Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2016 | May. 13, 2016 | |
Document And Entity Information | ||
Entity Registrant Name | Axion Power International, Inc. | |
Entity Central Index Key | 1,028,153 | |
Document Type | 10-Q | |
Trading Symbol | AXPW | |
Document Period End Date | Mar. 31, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity a Well-known Seasoned Issuer | No | |
Entity a Voluntary Filer | No | |
Entity's Reporting Status Current | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 45,257,783 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2,016 |
CONSOLIDATED BALANCE SHEETS (un
CONSOLIDATED BALANCE SHEETS (unaudited) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Assets | ||
Cash and cash equivalents | $ 1,259,394 | $ 1,006,743 |
Restricted cash | 5,350,936 | 7,150,003 |
Accounts receivable, net | 549 | 13,057 |
Other current assets | 269,329 | 378,013 |
Inventories, net | 324,964 | 279,835 |
Total current assets | 7,205,172 | 8,827,651 |
Property and equipment, net | 1,699,721 | 1,771,641 |
Total assets | 8,904,893 | 10,599,292 |
Liabilities and stockholders' (deficit) | ||
Accounts payable | 393,000 | 361,022 |
Other liabilities | 799,957 | 790,000 |
Notes payable | 185,109 | 371,263 |
Accrued interest convertible notes | 45,602 | 93,755 |
Subordinated convertible notes | 65,000 | $ 65,000 |
Derivative liability | 1,284,533 | |
Senior convertible notes, net of discount | 7,240,695 | $ 7,085,818 |
Total current liabilities | $ 10,013,896 | 8,766,858 |
Derivative liability | 2,153,920 | |
Total liabilities | $ 10,013,896 | $ 10,920,778 |
Stockholder' (Deficit) | ||
Convertible preferred stock - 12,500,000 shares authorized Series A preferred - 2,000,000 shares designated, $0.005 par value, 0 shares issued and outstanding | ||
Common stock - 100,000,000 shares authorized $0.005 par value, 9,086,972 issued and outstanding (3,967,982 in 2015) | $ 45,436 | $ 19,841 |
Additional paid-in capital | 123,809,602 | 122,556,491 |
Retained earnings (deficit) | (124,712,429) | (122,646,205) |
Cumulative foreign currency translation adjustment | (251,612) | (251,613) |
Total stockholders' (deficit) | (1,109,003) | (321,486) |
Total liabilities & stockholders' (deficit) | $ 8,904,893 | $ 10,599,292 |
CONSOLIDATED BALANCE SHEETS (u3
CONSOLIDATED BALANCE SHEETS (unaudited) (Parenthetical) - $ / shares | Mar. 31, 2016 | Dec. 31, 2015 |
Convertible preferred stock, authorized | 12,500,000 | 12,500,000 |
Common stock, par value (in dollars per share) | $ 0.005 | $ 0.005 |
Common stock, authorized | 100,000,000 | 100,000,000 |
Common stock, issued | 9,086,972 | 3,967,982 |
Common stock, outstanding | 9,086,972 | 3,967,982 |
Series A Preferred Stock [Member] | ||
Convertible preferred stock, par value (in dollars per share) | $ 0.005 | $ 0.005 |
Convertible preferred stock, designated | 2,000,000 | 2,000,000 |
Convertible preferred stock, issued | 0 | 0 |
Convertible preferred stock, outstanding | 0 | 0 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS and COMPREHENSIVE LOSS (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Income Statement [Abstract] | ||
Net sales | $ 14,063 | $ 250,046 |
Cost of tangible goods sold | 98,534 | 217,672 |
Cost of goods sold - idle capacity | 350,200 | 487,328 |
Gross loss | (434,671) | (454,954) |
Research and development | 171,651 | 276,255 |
Selling, general and administrative | 772,009 | 826,213 |
Other (income) | (35,854) | (7) |
Operating loss | (1,342,477) | (1,557,415) |
Change in derivative value, (gain) | (769,683) | $ (668,536) |
Debt discount amortization expense | 877,049 | |
Interest expense, note payable | 2,863 | $ 3,296 |
Extinguishment loss on senior notes conversion | $ 334,791 | |
Placement agent warrants | $ 23,826 | |
Interest expense on convertible notes | $ 278,729 | 1,367 |
Loss before income taxes | $ (2,066,226) | $ (917,368) |
Income taxes | ||
Net loss | $ (2,066,226) | $ (917,368) |
Foreign translation adjustment | (1) | 1 |
Comprehensive (loss) | $ (2,066,227) | $ (917,367) |
Basic and diluted net loss per share (in dollars per share) | $ (0.39) | $ (2.62) |
Basic and diluted weighted average common shares outstanding (in shares) | 5,314,787 | 350,211 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Operating Activities | ||
Net loss | $ (2,066,226) | $ (917,368) |
Adjustments to reconcile net loss to net cash (used in) operating activities: | ||
Depreciation expense | 71,919 | 78,524 |
Change in derivative value (gain) | (769,683) | $ (668,536) |
Debt discount amortization expense | 877,049 | |
Extinguishment loss on senior note conversions | $ 334,791 | |
Placement agent warrants | $ 23,826 | |
Stock-based compensation expense | $ 12,243 | $ 108,071 |
Inventory valuation adjustment | 90,776 | |
Changes in operating assets & liabilities | ||
Accounts receivable, net | 12,508 | $ (19,604) |
Other current assets | 89,388 | 22,241 |
Inventory, net | (135,906) | 75,041 |
Accounts payable | 31,977 | (43,670) |
Other current liabilities | 9,957 | 151,558 |
Accrued interest | 61,648 | 1,367 |
Net cash (used in) operating activities | (1,379,559) | (1,188,550) |
Financing Activities | ||
Repayment of notes payable | (166,856) | $ (29,272) |
Change in restricted cash | 1,799,067 | |
Net cash (used in) provided by financing activities | 1,632,211 | $ (29,272) |
Effect of exchange rate on cash | (1) | 1 |
Net change in cash and cash equivalents | 252,651 | (1,217,821) |
Cash and cash equivalents - beginning of the period | 1,006,743 | 3,436,198 |
Cash and cash equivalents - ending | 1,259,394 | 2,218,377 |
Supplemental schedule of cash flow information: | ||
Cash paid for interest | $ 229,738 | $ 3,296 |
Cash paid for income taxes | ||
Supplemental schedule of non-cash investing and financing activities: | ||
Landlord lease deposit applied as payment against landlord note payable | $ 19,297 | |
Common stock issued for principal and interest payments on senior convertible notes | $ 831,971 | |
Placement agent warrants | $ 23,826 | |
Common stock issued for warrants exercised | 136,097 | |
Reclassification of derivative liability for warrants exercised | $ 1,310,264 | |
Reclassification of derivative liability pertaining to converted stock | $ 99,703 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | 1. Basis of Presentation These unaudited consolidated financial statements of Axion Power International, Inc., a Delaware corporation, include the operations of its wholly owned subsidiary, Axion Power Battery Manufacturing, Inc., a Pennsylvania corporation, and its two inactive wholly owned subsidiaries, Axion Power Corporation, a Canadian Federal corporation, and C & T Co. Inc., an Ontario corporation (collectively, the Company). In the opinion of management the accompanying unaudited consolidated financial statements contain all adjustments (which include normal recurring adjustments) necessary to present fairly the financial position, statements of income and comprehensive income and cash flows for the periods presented. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) have been condensed or omitted pursuant to the rules and regulations of the United States Securities and Exchange Commission (SEC). These consolidated financial statements should be read in conjunction with the audited financial statements and footnotes thereto in the Annual Report on Form 10-K for the year ended December 31, 2015. The results of income and comprehensive income for the three month period ended March 31, 2016 are not necessarily indicative of results of income and comprehensive income for the Companys 2016 calendar year. As approved by our board of directors and shareholders, we effected a 1-for-35 stock split of our common shares and Series A warrants on July 14, 2015. During 2015, there were 582,729 true-up rounding shares issued due to the above mentioned reverse stock split. All share related and per share information has been adjusted to give effect to the reverse stock split from the beginning of the earliest period presented. The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates, assumptions and judgments that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statement and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from the estimates. |
New Accounting Pronouncements
New Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
