||||||||||
Series A-3 OID Convertible Notes And Warrants [Member] | ||||||||||||
Interest rate | 0.00% | |||||||||||
Conversion price (in dollars per share) | $ / shares | $ 0.25 | |||||||||||
Principal amount | $ 11,765 | |||||||||||
Series A-3 OID Convertible Notes And Warrants [Member] | Private Placement [Member] | ||||||||||||
Conversion price (in dollars per share) | $ / shares | $ 0.25 | |||||||||||
Principal amount | $ 64,706 | |||||||||||
Proceeds from notes payable | 55,000 | |||||||||||
Debt issue discount | $ 9,706 | |||||||||||
Warrant exercise price (in dollars per share) | $ / shares | $ 0.60 | |||||||||||
Number of shares issued | shares | 129,412 | |||||||||||
Warrant term | 2 years | |||||||||||
Series A-3 OID Convertible Notes And Warrants [Member] | PrivatePlacement1Member | ||||||||||||
Conversion price (in dollars per share) | $ / shares | $ 0.20 | $ 0.20 | ||||||||||
Additonal interest expenses | $ 35,109 | |||||||||||
Number of shares issued upon conversion | shares | 798,825 | |||||||||||
Series B-1 OID Convertible Notes And Warrants [Member] | ||||||||||||
Interest rate | 0.00% | |||||||||||
Conversion price (in dollars per share) | $ / shares | $ 0.23 | $ 0.23 | ||||||||||
Principal amount | $ 80,000 | |||||||||||
Number of shares available for conversion | 347,826 | |||||||||||
Series B-1 OID Convertible Notes And Warrants [Member] | Private Placement [Member] | ||||||||||||
Conversion price (in dollars per share) | $ / shares | $ 0.35 | |||||||||||
Principal amount | $ 80,000 | |||||||||||
Proceeds from notes payable | 65,000 | |||||||||||
Debt issue discount | $ 15,000 | |||||||||||
Number of anti diluted securities | shares | 20,000,000 | |||||||||||
Series B-1 OID Convertible Notes And Warrants [Member] | Warrant [Member] | Private Placement [Member] | ||||||||||||
Warrant exercise price (in dollars per share) | $ / shares | $ 0.33 | $ 0.45 | ||||||||||
Number of shares issued | shares | 185,714 | |||||||||||
Warrant term | 4 years | |||||||||||
Series B-2 OID Convertible Notes And Warrants [Member] | ||||||||||||
Interest rate | 0.00% | |||||||||||
Principal amount | $ 2,537,647 | |||||||||||
Series B-2 OID Convertible Notes And Warrants [Member] | Private Placement [Member] | ||||||||||||
Conversion price (in dollars per share) | $ / shares | $ 0.20 | $ 0.25 | $ 0.25 | $ 0.20 | $ 0.20 | |||||||
Principal amount | $ 705,882 | $ 705,882 | $ 705,882 | $ 302,353 | $ 358,824 | |||||||
Proceeds from notes payable | 600,000 | 400,000 | 600,000 | 257,000 | 305,000 | |||||||
Debt issue discount | $ 105,882 | $ 105,882 | $ 105,882 | $ 45,353 | $ 53,824 | |||||||
Debt original conversion | $ 5,882 | |||||||||||
Number of shares issued upon conversion | shares | 29,410 | |||||||||||
Series B-2 OID Convertible Notes And Warrants [Member] | Warrant [Member] | Private Placement [Member] | ||||||||||||
Warrant exercise price (in dollars per share) | $ / shares | $ 0.60 | $ 0.60 | $ 0.60 | $ 0.60 | $ 0.60 | |||||||
Number of shares issued | shares | 3,529,412 | 1,176,470 | 1,411,764 | 755,882 | 897,060 | |||||||
Warrant term | 1 year | 1 year | 1 year | 1 year | 1 year |
SHAREHOLDERS' DEFICIENCY (Detai
SHAREHOLDERS' DEFICIENCY (Details) | 3 Months Ended | |
Mar. 31, 2015 | ||
Stockholders' Equity Note [Abstract] | ||
Dividend yield | 0.00% | [1] |
Expected volatility | 164.50% | [2] |
Risk-free interest rates | 1.61% | [3] |
Expected lives | 5 years | [2] |
[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. |
