Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Jul. 17, 2017 | Jun. 30, 2017 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | CALMARE THERAPEUTICS Inc | ||
Entity Central Index Key | 102,198 | ||
Document Type | 10-K | ||
Trading Symbol | CTTC | ||
Document Period End Date | Dec. 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 Public Float | $ 3,040,702 | ||
Entity Common Stock, Shares Outstanding | 30,376,639 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,016 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Current Assets: | ||
Cash | $ 12,551 | $ 49,801 |
Receivables, net of allowance of $317,659 at December 31, 2016 and 2015 | 3,366 | 33,081 |
Inventory | 3,838,220 | 4,028,220 |
Prepaid expenses and other current assets | 7,878 | 58,034 |
Total current assets | 3,862,015 | 4,169,136 |
Security Deposits | 15,000 | 15,000 |
Property and equipment, net | 7,199 | 23,726 |
TOTAL ASSETS | 3,884,214 | 4,207,862 |
Current Liabilities: | ||
Accounts payable | 2,086,825 | 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 | 3,442,308 | 2,248,024 |
Deferred revenue | 6,400 | 6,400 |
Notes payable | 5,541,850 | 3,785,063 |
Series C convertible preferred stock liability | 375,000 | 375,000 |
Series C convertible preferred stock derivative liability | 66,177 | 66,177 |
Total current liabilities | 17,696,260 | 14,553,746 |
Long term notes payable | 67,919 | |
Shareholders' deficit: | ||
Common stock, $.01 par value, 100,000,000 shares authorized at December 31, 2016 and at December 31, 2015, 28,966,639 shares issued and outstanding at December 31, 2016 and 28,515,888 shares issued and outstanding at December 31, 2015 | 289,666 | 285,158 |
Capital in excess of par value | 49,037,296 | 48,611,413 |
Accumulated deficit | (63,199,683) | (59,371,049) |
Total shareholders' deficit | (13,812,046) | (10,413,803) |
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT | 3,884,214 | 4,207,862 |
Preferred Stock [Member] | ||
Shareholders' deficit: | ||
Preferred stock | 60,675 | 60,675 |
Series B Preferred Stock [Member] | ||
Shareholders' deficit: | ||
Preferred stock | ||
Series C Preferred Stock [Member] | ||
Shareholders' deficit: | ||
Preferred stock |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Allowance for doubtful accounts | $ 317,659 | $ 317,659 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 28,966,639 | 28,515,888 |
Common stock, shares outstanding (in shares) | 28,966,639 | 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 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Revenue | ||
Product sales | $ 1,105,050 | $ 891,472 |
Cost of product sales | 317,286 | 279,687 |
Gross profit from product sales | 787,764 | 611,785 |
Other Revenue | ||
Retained royalties | 16,712 | 34,748 |
Other income | 47,114 | 69,304 |
Total other revenue | 63,826 | 104,052 |
Operating expenses | ||
Selling expenses | 157,298 | 250,995 |
Personnel and consulting expenses | 2,106,972 | 1,700,166 |
General and administrative expenses | 981,747 | 1,463,396 |
Total operating expenses | 3,246,017 | 3,414,557 |
Operating loss | (2,394,427) | (2,698,720) |
Other expense (income) | ||
Interest expense | 1,434,207 | 976,774 |
Loss on conversion of notes | 2,588 | |
Total other expense | 1,434,207 | 979,362 |
Loss before income taxes | (3,828,634) | (3,678,082) |
Provision (benefit) for income taxes | ||
Net loss | $ (3,828,634) | $ (3,678,082) |
Basic and diluted loss per share | $ (0.13) | $ (0.13) |
Basic and diluted weighted average number of common shares outstanding: | 28,715,010 | 27,885,238 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Deficit - USD ($) | Preferred Stock [Member] | Common Stock [Member] | Capital in excess of par value | Accumulated deficit | Total |
Balance at Dec. 31, 2014 | $ 60,675 | $ 259,089 | $ 47,634,857 | $ (55,692,697) | $ (7,738,346) |
Balance, shares at Dec. 31, 2014 | 2,427 | 25,908,978 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (3,678,082) | (3,678,082) | |||
Common shares and warrants issued for consulting services | $ 7,400 | 206,400 | 213,800 | ||
Common shares and warrants issued for consulting services (in shares) | 740,000 | ||||
Common stock issued to directors | $ 125 | 2,000 | 2,125 | ||
Common stock issued to directors (in shares) | 12,500 | ||||
Stock option compensation expense | 61,186 | 61,186 | |||
Common stock issued upon conversion of notes | $ 294 | 5,588 | 5,882 | ||
Common stock issued upon conversion of notes (in shares) | 29,410 | ||||
Private offering of common stock and warrants | $ 18,250 | 346,750 | 365,000 | ||
Private offering of common stock and warrants (in shares) | 1,825,000 | ||||
Warrant and beneficial conversion feature on notes payable | 354,632 | 354,632 | |||
Balance at Dec. 31, 2015 | $ 60,675 | $ 285,158 | 48,611,413 | (59,371,049) | (10,413,803) |
Balance, (in shares) at Dec. 31, 2015 | 2,427 | 28,515,888 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (3,828,634) | (3,828,634) | |||
Common shares and warrants issued for consulting services | |||||
Common stock issued to directors | $ 100 | 1,800 | 1,900 | ||
Common stock issued to directors (in shares) | 10,000 | ||||
Stock option compensation expense | 15,440 | 15,440 | |||
Stock grants to employees | $ 4,408 | 72,361 | 76,769 | ||
Stock grants to employees (in shares) | 440,751 | ||||
Warrant and beneficial conversion feature on notes payable | 336,282 | 336,282 | |||
Balance at Dec. 31, 2016 | $ 60,675 | $ 289,666 | $ 49,037,296 | $ (63,199,683) | $ (13,812,046) |
Balance, (in shares) at Dec. 31, 2016 | 2,427 | 28,966,639 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities: | ||
Net loss | $ (3,828,634) | $ (3,678,082) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 16,527 | 16,475 |
Stock option compensation expense | 15,440 | 61,186 |
Share-based compensation - common stock | 78,669 | 2,125 |
Common stock and warrants to consultants | 213,800 | |
Bad debt expense | 73 | 41 |
Debt discount amortization | 825,150 | 402,918 |
Loss on conversion of notes | 2,588 | |
Changes in assets and liabilities: | ||
Receivables | 29,642 | (30,803) |
Prepaid expenses and other current assets | 50,156 | 195,068 |
Inventory | 190,000 | 90,000 |
Accounts payable, accrued expenses and other liabilities | 1,385,727 | 1,207,086 |
Deferred revenue | (13,286) | |
Net cash used in operating activities | (1,237,250) | (1,530,883) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (4,561) | |
Net cash used in investing activities | (4,561) | |
Cash flows from financing activities: | ||
Proceeds from notes payable | 1,200,000 | 1,257,000 |
Repayment of note and warrant settlement | (42,500) | |
Proceeds from common stock and warrants | 365,000 | |
Net cash provided by financing activities | 1,200,000 | 1,579,500 |
Net increase (decrease) in cash | (37,250) | 44,056 |
Cash at beginning of year | 49,801 | 5,745 |
Cash at end of year | 12,551 | 49,801 |
Supplemental Cash Flow Information | ||
Cash Paid for interest | $ 10,000 |
Consolidated Statements of Cas7
Consolidated Statements of Cash Flows (Parenthetical) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | |
Advisory Firm [Member] | ||||
Common stock issued for consulting services | 620,000 | |||
Common stock issued for consulting services, value | $ 111,200 | |||
Advisory Firm (Consulting Services) [Member] | ||||
Common stock issued for consulting services | 120,000 | |||
Consulting expenses | $ 27,600 | $ 10,800 | $ 27,600 | |
Advisory Firm (Consulting Services) [Member] | Tranche Two [Member] | ||||
Common stock issued for consulting services | 60,000 | 60,000 | ||
Private Placement [Member] | Series B-2 OID Convertible Notes And Warrants [Member] | ||||
Number of shares issued upon conversion | 29,410 | |||
Physical Audit [Member] | ||||
Adjustment of inventory | $ 70,000 | |||
Capital In excess of par value [Member] | ||||
Allocation of proceeds from convertible note for the fair value of warrants and beneficial conversion feature to additional paid-in capital | $ 336,282 | $ 354,632 | ||
Warrant [Member] | ||||
Common stock issued for consulting services | 503,333 | |||
Common stock issued for consulting services, value | $ 75,000 |
BUSINESS AND BASIS OF PRESENTAT
BUSINESS AND BASIS OF PRESENTATION | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BUSINESS AND BASIS OF PRESENTATION | 1. Business AND BASIS OF PRESENTATION Calmare Therapeutics Incorporated (the “Company”) was incorporated in Delaware in 1971 as Competitive Technologies, Inc., succeeding an Illinois corporation incorporated in 1968. Effective August 20, 2014, the Company changed its name from Competitive Technologies, Inc. to Calmare Therapeutics Incorporated. The Company and its majority-owned (56.1%) subsidiary, Vector Vision, Inc., (collectively, “we,” “our,” or “us”), is a medical device company developing and commercializing innovative products and technologies for chronic neuropathic pain. The Company’s flagship medical device, the Calmare ® In 2007, the Company entered into an agreement (the “2007 Agreement”) with Giuseppe Marineo (“Marineo”) and Delta Research and Development (“Delta”), Mr. Marineo’s wholly-owned company, collectively (the “Parties”), that secured the exclusive, worldwide sales and distribution rights to the science behind Calmare Pain Mitigation Therapy™ (the “Technology”). Today, this science is effectuated by the Company’s flagship medical device – the Calmare Device. Sales of our Calmare Device continue to be the major source of revenue for the Company. In 2011, the Company’s 2007 agreement was amended (the “2011 Amendment”) to extend the exclusivity rights afforded to the Company by the 2007 Agreement through March 31, 2016. In July 2012, the Company and the Parties worked on a five-year extension to the 2011 Agreement (the “2012 Amendment”). However, the Company believes that the 2012 Amendment is neither valid nor enforceable as it was never duly signed or authorized and subsequently deemed null and void. Therefore, the Company’s rights are determined by the 2011 Amendment which provides the Company with the exclusive rights to manufacture and sell the Calmare Device worldwide using the Technology. The Company is negotiating an extension to the 2007 Agreement. (see The Company’s Distribution Rights, Marineo and Delta Since then the Company has entered into multiple sales agreements for the Calmare device. Sales to physicians and medical practices and to others with whom the Company had existing sales agreements continue to generate revenue for the Company. In June 15, 2010, the Company became a government contractor and was granted its first General Services Administration (“GSA”) contract (V797P-4300B) from the U.S. Veterans Administration (the “VA”) for Calmare Devices. The Company has a device manufacturing agreement, (the “Manufacturing Agreement”), with GEOMC Co., Ltd. (“GEOMC”, formerly Daeyang E & C Co., Ltd.) of Seoul, South Korea, to manufacture the Calmare Device, as per the specification delineated in the Company’s Food and Drug Administration’s 510k clearance (#K081255). As per this “clearance,” the Company has the sole, irrevocable right to sell the Calmare Device in the United States and global reciprocity countries. The Manufacturing Agreement is in effect for a period of ten (10) years through September 2017, subject to terms and conditions. The Calmare Device currently has a 510(k) clearance from the U.S. Food and Drug Administration (“FDA”). Full commercial introduction in the United States will require an “approval” from the FDA. The FDA’s approval process is rigorous, time consuming and costly. We may not be successful in obtaining FDA approval for the Calmare Device. 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. The Company has incurred operating losses since fiscal 2006 and has a working capital and shareholders’ deficiency at December 31, 2016. We continue to seek revenue from expansion of sales of the Calmare devices into new markets. At current reduced spending levels, the Company may not have sufficient cash flow to fund operations through 2018. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include adjustments to reflect the possible future effect of the recoverability and classification of assets or amounts and classifications of liabilities that may result from the outcome of this uncertainty. The Company’s continuation as a going concern is dependent upon its developing other recurring revenue streams sufficient to cover operating costs. If necessary, we will meet anticipated operating cash requirements by further reducing costs, issuing debt or equity, and/or pursuing sales of certain assets and technologies while we continue to pursue increased sales of our Calmare devices. The Company does not have any significant capital requirements in the budget going forward. There can be no assurance that the Company will be successful in such efforts. To return to and sustain profitability, we must increase our revenue through sales of our Calmare Devices and other products and services related to the Devices. Failure to develop a recurring revenue stream sufficient to cover operating expenses would negatively affect the Company’s financial position. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires that we make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and disclosure of contingent assets and liabilities. Actual results could differ significantly from our estimates. Revenue Recognition We earn revenue in two ways: retained royalties from licensing our clients’ and our own technologies to our customer licensees, and from sales of finished products, including the Calmare Device. We record revenue when the terms of the sales arrangement are accepted by all parties including a fee that is fixed and determinable, delivery has occurred and our customer has taken title, and collectability is reasonably assured, net of sales tax We are the primary obligor, responsible for delivering devices as well as for training our customers in the proper use of the device. We deal directly with customers, setting pricing and providing training; work directly with the inventor of the technology to develop specifications and any changes thereto and to select and contract with manufacturing partners; and retain significant credit risk for amounts billed to customers. Therefore, all product sales are recorded following a gross revenue methodology. The Company continues to receive retained royalties as a result of the licensing of patents derived from the Company’s prior business model. We determine the royalty revenue for a given period from the cash we receive in that period. These revenues are declining as the Company no longer actively licenses patents and existing agreements are reaching the end of their term. Unless otherwise specified, we record all other revenue, as earned. Concentration of Revenues Total revenue consists of revenue from product sales, retained royalties, and other income. During the year ended December 31, 2016, we derived approximately $1,129,000 or 96.6% of total revenue from sales and rentals of our Calmare devices. An additional 2% of revenue derived indirectly from those sales through sales of supplies and training. The remaining 1.4% of total revenue is derived from royalty payments. During the year ended December 31, 2015, we derived approximately $917,500 or 92.2% of total revenue from sales and rentals of our Calmare devices. An additional 4.3% of revenue derived indirectly from those sales through sales of supplies and training. The remaining 3.5% of total revenue is derived from royalty payments. Expenses Cost of product sales includes contractual payments to inventor and manufacturer relating to our Calmare Device. Expenses associated with shipping Devices are also included in cost of product sales. Selling expenses include commission expenses and other direct sales costs related to sales of Calmare Devices. Personnel and consulting expenses include salaries and benefits for employees plus consulting expenses related to technologies and specific revenue initiatives, and other direct costs. General and administrative expenses include directors’ fees and expenses, public company related expenses, professional services, including financing, marketing, audit and legal services, rent and other general business and operating expenses. Fair Value of Financial Instruments The Company believes the carrying amounts of cash, accounts receivable, deferred revenue, preferred stock liability and notes payable approximate fair value due to their short-term maturity. Inventory Inventory consists of finished product of our Calmare Device. Inventory is stated at lower of cost (first in, first out) and market. Property and Equipment Property and equipment are carried at cost net of accumulated depreciation. Expenditures for normal maintenance and repair are charged to expense as incurred. The costs of depreciable assets are charged to operations on a straight-line basis over their estimated useful lives, three to five years for equipment, or the terms of the related lease for leasehold improvements. The cost and related accumulated depreciation or amortization of property and equipment are removed from the accounts upon retirement or other disposition, and any resulting gain or loss is reflected in earnings. Impairment of Long-lived Assets We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. If the estimated fair value is less than the carrying amount of the asset, we record an impairment loss. If a quoted market price is available for the asset or a similar asset, we use it to determine estimated fair value. We re-evaluate the remaining useful life of the asset and adjust the useful life accordingly. There were no impairment indicators identified during the years ended December 31, 2016 and 2015. Income Taxes Income taxes are accounted for under an asset and a liability approach that requires recognition of deferred income tax assets and liabilities for the expected future consequences of events that have been recognized in the Company’s consolidated financial statements and income tax returns. The Company provides a valuation allowance for deferred income tax assets when it is considered more likely than not that all or a portion of such deferred income tax assets will not be realized. Net Income (Loss) Per Share We calculate basic net income (loss) per share based on the weighted average number of common shares outstanding during the period without giving any effect to potentially dilutive securities. Net income (loss) per share, assuming dilution, is calculated giving effect to all potentially dilutive securities outstanding during the period. Share-Based Compensation The Company accounts for its share-based compensation in accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) 718 – “Compensation – Stock Compensation.” Accordingly, the Company recognizes compensation expense equal to the fair value of the stock awards at the time of the grant over the requisite service period. Our accounting for share-based compensation has resulted in our recognizing non-cash compensation expense related to stock options granted to employees, which is included in personnel and consulting expenses, and stock options granted to our directors, which is included in general and administrative expenses. Recent Accounting Pronouncements In August 2014, the FASB issued Accounting Standards Update (“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 August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers Deferral of the Effective Date. Revenue from Contracts with Customers 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 In May 2016, the FASB issued ASU No. 2016-12, Narrow-Scope Improvements and Practical Expedients Revenue From Contracts With Customers. In May 2017, the FASB issued ASU No. 2017-09, Compensation – Stock Compensation, Scope of Modification Accounting, |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 3. INCOME TAXES In current and prior years, we generated significant federal and state income and alternative minimum tax losses, and these net operating losses (“NOLs”) were carried forward for income tax purposes to be used against future taxable income. A reconciliation of our effective income tax rate compared to the U.S. federal statutory rate is as follows: Year ended Year ended Provision (benefit) at U.S. federal statutory rate (34.0 )% (34.0 )% State provision (benefit), net of U.S. federal tax (4.9 ) (4.9 ) Permanent differences 0.2 0.1 Other items 0.2 1.9 Deferred tax valuation allowance 38.5 36.9 Effective income tax rate 0.0 % 0.0 % Net deferred tax assets consist of the following: December 31, 2016 December 31, 2015 Net federal and state operating loss carryforwards $ 20,072,124 $ 18,513,698 Impairment of investments 531,470 531,470 Other, net 798,494 795,327 Deferred tax assets 21,402,088 19,840,495 Valuation allowance (21,402,088 ) (19,840,495 ) Net deferred tax assets $ — $ — At December 31, 2016, we had aggregate federal net operating loss carryforwards of approximately $50,180,000 which expire at various times from 2017 through 2036. A majority of our federal NOLs can be used to reduce taxable income used in calculating our alternative minimum tax liability. We also have state net operating loss carryforwards of approximately $48,618,000 that expire at various times through 2036. Approximately $4,308,000 of our NOL carryforward remaining at December 31, 2016 was derived from income tax deductions related to the exercise of stock options. The tax effect of these deductions will be credited against capital in excess of par value at the time they are utilized for book purposes, and not credited to income. We will never receive a benefit for these NOLs in our statement of operations. Changes in the valuation allowance were as follows: Year ended Year ended Balance, beginning of year $ 19,840,495 $ 18,210,959 Change in temporary differences 3,167 28,061 Change in net operating and capital losses 1,558,426 1,601,476 Balance, end of year $ 21,402,088 $ 19,840,495 Our ability to derive future tax benefits from the net deferred tax assets is uncertain and therefore we continue to provide a full valuation allowance against the assets, reducing the carrying value to zero. We will reverse the valuation allowance if future financial results are sufficient to support a carrying value for the deferred tax assets. At December 31, 2016 and December 31, 2015, we had no uncertain tax positions. We include interest and penalties on the underpayment of income taxes in income tax expense. We file income tax returns in the United States and Connecticut. Our open tax years for review are fiscal years ended December 31, 2013 through year ended December 31, 2015. The Company’s returns filed with Connecticut are subject to audit as determined by the statute of limitations. |
NET LOSS PER COMMON SHARE
NET LOSS PER COMMON SHARE | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
NET LOSS PER COMMON SHARE | 4. NET LOSS PER COMMON SHARE The following sets forth the denominator used in the calculations of basic net loss per share and net loss per share assuming dilution: Year ended Year ended Denominator for basic net loss per share, weighted average shares outstanding 28,715,010 27,855,268 Dilutive effect of common stock options N/A N/A Dilutive effect of Series C convertible preferred stock and convertible debt N/A N/A Denominator for net loss per share, assuming dilution 28,715,010 27,855,268 Due to the net loss incurred for the years ended December 31, 2016, and December 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: December 31, December 31, Exercise of common stock options 1,502,500 2,038,500 Exercise of common stock warrants 9,625,042 9,207,486 Conversion of Series C convertible preferred stock 2,320,760 2,450,980 Conversion of convertible debt 18,500,915 11,442,095 Total 31,949,217 25,139,061 |
SHAREHOLDERS' DEFICIENCY
SHAREHOLDERS' DEFICIENCY | 12 Months Ended |
Dec. 31, 2016 | |
Stockholders' Equity Note [Abstract] | |
SHAREHOLDERS' DEFICIENCY | 5. SHAREHOLDERS’ DEFICIENCY Common Stock During 2013, the Company entered into an Equity Purchase Agreement (“EPA”) with Southridge Partners II, L.P. (“Southridge”). Under the terms of the EPA, which was filed with the SEC on February 26, 2013, Southridge will purchase, at the Company’s election, up to $10,000,000 of the Company’s registered common stock (the “Shares”). During the two year term of the EPA, the Company may at any time in its sole discretion deliver a “put notice” to Southridge thereby requiring Southridge to purchase a certain dollar amount of the Shares. Simultaneous with the delivery of such Shares, Southridge shall deliver payment for the Shares. Subject to certain restrictions, the purchase price for the Shares shall be equal to ninety percent of the lowest closing bid price for the Company’s common stock during the ten-day trading period immediately after the Shares specified in the Put Notice are delivered to Southridge. The number of Shares sold to Southridge shall not exceed the number of such shares that, when aggregated with all other shares of common stock of the Company then beneficially owned by Southridge, would result in Southridge owning more than 9.99% of all of the Company’s common stock then outstanding. Additionally, Southridge may not execute any short sales of the Company’s common stock. Under the terms of the EPA, the Company had issued a convertible promissory note in the amount of $65,000 to Southridge which, during 2013 Southridge converted to 260,000 shares of common stock. In addition, during 2013, the Company negotiated a liabilities purchase agreement (“LPA”) with Southridge (see Note 11). Under the terms of the LPA, the Company issued 200,000 shares of its common stock at $0.35, or $70,000, and a convertible note in the amount of $12,000 Southridge as a fee. Additionally, under the terms of the EPA and LPA, the Company issued 250,000 shares of its common stock at $0.35, or $87,500, to Southridge for expenses associated with the EPA and LPA. On August 14, 2014, the shareholders approved an amendment to the Company’s certificate of incorporation to effect up to a one-for-ten reverse stock split (the “Reverse Stock Split”) of the Company’s issued and outstanding common stock. The Board of Directors, in its sole discretion, has discretion to implement the Reverse Stock Split. As of July 17, 2017, the Board of Directors has not implemented the Reverse Stock Split. During 2015, the Company issued 500,000 shares with a fair value of $80,000 to an advisory firm for consulting services. During 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 2014 and remaining 60,000 shares vesting in 2015. The Company recorded consulting expenses of $10,800 in 2014 and $27,600 of consulting expenses in 2015. In each instance, the expense was based on the fair value on the vesting date. During 2015, the Company issued 503,333 stock warrants for consulting services performed and recorded consulting expense of $75,000 for the fair value of the warrants. During 2015, the Company issued 120,000 shares to an advisory firm for consulting services. The Company recorded consulting expenses of $31,200 based on the fair value on the issuance date. During 2015, the Company did private offerings of its common stock and warrants for a total consideration of $365,000. 