New Accounting Pronouncements | 2. New Accounting Pronouncements In March 2016, the FASB issued Accounting Standard Update (ASU) No. 2016-09, Compensation Stock Compensation (Topic 718): Improvements to employee share-based payment accounting, which includes provisions intended to simplify various aspects related to how share-based compensation payments are accounted for and presented in the financial statements. This amendment will be effective prospectively for reporting periods beginning on or after December 15, 2016, and early adoption is permitted. The Company is evaluating the impact that the new accounting guidance will have on its consolidated financial statements and related disclosures. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which requires lessees to recognize the lease assets and lease liabilities classified as operating leases on the balance sheet. The amendment will be effective for reporting periods beginning on or after December 15, 2018, and early adoption is permitted. The Company is evaluating the impact that the new accounting guidance will have on its consolidated financial statements and related disclosures. On November 20, 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes. The guidance requires that all deferred tax assets and liabilities, along with any related valuation allowance, be classified as noncurrent on the balance sheet. As a result, each jurisdiction will now only have one net noncurrent deferred tax asset or liability. The guidance does not change the existing requirement that only permits offsetting within a jurisdiction. The new guidance will be effective for public business entities in fiscal years beginning after December 15, 2016, including interim periods within those years (i.e., in the first quarter of 2017 for calendar year-end companies). Early adoption is permitted for all entities as of the beginning of an interim or annual reporting period. The Company is currently evaluating the impact, if any, of the adoption of this newly issued guidance to its consolidated financial statements. In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory In April 2015, the FASB issued ASU 2015-03, Interest Imputation of Interest (Topic 225-20): Simplifying the Presentation of Debt Issue Costs In February 2015, the FASB issued ASU 2015-02, Consolidations (Topic 225-20): Amendments to the Consolidation Analysis In January 2015, the FASB issued ASU 2015-01, Income Statement Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Inventories | 3. Inventories Inventory is recorded at the lower of cost or market value, and adjusted as appropriate for decreases in valuation and obsolescence. Adjustments to the valuation and obsolescence reserves are made after analyzing market conditions, historical sales activity, inventory costs and inventory composition to determine appropriate reserve levels. Cost is determined using the first-in first-out (FIFO) method. Many components and raw materials we purchase have minimum order quantities. A summary of inventory at March 31, 2016 and December 31, 2015 is as follows: March 31, 2016 December Raw materials $ 417,770 $ 363,559 Work in process 510,443 421,732 Finished goods 27,564 34,581 Inventory reserves (630,813 ) (540,037 ) $ 324,964 $ 279,835 |
Warrants
Warrants | 3 Months Ended |
Mar. 31, 2016 | |
Stockholders' Equity Note [Abstract] | |
Warrants | 4. Warrants Warrants consist of the following: Shares Weighted Weighted average Outstanding at January 1, 2016 12,582,352 $ 1.85 1.97 Granted - - - Exercised - - - Lapsed - - - Outstanding at March 31, 2016 12,582,352 $ 1.85 1.71 As of March 31, 2016, there were 34,521 Series B warrants classified as derivative liabilities which expired on April 29, 2016. As of March 31, 2015, there were 1,047,947 Series B warrants classified as derivative liabilities relating to the public common stock offering that occurred October 29, 2014. In addition there were 11,967,716 warrants also classified as derivative liabilities relating to the November 2015 private placement of senior convertible notes and warrants. |
Equity Compensation
Equity Compensation | 3 Months Ended |
Mar. 31, 2016 | |
Equity [Abstract] | |
Equity Compensation | 5. Equity Compensation The Company adopted ASC 718 Compensation Stock Compensation Equity-Based Payments to Non-Employees The stock based compensation expense for the three months ended March 31, 2016 and 2015 was $12,243 and $108,071, respectively, of which $0 and $12,240 was for the Companys Directors compensation in lieu of cash. Outstanding compensatory options consist of the following based on grant date: Weighted Average Number of Exercise Fair Remaining Aggregate Outstanding at January 1, 2016 15,119 $ 261.50 $ 87.08 4.9 $ - Granted - - - - - Forfeited or lapsed (107 ) 2,274.17 765.74 - - Outstanding at March 31, 2016 15,012 $ 246.88 $ 82.30 4.7 $ - Exercisable at March 31, 2016 11,549 $ 310.40 $ 100.32 4.2 $ - Non-vested compensatory options consist of the following based on grant date: All Options Shares Fair Value Subject to future vesting at January 1, 2016 5,210 $ 261.13 Granted - - Forfeited or lapsed (15 ) 133.33 Vested (1,732 ) 20.31 Subject to future vesting at March 31, 2016 3,463 $ 22.17 As of March 31, 2016, there was $70,332 of unrecognized compensation related to non-vested options granted under the plans. The Company expects to recognize this expense over a weighted average period of 1.75 year. There have been no options granted in 2016. |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 3 Months Ended |
Mar. 31, 2016 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) Per Share | 6. Earnings (Loss) Per Share Basic earnings per share is computed by dividing income available to common shareholders (the numerator) by the weighted-average number of common shares outstanding (the denominator) for the period. Diluted earnings per share are computed by assuming that any dilutive convertible securities outstanding were converted, with related preferred stock dividend requirements and outstanding common shares adjusted accordingly. It also assumes that outstanding common shares were increased by shares issuable upon exercise of those stock options for which the market price exceeds the exercise price, less shares which could have been purchased by us with the related proceeds. In periods of losses, diluted loss per share is computed on the same basis as basic loss per share as the inclusion of any other potential shares outstanding would be anti-dilutive. If the Company had generated earnings during the three months ended March 31, 2016 and 2015, the Company would have added 237,632,851 and 26,816,151 respectively, of common equivalent shares to the weighted average shares outstanding to compute the diluted weighted average shares outstanding. |
Other Income
Other Income | 3 Months Ended |
Mar. 31, 2016 | |
Component of Operating Income [Abstract] | |
Other Income | 7. Other Income For the quarter ended March 31, 2016, the Company recognized $35,854 in other income. The Company sold various pieces of zero value equipment. |
Notes with Landlords
Notes with Landlords | 3 Months Ended |
Mar. 31, 2016 | |
Notes With Landlords | |
Notes with Landlords | 8. Notes with Landlords At December 31, 2015, the Company had a remaining balance of $237,600 in notes with its landlords for its two New Castle facilities. The balance remaining at March 31, 2016 for the notes with the landlords was $91,703. As per the note agreement the Company made payments of $25,000 per month to Becan Development and for the final payment due in April reduced the cash payment by the original $19,297 lease deposit. In addition to the principal payments, Becan Development also received $2,300 in interest. As per the note agreement with S&S Partnership, the Company made monthly installment payments of $17,200 for a total of $51,600 in principal payments. The Company also paid $2,955 of accrued interest. As of April 1, 2016, the Company has moved from the Greenridge facility as planned and consolidated to the Clover Lane facility. Principal outstanding at March 31, 2016, on the remaining landlord notes is $91,703 plus interest that continues to accrue. |
Subordinated Convertible Notes
Subordinated Convertible Notes and Subordinated Warrants | 3 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
Subordinated Convertible Notes and Subordinated Warrants | 9. Subordinated Convertible Notes and Subordinated Warrants During 2013 , The fair value of the warrants, issued in connection with the Subordinated Notes is $304,000 in the aggregate and was calculated using the Black-Scholes-Merton option pricing model with the following assumptions: (i) expected life of 5 years, (ii) volatility of 80%, (iii) risk free interest rate of 0.75% and (iv) dividend yield of zero. The outstanding principal balance at March 31, 2016 and December 31, 2015, related to the Subordinated Notes is $65,000. The subordinated notes remain outstanding as a result of a verbal agreement with the noteholder to continue to extend The maturity thereof. |