SHAREHOLDERS' DEFICIENCY (Det48
SHAREHOLDERS' DEFICIENCY (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Recognized share based compensation expense | $ 1,900 | $ 2,125 |
Preferred Stock [Member] | ||
Divdend rate | 5.00% | |
Preferential non-cumulative dividends, payable quarterly (in dollars per share) | $ 1.25 | |
Preferred stock redemption price (in dollars per share) | 25 | |
Preferred stock liquidation preference price (in dollars per share) | $ 25 | |
Series C Convertible Preferred Stock [Member] | ||
Divdend rate | 5.00% | |
Employees' Directors' And Consultants Stock Option Plan [Member] | Employees [Member] | ||
Recognized share based compensation expense | $ 7,180 | $ 8,106 |
Employees' Directors' And Consultants Stock Option Plan [Member] | Non Employee Directors [Member] | ||
Options granted | 50,000 | |
Recognized share based compensation expense | $ 7,963 |
SHAREHOLDERS' DEFICIENCY (Det49
SHAREHOLDERS' DEFICIENCY (Details Narrative 1) - USD ($) | Aug. 14, 2014 | Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | Oct. 15, 2015 | Dec. 02, 2010 |
Common stock, par value | $ .01 | $ .01 | |||||
Description of reverse stock split | One-for-ten reverse stock split. | ||||||
Number of shares issued upon services | 500,000 | ||||||
Value of shares issued upon services | $ 80,000 | ||||||
Stock issuance amortized expense | 80,000 | ||||||
Common stock, authorized revised | 100,000,000 | ||||||
Common stock, authorized | 100,000,000 | 100,000,000 | 40,000,000 | ||||
Share based compensation expense | $ 7,180 | $ 16,069 | |||||
Non-employee directors [Member] | Director Compensation Plan [Member] | |||||||
Number of shares issued upon new issue | 10,000 | 12,500 | |||||
Share based compensation expense | $ 1,900 | $ 2,125 | |||||
Advisory Firm [Member] | |||||||
Number of shares issued upon services | 500,000 | ||||||
Value of shares issued upon services | $ 80,000 | ||||||
Stock issuance amortized expense | 80,000 | ||||||
Share based compensation expense | $ 20,000 | ||||||
Advisory Firm (Consulting Services) 1 [Member] | |||||||
Number of shares issued upon services | 120,000 | ||||||
Stock issuance amortized expense | $ 27,600 | $ 10,800 | |||||
Tranche Two [Member] | Advisory Firm (Consulting Services) 1 [Member] | |||||||
Number of shares issued upon services | 60,000 | 60,000 | |||||
Private Placement [Member] | |||||||
Value of shares issued upon new issue | $ 75,000 | ||||||
Private Placement [Member] | Tranche One [Member] | |||||||
Value of shares issued upon new issue | $ 500,000 | ||||||
Series C Convertible Preferred Stock [Member] | |||||||
Description of voting rights | Equivalent to 1,000 votes per $1,000 par value. | ||||||
Cumulative dividend rate | 5.00% | ||||||
Dividends declared | $ 4,674 | ||||||
Dividend paid | 107,874 | ||||||
Derivative liability | $ 66,177 | $ 66,177 | |||||
Preferred stock, outstanding | 375 | 375 | |||||
Common Stock | CTI Board of Directors [Member] | |||||||
Common stock, par value | $ 0.01 | ||||||
Ownership of outstanding shares of common stock | 20.00% | ||||||
Common Stock | Private Placement [Member] | |||||||
Number of shares issued upon new issue | 375,000 | ||||||
Share price (in dollars per share) | $ 0.20 | ||||||
Common Stock | Private Placement [Member] | Tranche One [Member] | |||||||
Number of shares issued upon new issue | 2,500,000 | ||||||
Share price (in dollars per share) | $ 0.20 | ||||||
Warrant [Member] | |||||||
Number of shares issued upon services | 333,333 | ||||||
