Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Mar. 30, 2015 | Jun. 30, 2014 | |
Document And Entity Information | |||
Entity Registrant Name | DAIS ANALYTIC CORP | ||
Entity Central Index Key | 1125699 | ||
Document Type | 10-K | ||
Document Period End Date | 31-Dec-14 | ||
Amendment Flag | FALSE | ||
Current Fiscal Year End Date | -19 | ||
Is Entity a Well-known Seasoned Issuer? | No | ||
Is Entity a Voluntary Filer? | No | ||
Is Entity's Reporting Status Current? | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $7,435,032 | ||
Entity Common Stock, Shares Outstanding | 119,109,034 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2014 |
Balance_Sheets
Balance Sheets (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
CURRENT ASSETS | ||
Cash and cash equivalents | $2,343,523 | $27,125 |
Accounts receivable, net | 191,641 | 149,130 |
Other receivables | 41,079 | 109,106 |
Inventory | 99,521 | 159,870 |
Prepaid expenses | 16,542 | 47,540 |
Total Current Assets | 2,692,306 | 492,771 |
Property and equipment, net | 64,551 | 96,981 |
OTHER ASSETS: | ||
Deposits | 2,280 | 2,280 |
Patents, net of accumulated amortization of $201,607 and $176,178 at December 31, 2014 and December 31, 2013, respectively | 113,672 | 113,139 |
Total Other Assets | 115,952 | 115,419 |
TOTAL ASSETS | 2,872,809 | 705,171 |
CURRENT LIABILITIES: | ||
Accounts payable, including related party payables of $501,396 and $160,374 at December 31, 2014 and December 31, 2013, respectively | 882,434 | 641,074 |
Accrued expenses, other | 110,976 | 126,990 |
Current portion of deferred revenue and customer deposits | 123,011 | 205,201 |
Note payable, related party | 35,000 | |
Total Current Liabilities | 1,116,421 | 1,008,265 |
LONG-TERM LIABILITIES: | ||
Accrued compensation and related benefits | 1,192,409 | 1,672,893 |
Deferred revenue, net of current portion | 1,699,679 | 1,773,525 |
Total Long-Term Liabilities | 2,892,088 | 3,446,418 |
Total Liabilities | 4,008,509 | 4,454,683 |
STOCKHOLDERS' DEFICIT | ||
Preferred stock; $0.01 par value; 10,000,000 shares authorized; 0 shares issued and outstanding | ||
Common stock, $0.01 par value; 200,000,000 shares authorized; 101,366,247 and 60,116,247 shares issued and 101,109,034 and 59,859,034 shares outstanding, respectively | 1,013,663 | 601,163 |
Common stock payable | 2,199,960 | |
Capital in excess of par value | 38,768,460 | 36,994,742 |
Accumulated deficit | -41,845,671 | -40,073,305 |
Total | 136,412 | -2,477,400 |
Treasury stock at cost, 257,213 shares | -1,272,112 | -1,272,112 |
Total Stockholders' Deficit | -1,135,700 | -3,749,512 |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $2,872,809 | $705,171 |
Balance_Sheets_Parenthetical
Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Other assets: | ||
Patents, net of accumulated amortization | $201,607 | $176,178 |
Current liabilities: | ||
Accounts payable, including related party payables | $501,396 | $160,374 |
Stockholders' deficit: | ||
Preferred stock par value | $0.01 | $0.01 |
Preferred stock shares authorized | 10,000,000 | 10,000,000 |
Preferred stock shares issued | 0 | 0 |
Preferred stock shares outstanding | 0 | 0 |
Common stock par value | $0.01 | $0.01 |
Common stock shares authorized | 200,000,000 | 200,000,000 |
Common stock shares issued | 101,366,247 | 60,116,247 |
Common stock shares outstanding | 101,109,034 | 59,859,034 |
Treasury stock shares | 257,213 | 257,213 |
Statements_Of_Operations
Statements Of Operations (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
REVENUE: | ||
Sales | $1,718,315 | $1,526,989 |
License and royalty fees | 181,935 | 215,606 |
TOTAL | 1,900,250 | 1,742,595 |
COST OF GOODS SOLD | 1,217,559 | 1,257,418 |
GROSS MARGIN | 682,691 | 485,177 |
OPERATING EXPENSES | ||
Research and development expenses, net of government grant proceeds of $354,988 and $180,956, respectively | 408,119 | 495,175 |
Selling, general and administrative expenses | 2,047,898 | 2,108,629 |
Impairment of equipment | 2,672 | |
TOTAL OPERATING EXPENSES | 2,456,017 | 2,606,476 |
LOSS FROM OPERATIONS | -1,773,326 | -2,121,299 |
OTHER (EXPENSE) INCOME | ||
Other income | 1,500 | |
Interest expense | -1,035 | -179 |
Interest income | 495 | |
TOTAL OTHER EXPENSE (INCOME) | 960 | -179 |
NET LOSS | ($1,772,366) | ($2,121,478) |
NET LOSS PER COMMON SHARE, BASIC AND DILUTED | ($0.02) | ($0.04) |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING, BASIC AND DILUTED | 93,876,521 | 57,542,454 |
Statements_Of_Operations_Paren
Statements Of Operations (Parenthetical) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Statements Of Operations Parenthetical | ||
Research and development expenses, net of government grant | $354,988 | $180,956 |
Shareholders_Equity
Shareholders Equity (USD $) | Common Stock | Common Stock Payable | CapitalIn Excess Of Par Value | Accumulated Deficit | Treasury Stock | Total |
Beginning Balance, Amount at Dec. 31, 2012 | $552,749 | $19,255 | $35,723,001 | ($37,951,827) | ($1,272,112) | ($2,928,934) |
Beginning Balance, Shares at Dec. 31, 2012 | 55,274,817 | |||||
Stock based compensation | 836,011 | 836,011 | ||||
Issuance of common stock for cash, Amount | 48,414 | -19,255 | 435,730 | 464,889 | ||
Issuance of common stock for cash, Shares | 4,841,430 | |||||
Net Loss | -2,121,478 | -2,121,478 | ||||
Ending Balance, Amount at Dec. 31, 2013 | 601,163 | 36,994,742 | -40,073,305 | -1,272,112 | -3,749,512 | |
Ending Balance, Shares at Dec. 31, 2013 | 60,116,247 | |||||
Stock based compensation | 686,218 | 686,218 | ||||
Issuance of common stock for cash, Amount | 412,500 | 1,087,500 | 1,500,000 | |||
Issuance of common stock for cash, Shares | 41,250,000 | |||||
Proceeds for stock to be issued | 2,199,960 | 2,199,960 | ||||
Net Loss | -1,772,366 | -1,772,366 | ||||
Ending Balance, Amount at Dec. 31, 2014 | $1,013,663 | $2,199,960 | $38,768,460 | ($41,845,671) | ($1,272,112) | ($1,135,700) |
Ending Balance, Shares at Dec. 31, 2014 | 101,366,247 |
Statements_Of_Cash_Flows
Statements Of Cash Flows (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | ($1,772,366) | ($2,121,478) |
Adjustments to reconcile net loss to net cash and cash equivalents | ||
Depreciation and amortization | 67,059 | 106,725 |
Issuance of stock options for services | 11,809 | 19,105 |
Stock based compensation expense | 674,409 | 816,906 |
Decrease in allowance for doubtful accounts | -92 | -1,745 |
Impairment of equipment | 2,672 | |
(Increase) decrease in: | ||
Accounts receivable | -42,419 | 365,457 |
Other receivables | 68,027 | -109,106 |
Inventory | 60,349 | 132,573 |
Prepaid expenses | 30,998 | -1,595 |
Increase (decrease) in: | ||
Accounts payable and accrued expenses | -275,426 | 67,143 |
Accrued compensation and related benefits | 20,288 | 178,154 |
Deferred revenue | -156,036 | -104,995 |
Net cash used by operating activities | -1,313,400 | -650,184 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Increase in patent costs | -25,962 | -28,291 |
Purchase of property and equipment | -9,200 | -88,439 |
Net cash used by investing activities | -35,162 | -116,730 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
(Payment of) proceeds from issuance of notes payable, related party | -35,000 | 35,000 |
Proceeds for stock to be issued | 2,199,960 | |
Issuance of common stock, net of offering costs | 1,500,000 | 464,889 |
Net cash provided by financing activities | 3,664,960 | 499,889 |
Net increase (decrease) in cash and cash equivalents | 2,316,398 | -267,025 |
Cash and cash equivalents, beginning of period | 27,125 | 294,150 |
Cash and cash equivalents, end of period | 2,343,523 | 27,125 |
SUPPLEMENTAL CASH FLOW INFORMATION: | ||
Cash paid for interest | $1,035 | $179 |
Background_Information
Background Information | 12 Months Ended |
Dec. 31, 2014 | |
Notes to Financial Statements | |
Note 1 - Background Information | Dais Analytic Corporation (the “Company”), a New York corporation, has developed and is commercializing applications using its nano-structure polymer technology. The first commercial product is an energy recovery ventilator (“ERV”) (cores and systems) for use in commercial Heating, Ventilating, and Air Conditioning (HVAC) applications. In addition to direct sales, the Company licenses its nano-structured polymer technology to strategic partners in the aforementioned application and is in various stages of development with regard to other applications employing its base technologies. The Company was incorporated in April of 1993 with its corporate headquarters located in Odessa, Florida. |
The Company is dependent on third parties to manufacture the key components needed for our nano-structured based materials and value added products made with these materials. Accordingly, a supplier’s failure to supply components in a timely manner, or to supply components that meet our quality, quantity and cost requirements or our technical specifications, or the inability to obtain alternative sources of these components on a timely basis or on terms acceptable to us, would create delays in production of our products or increase our unit costs of production. Certain of the components contain proprietary products of our suppliers, or the processes used by our suppliers to manufacture these components are proprietary. If we are required to replace any of our suppliers, while we should be able to obtain comparable components from alternative suppliers at comparable costs, this would create a delay in production. | |
For the year ended December 31, 2014, two customers, Multistack LLC and Soex, accounted for approximately 60% and 27% of the Company’s revenue, respectively. At December 31, 2014, amounts due from these customers were approximately 67% and 0%, respectively, of total accounts receivable. For the year ended December 31, 2013, one customer, Multistack LLC, accounted for approximately 83% of the Company’s revenue. At December 31, 2013, amounts due from this customer were approximately 63% of total accounts receivable. See Note 10 for a discussion of Multistack and the licensing agreement with MG Energy LLC. |