Public offering of common stock
Public offering of common stock, Series A warrants and Series B warrants | 3 Months Ended |
Mar. 31, 2016 | |
Public Offering Of Common Stock Series Warrants And Series B Warrants | |
Public offering of common stock, Series A warrants and Series B warrants | 10. Public offering of common stock, Series A warrants and Series B warrants Effective October 29, 2014, the Company consummated an underwritten public offering consisting of 53,572 shares of common stock ("Common Stock"), together with Series A warrants to purchase 53,572 shares of its Common Stock ("Series A Warrants") and Series B warrants to purchase 1,875,000 shares of its Common Stock (Series B Warrants) for gross proceeds to the Company of approximately $6.1 million and net proceeds of $5.5 million. The public offering price for each share of Common Stock, together with one Series A Warrant and one Series B Warrant, was $113.75. The Series A Warrants may be exercised for a period of five years and have an exercise price of $113.75 per share of Common Stock. The Series B Warrants were originally exercisable for a period of 15 months from the date of closing and expired on April 29, 2016 (due to an extension) and had an exercise price of $113.75 per share of Common Stock. In connection with the offering, the Company granted to the underwriter a 45-day option to acquire up to 8,036 additional shares of Common Stock and/or up to 8,036 additional Series A Warrants and/or up to 281,250 additional Series B Warrants. The Company has also closed on the underwriters exercise of the over-allotment option on the Series A Warrants and the Series B Warrants. The Companys common stock and Series A Warrants are now listed on the OTCQB Capital Market under the symbols AXPW and AXPWW, respectively. On June 15, 2015, as the result of an agreement with the holders of our Series A warrants and Series B warrants, we adjusted the terms of our Series A warrants so that the exercise price was reduced to $.50, which number was changed to $17.50 as a result of our July 14, 2015 1-for -35 reverse stock split. As of March 31, 2016, 34,521 Series B warrants remained unexercised. On April 26, 2016, 10,000 Series B warrants were exercised and 11,250 shares of the Companys common stock were issued. The remaining 24,521 unexercised Series B warrants expired on April 29, 2016. Accounting for the Series B warrants Pursuant to ASC 815-40, due to the net settlement terms included in the Series B warrants, which requires an increased number of shares to be issued if the price of the Companys common stock falls, the Company determined that the Series B warrants were not indexed to the Companys own stock and must be recognized separately as a derivative liability in the consolidated balance sheet, measured at fair value and marked to market each reporting period. As of March 31, 2016 and December 31, 2015, the fair value of the Series B warrants was estimated to be $2,089 and $35,764, respectively. The change in the fair value of the Series B warrant liability is as follows: Fair Value Series B warrant liability, January 1, 2016 $ 35,764 Revaluation of remaining Series B warrants (33,675 ) Series B warrant liability, March 31, 2016 $ 2,089 Fair Value Disclosure The Company has three Level 3 financial instruments - Series B warrants associated with the public offering of common stock, Senior Warrants and the conversion feature associated with the 2015 Senior Notes, which are recorded at fair value on a periodic basis. The Series B warrants, Senior Warrants and the conversion feature associated with the 2015 placement, are evaluated under the hierarchy of FASB ASC Subtopic 480-10, FASB ASC Paragraph 815-25-1 and FASB ASC Subparagraph 815-10-15-74 addressing embedded derivatives. The fair value of the warrants and the conversion feature are estimated using the Monte Carlo simulation model. In addition, the Company has warrants and a conversion feature related to the Private Placement note dated November 5, 2015. For the warrants issued in 2015, at inception, the warrants were valued by calibrating the aggregate fair value of the notes and warrants to the transaction price, as required by ASC 820. Calibrating the valuation model to ensure that the model is consistent with the fair value at initial recognition provides a basis for estimating the inputs required in the analysis that are not directly observable. For each subsequent reporting date, the warrants were valued based on the payoff structure, considering the change in assumptions between the inception and the subsequent reporting date. |
Description of the 2015 Private
Description of the 2015 Private Placement | 3 Months Ended |
Mar. 31, 2016 | |
Description Of 2015 Private Placement | |
Description of the 2015 Private Placement | 11. Description of the 2015 Private Placement On November 4, 2015, we entered into a financing transaction for the sale of convertible notes and warrants issued by us with gross proceeds of $9,000,000 to us. Upon closing of the sale of the notes and warrants, which occurred on November 5, 2015, we received cash proceeds of $1.85 million and deposit of an additional $7,100,000 million into a series of control accounts in our name. Under the original terms of the notes, we are permitted to withdraw funds from our control accounts (i) in connection with certain conversions of the notes or (ii) otherwise, as follows: $1 million on each 30-day anniversary of the commencing on the 30 th We received approximately $1,700,000 in net proceeds at closing, which occurred on November 5, 2015, after deducting our placement agents fee of $138,750. Offering expenses, other than our placement agents fee, were approximately $100,000, which were paid out of the proceeds at Closing. At each release of funds starting on May 6, 2016, we are to receive approximately $620,000 in net proceeds, after deducting our placement agents fee of $50,000, if equity conditions are met. As a result of a further waiver and amendment entered into on May 1, 2016, the equity conditions were waived with respect to a release of $310,000 to us on May 6, 2016. Further, the waiver and amendment (i) waives equity conditions for our ability to make all installment and preinstallment payments in stock through May 6, 2017, and (ii) reduces the preinstallment and installment conversion prices to 75% of an average vwap price over the five trading days preceding the date of issuance. The initial conversion price of the notes was $1.23 per share (for optional conversions only and not Company amortization payments), and the initial exercise price of the 10,975,608 warrants was $1.29 per share. As a result of the rollover of $363,530 of principal amount and accrued and unpaid interest of our August 2015 Bridge Notes, on November 10, 2015, an additional note in the principal amount of $363,530 of notes, and an additional 443,328 warrants were issued to replace the rolled over Bridge Notes. The outstanding principal bears interest at 9% per annum and shall be repaid or converted at monthly installment dates over a 14-month period. Additionally, the notes are convertible by the holder at any time after issuance. Pursuant to the optional conversion feature of these notes (as opposed to the monthly Company conversions which are at a discount formula as set forth below), the Company would deliver the number of shares of common stock equal to the outstanding principal amount, accrued interest amount, and a make whole amount equal to the interest that would be accrued on the conversion amount until maturity, divided by the fixed conversion price of $1.23. Additionally, a portion of the outstanding amount is exchanged for common shares at each Monthly Installment Date at a conversion price equal to the lower of the conversion price in effect and 85% of the fair value of the common shares the trading day prior to the installment date. On the 23 rd As the Company was required to separate the conversion option in the notes under ASC 815, Derivatives and Hedging, At inception, the warrants were valued by calibrating the aggregate fair value of the notes and warrants to the transaction price, as required by ASC 820. Calibrating the valuation model to ensure that the model is consistent with the fair value at initial recognition provides a basis for estimating the inputs required