1,825,000 shares of common stock were issued at a per share price of $0.20. The common stock holders were also issued warrants to purchase 912,500 shares of common stock. The warrants have an exercise price of $0.60 and a 1-year term. The warrants were recorded to additional paid-in-capital. On October 15, 2015 the shareholders approved an increase in the number of authorized shares of common stock from 40 million to 100 million. During 2016, the Company issued 440,751 shares to its President & CEO in lieu of cash bonuses earned from April 1, 2015 through September 30, 2016. The Company recorded a compensation expense of $76,769 related to this transaction in 2016. The Company issued 10,000 and 12,500 shares of its common stock to non-employee directors under its Director Compensation Plan in 2016 and 2015, respectively. The Company recorded expense of $1,900 and $2,125 for director stock compensation expense in 2016 and 2015, respectively. Preferred Stock Holders of 5% preferred stock are entitled to receive, if, as, and when declared by the Board of Directors, out of funds legally available therefore, preferential non-cumulative dividends at the rate of $1.25 per share per annum, payable quarterly, before any dividends may be declared or paid upon or other distribution made in respect of any share of common stock. The 5% preferred stock is redeemable, in whole at any time or in part from time to time, on 30 days’ notice, at the option of the Company, at a redemption price of $25. In the event of voluntary or involuntary liquidation, the holders of preferred stock are entitled to $25 per share in cash before any distribution of assets can be made to holders of common stock. Each share of 5% preferred stock is entitled to one vote. Holders of 5% preferred stock have no preemptive or conversion rights. The preferred stock is not registered to be publicly traded. At its December 2, 2010 meeting, the Company’s Board of Directors declared a dividend distribution of one right (each, a “Right”) for each outstanding share of common stock, par value $0.01, of the Company (the “Common Shares”). The dividend was payable to holders of record as of the close of business on December 2, 2010 (the “Record Date”). Issuance of the dividend may be triggered by an investor purchasing more than 20% of the outstanding shares of common stock. On December 15, 2010, the Company issued a $400,000 promissory note. The promissory note was scheduled to mature on December 31, 2012 with an annual interest rate of 5%. On December 15, 2010, the Company’s Board of Directors authorized the issuance of 750 shares of Series C Convertible Preferred Stock ($1,000 par value) with a 5% cumulative dividend to William R. Waters, Ltd. of Canada. On December 30, 2010, 750 shares were issued. The Company converted the above $400,000 promissory note into 400 shares and received cash of $350,000 for the remaining 350 shares. Effective June 16, 2011, William R. Waters, Ltd. of Canada converted one half of its Series C Convertible Preferred Stock, or 375 shares, to 315,126 shares of common stock. The rights of the Series C Convertible Preferred Stock are as follows: a) Dividend rights b) Voting rights c) Liquidation rights d) Conversion rights On the date of conversion of the 375 shares of Series C Convertible Preferred Stock the Company calculated the value of the derivative liability to be $81,933. Upon conversion, the $81,933 derivative liability was reclassified to equity. The Company recorded a convertible preferred stock derivative liability of $66,177 associated with the 375 shares of Series C Convertible Preferred Stock outstanding at both December 31, 2016 and December 31, 2015. The Company has classified the Series C Convertible Preferred Stock as a liability at December 31, 2016 and at December 31, 2015 because the variable conversion feature may require the Company to settle the conversion in a variable number of its common shares. |
RECEIVABLES
RECEIVABLES | 12 Months Ended |
Dec. 31, 2016 | |
Receivables [Abstract] | |
RECEIVABLES | 6. RECEIVABLES Receivables consist of the following: December 31, 2016 December 31, Calmare device sales receivable, net of allowance of $210,284 and $210,284 at December 31, 2016 and 2015, respectively $ — $ 31,827 Royalties, net of allowance of $101,154 at December 31, 2016 and 2015 — — Other, net of allowance of $6,221 and $6,221 at December 31, 2016 and 2015, respectively 3,366 1,254 Total $ 3,366 $ 33,081 |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | 7. PROPERTY AND EQUIPMENT, NET Property and equipment, net, consist of the following: December 31, 2016 December 31, Property and equipment, gross $ 220,051 $ 220,051 Accumulated depreciation and amortization (212,852 ) (196,325 ) Property and equipment, net $ 7,199 $ 23,726 Depreciation and amortization expense was $16,527 and $16,475 for the years ended December 31, 2016 and 2015, respectively. |
AVAILABLE-FOR-SALE AND EQUITY S
AVAILABLE-FOR-SALE AND EQUITY SECURITIES | 12 Months Ended |
Dec. 31, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |
AVAILABLE-FOR-SALE AND EQUITY SECURITIES | 8. AVAILABLE-FOR-SALE AND EQUITY SECURITIES December 31, 2016 December 31, Number of Type Security Innovation, Inc. — — 223,317 Common stock Xion Pharmaceutical Corporation — — 0 Common stock In prior years, we acquired 3,129,509 shares of NTRU Cryptosystems, Inc. (“NTRU”) common stock, and certain preferred stock that later was redeemed, in exchange for cash and a reduction in our future royalty rate on sales of NTRU’s products. NTRU was a privately held company that sold encryption software for security purposes, principally in wireless markets. There was no public market for NTRU shares. In 2003, we wrote down the value of NTRU to $0, but we continued to own the shares. On July 22, 2009, all NTRU assets were acquired by Security Innovation, an independent provider of secure software located in Wilmington, MA. We received 223,317 shares of stock in the privately held Security Innovation for our shares of NTRU. In September 2009 we announced the formation of a joint venture with Xion Corporation for the commercialization of our patented melanocortin analogues for treating sexual dysfunction and obesity. We received 60 shares of privately held Xion Pharmaceutical Corporation common stock in June 2010. The Company currently owns 30% of the outstanding stock of Xion Pharmaceutical Corporation. On March 23, 2015, the Company received notice that Xion Pharmaceutical Corporation was to be dissolved. The dissolution was effective October 14, 2015. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | 9. FAIR VALUE MEASUREMENTS The Company measures fair value in accordance with Topic 820 of the FASB ASC, Fair Value Measurement (“ASC 820”), which provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under ASC 820 are described as follows: Level 1 - Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Company has the ability to access. Level 2 - Inputs to the valuation methodology include: ● Quoted prices for similar assets or liabilities in active markets; ● Quoted prices for identical or similar assets or liabilities in inactive markets; ● Inputs other than quoted prices that are observable for the asset or liability; ● Inputs that are derived principally from or corroborated by observable market data by correlation or other means. If the asset or liability has a specified (contractual) term, the Level 2 input must be observable for substantially the full term of the asset or liability. Level 3 - Inputs to the valuation methodology are unobservable and significant to the fair value measurement. The asset’s or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs. The Company values its derivative liability associated with the variable conversion feature on its Series C Convertible Preferred Stock (Note 5) based on the market price of its common stock. For each reporting period the Company calculates the amount of potential common stock that the Series C Preferred Stock could convert into based on the conversion formula (incorporating market value of our common stock) and multiplies those converted shares by the market price of its common stock on that reporting date. The total converted value is subtracted by the consideration paid to determine the fair value of the derivative liability. The Company classified the derivative liability of approximately $66,000 at both December 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. |
PREPAID EXPENSES AND OTHER CURR
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 12 Months Ended |
Dec. 31, 2016 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 10. PREPAID EXPENSES AND OTHER CURRENT ASSETS Prepaid expenses and other current assets consist of the following: December 31, 2016 December 31, Prepaid insurance $ 2,151 $ 47,931 Other 5,727 10,103 Prepaid expenses and other current assets $ 7,878 $ 58,034 |
LIABILITIES ASSIGNED TO LIABILI
LIABILITIES ASSIGNED TO LIABILITY PURCHASE AGREEMENT | 12 Months Ended |
Dec. 31, 2016 | |
Liabilities Assigned To Liability Purchase Agreement [Abstract] | |
LIABILITIES ASSIGNED TO LIABILITY PURCHASE AGREEMENT | 11. LIABILITIES ASSIGNED TO LIABILITY PURCHASE AGREEMENT During the third quarter of 2013, the Company negotiated a LPA with Southridge. The LPA takes advantage of a provision in the Securities Act of 1933, Section 3(a)(10), that allows the exchange of claims, securities, or property for stock when the arrangement is approved for fairness by a court proceeding. The process, approved by the court in August 2013, has the potential to eliminate nearly $2.1 million of our financial obligations to existing creditors who agreed to participate and executed claims purchase agreements with Southridge’s affiliate ASC Recap accounting for $2,093,303 of existing payables, accrued expenses and other current liabilities, and notes payable. The process began with the issuance in September 2013 of 1,618,235 shares of the Company’s common stock to ASC Recap. During September and October 2013, ASC Recap sold the Company’s common stock and during the three months ended March 31, 2014 paid creditors approximately $80,000 from the proceeds and retained a service fee of approximately $27,000. During 2014, the Company also made cash payments of $18,000 for accrued expenses previously included in the LPA amount. As of July 17, 2017, no further shares of the Company’s 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. |
ACCRUED EXPENSES AND OTHER LIAB
ACCRUED EXPENSES AND OTHER LIABILITIES | 12 Months Ended |
Dec. 31, 2016 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES AND OTHER LIABILITIES | 12. ACCRUED EXPENSES AND OTHER LIABILITIES Accrued expenses and other liabilities consist of the following: December 31, 2016 December 31, Royalties payable $ 583,482 $ 487,739 Accrued compensation 386,559 49,769 Commissions payable 79,480 15,900 Accrued interest payable 2,172,124 1,589,256 Other 220,663 105,360 Accrued expenses and other liabilities, net $ 3,442,308 $ 2,248,024 Excluded above is approximately $217,000 of accrued expenses and other liabilities for both December 31, 2016 and December 31, 2015 that fall under the LPA with ASC Recap, and are expected to be repaid using the process as described in Note 11. Because there can be no assurance that the Company will be successful in completing this process, the Company retains ultimate responsibility for these liabilities, until fully paid down. |
NOTES PAYABLE
NOTES PAYABLE | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE | 13. NOTES PAYABLE Notes payable consist of the following: Short term December 31, 2016 December 31, 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-1 OID Convertible Notes and Warrants 77,849 — Series B-2 OID Convertible Notes and Warrants 3,211,648 1,532,710 Short term notes payable, gross 6,027,830 4,271,043 Less LPA amount (485,980 ) (485,980 ) Short term notes payable, net $ 5,541,850 $ 3,785,063 Long term December 31, 2016 December 31, Series B-1 OID Convertible Notes and Warrants $ — $ 67,919 Details of notes payable as of December 31, 2016, are as follows: Short term Carrying Cash Common Maturity 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-1 OID Convertible Notes $ 80,000 $ 77,849 None $0.23 3/2017 Series B-2 OID Convertible Notes and Warrants 3,243,529 3,211,648 None $0.20 – 0.25 8/2015 – 1/2017 Short term notes payable, gross $ 6,059,274 6,027,830 Less LPA amount (485,980 ) Short term notes payable, net $ 5,541,850 (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 $ 1,188,900 2012 1,210,000 2011 100,000 Total $ 2,498,980 These notes have been extended several times and all bear 6.00% simple interest. As of December 31, 2016, there is unpaid interest of $584,000 related to these notes. A conversion feature was added to the Notes when they were extended, which allows for conversion of the eligible principal amounts to common stock at any time after the six month anniversary of the effective date – the date the funds are received – at a rate of $1.05 per share. Additional terms have been added to all Notes to include additional interest of 1% simple interest per month on all amounts outstanding for all Notes if extended beyond their original maturity dates and to provide the lender with a security interest in unencumbered inventory and intangible assets of the Company other than proceeds relating to the Calmare Device and accounts receivable. Due to the Board’s February 10, 2014 decision authorizing management to nullify certain actions taken by prior management, the additional terms noted above were not approved and therefore, the additional interest for the extension of the Notes was not recorded. During 2014, management has been in negotiations to modify the terms of the Notes. However, until those negotiations are resolved, the Company has agreed to honor the additional terms and as such, the Company recorded additional interest of $425,000 and $388,000 during the years ended December 31, 2016 and December 31, 2015, respectively. The Company has recorded total additional interest of $1,432,000 through December 31, 2016. A total of $485,980 of the aforementioned notes issued between December 1, 2012 and March 31, 2013 fall under the LPA with ASC Recap, and are expected to be repaid using the process as described in Note 11. Because there can be no assurance that the Company will be successful in completing this process, the Company retains ultimate responsibility for this debt, until fully paid down. As a result, the Company continues to accrue interest on these notes and they remain convertible as described above. 24 month Convertible Notes In March 2012, the Company issued a 24-month convertible promissory note to borrow $100,000. Additional 24-month convertible promissory notes were issued in April 2012 ($25,000) and in June 2012 ($100,000). All of the notes bear 6.00% simple interest. Conversion of the eligible principal amounts to common stock is allowed at any time at a rate of $1.05 per share. As of July 17, 2017, the Company has not repaid the principal due on the March 2012 $100,000 note, the April 2012 $25,000 note or the June 2012 $100,000 note and is in default under the terms of the notes. There is also unpaid interest of $53,000 related to these notes at December 31, 2016. 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 shares of common stock. The warrants have an exercise price $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 were allocated to the components as follows: Proceeds allocated Private Offering Notes $ 32,390 Private Offering Warrants 14,845 Beneficial Conversion feature 7,765 Total $ 55,000 During 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 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 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 these 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 July 17, 2017, 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 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 Private Offering Notes $ 46,222 Private Offering Warrants 18,778 Beneficial Conversion feature — Total $ 65,000 Series B-2 Original Issue Discount 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 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 July 17, 2017, 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 Private Offering Notes $ 197,521 Private Offering Warrants 46,097 Beneficial Conversion feature 13,382 Total $ 257,000 As of July 17, 2017, these 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 Private Offering Notes $ 342,857 Private Offering Warrants 120,000 Beneficial Conversion feature 137,143 Total $ 600,000 As of July 17, 2017, these 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 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 Private Offering Notes $ 361,991 Private Offering Warrants 38,009 Beneficial Conversion feature Total $ 400,000 As of July 17, 2017, these 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, 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 Private Offering Notes $ 454,545 Private Offering Warrants 122,727 Beneficial Conversion feature 22,728 Total $ 600,000 As of July 17, 2017, these 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 June 30, 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 3,000,000 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 128.74-134.16 % Risk Free Rate 0.55-0.61 % The proceeds of the Notes were allocated to the components as follows: Proceeds Private Offering Notes $ 409,174 Private Offering Warrants 111,243 Beneficial Conversion feature 79,583 Total $ 600,000 As of July 17, 2017, these 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. |