Going_Concern_and_Managements_
Going Concern and Management's Plans | 12 Months Ended |
Dec. 31, 2014 | |
Notes to Financial Statements | |
Note 2 - Going Concern | The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. For the year ended December 31, 2014, the Company generated a net loss of $1,772,366 and the Company has incurred significant losses since inception. As of December 31, 2014, the Company has an accumulated deficit of $41,845,671, working capital of $1,575,885 and a stockholders’ deficit of $1,135,700. The Company used $1,313,400 and $650,184 of cash in operations during 2014 and 2013, respectively, which was funded by proceeds from debt and equity financings. There is no assurance that such financing will be available in the future. |
On January 21, 2014 the Company entered into a Securities Purchase Agreement (the “SPA”) with an investor, Soex (Hong Kong) Industry & Investment Co., Ltd., a Hong Kong corporation (the “Investor”), pursuant to which the Company agreed to sell 37.5 million shares of the Company’s common stock, for $1.5 million, at $0.04 per share pursuant to Regulation S. The Company received the $1.5 million from the Investor on March 3, 2014and has issued the 37.5 million shares of common stock to the Investor and 3,750,000 shares of common stock to a non-U.S. placement agent. The Company is using the proceeds from the sale of the common stock for working capital and business development. | |
On December 15, 2014, the Company entered into a Securities Purchase Agreement with two investors, Hong Kong SAGE Technology Investment Co., Limited and Hong Kong JHSE Technology Investment Co., Limited who agreed to purchase 18 million shares of the Company’s Common Stock for $2,750,000, at approximately $0.153 per share. At December 31, 2014, the Company has recl184 of cash in operations during 2014 and 2013, respectively, which was funded by proceeds from debt and equity financings. There is no assurance that such financing will be available in the future. | |
On January 21, 2014 the Company entered into a Securities Purchase Agreement (the “SPA”) with an investor, Soex (Hong Kong) Industry & Investment Co., Ltd., a Hong Kong corporation (the “Investor”), pursuant to which the Company agreed to sell 37.5 million shares of the Company’s common stock, for $1.5 million, at $0.04 per share pursuant to Regulation S. The Company received the $1.5 million from the Investor on March 3, 2014and has issued the 37.5 million shares of common stock to the Investor and 3,750,000 shares of common stock to a non-U.S. placement agent. The Company is using the proceeds from the sale of the common stock for working capital and business development. | |
On December 15, 2014, the Company entered into a Securities Purchase Agreement with two investors, Hong Kong SAGE Technology Investment Co., Limited and Hong Kong JHSE Technology Investment Co., Limited who agreed to purchase 18 million shares of the Company’s Common Stock for $2,750,000, at approximately $0.153 per share. At December 31, 2014, the Company has received $2,199,960 in cash proceeds from the sale of this stock and has a cash balance of $2,343,523. | |
Management believes that the Company’s current cash position and its ability to obtain additional sources of cash flow is sufficient to fund its working capital requirements for the next year. However, there can be no assurance that the Company will be successful in its efforts to secure such additional sources of cash flow. Any failure by us to timely procure additional financing or investment adequate to fund our ongoing operations, including planned product development initiatives and commercialization efforts, may have material adverse consequences on our financial condition, results of operations and cash flows. | |
The financial statements of the Company do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern. |
Significant_Accounting_Policie
Significant Accounting Policies | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Notes to Financial Statements | |||||||||
Note 3 - Significant Accounting Policies | The significant accounting policies followed are: | ||||||||
Use of estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | |||||||||
Cash and cash equivalents – For purposes of the Statements of Cash Flows, the Company considers all highly liquid debt instruments with a maturity of three months or less to be cash equivalents. Cash and cash equivalents are maintained at financial institutions and, at times, balances may exceed federally insured limits. The Company has never experienced any losses related to these balances. | |||||||||
Accounts receivable - Accounts receivable consist primarily of receivables from the sale of our ERV products and royalties due under license and supply agreements. The Company regularly reviews accounts receivable for any bad debts based on an analysis of the Company’s collection experience, customer credit worthiness, and current economic trends. After all attempts to collect a receivable have failed, the receivable is written off against the allowance. Based on management’s review of accounts receivable, we have recorded an allowance for doubtful accounts of $739 and $831 at December 31, 2014 and 2013. | |||||||||
Other receivables - Accounts receivable consist primarily of receivables from the U.S. Department of Defense and the U.S. Department of Energy ARPA-E grant program (See Note 3- Research and development expenses, and grant proceeds). The Company prepares invoices as it meets grant program milestones. Based on management’s review of other receivables, management has determined that no allowance for uncollectibilty is necessary at December 31, 2014 and 2013. | |||||||||
Inventory - Inventory consists of raw materials and work-in-process and is stated at the lower of cost, determined by first-in, first-out method, or market. Market is determined based on the net realizable value, with appropriate consideration given to obsolescence, excessive levels, deterioration and other factors. At December 31, 2014 and 2013, the Company had $5,325 and $78,240 of in-process inventory, respectively. A reserve is recorded for any inventory deemed excessive or obsolete. No reserve is considered necessary at December 31, 2014 and 2013. | |||||||||
Property and equipment - Property and equipment are recorded at cost. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets ranging from 3 to 7 years. Leasehold improvements are amortized over the shorter of their estimated useful lives of 5 years or the related lease life. Depreciation expense was approximately $41,600 and $84,300 the years ended December 31, 2014 and 2013, respectively. Gains and losses upon disposition are reflected in the statement of operations in the period of disposition. Maintenance and repair expenditures are charged to expense as incurred. | |||||||||
Intangible assets - Identified intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The Company’s existing intangible assets consist solely of patents. Patents are amortized over their estimated useful or economic lives of 17 to 20 years. Patent amortization expense was approximately $25,400 and $22,400 for the years ended December 31, 2014 and 2013, respectively. Based on current capitalized costs, total patent amortization expense is estimated to be approximately $18,000 per year for the next five years and $23,000 thereafter. | |||||||||
Long-lived assets - Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the book value of the asset may not be recoverable. The Company periodically evaluates whether events and circumstances have occurred that indicate possible impairment. When impairment indicators exist, the Company uses market quotes, if available or an estimate of the future undiscounted net cash flows of the related asset or asset group over the remaining life in measuring whether or not the asset values are recoverable. During the years ended December 31, 2014 and 2013, the Company recognized $0 and $2,672, respectively, in impairment costs. | |||||||||
Government Grants -Grants are recognized when there is reasonable assurance that the grant will be received and that any conditions associated with the grant will be met. When grants are received related to property and equipment, the Company reduces the basis of the assets on the balance sheet, resulting in lower depreciation expense over the life of the associated asset. Grants received related to expenses are reflected as a reduction of the associated expense in the period in which the expense is incurred. | |||||||||
Research and development expenses, and grant proceeds - Expenditures for research, development, and engineering of products are expensed as incurred. For the years ended December 31, 2014 and 2013, the Company incurred research and development costs of approximately $763,100 and $676,100, respectively. The Company accounts for proceeds received from government grants for research as a reduction in research and development costs. For the years ended December 31, 2014 and 2013, the Company recorded approximately $355,000 and $181,000, respectively, in proceeds against research and development expenses on the statements of operations. | |||||||||
On January 23, 2013, the U.S. Department of Defense and the U.S. Department of Energy approved an ARPA-E contract of up to $800,000 to the Company for the funding of a project to develop an energy-efficient, compact dehumidification system utilizing a polymer membrane that allows moisture to pass through. The contract is conditioned upon the Company contributing $200,000 of the proposed total project cost of $1,000,000. For the year ended December 31, 2013, the Company has incurred approximately $181,000 in expenses and recognized the same amount as a reduction to research and development expense related to this award. During 2014, the contract was amended to extend the term through March 31, 2015. For the year ended December 31, 2014, the Company incurred approximately $334,000 in expenses and recognized approximately $267,000 as a reduction to research and development expense under the award. | |||||||||