Value of shares issued upon services | $ 75,000 | ||||||
Warrant [Member] | Advisory Firm [Member] | |||||||
Warrant term | 5 years | ||||||
Fair value of warrants | $ 75,000 | ||||||
Number of shares issued upon services | 333,333 | ||||||
Warrant [Member] | Private Placement [Member] | |||||||
Number of shares issued upon new issue | 187,500 | ||||||
Exercise price (in dollars per share) | $ 0.60 | ||||||
Warrant term | 3 years | ||||||
Warrant [Member] | Private Placement [Member] | Tranche One [Member] | |||||||
Number of shares issued upon new issue | 1,250,000 | ||||||
Exercise price (in dollars per share) | $ 0.60 | ||||||
Warrant term | 3 years | ||||||
Series C Convertible Preferred Stock [Member] | |||||||
Preferred stock, outstanding | 375 | 375 | |||||
Series C Convertible Preferred Stock [Member] | Accounts Payable and Accrued Liabilities [Member] | |||||||
Dividend payable | $ 89,127 |
CONTRACTUAL OBLIGATIONS AND C50
CONTRACTUAL OBLIGATIONS AND CONTINGENCIES (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2016 | 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 Five [Member] | ||
Loss Contingencies [Line Items] | ||
Funding repayment obligation | $ 199,334 | |
Grant Funding Received In Nineteen Ninety Four [Member] | ||
Loss Contingencies [Line Items] | ||
Funding repayment obligation | $ 165,788 | |
Supported Products [Member] | Vector Vision, Inc. [Member] | ||
Loss Contingencies [Line Items] | ||
Percentage of revenues obligation | 1.50% | |
Licensing Supported Products [Member] | Vector Vision, Inc. [Member] | ||
Loss Contingencies [Line Items] | ||
Percentage of revenues obligation | 15.00% |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrtive) - USD ($) | Oct. 15, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2010 |
Related Party Transaction [Line Items] | ||||
Director's service charges per day | $ 1,000 | |||
Notes payable to related parties | 2,598,980 | |||
Sales revenue | 56,250 | $ 7,950 | ||
Mr.Stephen J.D'Amato, M.D (Calmar Pain Relief, LLC.) [Member] | ||||
Related Party Transaction [Line Items] | ||||
Sales revenue | $ 550,000 | |||
Robert T. Conway [Member] | ||||
Related Party Transaction [Line Items] | ||||
Officers compensation | $ 7,500 | |||
Exercise price of warrants | $ 0.60 | |||
Warrants term | 5 years | |||
Issued warrants to purchase shares of common stock | 167,000 | |||
Aggregate estimate fair value of warrant | $ 33,734 | |||
Board of Directors Chairman [Member] | ||||
Related Party Transaction [Line Items] | ||||
Notes payable to related parties | 2,498,980 | |||
Director [Member] | ||||
Related Party Transaction [Line Items] | ||||
Notes payable to related parties | $ 100,000 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | 1 Months Ended | ||
Apr. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | |
Subsequent Event [Line Items] | |||
Common stock issued | 28,525,888 | 28,515,888 | |
Principal amount | $ 5,273,392 | ||
Subsequent Event [Member] | |||
Subsequent Event [Line Items] | |||
Convertible promissory notes conversion price | $ 0.20 | ||
Issued warrants to purchase shares of common stock | 3,000,000 | ||
Exercise price of warrants | $ 0.60 | ||
Warrants term | 1 year | ||
Principal amount | $ 705,882 | ||
Proceeds from notes payable | 600,000 | ||
Original issue discount | $ 105,882 | ||
Subsequent Event [Member] | President and CEO [Member] | |||
Subsequent Event [Line Items] | |||
Common stock issued | 261,943 | ||
Percentage of stock vested | 100.00% |