STOCK-BASED COMPENSATION PLANS
STOCK-BASED COMPENSATION PLANS | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK-BASED COMPENSATION PLANS | 14. STOCK-BASED COMPENSATION PLANS 2011 Employees’, Directors’ and Consultants’ Stock Option Plan – The following information relates to the 2011 Option Plan: December 31, 2016 December 31, 2015 Common shares reserved for issuance on exercise of options 1,447,500 1,867,500 Shares available for future option grants 0 0 1997 Employee Stock Option Plan The following information relates to the 1997 Option Plan: December 31, 2016 December 31, 2015 Common shares reserved for issuance on exercise of options 15,000 51,000 Shares available for future option grants — — 2000 Director’s Stock Option Plan The following information relates to the 2000 Directors’ Stock Option Plan: December 31, December 31, Common shares reserved for issuance on exercise of options 40,000 120,000 Shares available for future option grants — — Summary of Common Stock Options Also $0 and $7,963 of noncash compensation expense was included in general and administrative expenses, from stock options granted to directors pursuant to the Directors Option Plan in the years ended December 31, 2016 and 2015, respectively. Since these stock options are fully vested upon grant, the full fair value of the stock options is recorded as expense at the date of grant. The Company realized a credit of $13,280 in 2016 for options cancelled as a result of the January 2016 resignation of the Company’s Chief Financial Officer. During the year ended December 31, 2015, the Company granted 50,000 options to non-employee directors which were fully vested upon issuance, as approved by the Board of Directors. During the year ended December 31, 2015, the Company granted 300,000 options to the Company’s Chief Medical Officer. As approved by the Board of Directors, these options vest over a four (4) year period, with 60,000 options vested upon issuance. During the year ended December 31, 2016, no stock options were granted. We estimated the fair value of each option on the grant date using a Black-Scholes option-pricing model with the following weighted average assumptions: Year ended Year ended Dividend yield (1) — % 0.0 % Expected volatility (2) — % 159.8% - 164.5 % Risk-free interest rates (3) — % 1.61 % Expected lives (2) — 5 years (1) We have not paid cash dividends on our common stock since 1981, and currently do not have plans to pay or declare cash dividends. Consequently, we used an expected dividend rate of zero for the valuations. (2) Estimated based on our historical experience. Volatility was based on historical experience over a period equivalent to the expected life in years. (3) Based on the U.S. Treasury constant maturity interest rate with a term consistent with the expected life of the options granted. A summary of the status of all our common stock options as of December 31, 2016 and 2015, and changes during the periods then ended is presented below. Year ended December 31, 2016 Year ended December 31, 2015 Shares Weighted Average Exercise Price Aggregate Intrinsic Values Shares Weighted Aggregate Outstanding at beginning of period 2,038,500 $ 0.40 $ 1,692,000 $ 0.44 Granted — — 350,000 0.26 Expired or terminated (46,000 ) 1.90 (4,000 ) 5.34 Forfeited (490,000 ) 0.79 — — Exercised — — Outstanding at end of year 1,502,500 $ 0.22 $ 111,206 2,038,500 $ 0.40 $ 100,500 Vested at end of year 1,118,500 $ 0.24 $ 89,186 1,212,500 $ 0.52 $ 60,550 Nonvested at end of year 384,000 $ 0.18 $ 22,020 826,000 $ 0.21 $ 40,000 Weighted average fair value per share of options issued during the year $ — $ 0.26 Generally, we issue new shares of common stock to satisfy stock option exercises. |
401(k) PLAN
401(k) PLAN | 12 Months Ended |
Dec. 31, 2016 | |
Pension and Other Postretirement Benefit Contributions [Abstract] | |
401(k) PLAN | 15. 401(k) PLAN We have an employee-defined contribution plan qualified under section 401(k) of the Internal Revenue Code (the “Plan”), for all employees age 21 or over, and meeting certain service requirements. The Plan has been in effect since January 1, 1997. Participation in the Plan is voluntary. Employees may defer compensation up to a specific dollar amount determined by the Internal Revenue Service for each calendar year. We do not make matching contributions, and employees are not allowed to invest in our stock under the Plan. Our directors may authorize a discretionary contribution to the Plan, allocated according to the provisions of the Plan, and payable in shares of our common stock valued as of the date the shares are contributed. No contributions were accrued or made in the years ended December 31, 2016 and 2015. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 16. COMMITMENTS AND CONTINGENCIES Operating Leases Future minimum rental payments required under operating leases with remaining non-cancelable lease terms as of December 31, 2016, are as follows: More than 5 years $ — 3-5 years — 1-3 years 13,645 Within 1 year 81,301 Total $ 94,946 Total rental expense for all operating leases was: Year ended Year ended Minimum rental payments $ 70,597 $ 68,315 Deferred rent charge (7,522 ) (4,793 ) $ 63,077 $ 63,522 Contingencies – Revenue based As of December 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 - The Company’s Distribution Rights, Marineo and Delta On April 8, 2014, Mr. Giuseppe Marineo, Delta Research and Development (“Delta”), Mr. Marineo’s research company, and Delta International Services and Logistics (“DIS&L”), Delta’s commercial arm in which Mr. Marineo is the sole beneficiary of all proceeds as its founder and sole owner (collectively the “Group”), issued a press release (the “Group’s Press Release”) regarding 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 Group’s Press Release was inaccurate and has since been purged by the overseeing body of wire services. This issue between the Company and the Group is over the validity of a 2012 Amendment to a Sales and Representation Agreement (the “Amendment”) which, if valid and enforceable, may have compromised its rights to sell, distribute and manufacture the Calmare Device as an exclusive agent of the Group in the global marketplace, especially in the European, Middle Eastern and North African (“EMENA”) territory which was responsible for approximately 70% of gross Calmare Device sales in 2011. However, the Company believes that the Amendment is neither valid nor enforceable as it was never duly signed or authorized and subsequently deemed null and void. Therefore, the parties’ rights are determined by an earlier agreement whereby the Company 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 Counsel’s interpretation of the events surrounding the execution of the Amendment. At this time, the Company continues to work to find a reasonable and amicable resolution to the situation. Contingencies – Litigation Cases 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 GEOMC’s 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. On June 7, 2017, William Austin Lewis (“Lewis”), Lewis Asset Management (“Lewis Asset”), Lewis Opportunity Fund LP (“Lewis Opportunity Fund”), and William A. Lewis Defined Pension Plan and Trust (“Lewis Defined Pension Plan and Trust”) filed a complaint in the United States District Court for the Southern District of New York, against the Company, Conrad F. Mir (“Mir”), Peter Brennan (“Brennan”) Rustin Howard (“Howard”), and Carl O’Connell (“O’Connell”) (collectively, “Defendants”). The lawsuit alleges that Defendants violated federal securities laws and disseminated false and misleading statements concerning the financial status and contractual relations of the Company. Lewis, Lewis Opportunity Fund, and Lewis Defined Pension Plan and Trust are shareholders in the Company. The complaint seeks to recover unspecified compensatory and punitive damages. The Company believes it has meritorious defenses to the allegations and the Company intends to vigorously defend against the litigation. On March 13, 2017, Bryan Clark filed a complaint against the Company, in the Circuit Court of the First Judicial Circuit in and for Escambia County, Florida. The complaint alleges that the Company is in breach of the terms of its promissory note with Mr. Clark. The Company is negotiating a settlement with Mr. Clark. Cases settled: On August 18, 2014, notice was issued to the Company that on June 23, 2014, Timothy Conley filed a complaint against the Company, in the United States District Court for the District of Rhode Island. The complaint alleged that the Company’s former acting interim chief executive, Johnnie Johnson, and Mr. Conley entered into an agreement whereby the Company agreed to make payments to Mr. Conley. Among other allegations, Mr. Conley claims that the Company’s nonpayment to Mr. Conley constitutes a breach of contract. On March 16, 2017, the Company entered into a Settlement, Compromise and Mutual Release Agreement with Mr. Conley. Under the terms of this agreement, the Company, without acknowledging any liability, agreed to a settlement payment to fully and completely resolve all claims from the Mr. Conley’s complaint. Each party has also released and discharged the other party of any liability or claims that the first party ever had, may have had, or in the future have against the other party. The Company has accrued the amount of the settlement in Accounts Payable and Accrued Liabilities as of December 31, 2016. On June 6, 2016, notice was issued to the Company that on May 26, 2016, CME Acuity Rx, LLC (“CME Acuity”) filed a complaint against the Company, in the Superior Court of New Jersey. The complaint alleged the Company and CME Acuity entered into an agreement whereby the Company agreed to make payments to CME Acuity.in return for services to the Company. Among other allegations, CME Acuity claimed that the Company’s nonpayment to CME Acuity constituted a breach of contract. On February 27, 2017, the Company entered into a Settlement, Compromise and Mutual Release Agreement with CME Acuity. Under the terms of this Agreement, the Company, without acknowledging any liability, agreed to a settlement payment to fully and completely resolve all claims from the CME Acuity complaint. Each party has also released and discharged the other party of any liability or claims that the first party ever had, may have had, or in the future have against the other party. The Company has accrued the amount of the settlement in Accounts Payable as of December 31, 2016. On November 9, 2016, the Company filed a complaint against Joel Bradus, an independent contractor for CME Acuity, in the Supreme Court of the State of New York, County of New York. The complaint alleges that Mr. Bradus interfered in the business relationship between the Company and CME Acuity, interfered in the business relationship between the Company and one of its major customers, and engaged in written and oral defamatory conduct against the Company. The Company was seeking actual, consequential, compensatory and punitive damages. On February 27, 2017, the Company entered into a Settlement, Compromise and Mutual Release Agreement with Mr. Bradus. Under the terms of this agreement, Mr. Bradus agrees to take no action which is intended, or would reasonably be expected, to cause material harm to the Company. Each party has also released and discharged the other party of any liability or claims that the first party ever had, may have had, or in the future have against the other party. Other: On January 27, 2017, Christine Chansky (the “Plaintiff”) filed a complaint against the Company, in the United States District Court for the District of New Jersey. The complaint alleged wrongful termination and other claims. On May 25, 2017, the Court filed a 60-day order administratively terminating the action. The Company is discussing a settlement with Ms. Chansky, however, to date, no settlement has been reached. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | 17. RELATED PARTY TRANSACTIONS Our board of directors determined that when a director’s services are outside the normal duties of a director, we compensate the director at the rate of $1,000 per day, plus expenses, which is the same amount we pay a director for attending a one-day Board meeting. We classify these amounts as consulting expenses, included in personnel and consulting expenses. As of December 31, 2016, and December 31, 2015, the Company has $433,300 and $308,400, respectively, owed in fees to current directors, which are in Accounts Payable. At December 31, 2016 and at December 31, 2015, $2,598,980 of the outstanding Notes were payable to related parties; $2,498,980 to the chairman of our Board, Peter Brennan, and $100,000 to another director, Stan Yarbro. Accrued Interest on the Note to Mr. Brennan, which is in Accrued Liabilities, was $615,000 and $465,000, respectively, as of December 31, 2016 and December 31, 2015. Accrued Interest on the Note to Mr. Yarbro, which is in Accrued Liabilities, was $28,000 and $22,000, respectively, as of December 31, 2016 and December 31, 2015. In addition, the Company has recorded additional interest on Mr. Brennan’s Notes, pending negotiations, of $1,432,000 as of December 31, 2016, and $1,007,000 as of December 31, 2015 (see 90 day Convertible Notes above). On September 15, 2015, the Company announced the appointment of Stephen J. D’Amato, M.D. as chief medical officer of the Company. During 2010, Calmar Pain Relief, LLC, purchased 10 Calmare devices from the Company for an aggregate purchase price of $550,000. Additionally, during 2016 and 2015, Calmar Pain Relief purchased certain supplies from the Company totaling $3,200 and $1,900, respectively. Dr. D’Amato is one of the managing members of Calmar Pain Relief, LLC. On October 15, 2015, the Company entered into a consulting agreement with VADM Robert T. Conway, Jr., U.S. Navy, (Ret) (the “Admiral”), a member of the Company’s 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. As a result of this agreement, the Board of Directors has determined that the Admiral is no longer an independent director of the Company. On January 19, 2017, the Admiral resigned from the Board of Directors. As of January 19, 2017, the Company has $30,000 in consulting fees payable to the Admiral. |