In March 2014, the U.S. Army issued a Small Business Innovation Research (SBIR) contract of up to approximately $100,000 to the Company for the funding of a project to develop the Company’s NanoClear® water cleaning process. The contract is not conditioned upon a contribution from the Company. For the year ended December 31, 2014, the Company recognized approximately $88,000 under this contract as a reduction to research and development expense. | |||||||||
Stock issuance costs - Stock issuance costs are recorded as a reduction of the related proceeds through a charge to stockholders’ equity. | |||||||||
Common stock - The Company records common stock issuances when all of the legal requirements for the issuance of such common stock have been satisfied. | |||||||||
Revenue recognition - Generally, the Company recognizes revenue for its products upon shipment to customers, provided no significant obligations remain and collection is probable. | |||||||||
In certain instances, our ConsERV system product may carry a limited warranty of up to two years for all parts contained therein with the exception of the energy recovery ventilator core produced and sold by Dais its distributor may carry a limited warranty of up to ten years. The limited warranty includes replacement of defective parts for the ConsERV system, and includes workmanship and material failure for the ConsERV core. The Company has recorded an accrual of approximately $91,500 and $92,100 for future warranty expenses at December 31, 2014 and 2013, respectively, which is included in the line item for accrued expenses, other. | |||||||||
Revenue derived from the sale of licenses is deferred and recognized as revenue on a straight-line basis over the life of the license, or until the license arrangement is terminated. Royalties are recognized as earned. The Company recognized revenue of $121,935 and $189,100, respectively, from license agreements for the years ended December 31, 2014 and 2013. The Company recognized revenue of $60,000 and $26,512, respectively, from royalties for the years ended December 31, 2014 and 2013. | |||||||||
The Company accounts for revenue arrangements with multiple elements under the provisions of the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 605-25, "Revenue Recognition—Multiple-Element Arrangements," In order to account for these agreements, the Company must identify the deliverables included within the agreement and evaluate which deliverables represent separate units of accounting based on if certain criteria are met, including whether the delivered element has stand-alone value to the licensee. The consideration received is allocated among the separate units of accounting, and the applicable revenue recognition criteria are applied to each of the separate units. | |||||||||
Stock based compensation - The Company recognizes all share-based payments to employees, including grants of employee stock options, as compensation expense in the financial statements based on their fair values. That expense will be recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period). | |||||||||
The value of each grant is estimated at the grant date using the Black-Scholes option model with the following assumptions for options granted during the years ended December 31, 2014 and 2013: | |||||||||
Years Ended December 31, | |||||||||
2014 | 2013 | ||||||||
Dividend rate | 0 | % | 0 | % | |||||
Risk free interest rate | 2.00% – 3.00 | % | 2.03% – 2.20 | % | |||||
Expected term | 10 years | 10 years | |||||||
Expected volatility | 168% – 183 | % | 135% – 177 | % | |||||
The basis for the above assumptions are as follows: the dividend rate is based upon the Company’s history of dividends; the risk-free interest rate for periods within the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of grant; the expected term was calculated based on the Company’s historical pattern of options granted and the period of time they are expected to be outstanding; and expected volatility was calculated based upon historical trends in the Company’s common stock, as well as a peer company’s historical common stock activity. | |||||||||
Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Based on historical experience of forfeitures, the Company estimated forfeitures at 0% for each of the years ended December 31, 2014 and 2013. | |||||||||
Non-employee stock-based compensation - The Company’s accounting policy for equity instruments issued to consultants and vendors in exchange for goods and services follows the provisions of ASC 505-50 Equity-Based Payments to Non-Employees. Stock-based compensation related to non-employees is accounted for based on the fair value of the related stock or options or the fair value of the services, whichever is more readily determinable. The measurement date for the fair value of the equity instruments issued is determined at the earlier of (i) the date at which a commitment for performance by the consultant or vendor is reached or (ii) the date at which the consultant or vendor’s performance is complete. In the case of equity instruments issued to consultants, the fair value of the equity instrument is recognized over the term of the consulting agreement. | |||||||||
The fair value of stock options issued to consultants in 2014 was calculated using the Black-Scholes model with the following assumptions: Expected life in years: 3 years; Estimated volatility 177%; Risk-free interest rate: 0.2%; Dividend yield: 0%.The fair value of stock options issued to consultants in 2013 was calculated using the Black-Scholes model with the following assumptions: Expected life in years: 2 years; Estimated volatility 165%; Risk-free interest rate: 0.26%; Dividend yield: 0%. The Company recognized $11,809 and $19,105 of compensation expense for stock options issued to consultants during the years ended December 31, 2014 and 2013, respectively. | |||||||||
Financial instruments - The Company accounts for financial instruments in accordance with FASB Accounting Standards Codification (ASC) 820 “Fair Value Measurements and Disclosures” (ASC 820). ASC 820 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below: | |||||||||
· | Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. | ||||||||
· | Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means. | ||||||||
· | Level 3 - Inputs that are both significant to the fair value measurement and unobservable. | ||||||||
The Company does not have any level 1, 2 or 3 financial instruments. The respective carrying values of certain on-balance sheet financial instruments approximated their fair values due to the short-term nature of these instruments. These financial instruments include cash and cash equivalents, accounts receivable, other receivables, accounts payable, accrued compensation and accrued expenses. The fair value of the Company’s related party note payable is estimated based on current rates that would be available for debt of similar terms which is not significantly different from its stated value. | |||||||||
Income taxes - Income taxes are provided for the tax effects of transactions reported in the financial statements and consist of taxes currently due plus deferred taxes resulting from temporary differences. Such temporary differences result from differences in the carrying value of assets and liabilities for tax and financial reporting purposes. The deferred tax assets and liabilities represent the future tax consequences of those differences, which will either be taxable or deductible when the assets and liabilities are recovered or settled. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. | |||||||||
The Company identifies and evaluates uncertain tax positions, if any, and recognizes the impact of uncertain tax positions for which there is a less than more-likely-than-not probability of the position being upheld when reviewed by the relevant taxing authority. Such positions are deemed to be unrecognized tax benefits and a corresponding liability is established on the balance sheet. The Company has not recognized a liability for uncertain tax positions. If there were an unrecognized tax benefit, the Company would recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. The Company’s remaining open tax years subject to examination by the Internal Revenue Service generally remain open for three years from the date of filing. | |||||||||
Derivative Financial Instruments - The Company does not use derivative instruments to hedge exposure to cash flow, market or foreign currency risk. Terms of convertible promissory note instruments are reviewed to determine whether or not they contain embedded derivative instruments that are required under ASC 815 “Derivative and Hedging” (ASC 815) to be accounted for separately from the host contract, and recorded on the balance sheet at fair value. The fair value of derivative liabilities, if any, is required to be revalued at each reporting date, with corresponding changes in fair value recorded in current period operating results. | |||||||||
Freestanding warrants issued by the Company in connection with the issuance or sale of debt and equity instruments are considered to be derivative instruments and are evaluated and accounted for in accordance with the provisions of ASC 815. Pursuant to ASC 815, an evaluation of specifically identified conditions is made to determine whether fair value of warrants issued is required to be classified as equity or as a derivative liability. | |||||||||