in the analysis that are not directly observable. For each subsequent reporting date, the warrants are valued based on the payoff structure, considering the change in assumptions between the inception and the subsequent reporting date. The conversion feature fair value is determined at inception and for each reporting date using a with and without analysis, based on the payoff structure of the notes. The same key assumptions utilized in the warrants valuation were considered in the conversion feature fair value, Using the Calibration model, to calculate the mark to market value at March 31, 2016, the following key assumptions were utilized in both the valuations of the notes and warrants as follows: (i) risk free interest rate 0.47%, (ii) credit spread 125%, (iii) volatility 51%, (iv) stock price $0.05. Derivative liability relating to the 2015 Private Placement The change in the fair value of the 2015 Private Placement derivative liability is as follows: Private Placement derivative liability, January 1, 2016 $ 2,118,156 Reclassification of derivative liability pertaining to converted stock (99,703 ) Revaluation of Private Placement Derivative liability (736,009 ) Private Placement Derivative liability March 31, 2016 $ 1,282,444 Securities Purchase Agreement The notes and warrants were issued pursuant to the terms of a Securities Purchase Agreement among us and the investors named therein. The Purchase Agreement provided for the sale of the notes and warrants for gross proceeds of $9,000,000 to us. Notes Ranking The notes are senior unsecured obligations of us. Maturity Date Unless earlier converted or redeemed, the notes mature 14 months from the Closing, subject to the right of the investors to extend the date (i) if an event of default under the notes has occurred and is continuing or any event shall have occurred and be continuing that with the passage of time and the failure to cure would result in an event of default under the Notes and (ii) for a period of 20 business days after the consummation of a fundamental transaction if certain events occur. Interest The notes bear interest at the rate of 9% per annum and are compounded monthly, on the first calendar day of each calendar month. The interest rate will increase to 18% per annum upon the occurrence and continuance of an event of default (as described below). Interest on the notes is payable in arrears on each installment date (as defined below). If a holder elects to convert or redeem all or any portion of a note prior to the maturity date, all accrued and unpaid interest on the amount being converted or redeemed will also be payable. If we elect to redeem all or any portion of a note prior to the maturity date, all accrued and unpaid interest on the amount being redeemed will also be payable. The amount of interest due at any time is the amount of any interest that, but for any conversion, installment conversion, acceleration or redemption hereunder on such given date, would have accrued with respect to the conversion amount or installment amount being converted or redeemed under the note at the interest rate for the period from such given date through the maturity date of the note. Optional Conversion All amounts due under the notes are convertible at any time, in whole or in part, at the option of the holders into shares of our common stock at a fixed conversion price, which is subject to adjustment as described below. The notes are initially convertible into shares of our common stock at the initial price of $1.23 per share. This conversion price is subject to adjustment for stock splits, combinations or similar events and full ratchet antidilution provisions. Payment of Principal and Interest We have agreed to make amortization payments with respect to the principal amount of each note in shares of our common stock, subject to the satisfaction of certain equity conditions, or at our option, in cash on each of the following installment dates: the twenty-first trading day after the earlier of (x) the initial effective date of a registration statement filed in connection with this offering or (y) May 2, 2016; the first trading day of the calendar month immediately following the initial installment date (or if such date is less than twenty trading days after the initial installment date, the second calendar month immediately following the initial installment date to the extent); and then each month through and including the Maturity Date, each in an amount equal to 1/11 of the principal amount of each note. Payment in stock is at 85% of the market price based upon a variable weighted average price formula. As a result of the amendment agreements entered into by us with each selling stockholder on January 28, 2016, an additional $1,800,000 million was released from the controlled accounts on January 28, 2016, starting on May 2, 2016, and continuing for seven consecutive months thereafter on the 1 st Acceleration and Deferral of Amortization Amounts During each period after an installment date and prior to the immediately subsequent installment date, a holder may elect to accelerate the amortization of the note at the applicable amortization conversion price for such prior installment date with respect to any given installment period, the holder may not elect to effect any acceleration during such installment period if either (x) in the aggregate, all the accelerations in such installment period exceeds the sum of two (2) other installment amounts, or (y) accelerations have been consummated in four (4) prior installment periods. The holder of a note may, at the holders election by giving notice to us, defer the payment of the installment amount due on any installment dates, in whole or in part, to another installment date, in which case the amount deferred will become part of such subsequent installment date and will continue to accrue interest. Events of Default The notes contain standard and customary events of default including but not limited: (i) failure to register our common stock within certain time periods; (ii) failure to make payments when due under the Notes; and (iii) bankruptcy or insolvency of us. If an event of default occurs, each holder may require us to redeem all or any portion of the notes (including all accrued and unpaid interest thereon), in cash, at a price equal to the greater of (i) up to 125% of the amount being redeemed, depending on the nature of the default, and (ii) the intrinsic value of the shares of common stock then issuable upon conversion of the note. Fundamental Transactions The notes prohibit us from entering into specified transactions involving a change of control, unless the successor entity assumes in writing all of our obligations under the notes under a written agreement. In the event of transactions involving a change of control, the holder of a note will have the right to require us to redeem all or any portion of the Note it holds (including all accrued and unpaid interest thereon) at a price equal to the greater 125% of the amount of the Note being redeemed and the intrinsic value of the shares of common stock then issuable upon conversion of the note being redeemed. Limitations on Conversion and Issuance A note may not be converted and shares of common stock may not be issued under the notes if, after giving effect to the conversion or issuance, the holder together with its affiliates would beneficially own in excess of 4.99% of our outstanding shares of common stock. At each holders option, the note blocker may be raised or lowered to any other percentage not in excess of 9.99%. As a result of the January 28, 2016 amendment agreements, there is no exchange cap in this transaction. January 28, 2016 Amendment Agreements On January 28, 2016, we entered into amendment agreements with each of the selling stockholders with respect to the November 5, 2015 private placement exempt from securities registration under Section 4(a)(2) of the Securities Act of 1933 and Rule 506(b) of Regulation D. On or about November 20, 2015, we filed a registration statement on Form S-1 to register the Registrable Securities, and as a result of comments received from the SEC, we withdrew this original S-1 on January 21, 2016. Subsequent to the withdrawal of the original S-1, we sought to make certain amendments to the terms of the securities purchase agreement and registration rights agreement, entered into in connection with the sale of the senior secured convertible notes, as well as to the notes. The amendments are embodied in the amendment agreements with each of the buyers. Changes