SUBSEQUENT EVENT
SUBSEQUENT EVENT | 12 Months Ended |
Dec. 31, 2016 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENT | 18. SUBSEQUENT EVENTS On January 19, 2017, Robert T. Conway, Jr. informed Calmare Therapeutics Incorporated (the “Company”) of his decision to resign, effective immediately, from the Company’s Board of Directors (the “Board”). Mr. Conway was the Chairman of Nominating and Corporate Governance Committee and a member of Compensation Committee of the Board at the time of his resignation. The resignation was not the result of any disagreements with the Company. On January 19, 2017, Steve Roehrich informed the Company of his decision to resign, effective at the close of business on January 19, 2017, from the Company’s Board. Mr. Roehrich was a member of the Audit Committee and a member of the Nominating and Corporate Governance Committee of the Board at the time of his resignation. The resignation was not the result of any disagreements with the Company. On January 24, 2017, the Company’s Board of Directors voted unanimously to reduce the number of board members from seven (7) to five (5). On March 15, 2017, the Company entered into an Agreement with a consulting firm to provide marketing and investor relations advice to the Company. Under the terms of the Agreement, the Company paid the consulting firm one million, four hundred thousand shares (1,400,000) of Common Stock valued at $170,800. On March 18, 2017, Stan Yarbro was removed as a Director of the Company by a majority vote of the Board, effective immediately. Mr. Yarbro was Chairman of the Audit Committee and a member of the Compensation Committee of the Board at the time of his removal. During the quarter ended March 31, 2017, the Company did an additional private offering with Peter Brennan, Chairman of the Board, under which it issued a convertible promissory Note in the amount of $24,706 for consideration of $21,000, the difference between the proceeds from the Note and principal amount consisting of $3,706 of original issue discount. The Note is convertible at an initial conversion price of $0.20 per share any time after issuance thereby having an embedded beneficial conversion feature. The note holder was also issued market-related warrants for 123,530 in shares of common stock. The warrants have an exercise price of $0.60 and a 1-year term. During the quarter ended March 31, 2017, the Company did an additional private offering under which it issued a convertible promissory Note in the amount of $102,000. The Note is convertible any time after issuance at a conversion price equal to 58% of the lowest trading price in the twenty (20) days prior to conversion. The Note also bears an interest rate of 12% per annum. There is a requirement that the Company reserve 20 million shares of common stock for future conversion of this Note. During the quarter ended June 30, 2017, the Company did an additional private offering with Peter Brennan, Chairman of the Board, under which it issued a convertible promissory Note in the amount of $82,353 for consideration of $70,000, the difference between the proceeds from the Note and principal amount consisting of $12,353 of original issue discount. The Note is convertible at an initial conversion price of $0.20 per share any time after issuance thereby having an embedded beneficial conversion feature. The note holder was also issued market-related warrants for 411,765 in shares of common stock. The warrants have an exercise price of $0.60 and a 1-year term. |
SUMMARY OF SIGNIFICANT ACCOUN26
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires that we make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and disclosure of contingent assets and liabilities. Actual results could differ significantly from our estimates. |
Revenue Recognition | Revenue Recognition We earn revenue in two ways: retained royalties from licensing our clients’ and our own technologies to our customer licensees, and from sales of finished products, including the Calmare Device. We record revenue when the terms of the sales arrangement are accepted by all parties including a fee that is fixed and determinable, delivery has occurred and our customer has taken title, and collectability is reasonably assured, net of sales tax We are the primary obligor, responsible for delivering devices as well as for training our customers in the proper use of the device. We deal directly with customers, setting pricing and providing training; work directly with the inventor of the technology to develop specifications and any changes thereto and to select and contract with manufacturing partners; and retain significant credit risk for amounts billed to customers. Therefore, all product sales are recorded following a gross revenue methodology. The Company continues to receive retained royalties as a result of the licensing of patents derived from the Company’s prior business model. We determine the royalty revenue for a given period from the cash we receive in that period. These revenues are declining as the Company no longer actively licenses patents and existing agreements are reaching the end of their term. Unless otherwise specified, we record all other revenue, as earned. |
Concentration of Revenues | Concentration of Revenues Total revenue consists of revenue from product sales, retained royalties, and other income. During the year ended December 31, 2016, we derived approximately $1,129,000 or 96.6% of total revenue from sales and rentals of our Calmare devices. An additional 2% of revenue derived indirectly from those sales through sales of supplies and training. The remaining 1.4% of total revenue is derived from royalty payments. During the year ended December 31, 2015, we derived approximately $917,500 or 92.2% of total revenue from sales and rentals of our Calmare devices. An additional 4.3% of revenue derived indirectly from those sales through sales of supplies and training. The remaining 3.5% of total revenue is derived from royalty payments. |
Expenses | Expenses Cost of product sales includes contractual payments to inventor and manufacturer relating to our Calmare Device. Expenses associated with shipping Devices are also included in cost of product sales. Selling expenses include commission expenses and other direct sales costs related to sales of Calmare Devices. Personnel and consulting expenses include salaries and benefits for employees plus consulting expenses related to technologies and specific revenue initiatives, and other direct costs. General and administrative expenses include directors’ fees and expenses, public company related expenses, professional services, including financing, marketing, audit and legal services, rent and other general business and operating expenses. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company believes the carrying amounts of cash, accounts receivable, deferred revenue, preferred stock liability and notes payable approximate fair value due to their short-term maturity. |
Inventory | Inventory Inventory consists of finished product of our Calmare Device. Inventory is stated at lower of cost (first in, first out) and market. |
Property and Equipment | Property and Equipment Property and equipment are carried at cost net of accumulated depreciation. Expenditures for normal maintenance and repair are charged to expense as incurred. The costs of depreciable assets are charged to operations on a straight-line basis over their estimated useful lives, three to five years for equipment, or the terms of the related lease for leasehold improvements. The cost and related accumulated depreciation or amortization of property and equipment are removed from the accounts upon retirement or other disposition, and any resulting gain or loss is reflected in earnings. |
Impairment of Long-lived Assets | Impairment of Long-lived Assets We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. If the estimated fair value is less than the carrying amount of the asset, we record an impairment loss. If a quoted market price is available for the asset or a similar asset, we use it to determine estimated fair value. We re-evaluate the remaining useful life of the asset and adjust the useful life accordingly. There were no impairment indicators identified during the years ended December 31, 2016 and 2015. |
Income Taxes | Income Taxes Income taxes are accounted for under an asset and a liability approach that requires recognition of deferred income tax assets and liabilities for the expected future consequences of events that have been recognized in the Company’s consolidated financial statements and income tax returns. The Company provides a valuation allowance for deferred income tax assets when it is considered more likely than not that all or a portion of such deferred income tax assets will not be realized. |
Net Income (Loss) Per Share | Net Income (Loss) Per Share We calculate basic net income (loss) per share based on the weighted average number of common shares outstanding during the period without giving any effect to potentially dilutive securities. Net income (loss) per share, assuming dilution, is calculated giving effect to all potentially dilutive securities outstanding during the period. |
Share-Based Compensation | Share-Based Compensation The Company accounts for its share-based compensation in accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) 718 – “Compensation – Stock Compensation.” Accordingly, the Company recognizes compensation expense equal to the fair value of the stock awards at the time of the grant over the requisite service period. Our accounting for share-based compensation has resulted in our recognizing non-cash compensation expense related to stock options granted to employees, which is included in personnel and consulting expenses, and stock options granted to our directors, which is included in general and administrative expenses. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In August 2014, the FASB issued Accounting Standards Update (“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 August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers Deferral of the Effective Date. Revenue from Contracts with Customers 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 In May 2016, the FASB issued ASU No. 2016-12, Narrow-Scope Improvements and Practical Expedients Revenue From Contracts With Customers. In May 2017, the FASB issued ASU No. 2017-09, Compensation – Stock Compensation, Scope of Modification Accounting, |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of reconciliation of tax rate | A reconciliation of our effective income tax rate compared to the U.S. federal statutory rate is as follows: Year ended Year ended Provision (benefit) at U.S. federal statutory rate (34.0 )% (34.0 )% State provision (benefit), net of U.S. federal tax (4.9 ) (4.9 ) Permanent differences 0.2 0.1 Other items 0.2 1.9 Deferred tax valuation allowance 38.5 36.9 Effective income tax rate 0.0 % 0.0 % |
Schedule of deferred tax assets | Net deferred tax assets consist of the following: December 31, 2016 December 31, 2015 Net federal and state operating loss carryforwards $ 20,072,124 $ 18,513,698 Impairment of investments 531,470 531,470 Other, net 798,494 795,327 Deferred tax assets 21,402,088 19,840,495 Valuation allowance (21,402,088 ) (19,840,495 ) Net deferred tax assets $ — $ — |
Schedule of changes in the valuation allowance | Changes in the valuation allowance were as follows: Year ended Year ended Balance, beginning of year $ 19,840,495 $ 18,210,959 Change in temporary differences 3,167 28,061 Change in net operating and capital losses 1,558,426 1,601,476 Balance, end of year $ 21,402,088 $ 19,840,495 |
NET LOSS PER COMMON SHARE (Tabl
NET LOSS PER COMMON SHARE (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of calculation of net earnings per share | The following sets forth the denominator used in the calculations of basic net loss per share and net loss per share assuming dilution: Year ended Year ended Denominator for basic net loss per share, weighted average shares outstanding 28,715,010 27,855,268 Dilutive effect of common stock options N/A N/A Dilutive effect of Series C convertible preferred stock and convertible debt N/A N/A Denominator for net loss per share, assuming dilution 28,715,010 27,855,268 |