Earnings (loss) per share - Basic income (loss) per share is computed by dividing net income (loss) attributable to common stockholders by the weighted average common shares outstanding for the period. Diluted income (loss) per share is computed giving effect to all potentially dilutive common shares. Potentially dilutive common shares may consist of incremental shares issuable upon the exercise of stock options and warrants and the conversion of notes payable to common stock. In periods in which a net loss has been incurred, all potentially dilutive common shares are considered anti-dilutive and thus are excluded from the calculation. Common share equivalents of 36,796,512 and 39,365,082 were excluded from the computation of diluted earnings per share for the years ended December 31, 2014 and 2013, respectively, because their effect is anti-dilutive. | |||||||||
The following sets forth the computation of basic and diluted net earnings (loss) per common share for the years ended December 31, 2014 and 2013: | |||||||||
For the Years Ended December 31, | |||||||||
2014 | 2013 | ||||||||
Numerator: | |||||||||
Net loss | $ | (1,772,366 | ) | $ | (2,121,478 | ) | |||
Denominator: | |||||||||
Weighted average basic shares outstanding | 93,876,521 | 57,542,454 | |||||||
Potential shares under stock options | - | - | |||||||
Less shares assumed repurchased under the treasury stock method | - | - | |||||||
Weighted average fully diluted shares outstanding | 93,876,521 | 57,542,454 | |||||||
Net loss per common share – basic | $ | (0.02 | ) | $ | (0.04 | ) | |||
Net loss per common share – diluted | $ | (0.02 | ) | $ | (0.04 | ) | |||
Recent Accounting Pronouncements. | |||||||||
There are new accounting pronouncements issued by the Financial Accounting Standards Board ("FASB") which are not yet effective. Management does not believe any of these accounting pronouncements will have a material impact on the Company's financial position or operating results. | |||||||||
In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (ASU 2014-09), which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP. | |||||||||
The standard is effective for annual periods beginning after December 15, 2016, and interim periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption (which includes additional footnote disclosures). The Company is currently evaluating the impact of the adoption of ASU 2014-09 on its financial statements and has not yet determined the method by which it will adopt the standard in 2017. |
Property_and_Equipment
Property and Equipment | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Notes to Financial Statements | |||||||||
Note 4 - Property and Equipment | Property and equipment consist of the following: | ||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Furniture and fixtures | $ | 38,764 | $ | 38,764 | |||||
Computer equipment | 64,305 | 64,305 | |||||||
Demonstration equipment | 92,733 | 92,733 | |||||||
Office and lab equipment | 223,666 | 224,174 | |||||||
Leasehold improvements | 9,708 | - | |||||||
Property and equipment, gross | 429,176 | 419,976 | |||||||
Less accumulated depreciation | 364,625 | 322,995 | |||||||
Property and equipment, net | $ | 64,551 | $ | 96,981 |
Prepaid_Expenses
Prepaid Expenses | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Notes to Financial Statements | |||||||||
Note 5 - Prepaid Expenses | Prepaid expenses consist of the following: | ||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Prepaid expenses | $ | 500 | $ | 11,700 | |||||
Prepaid insurance | 16,042 | 35,840 | |||||||
$ | 16,542 | $ | 47,540 |
Accrued_Expenses_Other
Accrued Expenses, Other | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Notes to Financial Statements | |||||||||
Note 6 - Accrued Expenses, Other | Accrued expenses, other consists of the following: | ||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Accrued expenses, other | $ | 19,445 | $ | 34,890 | |||||
Accrued warranty costs | 91,531 | 92,100 | |||||||
$ | 110,976 | $ | 126,990 |
Related_Party_Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2014 | |
Notes to Financial Statements | |
Note 7 - Related Party Transactions | Timothy N. Tangredi, our Chief Executive Officer and Chairman, is a founder and a member of the board of directors of Aegis BioSciences, LLC (“Aegis”). Mr. Tangredi currently owns 52% of Aegis’ outstanding equity and spends approximately one to two days per month on Aegis business for which he is compensated by Aegis. Aegis has two exclusive, world-wide licenses from us under which it has the right to use and sell products containing our polymer technologies in biomedical and health care applications. As a result of a $150,000 payment made by Aegis, the first license is considered fully paid and as such no additional license revenue will be forthcoming. Pursuant to the second license Aegis made an initial one-time payment of $50,000 and is to make royalty payments of 1.5% of the net sales price it receives with respect to any personal hygiene product, surgical drape or clothing products (the latter when employed in medical and animal related fields) and license revenue it receives should Aegis grant a sublicense to a third party. To date Aegis has sold no such products nor has it received any licensing fees requiring a royalty payment be made to us. All obligations for such payments will end on the earlier of June 2, 2015 or upon the aggregate of all sums paid to us by Aegis under the agreement reaching $1 million. The term of each respective license runs for the duration of the patented technology. |
The Company rents a building that is owned by two stockholders of the Company, one of which is the Chief Executive Officer. Rent expense for this building is $4,066 per month, including sales tax. The Company recognized rent expense of approximately $49,000 in each of the years ended December 31, 2014 and 2013. At December 31, 2013, $124,917 was included in accounts payable for amounts owed to these stockholders for rent. | |
The Company also has accrued compensation due to the Chief Executive Officer as of December 31, 2014 and 2013 of $1,292,410 and $1,254,122, respectively. The Company determined that the balance is a long term liability, as the Company does not believe it will be repaid within the next year. The Company did, however, classify $100,000 as a current liability in accounts payable at December 31, 2014 as the Chief Executive Officer is required to convert $100,000 of the outstanding amount into the Company’s common stock. | |
The Company also has accrued compensation due to its general counsel, Mr. Tangredi’s wife, for deferred salaries earned and unpaid equal to $400,772 and $418,772 as of December 31, 2014 and December 31, 2013, respectively. As of December 31, 2013, the Company determined that all of the accrued payroll to its general counsel was a long term liability, as the Company did not believe it would be repaid within the next year. The general counsel, however, retired as of October 10, 2014. The Company has agreed to pay the general counsel on a payment schedule over the next three years with (a) payments of $50,000 on October 17, 2014 and February 15, 2015, (b) 36 monthly payments ranging from $7,000 to $7,500 over the next three years and (c) a $50,772 lump-sum payment on October 17, 2017 if a balance remains. Under certain circumstances, such as completion of a financing or cash flow generating event or a change in control, as defined, the Company would be required to make accelerated payments under the agreement. If the Company defaults on the payment terms it may be required to pay interest and penalties, as defined, to the general counsel. The Company has made $14,000 of payments under this agreement as of December 31, 2014. The entire balance is included in accounts payable and classified as a current liability because the Company believes that there is a strong likelihood it will repay the amount within one year. | |
On November 25, 2013, the Company entered into an agreement with a related party to borrow $35,000 which is due on demand and bears interest at 6%. The Company paid all interest and principal due under this note on March 7, 2014. | |
The above terms and amounts are not necessarily indicative of the terms and amounts that would have been incurred had comparable transactions been entered into with independent parties. |
Equity_Transactions
Equity Transactions | 12 Months Ended |
Dec. 31, 2014 | |
Notes to Financial Statements | |
Note 8 - Equity Transactions | Preferred Stock |
At December 31, 2014 and 2013, the Company’s Board of Directors has authorized 10,000,000 million shares of preferred stock with a par value of $0.01 to be issued in series with terms and conditions to be determined by the Board of Directors. The Company has designated 400,000 shares of Series A convertible preferred stock; 1,000,000 shares of Series B convertible preferred stock; 500,000 shares of Series C convertible preferred stock; and 1,100,000 shares of Series D convertible preferred stock. The Series A through D convertible preferred stock rank senior to the common stock as to dividends and liquidation. Each share of Series A through D convertible preferred stock is convertible into one share of common stock, except in specified circumstances as defined by the Company’s Certificate of Incorporation, and is automatically converted into common stock upon the occurrence of an initial public offering that meets certain criteria. No dividend or distribution may be paid on any shares of the Company’s common stock unless an equivalent dividend or distribution is paid on the Series A through D convertible preferred stock. In December 2014, the Company’s board of directors approved an amendment of the Company’s Amended and Restated Articles of Incorporation to modify the designations of the Company’s preferred stock. This amendment is subject to stockholder approval which was obtained in February 2015 (See Note 13). | |
Common Stock | |
At December 31, 2014 and 2013, the Company’s Board of Directors has authorized 200,000,000 million shares of common stock with a par value of $0.01 to be issued in series with terms and conditions to be determined by the Board of Directors. In December 2014, the Company’s board of directors approved an amendment of the Company’s Amended and Restated Articles of Incorporation that increased the authorized number of the Company’s shares of common stock to 240,000,000. This amendment is subject to stockholder approval which was obtained in February 2015 (See Note 13). | |