to the securities purchase agreement are as follows: · The term principal market was changed from the Nasdaq Capital Market to the OTCQB. This change was also made in the notes and accompanying warrants for conformity. · Section 4(d) was amended to add the following at the end of the Section. Until the later of June 2, 2016 and the date on which the Buyers are eligible to resell all shares of Company Common Stock underlying the Notes and Warrants (assuming cashless exercise of the Warrants) without restriction under Rule 144 (assuming such Buyers are not then affiliates of we), we may not make any payments to Affiliates of we other than (i) up to $11,800 to repay, in full, that certain bridge note issued by we to Walker Wainwright; (ii) director and Board committee fees in the ordinary course of business, consistent with past practices, to its non-management directors accruing on or after January 1, 2016 in an amount not to exceed $25,000, in the aggregate, per calendar quarter, (iii) current compensation arrangements (but not accrued and unpaid obligations for compensation to current and former officers of we) to its executive officers upon terms and conditions publicly existing as of December 31, 2015 and/or disclosed on a Current Report on Form 8-K on January 27, 2016; (iv) stock options and/or restricted stock as per normal Board of Directors policy; and (v) customary, reasonable and usual travel and lodging expenses for Company business. · We no longer have the obligation to obtain shareholder approval for the issuance of securities with respect to the private placement as we are moving our listing to the OTCQB which does not require shareholder approval for issuance of securities in this transaction. Accordingly, the exchange cap at 19.9% of issued and outstanding shares was also omitted. Changes to the notes are as follows: · The definition of an event upon which funds can be released from any of the controlled accounts was amended to read as follows: Controlled Account Release Event means, as applicable, (i) with respect to any Restricted Principal designated to be converted in a Conversion Notice, our receipt of both (A) such Conversion Notice hereunder executed by the Holder in which all, or any part, of the Principal to be converted includes any Restricted Principal and (B) written confirmation by the Holder that the shares of Common Stock issued pursuant to such Conversion Notice have been properly delivered in accordance with Section 3(c) (in each case, as adjusted, if applicable, to reflect the withdrawal of any Conversion Notice, in whole or in part, by the Holder, whether pursuant to Section 3(c)(ii) or otherwise), (ii) our receipt of a notice by the Holder electing to effect a release of any Restricted Principal to we, (iii) on the date of execution of the certain Amendment Agreements, dated January 28, 2016, by and among we and certain holders of the Notes, which act as an amendment to the Notes, $1,800,000, and (iv) on May 2, 2016, and the first Trading Day of each of the subsequent seven calendar months thereafter, the lesser of (x) the amount of Restricted Principal then outstanding hereunder and (y) the Holder Pro Rata Amount of $668,750; provided, in the case of clause (iv) above, as of such date of determination, no Equity Conditions Failure then exists. The Buyer hereby waives all Equity Condition Failures existing on or before the date of this Agreement. · Each existing note is being split into two notes, one of which is in the principal amount of the buyers pro rata portion of the initial $3,650,000 principal amount of funds released from the controlled accounts, and the second of which represents the remaining principal amount of the original note issued to that buyer. Changes to the registration rights agreement are as follows: · The filing deadline for the initial registration statement (registering shares to be issued upon conversion of the $3,650,000 principal amount of the notes and interest thereon representing the total amount of funds released from the controlled accounts to date) was changed to January 29, 2016, and the effectiveness deadline for the initial registration statement was changed to February 16, 2016. · The number of registrable securities was reduced to 10,735,296 shares of our common stock which may be issued upon conversion of up to $3.65 million principal amount of the notes and 966,178 shares of our common stock which may be issued upon conversion of interest due and owing on the released $3.65 million principal amount. · The initial notice date for installment payments by us is now the earlier of the effectiveness date of the registration statement being filed on January 29, 2016, and May 2, 2016. May 1, 2016 Waiver and Amendment The Company has entered into a Waiver and Amendment (Waiver) with each of the buyers listed on the Schedule of Buyers attached to the securities purchase agreement. In each Waiver, the Company and the Buyer agreed as follows: With respect to the Notes, the Buyer waives the Volume Failure (as defined in the securities purchase agreement) and the Price Failure (as defined in the securities purchase agreement) on any and all Installment Conversions (as defined in the securities purchase agreement) and delivery of shares for any Pre-Installment Conversion Shares (as defined in the securities purchase agreement) pursuant to an Installment Notice (as defined in the securities purchase agreement) until May 1, 2017. Section 3(b)(2) of the Notes is amended by replacing the definition of Conversion Price, as defined in the Notes, with the following definition: as of any Conversion Date or other date of determination, a price per share equal to the lowest of (x) $1.23, subject to adjustment as provided in this Note (the price set forth in this clause (x), the "Fixed Conversion Price"), (y) 75% of the arithmetic average of the Weighted Average Prices of the Common Stock during the five (5) consecutive Trading Day period ending immediately preceding the time of delivery of the applicable Conversion Notice, and (z) 75% of the Weighted Average Price of the Common Stock on the Trading Day of the delivery of the applicable Conversion Notice. For the avoidance of doubt, all such foregoing determinations to be appropriately adjusted for any stock dividend, stock split, stock combination, reclassification or similar transaction during the applicable calculation period. All references in paragraphs 7, 8 and 11 of the Notes to Conversion Price are amended to state Fixed Conversion Price. Paragraph 4 of the Amendment Agreement, dated January 28, 2016, among the Company and the Buyers, is amended by adding the following sentence at the end of the paragraph: Notwithstanding anything to the contrary in this paragraph 4, the Company and the Buyers hereby acknowledge that the Equity Conditions for the Controlled Account Release Event on May 6, 2016 are not, and are deemed not to be, satisfied, and the Buyers hereby waive the Equity Conditions for the Controlled Account Release Event on May 6, 2016, for an aggregate release of $310,000, to be released proportionately among the Buyers based upon the pro rata share as a result of the original principal amounts of the Notes. The Waivers became effective on May 1, 2016. Warrants The warrants entitle the holders of the warrants to purchase, in aggregate, 11,418,936 (10,975,608 shares from the November 5, 2015 closing and 443,328 shares from the rollover of Bridge Notes described at the beginning of this section) shares of our common stock. The warrants will expire November 5, 2017. The Warrants are initially exercisable at an exercise price equal to the lower of $1.29 and 85% of the market price at the time of exercise, subject to certain adjustments. The warrants may be exercised for cash, provided that, if there is no effective registration statement available registering the exercise of the warrants, the warrants may be exercised on a cashless basis. The exercise price of the warrants is subject to adjustment for stock splits, combinations or similar events, and, in this event, the number of shares issuable upon the exercise of the warrant will also be adjusted so that the aggregate exercise price shall be the same immediately before and immediately after the adjustment. In addition, the exercise price is also subject to a full ratchet anti-dilution adjustment if we issue or are deemed to have issued securities at a price lower than the then applicable exercise price. Limitations on Exercise The warrants may not be exercised if, after giving effect to the exercise, the