Schedule of potentially dilutive securities | Potentially dilutive securities outstanding are summarized as follows: December 31, December 31, Exercise of common stock options 1,502,500 2,038,500 Exercise of common stock warrants 9,625,042 9,207,486 Conversion of Series C convertible preferred stock 2,320,760 2,450,980 Conversion of convertible debt 18,500,915 11,442,095 Total 31,949,217 25,139,061 |
RECEIVABLES (Tables)
RECEIVABLES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Receivables [Abstract] | |
Schedule of receivables | Receivables consist of the following: December 31, 2016 December 31, Calmare device sales receivable, net of allowance of $210,284 and $210,284 at December 31, 2016 and 2015, respectively $ — $ 31,827 Royalties, net of allowance of $101,154 at December 31, 2016 and 2015 — — Other, net of allowance of $6,221 and $6,221 at December 31, 2016 and 2015, respectively 3,366 1,254 Total $ 3,366 $ 33,081 |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment, net | Property and equipment, net, consist of the following: December 31, 2016 December 31, Property and equipment, gross $ 220,051 $ 220,051 Accumulated depreciation and amortization (212,852 ) (196,325 ) Property and equipment, net $ 7,199 $ 23,726 |
AVAILABLE-FOR-SALE AND EQUITY31
AVAILABLE-FOR-SALE AND EQUITY SECURITIES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of available-for-sale securities | December 31, 2016 December 31, Number of Type Security Innovation, Inc. — — 223,317 Common stock Xion Pharmaceutical Corporation — — 0 Common stock |
PREPAID EXPENSES AND OTHER CU32
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables) | 12 Months Ended |
Dec. 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: December 31, 2016 December 31, Prepaid insurance $ 2,151 $ 47,931 Other 5,727 10,103 Prepaid expenses and other current assets $ 7,878 $ 58,034 |
ACCRUED EXPENSES AND OTHER LI33
ACCRUED EXPENSES AND OTHER LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Payables and Accruals [Abstract] | |
Schedule of accrued expenses and other liabilities | Accrued expenses and other liabilities consist of the following: December 31, 2016 December 31, Royalties payable $ 583,482 $ 487,739 Accrued compensation 386,559 49,769 Commissions payable 79,480 15,900 Accrued interest payable 2,172,124 1,589,256 Other 220,663 105,360 Accrued expenses and other liabilities, net $ 3,442,308 $ 2,248,024 |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Debt Instrument [Line Items] | |
Schedule of notes payable | Notes payable consist of the following: Short term September 30, 2016 December 31, 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 3,170,105 1,532,710 Short term notes payable, gross 5,908,438 4,271,043 Less LPA amount (485,980 ) (485,980 ) Short term notes payable, net $ 5,422,458 $ 3,785,063 Long term September 30, December 31, 2015 Series B-1 OID Convertible Notes and Warrants $ - $ 67,919 |
Schedule of notes payable details | Details of notes payable as of September 30, 2016 are as follows: Short term Principal Carrying Cash Interest Common 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 3,323,529 3,170,105 None $ 0.20 – 0.25 11/2015 – 03/2017 Short term notes payable, gross $ 6,059,274 5,908,438 Less LPA amount (485,980 ) Short term notes payable, net $ 5,422,458 (1) Includes $2,588 of accrued loss on conversion of OID note. |
Schedule of 90 day convertible notes | The Company has issued 90-day notes payable to borrow funds from a director, now the chairman of our Board, as follows: 2013 $ 1,188,980 2012 1,210,000 2011 100,000 Total $ 2,498,980 |
Private Placement [Member] | 15% Series A-3 OID Convertible Notes And Warrants [Member] | Warrant [Member] | |
Debt Instrument [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 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 |
Private Placement [Member] | Series B-1 OID Convertible Notes And Warrants [Member] | Warrant [Member] | |
Debt Instrument [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 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 Private Offering Notes $ 46,222 Private Offering Warrants 18,778 Total $ 65,000 |
Private Placement [Member] | Series B-2 OID Convertible Notes And Warrants [Member] | Warrant [Member] | |
Debt Instrument [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 % 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 128.74-134.16 % Risk Free Rate 0.55-0.61 % |
Schedule of proceeds from debt | The proceeds of the Notes were allocated to the components as follows: Proceeds 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 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 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 Private Offering Notes $ 361,991 Private Offering Warrants 38,009 Total $ 400,000 The proceeds of the Notes were allocated to the components as follows: Proceeds Private Offering Notes $ 454,545 Private Offering Warrants 122,727 Beneficial Conversion feature 22,728 Total $ 600,000 The proceeds of the Notes were allocated to the components as follows: Proceeds Private Offering Notes $ 409,174 Private Offering Warrants 111,243 Beneficial Conversion feature 79,583 Total $ 600,000 |
STOCK-BASED COMPENSATION PLANS
STOCK-BASED COMPENSATION PLANS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Schedule of assumptions used to estimate fair value of share options | We estimated the fair value of each option on the grant date using a Black-Scholes option-pricing model with the following weighted average assumptions: Year ended Year ended Dividend yield (1) — % 0.0 % Expected volatility (2) — % 159.8% - 164.5 % Risk-free interest rates (3) — % 1.61 % Expected lives (2) — 5 years (1) We have not paid cash dividends on our common stock since 1981, and currently do not have plans to pay or declare cash dividends. Consequently, we used an expected dividend rate of zero for the valuations. (2) Estimated based on our historical experience. Volatility was based on historical experience over a period equivalent to the expected life in years. (3) Based on the U.S. Treasury constant maturity interest rate with a term consistent with the expected life of the options granted. |
Summary of stock option activity under stock options | A summary of the status of all our common stock options as of December 31, 2016 and 2015, and changes during the periods then ended is presented below. Year ended December 31, 2016 Year ended December 31, 2015 Shares Weighted Aggregate Shares Weighted Aggregate Outstanding at beginning of period 2,038,500 $ 0.40 $ 1,692,000 $ 0.44 Granted — — 350,000 0.26 Expired or terminated (46,000 ) 1.90 (4,000 ) 5.34 Forfeited (490,000 ) 0.79 — — Exercised — — Outstanding at end of year 1,502,500 $ 0.22 $ 111,206 2,038,500 $ 0.40 $ 100,500 Vested at end of year 1,118,500 $ 0.24 $ 89,186 1,212,500 $ 0.52 $ 60,550 Nonvested at end of year 384,000 $ 0.18 $ 22,020 826,000 $ 0.21 $ 40,000 Weighted average fair value per share of options issued during the year $ — $ 0.26 |
2011 Option Plan [Member] | |
Schedule of stock option plan | The following information relates to the 2011 Option Plan: December 31, 2016 December 31, 2015 Common shares reserved for issuance on exercise of options 1,447,500 1,867,500 Shares available for future option grants 0 0 |
1997 Employee Stock Option Plan [Member] | |
Schedule of stock option plan | The following information relates to the 1997 Option Plan: December 31, 2016 December 31, 2015 Common shares reserved for issuance on exercise of options 15,000 51,000 Shares available for future option grants — — |
2000 Directors' Stock Option Plan [Member] | |
Schedule of stock option plan | The following information relates to the 2000 Directors’ Stock Option Plan: December 31, December 31, Common shares reserved for issuance on exercise of options 40,000 120,000 Shares available for future option grants — — |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future minimum rental payments | Future minimum rental payments required under operating leases with remaining non-cancelable lease terms as of December 31, 2016, are as follows: More than 5 years $ — 3-5 years — 1-3 years 13,645 Within 1 year 81,301 Total $ 94,946 |
Schedule of total rental expenses | Total rental expense for all operating leases was: Year ended Year ended Minimum rental payments $ 70,597 $ 68,315 Deferred rent charge (7,522 ) (4,793 ) $ 63,077 $ 63,522 |
BUSINESS AND BASIS OF PRESENT37
BUSINESS AND BASIS OF PRESENTATION (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 15, 2010 |
Organization Consolidation And Presentation Of Financial Statements [Line Items] | |||
Principal amount | $ 6,059,274 | ||
Carrying amount | 6,027,830 | $ 4,271,043 | |
Promissory Notes [Member] | |||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | |||
Principal amount | 6,059,000 | $ 400,000 | |
Carrying amount | $ 6,028,000 | ||
Vector Vision, Inc. [Member] | |||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | |||
Ownership percentage | 56.10% |
SUMMARY OF SIGNIFICANT ACCOUN38
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Sales Revenue, Net [Member] | Royalty [Member] | ||
Accounting Policies [Line Items] | ||
Percentage of revenue | 1.40% | 3.50% |
Sales Revenue, Net [Member] | Calmare Pain Therapy Medical Device Technology [Member] | ||
Accounting Policies [Line Items] | ||
Revenue | $ 1,129,000 | $ 917,500 |
Percentage of revenue | 96.60% | 92.20% |
Sales of Supplies and Training [Member] | Calmare Pain Therapy Medical Device Technology [Member] | ||
Accounting Policies [Line Items] | ||
Percentage of revenue | 2.00% | 4.30% |
Equipment [Member] | Maximum [Member] | ||
Accounting Policies [Line Items] | ||
Estimated useful life | 5 years | |
Equipment [Member] | Minimum [Member] | ||
Accounting Policies [Line Items] | ||
Estimated useful life | 3 years |
INCOME TAXES (Details)
INCOME TAXES (Details) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | ||
Provision (benefit) at U.S. federal statutory rate | (34.00%) | (34.00%) |
State provision (benefit), net of U.S. federal tax | (4.90%) | (4.90%) |
Permanent differences | 0.20% | 0.10% |
Other items | 0.20% | 1.90% |
Deferred tax valuation allowance | 38.50% | 36.90% |
Effective income tax rate | 0.00% | 0.00% |
INCOME TAXES (Details 1)
INCOME TAXES (Details 1) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Income Tax Disclosure [Abstract] | |||
Net federal and state operating loss carryforwards | $ 20,072,124 | $ 18,513,698 | |
Impairment of investments | 531,470 | 531,470 | |
Other, net | 798,494 | 795,327 | |
Deferred tax assets | 21,402,088 | 19,840,495 | |
Valuation allowance | (21,402,088) | (19,840,495) | $ (18,210,959) |
Net deferred tax assets |
INCOME TAXES (Details 2)
INCOME TAXES (Details 2) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Changes in the valuation allowance were as follows: | ||
Balance, beginning of year | $ 19,840,495 | $ 18,210,959 |
Change in temporary differences | 3,167 | 28,061 |
Change in net operating and capital losses | 1,558,426 | 1,601,476 |
Balance, end of year | $ 21,402,088 | $ 19,840,495 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Income Tax Disclosure [Abstract] | |
Federal net operating loss carryforwards | $ 50,180,000 |
Federal net operating loss carryforwards, expiration period | 2017 through 2036 |
State net operating loss carryforwards | $ 48,618,000 |
State net operating loss carryforwards, expiration dates | Dec. 31, 2036 |
NOL carryforward remaining | $ 4,308,000 |
NET LOSS PER COMMON SHARE (Deta
NET LOSS PER COMMON SHARE (Details) - shares | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Earnings Per Share [Abstract] | ||
Denominator for basic net loss per share, weighted average shares outstanding | 28,715,010 | 27,855,268 |
Dilutive effect of common stock options | ||
Dilutive effect of Series C convertible preferred stock and convertible debt | ||
Denominator for net loss per share, assuming dilution | 28,715,010 | 27,855,268 |
NET LOSS PER COMMON SHARE (De44
NET LOSS PER COMMON SHARE (Details 1) - shares | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Anti-dilutive securities excluded from computation of earnings per share | 31,949,217 | 25,139,061 |
Exercise of Common Stock Options [Member] | ||
Anti-dilutive securities excluded from computation of earnings per share | 1,502,500 | 2,038,500 |
Exercise of Common Stock Warrants [Member] | ||
Anti-dilutive securities excluded from computation of earnings per share | 9,625,042 | 9,207,486 |
Conversion of Series C Convertible Preferred Stock [Member] | ||
Anti-dilutive securities excluded from computation of earnings per share | 2,320,760 | 2,450,980 |
Conversion of Convertible Debt [Member] | ||
Anti-dilutive securities excluded from computation of earnings per share | 18,500,915 | 11,442,095 |
SHAREHOLDERS' DEFICIENCY (Detai
SHAREHOLDERS' DEFICIENCY (Details Narrative) - USD ($) | Jun. 16, 2011 | Dec. 30, 2010 | Dec. 15, 2010 | Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Oct. 15, 2015 |
Principal Amount | $ 6,059,274 | |||||||||
Shares issued, price per share | $ 0.20 | |||||||||
Proceeds from private placement | $ 365,000 | |||||||||
Common stock issued | 1,825,000 | |||||||||
Issued warrants to purchase shares of common stock | 912,500 | |||||||||
Exercise price of warrants | $ 0.60 | |||||||||
Warrants term | 1 year | |||||||||
Common stock, shares authorized | 100,000,000 | 100,000,000 | ||||||||
Shares issued under compensation plan to non employee directors | 10,000 | 12,500 | ||||||||
Director stock compensation expense | $ 1,900 | $ 2,125 | ||||||||
Preferred Stock [Member] | ||||||||||
Percentage of cumulative dividend rate | 5.00% | |||||||||
Preferential non-cumulative dividends (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 | |||||||||
Preferred stock redemption period | 30 days | |||||||||
Dividend declared, date of record | Dec. 2, 2010 | |||||||||
Trigger for issuance of dividends, percentage of outstanding common shares purchased | 20.00% | |||||||||
Preferred stock, shares authorized | 35,920 | 35,920 | ||||||||
Preferred stock, par value (in dollars per shares) | $ 25 | $ 25 | ||||||||
Preferred stock, shares issued | 2,427 | 2,427 | ||||||||