In March 2013, the Company received $29,973 from GVI towards the purchase of common stock at $0.10 per share. The Company issued 492,280 shares of common stock for the $29,973 payment received in March and the $19,255 common stock payable. The Company also issued GVI warrants to purchase 123,070 shares of the Company’s common stock at $0.30 per share. The warrants are exercisable for 60 months from the date of issuance. | |
In May 2013, the Company received $149,915 from GVI towards the purchase of common stock at $0.10 per share. The Company issued 1,499,150 shares of common stock with warrants to purchase 374,788 shares of the Company’s common stock at $0.50 per share. The warrants are exercisable for 60 months from the date of issuance. All warrants issued to GVI are subject to standard anti-dilution adjustments for stock splits and other subdivisions. | |
In the third quarter of 2013, the Company issued, pursuant to a Stock Purchase Agreement with a limited liability company controlled by a person who subsequently was appointed a director of the Company, 2,850,000 restricted shares of the Company’s common stock at a purchase price of $0.10 per share for a total of $285,000. With the issuance of the common stock, the Company issued warrants to purchase 712,500 shares of the Company’s common stock at $0.50 per share. The warrants are exercisable for 60 months from the date of issuance. The warrants are subject to standard anti-dilution adjustments for stock splits and other subdivisions. | |
On January 21, 2014, the Company entered into a Securities Purchase Agreement (the “SPA”) with an investor, Soex (Hong Kong) Industry & Investment Co., Ltd., a Hong Kong corporation (the “Investor”), pursuant to which the Company agreed to sell 37.5 million shares of the Company’s common stock, for $1.5 million, at $0.04 per share pursuant to Regulation S. The Company received the $1.5 million from the Investor on March 3, 2014, ahead of the March 7, 2014 deadline specified in the SPA and has issued the 37.5 million shares of common stock to the Investor and 3,750,000 shares of common stock to a non-U.S. placement agent. The Company is using the proceeds from the sale of the common stock for working capital and business development. To further the distribution of Dais’s products and strengthen the relationship between the Company and the Investor, the Investor agreed to form, and issue to the Company equity in, a subsidiary (the “Subsidiary”) which will function as the manufacturer and master distributor. The Investor has formed the Subsidiary but has not issued the equity to Dais. The SPA also requires the Company to appoint a director nominated by the Investor which was completed on October 3, 2014. The Investor also signed a voting agreement which obligates the Investor to vote as recommended by the Company’s board of directors for a one-year period beginning on the date the shares of common stock are issued to the Investor, which were issued on March 6, 2014. | |
On December 15, 2014, the Company entered into a Securities Purchase Agreement (the “2014 SPA”) with two investors with principal offices in Hong Kong (“2014 Investors”). Pursuant to the 2014 SPA, the Company agreed to sell 18,000,000 shares of the Company’s common stock for $2,750,000, at approximately $0.153 per share. The Company received approximately $2,200,000 of the cash proceeds as of December 31, 2014 which is classified in the equity section as a common stock payable. The remaining $550,000 was received and the Company issued the 18,000,000 shares of common stock during the first quarter of 2015. Pursuant to terms of the 2014 SPA, the 2014 Investors signed a voting agreement which obligates the 2014 Investors to vote as recommended by the Company’s board of directors through the earlier of the anniversary of the satisfaction of the certain conditions in the voting agreement or upon mutual written agreement of the Company and the 2014 Investors to terminate the voting agreement. The 2014 Investors will have the right to nominate a member to the Company’s board as long as they own at least 9.99% of the Company’s common stock. The Company is required to register the shares of the Company’s common stock acquired by the Purchasers after certain conditions are met. 20,333,334 shares of the Company’s common shares may be issued to the 2014 Investors in connection with the purchase of 51% of the equity of an existing PRC company with assets of at least $3,000,000 if the purchasers capitalize the existing PRC company with $3,000,000, issue the Company 51% of the existing PRC company’s equity and arrange an HVAC services agreement $60,000,000 in sales over a three year period. The conditions have not yet been met. |
Stock_Options_and_Warrants
Stock Options and Warrants | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Notes to Financial Statements | |||||||||||||||||
Note 9 - Stock Options and Warrants | In June 2000 and November 2009, our Board of Directors adopted, and our shareholders approved, the 2000 Incentive Compensation Plan (“2000 Plan”) and the 2009 Long-Term Incentive Plan (“2009 Plan”), respectively (together the “Plans”). The Plans provide for the granting of options to qualified employees of the Company, independent contractors, consultants, directors and other individuals. The Company’s Board of Directors approved and made available 11,093,882 and 15,000,000 shares of common stock to be issued pursuant to the 2000 Plan and the 2009 Plan, respectively. The 2000 Plan permits grants of options to purchase common shares authorized and approved by our Board of Directors and shareholders for issuance prior to the enactment of the 2000 Plan. The Plans permit grants of options to purchase common shares authorized and approved by the Company’s Board of Directors. See Note 13 for a discussion of the Company’s 2015 Stock Incentive Plan approved by shareholders on February 27, 2015. | ||||||||||||||||
The average fair value of options granted at market during 2014 and 2013 was $0.29 and $0.14 per option, respectively. The total intrinsic value of options exercised during the years ended December 31, 2014 and 2013 was $0 and $0, respectively. | |||||||||||||||||
The following summarizes the information relating to outstanding stock options granted pursuant to the above plans as well as outside of the plans during 2014 and 2013: | |||||||||||||||||
Common Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value | ||||||||||||||
Outstanding at December 31, 2012 | 18,647,332 | $ | 0.29 | 6.06 | $ | 26,345 | |||||||||||
Granted | 5,468,000 | 0.14 | |||||||||||||||
Forfeited or expired | (2,583,916 | ) | 0.14 | ||||||||||||||
Outstanding at December 31, 2013 | 21,531,416 | 0.26 | 5.91 | - | |||||||||||||
Granted | 2,240,000 | 0.3 | |||||||||||||||
Forfeited or expired | (2,409,300 | ) | 0.25 | ||||||||||||||
Outstanding at December 31, 2014 | 21,362,116 | $ | 0.27 | 5.57 | $ | 1,579,657 | |||||||||||
Exercisable at December 31, 2014 | 21,182,949 | $ | 0.27 | 5.55 | $ | 1,545,915 | |||||||||||
Stock compensation expense for options granted to both employees and consultants was approximately $686,000 for the year ended December 31, 2014 and $836,000 for the year ended December 31, 2013. The total fair value of shares vested during the years ended December 31, 2014 and 2013 was approximately $703,000 and $778,000, respectively. | |||||||||||||||||
As of December 31, 2014, there was approximately $11,700 of unrecognized employee stock-based compensation expense related to non vested stock options, which is expected to be recognized for the year ended December 31, 2015. | |||||||||||||||||
The following table represents our non vested share-based payment activity for the years ended December 31, 2014 and 2013: | |||||||||||||||||
Number of | Weighted Average Grant Date Fair Value | ||||||||||||||||
Options | |||||||||||||||||
Nonvested options - December 31, 2012 | 1,235,555 | $ | 0.16 | ||||||||||||||
Granted | 5,468,000 | 0.16 | |||||||||||||||
Forfeited | (1,392,915 | ) | 0.24 | ||||||||||||||
Vested | (4,705,500 | ) | 0.17 | ||||||||||||||
Nonvested options - December 31, 2013 | 605,140 | 0.13 | |||||||||||||||
Granted | 2,240,000 | 0.29 | |||||||||||||||
Vested | (2,477,916 | ) | 0.29 | ||||||||||||||
Forfeited | (188,057 | ) | 0.12 | ||||||||||||||
Nonvested options - December 31, 2014 | 179,167 | $ | 0.11 | ||||||||||||||
Warrants | |||||||||||||||||
At December 31, 2013, the Company had outstanding warrants to purchase the Company’s common stock which were issued in connection with multiple financing arrangements and consulting agreements. Information relating to these warrants is summarized as follows: | |||||||||||||||||
Warrants | Remaining Number Outstanding | Weighted Average Remaining Life (Years) | Weighted Average Exercise Price | ||||||||||||||
Warrants-Financing | 7,000,000 | 1.22 | $ | 0.34 | |||||||||||||
Warrants-Consulting Agreement | 425,000 | 0.07 | $ | 0.28 | |||||||||||||
Warrants-Note Conversions | 1,061,538 | 1.2 | $ | 0.28 | |||||||||||||
Warrants-Stock Purchases | 6,547,858 | 2.77 | $ | 0.36 | |||||||||||||
Warrants-Services | 400,000 | 0.06 | $ | 0.5 | |||||||||||||
Total | 15,434,396 |
Deferred_Revenue
Deferred Revenue | 12 Months Ended |
Dec. 31, 2014 | |
Notes to Financial Statements | |
Note 10 - Deferred Revenue | On October 30, 2012, the Company and MG Energy LLC, a Delaware limited liability company (“MG Energy”) , a company in which a shareholder of the Company holds a position , entered into a License and Supply Agreement (the “Agreement”), effective October 26, 2012, pursuant to which the Company licensed certain intellectual property and improvements thereto to MG Energy, for use in the manufacture and sale of energy recovery ventilators (“ERV”) and certain other HVAC systems for installation in commercial, residential or industrial buildings in North America and South America in exchange for the cancellation of $2,034,521 of debt due to MG Energy. MG Energy also agreed to purchase its requirements of certain ConsERV products from the Company for MG Energy’s use, pursuant to the terms and conditions of the Agreement. MG Energy will also pay royalties, as defined, to the Company on the net sales of each product or system sold. The term of the Agreement will expire upon the last to expire of the underlying patent rights for the licensed technology. |