holder of the warrant together with its affiliates would beneficially own in excess of 4.99% of our outstanding shares of common stock. At each holders option, the warrant blocker applicable to the exercise of the warrants may be raised or lowered to any other percentage not in excess of 9.99%. Fundamental Transactions The warrants prohibit us from entering into specified transactions involving a change of control, unless the successor entity assumes all of our obligations under the Warrants under a written agreement before the transaction is completed. Registration Rights Agreement We entered into a Registration Rights Agreement with the Holders as of the date of Closing. Under this Agreement, we have agreed to register 200% of the shares issuable under the notes and 125% of the shares issuable under the warrants, with filing to occur no later than 15 days of the Closing and with effectiveness to occur no later than 75 days of the Closing. If we are unable to meet either of these deadlines, we may be required to pay certain cash damages under the registration rights agreement or, with the passage of additional time, an event of default under the notes may occur. As a result of the January 28, 2016 amendment, the Company was only required to register shares of stock upon conversion of $3.65 million principal amount of the notes, and interest thereon with a 200% reserve for registration. 2015 Private Placement Debt Rollforward: Balance- January 1, 2016 $ 7,085,818 Conversion of senior convertible notes (722,172 ) Amortization of senior convertible notes 877,049 Balance- March 31, 2016 $ 7,240,695 As of March 31, 2016, the Company has issued 4,443,567 shares of its common stock to convert $722,172 of principal. In addition on March 31, 2016, the Company issued 366,594 shares of common stock for $59,580 interest and 308,828 shares of common stock for $50,221 make whole interest. The Company recognized an extinguishment loss of $334,791 on the conversions of the senior convertible notes. The loss is determined based on the difference between the conversion price as calculated on the installment date versus the previously calculated price on the notice date. The Company estimates that it will need to issue an additional 13,073,000 shares due to this price variance. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 13. Related party transactions During the first quarter of 2016, the Company engaged the services of a marketing firm to provide branding and web site development at a cost of $15,000. We engaged the firm to further provide sales and marketing services for the full year at an estimated cost of $115,000. The principal of this firm is our Chief Executive Officers brother in law; however, neither our Chief Executive Officer nor his immediate family has any direct or indirect interest in the marketing firm. As of March 31, 2016, the Company has paid $80,000 to this marketing firm. At March 31, 2016, there was no balance owed to this related party in the Companys accounts payable balance. At March 31, 2016, the Companys accounts payable balance included $75,341 as a result of related party transactions. Of those transactions, $59,593 was for consulting fees associated with the previous CEO, $17,290 was for director related meeting fees, and $3,980 was for employee related travel expense reimbursement. For the period ended March 31, 2015, the Companys accounts payable balance included $16,947 in related party transactions. Of those transactions $8,343, was for fees associated with the previous CEO, and $8,604 were for employee related travel expense reimbursement. |
Going concern
Going concern | 3 Months Ended |
Mar. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going concern | 14. Going concern The accompanying unaudited consolidated financial statements have been prepared assuming that the Company will continue as a going concern. At March 31, 2016 the Companys working capital was $(2.8) million. The financial resources of the Company will not provide sufficient funds for the Companys operations beyond the third quarter of 2016, as those operations currently exist. Subsequent funding will be required to fund the Companys ongoing operations, working capital, and capital expenditures beyond the third quarter of 2016. No assurances can be given that the Company will be successful in arranging the further funds needed to continue the execution of its business plan, which includes the development and commercialization of new products, or even if further funding is available, upon what terms. Failure to obtain such funds on terms acceptable to the Companys management will require management to substantially curtail, if not cease, operations, which will result in a material adverse effect on the financial position and results of operations of the Company. The unaudited consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that might occur if the Company is unable to continue as a going concern. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | 15. Subsequent events On April 27, 2016, there was a cashless exercise of 10,000 Series B warrants that resulted in the issuance of 11,250 shares of the Companys common stock. The remaining Series B warrant expired on April 29, 2016. Effective April 21, 2016, Stanley Hirschman resigned as a director and chairman and member of the Audit Committee of the Company due to his inability to devote the time and resources necessary to continue in his role as a director. On April 25, 2016, the Companys Board of Directors appointed Richard Bogan, its Chief Executive Officer, as its Chairman in addition to being its CEO, and Donald Farley, as its Vice Chairman. The Board also appointed Michael Kishinevsky as the interim chairman of its Audit Committee. On May 1, 2016, the Company has entered into Waiver and Amendment agreements with each of the investors in its November 2015 private placement. The terms of the Waivers are described fully in Note 11 to these financial statements. As of May 13, 2016, 41,289,801 shares of our common stock have been issued as a result of the conversion of principal, interest and make-whole interest of our November 2015 Senior Convertible Notes which shall be applied consistent with conversion notices and for Pre-Installment Shares, calculation and application of the applicable Installment Price and share true up arising therefrom. |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Schedule of inventory | A summary of inventory at March 31, 2016 and December 31, 2015 is as follows: March 31, 2016 December Raw materials $ 417,770 $ 363,559 Work in process 510,443 421,732 Finished goods 27,564 34,581 Inventory reserves (630,813 ) (540,037 ) $ 324,964 $ 279,835 |
Warrants (Tables)
Warrants (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Stockholders' Equity Note [Abstract] | |
Schedule of information on warrants outstanding | Warrants consist of the following: Shares Weighted Weighted average Outstanding at January 1, 2016 12,582,352 $ 1.85 1.97 Granted - - - Exercised - - - Lapsed - - - Outstanding at March 31, 2016 12,582,352 $ 1.85 1.71 |
Equity Compensation (Tables)
Equity Compensation (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Equity [Abstract] | |
Schedule of outstanding compensatory options | Outstanding compensatory options consist of the following based on grant date: Weighted Average Number of Exercise Fair Remaining Aggregate Outstanding at January 1, 2016 15,119 $ 261.50 $ 87.08 4.9 $ - Granted - - - - - Forfeited or lapsed (107 ) 2,274.17 765.74 - - Outstanding at March 31, 2016 15,012 $ 246.88 $ 82.30 4.7 $ - Exercisable at March 31, 2016 11,549 $ 310.40 $ 100.32 4.2 $ - |
Schedule of non-vested compensatory stock options | Non-vested compensatory options consist of the following based on grant date: All Options Shares Fair Value Subject to future vesting at January 1, 2016 5,210 $ 261.13 Granted - - Forfeited or lapsed (15 ) 133.33 Vested (1,732 ) 20.31 Subject to future vesting at March 31, 2016 3,463 $ 22.17 |
Public offering of common sto23
Public offering of common stock, Series A warrants and Series B warrants (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Public Offering Of Common Stock Series Warrants And Series B Warrants | |
Schedule of change in the fair value of the Series B warrant liability | The change in the fair value of the Series B warrant liability is as follows: Fair Value Series B warrant liability, January 1, 2016 $ 35,764 Revaluation of remaining Series B warrants (33,675 ) Series B warrant liability, March 31, 2016 $ 2,089 |