Preferred stock, shares outstanding (in shares) | 2,427 | 2,427 | ||||||||
Series C Preferred Stock [Member] | ||||||||||
Preferred stock, shares authorized | 750 | 750 | ||||||||
Preferred stock, par value (in dollars per shares) | $ 1,000 | $ 1,000 | ||||||||
Preferred stock, shares issued | 350 | 375 | 375 | |||||||
Proceeds from preferred stock issued | $ 350,000 | |||||||||
Dividends declared | $ 122,000 | |||||||||
Dividends declared during year | 18,801 | |||||||||
Dividends declared and unpaid | $ 103,254 | |||||||||
Preferred stock, voting rights | Holders of these shares of Series C Convertible Preferred Stock shall have voting rights equivalent to 1,000 votes per $1,000 par value Series C Convertible Preferred share voted together with the shares of Common Stock | |||||||||
Preferred stock, threshold percentage of stock price trigger | 85.00% | |||||||||
Derivative liability | $ 81,933 | $ 66,177 | $ 66,177 | |||||||
Preferred stock, shares outstanding (in shares) | 375 | 375 | 375 | |||||||
Minimum [Member] | ||||||||||
Common stock, shares authorized | 40,000,000 | |||||||||
Maximum [Member] | ||||||||||
Common stock, shares authorized | 100,000,000 | |||||||||
Warrant [Member] | ||||||||||
Common stock issued for consulting services | 503,333 | |||||||||
Common stock issued for consulting services, value | $ 75,000 | |||||||||
Advisory Firm [Member] | ||||||||||
Common stock issued for consulting services | 500,000 | |||||||||
Common stock issued for consulting services, value | $ 80,000 | |||||||||
Advisory Firm (Consulting Services) [Member] | ||||||||||
Common stock issued for consulting services | 120,000 | |||||||||
Common stock issued for consulting services, value | $ 31,200 | |||||||||
Consulting expenses | $ 27,600 | $ 10,800 | $ 27,600 | $ 10,800 | ||||||
Advisory Firm (Consulting Services) [Member] | Tranche Two [Member] | ||||||||||
Common stock issued for consulting services | 60,000 | 60,000 | ||||||||
Promissory Notes [Member] | ||||||||||
Principal Amount | $ 400,000 | $ 6,059,000 | ||||||||
Interest rate | 5.00% | |||||||||
Convertible Notes Payable Four [Member] | Series C Preferred Stock [Member] | ||||||||||
Principal Amount | $ 400,000 | |||||||||
Debt conversion, shares issued | 400 | |||||||||
Southridge, Partners II, L.P. [Member] | Series C Preferred Stock [Member] | ||||||||||
Percentage of cumulative dividend rate | 5.00% | |||||||||
Preferred stock, shares authorized | 750 | |||||||||
Preferred stock, par value (in dollars per shares) | $ 1,000 | |||||||||
Southridge, Partners II, L.P. [Member] | Equity Purchase Agreement [Member] | ||||||||||
Stock to be purchased | $ 10,000,000 | |||||||||
Term of agreement | 2 years | |||||||||
Percentage of shares outstanding owned | 9.99% | |||||||||
Southridge, Partners II, L.P. [Member] | Equity Purchase Agreement [Member] | Convertible Notes Payable Two [Member] | ||||||||||
Principal Amount | $ 65,000 | |||||||||
Debt conversion, shares issued | 260,000 | |||||||||
Southridge, Partners II, L.P. [Member] | Liabilities Purchase Agreement [Member] | ||||||||||
Number of common stock issued in accordance with liability purchase agreement | 200,000 | |||||||||
Shares issued, price per share | $ 0.35 | |||||||||
Common stock issued in accordance with liability purchase agreement | $ 70,000 | |||||||||
Southridge, Partners II, L.P. [Member] | Liabilities Purchase Agreement [Member] | Convertible Notes Payable Three [Member] | ||||||||||
Principal Amount | $ 12,000 | |||||||||
Southridge, Partners II, L.P. [Member] | Equity And Liabilities Purchase Agreement [Member] | ||||||||||
Common stock issued | 250,000 | |||||||||
Shares issued, price per share | $ 0.35 | |||||||||
Common stock issued as part of equity purchase agreement and/or liability purchase agreement | $ 87,500 | |||||||||
Williamr Walters Ltd Of Canada [Member] | Series C Preferred Stock [Member] | ||||||||||
Preferred stock converted | 375 | |||||||||
Common stock issued upon preferred stock conversion | 315,126 | |||||||||
Mr. Conrad Mir [Member] | ||||||||||
Shares issued under compensation plan to non employee directors | 440,751 | |||||||||
Director stock compensation expense | $ 76,769 |
RECEIVABLES (Details)
RECEIVABLES (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Receivables [Abstract] | ||
Calmare device sales receivable, net of allowance of $210,284 and $210,284 at December 31, 2016 and 2015, respectively | $ 31,827 | |
Royalties, net of allowance of $101,154 at December 31, 2016 and 2015 | $ 0 | |
Other, net of allowance of $6,221 and $6,221 at December 31, 2016 and 2015, respectively | 3,366 | 1,254 |
Total | 3,366 | 33,081 |
Calmare sales receivable, allowance amount | 210,284 | 210,284 |
Allowance for doubtful accounts | 317,659 | 317,659 |
Other, net of allowance | $ 6,221 | $ 6,221 |
PROPERTY AND EQUIPMENT, NET (De
PROPERTY AND EQUIPMENT, NET (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Property, Plant and Equipment [Abstract] | ||
Property and equipment, gross | $ 220,051 | $ 220,051 |
Accumulated depreciation and amortization | (212,852) | (196,325) |
Property and equipment, net | $ 7,199 | $ 23,726 |
PROPERTY AND EQUIPMENT, NET (48
PROPERTY AND EQUIPMENT, NET (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation and amortization expense | $ 16,527 | $ 16,475 |
AVAILABLE-FOR-SALE AND EQUITY49
AVAILABLE-FOR-SALE AND EQUITY SECURITIES (Details) - Common Stock [Member] - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2009 |
Xion Pharmaceutical Corporation [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Available-for-sale securities, fair value | $ 0 | $ 0 | |
Number of shares held | 0 | 0 | 60 |
Security Innovation, Inc. [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Available-for-sale securities, fair value | $ 0 | $ 0 | |
Number of shares held | 223,317 | 0 |
AVAILABLE-FOR-SALE AND EQUITY50
AVAILABLE-FOR-SALE AND EQUITY SECURITIES (Details Narrative) - USD ($) | 12 Months Ended | ||||
Dec. 31, 2016 | Dec. 31, 2003 | Dec. 31, 2015 | Sep. 30, 2009 | Jul. 22, 2009 | |
NTRU Cryptosystems, Inc [Member] | |||||
Schedule of Available-for-sale Securities [Line Items] | |||||
Number of shares held | 223,317 | ||||
NTRU Cryptosystems, Inc [Member] | Common Stock [Member] | |||||
Schedule of Available-for-sale Securities [Line Items] | |||||
Number of shares acquired | 3,129,509 | ||||
Write down value | $ 0 | ||||
Xion Pharmaceutical Corporation [Member] | Common Stock [Member] | |||||
Schedule of Available-for-sale Securities [Line Items] | |||||
Number of shares held | 0 | 0 | 60 | ||
Percentage of shares outstanding owned | 30.00% |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details Narrative) - USD ($) | Dec. 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 CU52
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid insurance | $ 2,151 | $ 47,931 |
Other | 5,727 | 10,103 |
Prepaid expenses and other current assets | $ 7,878 | $ 58,034 |
LIABILITIES ASSIGNED TO LIABI53
LIABILITIES ASSIGNED TO LIABILITY PURCHASE AGREEMENT (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||
Sep. 30, 2013 | Mar. 31, 2014 | Dec. 31, 2014 | Dec. 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 | |||||
Liabilities Purchase Agreement [Member] | Common Stock Including Additional Paid in Capital [Member] | ||||||
Liabilities Assigned To Liability Purchase Agreement [Line Items] | ||||||
Common stock issued in accordance with liability purchase agreement, shares | 1,618,235 |
ACCRUED EXPENSES AND OTHER LI54
ACCRUED EXPENSES AND OTHER LIABILITIES (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Payables and Accruals [Abstract] | ||
Royalties payable | $ 583,482 | $ 487,739 |
Accrued compensation | 386,559 | 49,769 |
Commissions payable | 79,480 | 15,900 |
Accrued interest payable | 2,172,124 | 1,589,256 |
Other | 220,663 | 105,360 |
Accrued expenses and other liabilities, net | $ 3,442,308 | $ 2,248,024 |
ACCRUED EXPENSES AND OTHER LI55
ACCRUED EXPENSES AND OTHER LIABILITIES (Details Narrative) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Payables and Accruals [Abstract] | ||
Accrued expenses and other liabilities - LPA | $ 217,000 | $ 217,000 |
NOTES PAYABLE (Details)
NOTES PAYABLE (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 | Mar. 31, 2013 |
Short term notes payable, gross | $ 6,027,830 | $ 4,271,043 | |
Less LPA amount | (485,980) | (485,980) | |
Short term notes payable, net | 5,541,850 | 3,785,063 | |
Long term notes payable, net | 67,919 | ||
90 Day Convertible Notes [Member] | |||
Less LPA amount | $ 485,980 | ||
90 Day Convertible Notes [Member] | Mr. Peter Brennan [Member] | |||
Short term notes payable, gross | 2,498,980 | 2,498,980 | |
24 Month Convertible Notes [Member] | |||
Short term notes payable, gross | 225,000 | 225,000 | |
24 Month Convertible Notes [Member] | Board Members [Member] | |||
Short term notes payable, gross | 100,000 | 100,000 | |
15% Series A-3 OID Convertible Notes And Warrants [Member] | |||
Short term notes payable, gross | 14,353 | 14,353 | |
Series B-1 OID Convertible Notes And Warrants [Member] | |||
Short term notes payable, gross | 77,849 | ||
Long term notes payable, net | 67,919 | ||
Series B-2 OID Convertible Notes And Warrants [Member] | |||
Short term notes payable, gross | $ 3,211,648 | $ 1,532,710 |
NOTES PAYABLE (Details 1)
NOTES PAYABLE (Details 1) - USD ($) | 12 Months Ended | |||||||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2013 | Jun. 30, 2012 | Apr. 30, 2012 | Mar. 31, 2012 | ||
Principal Amount | $ 6,059,274 | |||||||
Carrying Value | 6,027,830 | |||||||
Short term notes payable, gross | 6,027,830 | $ 4,271,043 | ||||||
Less LPA amount | (485,980) | (485,980) | ||||||
Short term notes payable, net | 5,541,850 | 3,785,063 | ||||||
90 Day Convertible Notes [Member] | ||||||||
Less LPA amount | $ 485,980 | |||||||
90 Day Convertible Notes [Member] | Mr. Peter Brennan [Member] | ||||||||
Principal Amount | 2,498,980 | |||||||
Carrying Value | $ 2,498,980 | |||||||
Cash Interest Rate | 6.00% | |||||||
Common Stock Conversion Price (in dollars per share) | $ 1.05 | |||||||
Maturity Date | Various 2014 | |||||||
Short term notes payable, gross | $ 2,498,980 | 2,498,980 | ||||||
24 Month Convertible Notes [Member] | ||||||||
Principal Amount | 225,000 | $ 100,000 | $ 25,000 | $ 100,000 | ||||
Carrying Value | $ 225,000 | |||||||
Cash Interest Rate | 6.00% | 6.00% | 6.00% | 6.00% | ||||
Common Stock Conversion Price (in dollars per share) | $ 1.05 | $ 1.05 | $ 1.05 | $ 1.05 | ||||
Maturity Date | 3/2014 6/2014 | |||||||
Short term notes payable, gross | $ 225,000 | 225,000 | ||||||
24 Month Convertible Notes [Member] | Board Members [Member] | ||||||||
Principal Amount | 100,000 | |||||||
Carrying Value | 100,000 | |||||||
Short term notes payable, gross | 100,000 | 100,000 | ||||||
15% Series A-3 OID Convertible Notes And Warrants [Member] | ||||||||
Principal Amount | 11,765 | |||||||
Carrying Value | [1] | $ 14,353 | ||||||
Common Stock Conversion Price (in dollars per share) | $ 0.25 | |||||||
Maturity Date | 1/2015 | |||||||
Short term notes payable, gross | $ 14,353 | 14,353 | ||||||
Accrued loss on conversion | 2,588 | |||||||
Series B-1 OID Convertible Notes And Warrants [Member] | ||||||||
Principal Amount | 80,000 | |||||||
Carrying Value | $ 77,849 | |||||||
Common Stock Conversion Price (in dollars per share) | $ 0.23 | $ 0.23 | ||||||
Maturity Date | 3/2017 | |||||||
Short term notes payable, gross | $ 77,849 | |||||||
Series B-2 OID Convertible Notes And Warrants [Member] | ||||||||
Principal Amount | 3,243,529 | |||||||
Carrying Value | $ 3,211,648 | |||||||
Maturity Date | 8/2015 1/2017 | |||||||
Short term notes payable, gross | $ 3,211,648 | $ 1,532,710 | ||||||
Series B-2 OID Convertible Notes And Warrants [Member] | Minimum [Member] | ||||||||
Common Stock Conversion Price (in dollars per share) | $ 0.20 | |||||||
Series B-2 OID Convertible Notes And Warrants [Member] | Maximum [Member] | ||||||||
Common Stock Conversion Price (in dollars per share) | $ 0.25 | |||||||
[1] | Includes $2,588 of accrued loss on conversion of OID note. |
NOTES PAYABLE (Details 2)
NOTES PAYABLE (Details 2) - USD ($) | Dec. 31, 2016 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
90 Day Convertible Notes [Member] | Mr. Peter Brennan [Member] | ||||
Total | $ 2,498,980 | $ 1,188,900 | $ 1,210,000 | $ 100,000 |
NOTES PAYABLE (Details 3)
NOTES PAYABLE (Details 3) - Private Placement [Member] - 15% Series A-3 OID Convertible Notes And Warrants [Member] - Warrant [Member] | 12 Months Ended |
Dec. 31, 2016 | |
Expected term | 2 years |
Volatility | 184.88% |
Risk Free Rate | 0.32% |
NOTES PAYABLE (Details 4)
NOTES PAYABLE (Details 4) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | |
Proceeds allocated to notes at issue date | $ 1,200,000 | $ 1,257,000 | |
Private Placement [Member] | |||
Total | $ 55,000 | ||
Private Placement [Member] | Warrant [Member] | |||
Proceeds allocated to warrants at issue date | 14,845 | ||
Private Placement [Member] | 15% Series A-3 OID Convertible Notes And Warrants [Member] | |||
Proceeds allocated to notes at issue date | 32,390 | ||
Beneficial Conversion feature | 7,765 | ||
Total | $ 55,000 |
NOTES PAYABLE (Details 5)
NOTES PAYABLE (Details 5) - Private Placement [Member] - 15% 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 | 798,825 | |
Shares to be issued subsequent | 529,415 | |
Principal amount of notes converted | $ 11,765 | $ 265,648 |
NOTES PAYABLE (Details 6)
NOTES PAYABLE (Details 6) - Private Placement [Member] - Series B-1 OID Convertible Notes And Warrants [Member] - Warrant [Member] | 3 Months Ended |
Mar. 31, 2014 | |
Expected term | 4 years |
Volatility | 151.52% |
Risk Free Rate | 1.32% |
NOTES PAYABLE (Details 7)
NOTES PAYABLE (Details 7) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||||
Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Proceeds allocated to notes at issue date | $ 1,200,000 | $ 1,257,000 | ||||||||
Private Placement [Member] | ||||||||||
Total | $ 600,000 | $ 257,000 | ||||||||
Private Placement [Member] | Warrant [Member] | ||||||||||
Proceeds allocated to warrants at issue date | $ 111,243 | $ 122,727 | $ 38,009 | $ 120,000 | $ 46,097 | $ 57,854 | ||||
Private Placement [Member] | Series B-1 OID Convertible Notes And Warrants [Member] | ||||||||||
Proceeds allocated to notes at issue date | $ 34,272 | |||||||||