The Company has identified all of the deliverables under the Agreement and has determined significant deliverables to be the license for the intellectual property and the supply services. In determining the units of accounting, the Company evaluated whether the license has stand-alone value to MG Energy based upon consideration of the relevant facts and circumstances of the Agreement. The Company determined that the license does not have stand-alone value to the licensee and, therefore, should be combined with the supply agreement as one unit of accounting. The initial payment for the license agreement will be treated as an advance payment and recognized over the performance period of the supply agreement. Royalties will be recognized as revenue when earned. The Company recognized license and royalty revenue of approximately $180,000 and $120,000 for this Agreement during the years ended December 31, 2014 and 2013, respectively. The deferred revenue for this agreement was approximately $1,775,000 and $1,895,000 at December 31, 2014 and December 31, 2013, respectively. | |
MG Energy entered into a sublicense with Multistack, LLC. Michael Gostomski, one of the Company’s shareholders with approximately 2,500,000 shares at December 31, 2014, has an ownership interest in both MG Energy and Multistack, LLC. For the years ended December 31, 2014 and 2013, Multistack, LLC, accounted for approximately 60% and 83% of the Company’s revenue, respectively. At December 31, 2014 and 2013, amounts due from Multistack, LLC were approximately 67% and 63% of total accounts receivable, respectively. | |
On April 24, 2014, the Company entered into a Distribution Agreement (the “Distribution Agreement”) with Soex (Hong Kong) Industry & Investment Co., Ltd., a Hong Kong corporation (the “Distributor”), to distribute certain of the Company’s products. Pursuant to the Distribution Agreement, in exchange for $500,000, including $50,000 due upon the execution of the Distribution Agreement, royalty payments and a commitment from the Distributor to purchase nano-material membrane and other products from Dais, the Distributor obtained the right to distribute and market Dais’s products for incorporation in energy recovery ventilators sold and installed in commercial, industrial and residential buildings, transportation facilities and vehicles (the “Field”) in mainland China, Hong Kong, Macao and Taiwan (the “Territory”). Further the Distributor received an exclusive license in the Territory to use Dais’s intellectual property in the manufacture and sale of Dais’s products in the Field and Territory and to purchase its requirements of nano-material membrane only from Dais, subject to terms and conditions of the Distribution Agreement. The initial term of the Distribution Agreement is fifteen years unless terminated for, among other causes, the Distributor’s failure to make payments to Dais for products ordered that do not exceed $15,000,000 in 2016 or any calendar year thereafter. | |
The Company has identified all of the deliverables under the Distribution Agreement and has determined significant deliverables to be the license for the intellectual property and the distribution services. In determining the units of accounting, the Company evaluated whether the license has stand-alone value to Soex (Hong Kong) based upon consideration of the relevant facts and circumstances of the Agreement. The Company determined that the license does not have stand-alone value to the licensee and, therefore, should be combined with the distribution agreement as one unit of accounting. The initial payment of $50,000 for the license agreement which was received during 2014 will be treated as deferred revenue and recognized over the performance period of the distribution agreement. Royalties will be recognized as revenue when earned. The Company recognized license revenue of approximately $1,000 for this Agreement during the year ended December 31, 2014. The deferred revenue for this agreement was approximately $49,000 at December 31, 2014. The Company has not received the remaining $450,000 which was due on or before October 24, 2014. Soex (Hong Kong) is in breach of the Distribution Agreement and may not be able to cure the breach. | |
To further the distribution of Dais’s products in the Territory, and to further the intent of the Company and the Distributor first memorialized in the Securities Purchase Agreement, dated January 21, 2014 between the Distributor and Dais, the Distributor shall form Soex (Beijing) Environmental Protection Technology Company Limited (the “Subsidiary”) which will function as the manufacturer and master distributor for the products in the Field and Territory. Upon the legal formation of the Subsidiary, Dais will be issued 25% of the equity of the Subsidiary, the right to a board seat and certain preemptive rights. The Subsidiary has been formed by Soex but the Company has not been issued any equity. | |
The Company entered into a licensing agreement during the year ended December 31, 2003 and received an initial fee of $770,000. This fee is deferred and recognized on a straight-line basis over the life of the license agreement of 10 years. In addition, the Company received royalties of $100,000 in each of the first three years of the agreement. The Company recognized revenue of approximately $39,000 for this agreement during the year ended December 31, 2013. This agreement expired in 2013. | |
The Company entered into a licensing agreement with a biomedical entity during the year ended December 31, 2005 and received an initial license fee of $50,000. This fee is deferred and recognized on a straight-line basis over the life of the license agreement of 10 years. The Company recognized revenue of approximately $1,400 and $5,000 for this agreement during the years ended December 31, 2014 and 2013 with no remaining deferred revenue balance on December 31, 2014. |
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | |
Dec. 31, 2014 | ||
Notes to Financial Statements | ||
Note 11 - Commitments and Contingencies | The Company has employment agreements with some of its key employees and executives. These agreements provide for minimum levels of compensation during current and future years. In addition, these agreements call for grants of stock options and for payments upon termination of the agreements. | |
The Company entered into an amended and restated employment agreement with Mr. Timothy N. Tangredi, our President, Chief Executive Officer, and director, dated as of September 14, 2011. Mr. Tangredi’s employment agreement provides for an initial term of three years commencing on September 14, 2011 with the term extending on the second anniversary thereof for an additional two year period and on each subsequent anniversary of the commencement date for an additional year. Mr. Tangredi’s initial base salary is $200,000. Mr. Tangredi’s base salary shall be increased annually, if applicable, by a sum equal to his current base salary multiplied by one third of the percentage increase in our yearly revenue compared to our prior fiscal year revenue; provided however any annual increase in Mr. Tangredi’s base salary shall not exceed a maximum of 50% for any given year. Any further increase in Mr. Tangredi’s base salary shall be at the sole discretion of our board of directors or compensation committee (if applicable). Additionally, at the discretion of our board of directors and its compensation committee, Mr. Tangredi may be eligible for an annual bonus, if any, of up to 100% of his then-effective base salary, if he meets or exceeds certain annual performance goals established by the board of directors. In addition to this bonus, Mr. Tangredi may be eligible for a separate merit bonus if approved by the board of directors, for specific extraordinary events or achievements such as a sale of a division, major license or distribution arrangement or merger. Mr. Tangredi is entitled to medical, disability and life insurance, as well as four weeks of paid vacation annually, an automobile allowance, reimbursement of all reasonable business expenses, automobile insurance and maintenance, and executive conference or educational expenses. | ||
Under his employment agreement, in addition to any other compensation which he may receive, if we complete a secondary public offering, Mr. Tangredi will be granted an option to purchase up to 520,000 shares of our common stock with an exercise price equal to the fair market value per share on the date of grant. This option will become vested and exercisable in thirds, with one third vested upon grant, another third at the one-year anniversary of the grant, and another third upon the second anniversary of the grant. The option shall have a term of ten years, shall be exercisable for up to three years after termination of employment (unless termination is for cause, in which event it shall expire on the date of termination), shall have a “cashless” exercise feature, and shall be subject to such additional terms and conditions as are then applicable to options granted under such plan provided they do not conflict with the terms set forth in the agreement. | ||
If Mr. Tangredi’s employment is terminated for any reason, we will be obligated to pay him his accrued but unpaid base salary, bonus and accrued vacation pay, and any unreimbursed expenses (“Accrued Sums”). | ||
In addition to any Accrued Sums owed, if Mr. Tangredi’s employment is terminated by us in the event of his disability or without cause or by Mr. Tangredi for good reason, he shall be entitled to: | ||