Description of the 2015 Priva24
Description of the 2015 Private Placement (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Description Of 2015 Private Placement | |
Schedule of change in the fair value of Private Placement derivative liability | The change in the fair value of the 2015 Private Placement derivative liability is as follows: Private Placement derivative liability, January 1, 2016 $ 2,118,156 Reclassification of derivative liability pertaining to converted stock (99,703 ) Revaluation of Private Placement Derivative liability (736,009 ) Private Placement Derivative liability March 31, 2016 $ 1,282,444 |
Schedule of senior convertibles notes | 2015 Private Placement Debt Rollforward: Balance- January 1, 2016 $ 7,085,818 Conversion of senior convertible notes (722,172 ) Amortization of senior convertible notes 877,049 Balance- March 31, 2016 $ 7,240,695 |
Basis of Presentation (Details
Basis of Presentation (Details Narrative) | Jul. 14, 2015 | Mar. 31, 2016Number | Dec. 31, 2015shares |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Number of subsidiaries | Number | 2 | ||
Stockholders' equity, reverse stock split | 1-for-35 | ||
Stock issued during period, shares, reverse stock splits | shares | 582,729 |
Inventories (Details)
Inventories (Details) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 417,770 | $ 363,559 |
Work in process | 510,443 | 421,732 |
Finished goods | 27,564 | 34,581 |
Inventory reserves | (630,813) | (540,037) |
Inventory, net | $ 324,964 | $ 279,835 |
Warrants (Details)
Warrants (Details) - Warrant [Member] | 3 Months Ended |
Mar. 31, 2016$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Outstanding at beginning | shares | 12,582,352 |
Granted | shares | |
Exercised | shares | |
Lapsed | shares | |
Outstanding at ending | shares | 12,582,352 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | |
Outstanding at beginning | $ / shares | $ 1.85 |
Granted | $ / shares | |
Exercised | $ / shares | |
Lapsed | $ / shares | |
Outstanding at ending | $ / shares | $ 1.85 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Life [Roll Forward] | |
Outstanding at beginning | 1 year 11 months 20 days |
Outstanding at ending | 1 year 8 months 16 days |
Warrants (Details Narrative)
Warrants (Details Narrative) - shares | 3 Months Ended | |||
Mar. 31, 2016 | Apr. 26, 2016 | Dec. 31, 2015 | Mar. 31, 2015 | |
Series B Warrants [Member] | ||||
Number of warrants | 34,521 | 24,521 | ||
Series B Warrants [Member] | Derivative Liabilities [Member] | ||||
Number of warrants | 34,521 | 1,047,947 | ||
Warrants expiration date | Apr. 29, 2016 | |||
Warrant [Member] | ||||
Number of warrants | 12,582,352 | 12,582,352 | ||
Warrant [Member] | Derivative Liabilities [Member] | 2015 Private Placement [Member] | ||||
Number of warrants | 11,967,716 |
Equity Compensation (Details)
Equity Compensation (Details) | 3 Months Ended |
Mar. 31, 2016USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
Outstanding at beginning | shares | 15,119 |
Granted | shares | |
Forfeited or lapsed | shares | (107) |
Outstanding at ending | shares | 15,012 |
Exercisable at ending | shares | 11,549 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | |
Outstanding at beginning | $ 261.50 |
Granted | |
Forfeited or lapsed | $ 2,274.17 |
Outstanding at ending | 246.88 |
Exercisable at ending balance | 310.40 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Fair Value [Roll Forward] | |
Outstanding at beginning | $ 87.08 |
Granted | |
Forfeited or lapsed | $ 765.74 |
Outstanding at ending | 82.30 |
Exercisable at ending | $ 100.32 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Weighted Average Remaining Life [Roll Forward] | |
Outstanding at beginning | 4 years 10 months 24 days |
Outstanding at ending | 4 years 8 months 12 days |
Exercisable at ending balance | 4 years 2 months 12 days |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Aggregate Intrinsic Value [Roll Forward] | |
Outstanding at beginning | $ | |
Granted | $ | |
Forfeited or lapsed | $ | |
Outstanding at ending | $ | |
Exercisable at ending | $ |
Equity Compensation (Details 1)
Equity Compensation (Details 1) | 3 Months Ended |
Mar. 31, 2016$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Number of Shares [Roll Forward] | |
Subject to future vesting at beginning | shares | 5,210 |
Granted | shares | |
Forfeited or lapsed | shares | (15) |
Vested | shares | (1,732) |
Subject to future vesting at ending | shares | 3,463 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | |
Subject to future vesting at beginning | $ / shares | $ 261.13 |
Granted | $ / shares | |
Forfeited or lapsed | $ / shares | $ 133.33 |
Vested | $ / shares | 20.31 |
Subject to future vesting at ending | $ / shares | $ 22.17 |
Equity Compensation (Details Na
Equity Compensation (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Equity [Abstract] | ||
Stock based compensation expense | $ 12,243 | $ 108,071 |
Directors' compensation in lieu of cash | 0 | $ 12,240 |
Unrecognized compensation related to non-vested options granted | $ 70,332 | |
Weighted average period for unrecognized compensation | 1 year 9 months |
Earnings (Loss) Per Share (Deta
Earnings (Loss) Per Share (Details Narrative) - shares | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Earnings Per Share [Abstract] | ||
Weighted average number of shares outstanding, diluted | 237,632,851 | 26,816,151 |
Other Income (Details Narrative
Other Income (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Component of Operating Income [Abstract] | ||
Other income | $ 35,854 | $ 7 |
Notes with Landlords (Details N
Notes with Landlords (Details Narrative) - Notes Payable to Landlord [Member] - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2016 | Dec. 31, 2015 | |
Remaining balance with the landlords | $ 91,703 | $ 237,600 |
Becan Development [Member] | ||
Deposit amount | 19,297 | |
Complete payment | 25,000 | |
Accrued interest | 2,300 | |
S&S Partnership [Member] | ||
Complete payment | 17,200 | |
Principal amount | 51,600 | |
Accrued interest | $ 2,955 |
Subordinated Convertible Note35
Subordinated Convertible Notes and Subordinated Warrants (Details Narrative) - 8% 2013 Subordinated Convertible Notes [Member] - USD ($) | 12 Months Ended | ||
Dec. 31, 2013 | Mar. 31, 2016 | Dec. 31, 2015 | |
Principal amount | $ 1,000,000 | $ 65,000 | $ 65,000 |
Net proceeds from debt | $ 1,000,000 | ||
Effective interest rate | 8.00% | ||
Conversion price (in dollars per share) | $ 462 | ||
Subordinated Warrant [Member] | |||
Warrant term | 5 years | ||
Number of shares called | 1,097 | ||
Exercise price (in dollars per share) | $ 528.50 | ||
Warrant fair value | $ 304,000 | ||
Expected life | 5 years | ||
Volatility rate | 80.00% | ||
Risk free interest rate | 0.75% | ||
Dividend yield | 0.00% |
Public offering of common sto36
Public offering of common stock, Series A warrants and Series B warrants (Details) - Series B Warrants [Member] | 3 Months Ended |
Mar. 31, 2016USD ($) | |
Warrant, Fair Value Disclosure [Roll Forward] | |
Series B warrant liability,beginning | $ 35,764 |
Revaluation of remaining Series B warrants | (33,675) |
Warrant liability fair value,ending | $ 2,089 |
Public offering of common sto37
Public offering of common stock, Series A warrants and Series B warrants (Details Narrative) - USD ($) | Apr. 26, 2016 | Jul. 14, 2015 | Oct. 29, 2014 | Mar. 31, 2016 | Dec. 31, 2015 | Jun. 25, 2015 |
Number of new shares issued during the period | 8,036 | 13,073,000 | ||||
Gross proceeds from public offering | $ 6,100,000 | |||||
Net proceeds from public offering | $ 5,500,000 | |||||
Description of reverse split stock | 1-for-35 | |||||
IPO [Member] | ||||||
Number of new shares issued during the period | 53,572 | |||||
Series A Warrants [Member] | ||||||
Number of shares called | 8,036 | |||||
Exercise price (in dollars per share) | $ 17.50 | |||||
Reduced exercise price (in dollars per share) | $ 0.50 | |||||
Description of reverse split stock | 1-for -35 reverse stock split. | |||||
Series A Warrants [Member] | IPO [Member] | ||||||
Number of shares called | 53,572 | |||||
Exercise price (in dollars per share) | $ 113.75 | |||||
Warrants exercisable period | 5 years | |||||
Series B Warrants [Member] | ||||||
Number of warrants unexercised | 24,521 | 34,521 | ||||
Number of shares called | 10,000 | 281,250 | ||||
Number of new shares issued during the period | 11,250 | |||||
Fair value warrants issued | $ 2,089 | $ 35,764 | ||||
Series B Warrants [Member] | IPO [Member] | ||||||
Number of shares called | 1,875,000 | |||||
Exercise price (in dollars per share) | $ 113.75 | |||||