Beneficial Conversion feature | 3,917 | |||||||||
Total | 65,000 | |||||||||
Private Placement [Member] | Series B-1 OID Convertible Notes And Warrants [Member] | Warrant [Member] | ||||||||||
Proceeds allocated to notes at issue date | 46,222 | |||||||||
Proceeds allocated to warrants at issue date | 18,778 | $ 26,811 | ||||||||
Total | $ 65,000 |
NOTES PAYABLE (Details 8)
NOTES PAYABLE (Details 8) - Private Placement [Member] - Series B-2 OID Convertible Notes And Warrants [Member] - Warrant [Member] | 3 Months Ended | |||||
Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | |
Expected term | 1 year | 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% | ||
Maximum [Member] | ||||||
Volatility | 134.16% | 185.71% | ||||
Risk Free Rate | 0.61% | 0.22% | ||||
Minimum [Member] | ||||||
Volatility | 128.74% | 180.15% | ||||
Risk Free Rate | 0.55% | 0.18% |
NOTES PAYABLE (Details 9)
NOTES PAYABLE (Details 9) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||
Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | |
Private Offering Notes | $ 1,200,000 | $ 1,257,000 | ||||||
Private Placement [Member] | ||||||||
Total | $ 600,000 | $ 257,000 | ||||||
Private Placement [Member] | Warrant [Member] | ||||||||
Private Offering Warrants | 111,243 | $ 122,727 | $ 38,009 | $ 120,000 | 46,097 | $ 57,854 | ||
Private Placement [Member] | Series B-2 OID Convertible Notes And Warrants [Member] | ||||||||
Private Offering Notes | 409,174 | 454,545 | 361,991 | 342,857 | 197,521 | 224,679 | ||
Beneficial Conversion feature | 79,583 | 22,728 | 137,143 | 13,382 | 22,467 | |||
Total | $ 600,000 | $ 600,000 | $ 400,000 | $ 600,000 | $ 257,000 | $ 305,000 |
NOTES PAYABLE (Details Narrativ
NOTES PAYABLE (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||||||
Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Mar. 31, 2013 | Jun. 30, 2012 | Apr. 30, 2012 | Mar. 31, 2012 | |
Liability purchase agreement amount | $ (485,980) | $ (485,980) | $ (485,980) | ||||||||||||
Principal amount | $ 6,059,274 | ||||||||||||||
Number of anti diluted securities | 31,949,217 | 25,139,061 | |||||||||||||
Private Placement [Member] | |||||||||||||||
Proceeds from notes payable | $ 55,000 | ||||||||||||||
Private Placement [Member] | |||||||||||||||
Proceeds from notes payable | $ 600,000 | $ 257,000 | |||||||||||||
90 Day Convertible Notes [Member] | |||||||||||||||
Liability purchase agreement amount | $ 485,980 | ||||||||||||||
90 Day Convertible Notes [Member] | Mr. Peter Brennan [Member] | |||||||||||||||
Interest rate | 6.00% | ||||||||||||||
Conversion price (in dollars per share) | $ 1.05 | ||||||||||||||
Additional interest rate per month | 1.00% | ||||||||||||||
Additonal interest expenses | $ 425,000 | $ 388,000 | |||||||||||||
Total additonal interest expenses | 1,432,000 | ||||||||||||||
Principal amount | 2,498,980 | ||||||||||||||
Accrued interest payable | $ 584,000 | ||||||||||||||
24 Month Convertible Notes [Member] | |||||||||||||||
Interest rate | 6.00% | 6.00% | 6.00% | 6.00% | |||||||||||
Conversion price (in dollars per share) | $ 1.05 | $ 1.05 | $ 1.05 | $ 1.05 | |||||||||||
Unpaid interest | $ 53,000 | ||||||||||||||
Principal amount | $ 225,000 | $ 100,000 | $ 25,000 | $ 100,000 | |||||||||||
15% Series A-3 OID Convertible Notes And Warrants [Member] | |||||||||||||||
Conversion price (in dollars per share) | $ 0.25 | ||||||||||||||
Principal amount | $ 11,765 | ||||||||||||||
15% Series A-3 OID Convertible Notes And Warrants [Member] | Private Placement [Member] | |||||||||||||||
Conversion price (in dollars per share) | $ 0.20 | $ 0.20 | $ 0.25 | ||||||||||||
Additonal interest expenses | $ 35,109 | ||||||||||||||
Principal amount | $ 64,706 | ||||||||||||||
Proceeds from notes payable | 55,000 | ||||||||||||||
Debt issue discount | $ 9,706 | ||||||||||||||
Number of shares issued upon conversion | 798,825 | ||||||||||||||
15% Series A-3 OID Convertible Notes And Warrants [Member] | Private Placement [Member] | Warrant [Member] | |||||||||||||||
Warrant exercise price (in dollars per share) | $ 0.60 | ||||||||||||||
Number of shares issued | 129,412 | ||||||||||||||
Warrant term | 2 years | ||||||||||||||
Series B-1 OID Convertible Notes And Warrants [Member] | |||||||||||||||
Conversion price (in dollars per share) | $ 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) | $ 0.35 | ||||||||||||||
Principal amount | $ 80,000 | ||||||||||||||
Proceeds from notes payable | 65,000 | ||||||||||||||
Debt issue discount | $ 15,000 | ||||||||||||||
Number of anti diluted securities | 20,000,000 | ||||||||||||||
Series B-1 OID Convertible Notes And Warrants [Member] | Private Placement [Member] | Warrant [Member] | |||||||||||||||
Proceeds from notes payable | $ 65,000 | ||||||||||||||
Warrant exercise price (in dollars per share) | $ 0.33 | $ 0.45 | |||||||||||||
Number of shares issued | 185,714 | ||||||||||||||
Warrant term | 4 years | ||||||||||||||
Series B-2 OID Convertible Notes And Warrants [Member] | |||||||||||||||
Principal amount | $ 3,243,529 | ||||||||||||||
Series B-2 OID Convertible Notes And Warrants [Member] | Private Placement [Member] | |||||||||||||||
Conversion price (in dollars per share) | $ 0.20 | $ 0.20 | $ 0.20 | $ 0.25 | $ 0.20 | $ 0.20 | $ 0.20 | ||||||||
Principal amount | $ 705,882 | $ 705,882 | $ 470,588 | $ 705,882 | $ 302,353 | $ 358,824 | $ 470,588 | ||||||||
Proceeds from notes payable | 600,000 | 600,000 | 400,000 | 600,000 | 257,000 | 305,000 | |||||||||
Debt issue discount | $ 105,882 | $ 105,882 | $ 70,588 | $ 105,882 | $ 45,353 | $ 53,824 | $ 70,588 | ||||||||
Debt original conversion | $ 5,882 | ||||||||||||||
Number of shares issued upon conversion | 29,410 | ||||||||||||||
Series B-2 OID Convertible Notes And Warrants [Member] | Private Placement [Member] | Warrant [Member] | |||||||||||||||
Warrant exercise price (in dollars per share) | $ 0.60 | $ 0.60 | $ 0.60 | $ 0.60 | $ 0.60 | $ 0.60 | $ 0.60 | ||||||||
Number of shares issued | 3,000,000 | 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 | 1 year |
STOCK-BASED COMPENSATION PLAN67
STOCK-BASED COMPENSATION PLANS (Details) - Employee Stock Option [Member] - shares | Dec. 31, 2016 | Dec. 31, 2015 |
2011 Option Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Common shares reserved for issuance on exercise of options | 1,447,500 | 1,867,500 |
Shares available for future option grants | 0 | 0 |
1997 Option Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Common shares reserved for issuance on exercise of options | 15,000 | 51,000 |
Shares available for future option grants | ||
2000 Directors' Stock Option Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Common shares reserved for issuance on exercise of options | 40,000 | 120,000 |
Shares available for future option grants |
STOCK-BASED COMPENSATION PLAN68
STOCK-BASED COMPENSATION PLANS (Details 1) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Dividend yield | 0.00% | |
Expected volatility | ||
Risk-free interest rates | 1.61% | |
Expected lives | 5 years | |
Minimum [Member] | ||
Expected volatility | 159.80% | |
Maximum [Member] | ||
Expected volatility | 164.50% |
STOCK-BASED COMPENSATION PLAN69
STOCK-BASED COMPENSATION PLANS (Details 2) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Outstanding at beginning of period | 2,038,500 | 1,692,000 |
Granted | 350,000 | |
Expired or terminated | (46,000) | (4,000) |
Forfeited | (490,000) | |
Exercised | ||
Outstanding at end of year | 1,502,500 | 2,038,500 |
Vested at end of year | 1,118,500 | 1,212,500 |
Nonvested at end of year | 384,000 | 826,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | ||
Outstanding at beginning of period | $ 0.40 | $ 0.44 |
Granted | 0.26 | |
Expired or terminated | 1.90 | 5.34 |
Forfeited | 0.79 | |
Outstanding at end of year | 0.22 | 0.40 |
Vested at end of year | 0.24 | 0.52 |
Nonvested at end of year | 0.18 | 0.21 |
Weighted average fair value per share of options issued during the year | $ 0.26 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Roll Forward] | ||
Outstanding at end of year | $ 111,206 | $ 100,500 |
Vested at end of year | 89,186 | 60,550 |
Nonvested at end of year | $ 22,020 | $ 40,000 |
STOCK-BASED COMPENSATION PLAN70
STOCK-BASED COMPENSATION PLANS (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Options expiration period | 1 year | |
Stock option compensation expense | $ 15,440 | $ 61,186 |
Options granted | 350,000 | |
Employee Stock Option [Member] | ||
Non-cash compensation expense | $ 28,720 | $ 61,186 |
Employee Stock Option [Member] | Personnel And Consulting Expenses [Member] | ||
Non-cash compensation expense | 28,720 | 53,223 |
Employee Stock Option [Member] | General and Administrative Expense [Member] | ||
Stock option compensation expense | 0 | $ 7,963 |
Employee Stock Option [Member] | Non-employee directors [Member] | ||
Options granted | 50,000 | |
Employee Stock Option [Member] | Mr. Stephen J. D Amato, M.D [Member] | ||
Vesting period of stock options | 4 years | |
Options granted | 300,000 | |
Options vested | 60,000 | |
Employee Stock Option [Member] | Mr. Thomas P. Richtarich [Member] | ||
Credit amount of options cancelled | $ 13,280 | |
Employee Stock Option [Member] | 2011 Option Plan [Member] | Minimum [Member] | ||
Percentage of Fair Market Value | 100.00% | |
Employee Stock Option [Member] | 1997 Option Plan [Member] | Minimum [Member] | ||
Percentage of Fair Market Value | 100.00% | |
Options expiration period | 10 years | |
Vesting period of stock options | 3 years | |
Employee Stock Option [Member] | 1997 Option Plan [Member] | Maximum [Member] | ||
Vesting period of stock options | 4 years | |
Employee Stock Option [Member] | 2000 Directors' Stock Option Plan [Member] | Director [Member] | ||
Shares issuable when director is first elected | 10,000 | |
Shares issuable to director on first business day of January | 10,000 | |
Employee Stock Option [Member] | 2000 Directors' Stock Option Plan [Member] | Minimum [Member] | ||
Percentage of Fair Market Value | 100.00% | |
Options expiration period | 10 years |
COMMITMENTS AND CONTINGENCIES71
COMMITMENTS AND CONTINGENCIES (Details) | Dec. 31, 2016USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
More than 5 years | |
3-5 years | |
1-3 years | 13,645 |
Within 1 year | 81,301 |
Total | $ 94,946 |
COMMITMENTS AND CONTINGENCIES72
COMMITMENTS AND CONTINGENCIES (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Minimum rental payments | $ 70,597 | $ 68,315 |
Deferred rent charge | (7,522) | (4,793) |
Total rent expense | $ 63,077 | $ 63,522 |
COMMITMENTS AND CONTINGENCIES73
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2011 | |
Loss Contingencies [Line Items] | ||
Percentage of revenues obligation | 7.50% | |
Gross Calmare Device sales, percentage | 70.00% | |
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% | |
Grant Funding Received In 1994 [Member] | ||
Loss Contingencies [Line Items] | ||
Funding repayment obligation | $ 165,788 | |
Grant Funding Received In 1995 [Member] | ||
Loss Contingencies [Line Items] | ||
Funding repayment obligation | $ 199,334 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | Jan. 19, 2017 | Oct. 15, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2010 |
Related Party Transaction [Line Items] | |||||
Notes payable to related parties | $ 2,598,980 | $ 2,598,980 | |||
Sales revenue | 1,105,050 | $ 891,472 | |||
Exercise price of warrants | $ 0.60 | ||||
Warrants term | 1 year | ||||
Issued warrants to purchase shares of common stock | 912,500 | ||||
Calmar Pain Relief, LLC [Member] | Mr. Stephen J. D Amato, M.D [Member] | |||||
Related Party Transaction [Line Items] | |||||
Purchases from Related Party | 3,200 | $ 1,900 | |||
Sales revenue | $ 550,000 | ||||
Director [Member] | |||||
Related Party Transaction [Line Items] | |||||
Director's service charges per day | 1,000 | ||||
Fees to directors | 433,300 | 308,400 | |||
Notes payable to related parties | 100,000 | 100,000 | |||
Accrued liabilities | 28,000 | 22,000 | |||
Mr. Peter Brennan [Member] | |||||
Related Party Transaction [Line Items] | |||||
Notes payable to related parties | 2,498,980 | 2,498,980 | |||
Accrued liabilities | 615,000 | 465,000 | |||
Additional accrued interest | $ 1,432,000 | $ 1,007,000 | |||
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 | ||||
Robert T. Conway [Member] | Subsequent Event [Member] | |||||
Related Party Transaction [Line Items] | |||||
Consulting fees payable | $ 30,000 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) | Mar. 15, 2017USD ($)shares | Jan. 24, 2017Director | Jun. 30, 2017USD ($)$ / sharesshares | Mar. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2016USD ($) |
Subsequent Event [Line Items] | |||||
Principal amount | $ 6,059,274 | ||||
Subsequent Event [Member] | |||||
Subsequent Event [Line Items] | |||||
Previous number of board member | Director | 7 | ||||
Revised number of board member | Director | 5 | ||||
Subsequent Event [Member] | Convertible Promissory Notes [Member] | Private Offering [Member] | Mr. Peter Brennan [Member] | |||||
Subsequent Event [Line Items] | |||||
Principal amount | $ 82,353 | $ 24,706 | |||
Proceeds from convertible debt | 70,000 | 21,000 | |||
Original issue discount | $ 12,353 | $ 3,706 | |||
Conversion price (in dollars per share) | $ / shares | $ 0.20 | $ 0.20 | |||
Subsequent Event [Member] | Convertible Promissory Notes [Member] | Private Offering [Member] | Mr. Peter Brennan [Member] | Warrant [Member] | |||||
Subsequent Event [Line Items] | |||||
Number of shares issued | shares | 411,765 | 123,530 | |||
Warrant exercise price (in dollars per share) | $ / shares | $ 0.60 | $ 0.60 | |||
Warrant term | 1 year | 1 year | |||
Subsequent Event [Member] | Convertible Promissory Notes [Member] | Private Offering [Member] | |||||
Subsequent Event [Line Items] | |||||
Principal amount | $ 102,000 | ||||
Description of conversion price | Conversion price equal to 58% of the lowest trading price in the twenty (20) days prior to conversion. | ||||
Interest rate | 12.00% | ||||
Number of shares reserve for future issuance | shares | 20,000,000 | ||||
Subsequent Event [Member] | Consulting Agreement [Member] | Investor [Member] | |||||
Subsequent Event [Line Items] | |||||
Number of shares issued | shares | 1,400,000 | ||||
Value of shares issued | $ 170,800 |