(i) | an amount equal to the sum of (A) the greater of 150% of the base salary then in effect or $320,000 plus (B) the cash bonus and/or merit bonus, if any, awarded for the most recent year; | |
(ii) | health and life insurance, a car allowance and other benefits set forth in the agreement until two years following termination of employment, and thereafter to the extent required by COBRA or similar statute; and | |
(iii) | all stock options, to the extent they were not exercisable at the time of termination of employment, shall become exercisable in full. | |
In addition to any Accrued Sum owed, in the event of termination upon death, Mr. Tangredi shall be entitled to (i) and (iii) above. | ||
In addition to any Accrued Sums owed, in the event that Mr. Tangredi elects to terminate employment within one year following a change in control, he shall receive a lump sum payment equal to the sum of (a) the greater of his then current base salary or $210,000 plus (b) the cash bonus and merit bonus, if any, awarded in the most recent year. In addition, he will be entitled to (ii) and (iii) above. | ||
The employment agreement also contains customary covenants restricting the use of our confidential information and solicitation of employees, which are similarly applicable to our other executive officers. In addition we are obligated to indemnify Mr. Tangredi for any claims made against him in connection with his employment with us, to advance indemnification expenses, and maintain his coverage under our directors’ and officers’ liability insurance policy. | ||
Under the employment agreement, we and Mr. Tangredi have agreed that we will retain an independent compensation consultant which may modify the compensation program for Mr. Tangredi and other officers, subject to certain conditions including approval of the board of directors. Notwithstanding the recommendation and board consideration, Mr. Tangredi has the right to continue the current terms of the employment agreement. Mr. Tangredi’s employment agreement was amended in February 2015. See Note 13. | ||
Litigation | ||
In the ordinary course of business, the Company may become a party to various legal proceedings generally involving contractual matters, infringement actions, product liability claims and other matters. In March 2014, the Company received notice of a lawsuit against the Company and one of its customers for damages in connection with the installation of equipment by a contractor involved in a construction project. The contractor makes claims for breach or warranties, negligence and products liability. In the complaint, the contractor alleges that it paid $180,000 to the general contractor of the project for damages, primarily consequential and incidental damages, allegedly caused by an alleged failure of a subcontracted component of equipment provided by the Company and its customer. Further, the Company has made claims against its supplier for contribution and indemnification for any damages. The supplier then instituted a counterclaim against the Company. The Company intends to vigorously defend itself against these allegations and, at this stage, the Company does not have an estimate of the likelihood or the amount of any potential expense, if any, for this lawsuit. |
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Notes to Financial Statements | |||||||||
Note 12 - Income Taxes | There is no current or deferred income tax expense or benefit for the years ended December 31, 2014 and 2013. The provision for income taxes is different from that which would be obtained by applying the statutory federal income tax rate to income before income taxes. The items causing this difference are as follows: | ||||||||
Year ended December 31, | |||||||||
2014 | 2013 | ||||||||
Tax (benefit) at U.S. statutory rate | $ | (610,000 | ) | $ | (721,000 | ) | |||
State income tax (benefit), net of federal benefit | (65,000 | ) | (77,000 | ) | |||||
Employee stock-based compensation | 157,000 | 284,000 | |||||||
Other adjustments | (20,000 | ) | (39,000 | ) | |||||
Expiration of net operating loss | - | - | |||||||
Change in valuation allowance | 538,000 | 553,000 | |||||||
$ | - | $ | - | ||||||
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are as follows: | |||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Deferred tax assets (liabilities), current: | |||||||||
Allowance for doubtful accounts | $ | 2,200 | $ | 2,200 | |||||
Stock warrant consideration and other | 118,800 | 114,100 | |||||||
Accrued shareholder interest | 120,600 | 120,600 | |||||||
Deferred license revenue | 81,700 | 81,800 | |||||||
Valuation allowance | (323,300 | ) | (318,700 | ) | |||||
$ | — | $ | — | ||||||
Deferred tax assets (liabilities), noncurrent: | |||||||||
Deferred revenue | $ | 692,700 | $ | 662,000 | |||||
Depreciation | 18,900 | 7,500 | |||||||
Bonus payable | - | 108,300 | |||||||
Accrued deferred compensation payable | 636,100 | 523,500 | |||||||
Research and development credit | 94,600 | 45,400 | |||||||
Stock Compensation | 84,000 | - | |||||||
Net operating loss carryforward | 8,541,500 | 8,187,700 | |||||||
Valuation allowance | (10,067,800 | ) | (9,534,400 | ) | |||||
$ | — | $ | — | ||||||
As of December 31, 2014 and 2013, the Company had federal and state net operating loss carry-forwards totaling approximately $22,700,000 and $21,800,000, respectively, which expire through 2034. The Company has established a valuation allowance to fully reserve all deferred tax assets at December 31, 2014 and 2013 because it is more likely than not that the Company will not be able to utilize these assets. The change in the valuation allowance for the years ended December 31, 2014 and 2013 was an increase of $538,000 and $553,000, respectively. | |||||||||
As of December 31, 2014, the Company has not performed an IRC Section 382 study to determine the amount, if any, of its net operating losses that may be limited as a result of the ownership change percentages during 2014. However, the Company will complete the study prior to the utilization of any of its recorded net operating losses. |
Subsequent_Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2014 | |
Notes to Financial Statements | |
Note 13 - Subsequent Events | Securities Purchase Agreement |
On December 15, 2014, the Company entered into a Securities Purchase Agreement (the “2014 SPA”) with two investors, Hong Kong SAGE Technology Investment Co., Limited and Hong Kong JHSE Technology Investment Co., Limited, both with principal offices in Hong Kong (the “Sage Purchasers”). Pursuant to the 2014 SPA, the Company agreed to sell 18,000,000 shares of the Company’s common stock for $2,750,000, at approximately $0.153 per share pursuant to Regulation S. The Company received $2,200,000 of the cash proceeds as of December 31, 2014. The remaining $550,000 was received and the Company issued the 18,000,000 shares of common stock during the first quarter of 2015. | |
Amendment to Authorized Shares and Designation of Preferred Stock | |
On March 5, 2015, the Company amended its Certificate of Incorporation to increase the number of authorized shares to 250,000,000, consisting of 240,000,000 shares of common stock and 10,000,000 shares of preferred stock, and to cancel the designated but unissued Series A-D Preferred Stock and create a new series of preferred stock designated as the “Class A Preferred Stock”. There are no shares of Class A Preferred Stock currently issued by the Company. Any holder of the Class A Preferred Stock shall not be entitled to any dividends. Each share of Class A Preferred Stock shall entitle the holder thereof to 150 votes on all matters submitted to a vote of the stockholders of the Company. The Class A Preferred Stock is convertible into common stock at a conversion price equal to 75% of the average closing price of the Company’s common stock for the 30 trading days prior to the holder’s election to convert. | |
Amended Employment Agreement | |
On February 27, 2015, the Company and Timothy N. Tangredi, the Company’s Chief Executive Officer entered into an amendment to Mr. Tangredi’s Amended and Restated Employment Agreement. Currently, the Company has non-interest bearing accrued compensation due to the Chief Executive Officer for deferred salaries earned and unpaid equal to approximately $1.3 million. The amendment provides that, if at any time during a calendar year, the unpaid compensation is greater than $500,000, Mr. Tangredi must convert $100,000 of unpaid compensation into the Company’s common stock during such calendar year. The conversion rate shall be equal to 75% of the average closing price for the Company’s common stock for the 30 trading days prior to the date of conversion. The Company shall also pay the Mr. Tangredi a cash payment equal to 20% of the compensation income incurred as a result of the conversion. Further, at any time any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934) becomes the “beneficial owner” (as defined in Rules 13(d)-3 and 13(d)-5 under such Act) of greater of 40% of the then-outstanding voting power of Company’s voting equity interests or a person or group initiate a tender offer for the Company’s common stock, Mr. Tangredi may convert unpaid compensation to Class A Convertible Preferred Stock of the Company at $1.50 per share. | |
Stockholders’ Meeting | |
On February 27, 2015, the Company held its Annual Meeting, at which the Company’s shareholders approved several proposals. | |
The shareholders approved an amendment to the Company’s Certificate of Incorporation to effect a reverse stock split of our common stock by a ratio of not less than 1-for-5 and not more than 1-for-20 (the “Reverse Stock Split”) at any time prior to March 31, 2016, with the Board of Directors having the discretion as to whether or not the Reverse Stock Split is to be effected, and with the exact ratio of any Reverse Stock Split to be set at a whole number within the above range as determined by the Board in its discretion. | |