Warrants exercisable period | 15 months | |||||
Warrants expiration date | Apr. 29, 2016 |
Description of the 2015 Priva38
Description of the 2015 Private Placement (Details) - 2015 Private Placement Notes and Warrants [Member] | 3 Months Ended |
Mar. 31, 2016USD ($) | |
Private Placement Derivative Liability [Roll Forward] | |
Private Placement derivative liability at beginning | $ 2,118,156 |
Reclassification of derivative liability pertaining to converted stock | (99,703) |
Revaluation of Private Placement Derivative liability | (736,009) |
Private Placement Derivative liability at ending | $ 1,282,444 |
Description of the 2015 Priva39
Description of the 2015 Private Placement (Details 1) | 3 Months Ended |
Mar. 31, 2016USD ($) | |
2015 Private Placement Debt [Roll forward] | |
Balance at beginning | $ 7,085,818 |
Conversion of senior convertible notes | (722,172) |
Amortization of senior convertible notes | 877,049 |
Balance at ending | $ 7,240,695 |
Description of the 2015 Priva40
Description of the 2015 Private Placement (Details Narrative) | May. 06, 2016USD ($) | Jan. 28, 2016USD ($)Number | Nov. 10, 2015USD ($) | Nov. 05, 2015USD ($) | Nov. 03, 2015USD ($) | Jan. 28, 2016USD ($)Numbershares | Mar. 31, 2016USD ($)$ / sharesshares | Mar. 31, 2015USD ($) | Nov. 04, 2015USD ($) |
Discount on debt | $ 877,049 | ||||||||
Warrant [Member] | |||||||||
Warrant issued | shares | 10,975,608 | ||||||||
Exercise price (in dollars per shares) | $ / shares | $ 1.29 | ||||||||
Senior Convertible Note [Member] | |||||||||
Conversion price | $ / shares | $ 1.23 | ||||||||
August 2015 Rollover Bridge Notes [Member] | |||||||||
Accrued and unpaid interest | $ 363,530 | $ 363,530 | |||||||
Principal amount | $ 363,530 | $ 363,530 | |||||||
August 2015 Rollover Bridge Notes [Member] | Warrant [Member] | |||||||||
Warrant issued | shares | 443,328 | ||||||||
9% Senior Convertible Note [Member] | |||||||||
Debt face amount | $ 9,363,530 | ||||||||
Volatility rate | 51.00% | ||||||||
Risk free interest rate | 0.47% | ||||||||
Conversion price | $ / shares | $ 1.23 | ||||||||
Issuance costs for compensation | $ 33,250 | ||||||||
Discount on debt | 691,861 | ||||||||
Initial value of warrants | $ 725,111 | ||||||||
Stock price (in dollars per share) | $ / shares | $ 0.05 | ||||||||
Description of payment of principal and interest | As a result of the amendment agreements entered into by us with each selling stockholder on January 28, 2016, an additional $1.8 million was released from the controlled accounts on January 28, 2016, starting on May 2, 2016, and continuing for seven consecutive months thereafter on the 1 st | ||||||||
Description of converion feature | Date prior to any installment date, shares are delivered based upon the conversion price formula for the installment amount, and then on the installment date in question, the amount of shares to be delivered is recalculated for the conversion price formula on that installment date, and if the conversion price is lower on the installment date than on the preinstallment date, a number of shares equal to the number to be delivered on the installment date less the number of shares delivered on the preinstallment date is delivered to the investor. The number of common shares deliverable under the contract is limited by a beneficial ownership cap of 4.99% for any single investor (except for one investor which has a cap of 9.99%), so shares may be deemed issued but held in abeyance by the transfer agent until the investor is able to accept further shares without exceeding the beneficial ownership cap. | ||||||||
2015 Private Placement [Member] | |||||||||
Value of principal amount on conversion | $ 722,172 | ||||||||
Number of common shares converted | shares | 4,443,567 | ||||||||
Number of share issued for interest | shares | 366,594 | ||||||||
Value of share issued for interest | $ 59,580 | ||||||||
Value of share issued for whole interest | $ 50,221 | ||||||||
Number of share issued for whole interest | shares | 308,828 | ||||||||
Extinguishment loss | $ 334,791 | ||||||||
Securities Purchase Agreement [Member] | |||||||||
Debt face amount | $ 9,000,000 | ||||||||
2015 Private Placement [Member] | Senior Notes And Warrants [Member] | |||||||||
Cash proceeds | $ 1,800,000 | $ 1,800,000 | $ 1,850,000 | ||||||
Deposit amount | $ 7,100,000 | ||||||||
Gross proceed from sale of debt | $ 1,700,000 | $ 9,000,000 | |||||||
Description of notes | Under the original terms of the notes, we are permitted to withdraw funds from our control accounts (i) in connection with certain conversions of the notes or (ii) otherwise, as follows: $1 million on each 30-day anniversary of the commencing on the 30 th | ||||||||
Cash proceeds released from the controlled accounts | $ 5,350,000 | 5,350,000 | |||||||
Number of installment | Number | 8 | ||||||||
Placement agent fees | 138,750 | ||||||||
Offering expenses | $ 100,000 | ||||||||
2015 Private Placement [Member] | Senior Notes And Warrants [Member] | Subsequent Event [Member] | |||||||||
Gross proceed from sale of debt | $ 620,000 | ||||||||
Placement agent fees | 50,000 | ||||||||
2015 Private Placement [Member] | Senior Notes And Warrants [Member] | Subsequent Event [Member] | Waiver And Amendment [Member] | |||||||||
Gross proceed from sale of debt | $ 310,000 | ||||||||
Description of notes | The waiver and amendment (i) waives equity conditions for our ability to make all installment and preinstallment payments in stock through May 6, 2016, and (ii) reduces the preinstallment and installment conversion prices to 75% of an average vwap price over the five trading days preceding the date of issuance. | ||||||||
2015 Private Placement Of Notes And Warrants Amendment Agreements [Member] | August 2015 Bridge Notes [Member] | |||||||||
Debt face amount | $ 3,650,000 | 3,650,000 | |||||||
Principal amount | $ 1,800,000 | ||||||||
Number of shares issued upon conversion | Number | 966,178 | ||||||||
Reduction in number of shares reserved for conversion | shares | 10,735,296 |
Description of the 2015 Priva41
Description of the 2015 Private Placement (Details Narrative 1) - $ / shares | 1 Months Ended | 3 Months Ended | |
Oct. 29, 2014 | Mar. 31, 2016 | Nov. 05, 2015 | |
Additional new shares issued due to price variance | 8,036 | 13,073,000 | |
Senior Notes And Warrants [Member] | Securities Purchase Agreement [Member] | |||
Conversion of stock description | The holder of the warrant together with its affiliates would beneficially own in excess of 4.99% of our outstanding shares of common stock. At each holders option, the warrant blocker applicable to the exercise of the warrants may be raised or lowered to any other percentage not in excess of 9.99%. | ||
Warrants expiration date | Nov. 5, 2017 | ||
Senior Notes And Warrants [Member] | Securities Purchase Agreement [Member] | Warrant [Member] | |||
Warrants to purchase | 11,418,936 | 10,975,608 | |
Exercise price (in dollars per shares) | $ 1.29 | ||
Percentage of exercise price of warrants | 85.00% | ||
Senior Notes And Warrants [Member] | Registration Rights Agreement [Member] | |||
Shares issuable percent | 200.00% | ||
Senior Notes And Warrants [Member] | Registration Rights Agreement [Member] | Warrant [Member] | |||
Percentage of warrants issuable | 125.00% |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Accounts payable | $ 75,341 | $ 16,947 |
Consulting fees | 0 | 12,240 |
Travel expense reimbursement | 3,980 | 8,604 |
Marketing Firm [Member] | ||
Advertising expense | 15,000 | |
Estimated advertising cost | 115,000 | |
Amount paid to related party | 80,000 | |
Previous CEO And Interim CEO [Member] | ||
Consulting fees | 59,593 | $ 8,343 |
Mr. DiGiancinto [Member] | ||
Meeting fees | $ 17,290 |
Going Concern (Details Narrativ
Going Concern (Details Narrative) | 3 Months Ended |
Mar. 31, 2016USD ($) | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Working capital | $ 2,800,000 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - shares | May. 13, 2016 | Apr. 27, 2016 | Apr. 26, 2016 | Oct. 29, 2014 | Mar. 31, 2016 |
Stock issued during period shares new issues | 8,036 | 13,073,000 | |||
Series B Warrants [Member] | |||||
Stock issued during period shares new issues | 11,250 | ||||
Number of shares called | 10,000 | 281,250 | |||
Subsequent Event [Member] | Senior Convertible Note [Member] | |||||
Stock issued during period shares new issues | 41,289,801 | ||||
Subsequent Event [Member] | Series B Warrants [Member] | |||||
Stock issued during period shares new issues | 11,250 | ||||
Number of shares called | 10,000 |