The shareholders approved an amendment to Certificate of Incorporation to increase the number of shares the corporation is authorized to issue to 250,000,000 shares, of which 240,000,000 shares of common stock and 10,000,000 shares of preferred stock shall be authorized. | |
The shareholders approved the Dais Analytic Corporation 2015 Stock Incentive Plan (the “2015 Plan”) The number of shares of our common stock reserved for issuance under the 2015 Plan is 10,000,000. The 2015 Plan authorized the grant to eligible individuals of (1) Stock Options (Incentive and Nonstatutory), (2) Restricted Stock, (3) Stock Appreciation Rights, or SARs, (4) Restricted Stock Units, (5) Other Stock-Based Awards, and (6) Cash-Based Awards. Unless otherwise determined by the Board, it will administer the 2015 Plan. | |
No other material events have occurred subsequent to December 31, 2014 that requires recognition or disclosure in these financial statements. |
Significant_Accounting_Policie1
Significant Accounting Policies (Policies) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Significant Accounting Policies Policies | |||||||||
Use of estimates | The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | ||||||||
Cash and cash equivalents | For purposes of the Statements of Cash Flows, the Company considers all highly liquid debt instruments with a maturity of three months or less to be cash equivalents. Cash and cash equivalents are maintained at financial institutions and, at times, balances may exceed federally insured limits. The Company has never experienced any losses related to these balances. | ||||||||
Accounts receivable | Accounts receivable consist primarily of receivables from the sale of our ERV products and royalties due under license and supply agreements. The Company regularly reviews accounts receivable for any bad debts based on an analysis of the Company’s collection experience, customer credit worthiness, and current economic trends. After all attempts to collect a receivable have failed, the receivable is written off against the allowance. Based on management’s review of accounts receivable, we have recorded an allowance for doubtful accounts of $739 and $831 at December 31, 2014 and 2013. | ||||||||
Other receivables | Accounts receivable consist primarily of receivables from the U.S. Department of Defense and the U.S. Department of Energy ARPA-E grant program (See Note 3- Research and development expenses, and grant proceeds). The Company prepares invoices as it meets grant program milestones. Based on management’s review of other receivables, management has determined that no allowance for uncollectibilty is necessary at December 31, 2014 and 2013. | ||||||||
Inventory | Inventory consists of raw materials and work-in-process and is stated at the lower of cost, determined by first-in, first-out method, or market. Market is determined based on the net realizable value, with appropriate consideration given to obsolescence, excessive levels, deterioration and other factors. At December 31, 2014 and 2013, the Company had $5,325 and $78,240 of in-process inventory, respectively. A reserve is recorded for any inventory deemed excessive or obsolete. No reserve is considered necessary at December 31, 2014 and 2013. | ||||||||
Property and equipment | Property and equipment are recorded at cost. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets ranging from 3 to 7 years. Leasehold improvements are amortized over the shorter of their estimated useful lives of 5 years or the related lease life. Depreciation expense was approximately $41,600 and $84,300 the years ended December 31, 2014 and 2013, respectively. Gains and losses upon disposition are reflected in the statement of operations in the period of disposition. Maintenance and repair expenditures are charged to expense as incurred. | ||||||||
Intangible assets | Identified intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The Company’s existing intangible assets consist solely of patents. Patents are amortized over their estimated useful or economic lives of 17 to 20 years. Patent amortization expense was approximately $25,400 and $22,400 for the years ended December 31, 2014 and 2013, respectively. Based on current capitalized costs, total patent amortization expense is estimated to be approximately $18,000 per year for the next five years and $23,000 thereafter. | ||||||||
Long-lived assets | Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the book value of the asset may not be recoverable. The Company periodically evaluates whether events and circumstances have occurred that indicate possible impairment. When impairment indicators exist, the Company uses market quotes, if available or an estimate of the future undiscounted net cash flows of the related asset or asset group over the remaining life in measuring whether or not the asset values are recoverable. During the years ended December 31, 2014 and 2013, the Company recognized $0 and $2,672, respectively, in impairment costs. | ||||||||
Government grants | Grants are recognized when there is reasonable assurance that the grant will be received and that any conditions associated with the grant will be met. When grants are received related to property and equipment, the Company reduces the basis of the assets on the balance sheet, resulting in lower depreciation expense over the life of the associated asset. Grants received related to expenses are reflected as a reduction of the associated expense in the period in which the expense is incurred. | ||||||||
Research and development expenses and grant proceeds | Expenditures for research, development, and engineering of products are expensed as incurred. For the years ended December 31, 2014 and 2013, the Company incurred research and development costs of approximately $763,100 and $676,100, respectively. The Company accounts for proceeds received from government grants for research as a reduction in research and development costs. For the years ended December 31, 2014 and 2013, the Company recorded approximately $355,000 and $181,000, respectively, in proceeds against research and development expenses on the statements of operations. | ||||||||
On January 23, 2013, the U.S. Department of Defense and the U.S. Department of Energy approved an ARPA-E contract of up to $800,000 to the Company for the funding of a project to develop an energy-efficient, compact dehumidification system utilizing a polymer membrane that allows moisture to pass through. The contract is conditioned upon the Company contributing $200,000 of the proposed total project cost of $1,000,000. For the year ended December 31, 2013, the Company has incurred approximately $181,000 in expenses and recognized the same amount as a reduction to research and development expense related to this award. During 2014, the contract was amended to extend the term through March 31, 2015. For the year ended December 31, 2014, the Company incurred approximately $334,000 in expenses and recognized approximately $267,000 as a reduction to research and development expense under the award. | |||||||||
In March 2014, the U.S. Army issued a Small Business Innovation Research (SBIR) contract of up to approximately $100,000 to the Company for the funding of a project to develop the Company’s NanoClear® water cleaning process. The contract is not conditioned upon a contribution from the Company. For the year ended December 31, 2014, the Company recognized approximately $88,000 under this contract as a reduction to research and development expense. | |||||||||
Stock issuance costs | Stock issuance costs are recorded as a reduction of the related proceeds through a charge to stockholders’ equity. | ||||||||
Common stock | The Company records common stock issuances when all of the legal requirements for the issuance of such common stock have been satisfied. | ||||||||
Revenue recognition | Generally, the Company recognizes revenue for its products upon shipment to customers, provided no significant obligations remain and collection is probable. | ||||||||
In certain instances, our ConsERV system product may carry a limited warranty of up to two years for all parts contained therein with the exception of the energy recovery ventilator core produced and sold by Dais its distributor may carry a limited warranty of up to ten years. The limited warranty includes replacement of defective parts for the ConsERV system, and includes workmanship and material failure for the ConsERV core. The Company has recorded an accrual of approximately $91,500 and $92,100 for future warranty expenses at December 31, 2014 and 2013, respectively, which is included in the line item for accrued expenses, other. | |||||||||
Revenue derived from the sale of licenses is deferred and recognized as revenue on a straight-line basis over the life of the license, or until the license arrangement is terminated. Royalties are recognized as earned. The Company recognized revenue of $121,935 and $189,100, respectively, from license agreements for the years ended December 31, 2014 and 2013. The Company recognized revenue of $60,000 and $26,512, respectively, from royalties for the years ended December 31, 2014 and 2013. | |||||||||
The Company accounts for revenue arrangements with multiple elements under the provisions of the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 605-25, "Revenue Recognition-Multiple-Element Arrangements," In order to account for these agreements, the Company must identify the deliverables included within the agreement and evaluate which deliverables represent separate units of accounting based on if certain criteria are met, including whether the delivered element has stand-alone value to the licensee. The consideration received is allocated among the separate units of accounting, and the applicable revenue recognition criteria are applied to each of the separate units. | |||||||||
Stock based compensation | The Company recognizes all share-based payments to employees, including grants of employee stock options, as compensation expense in the financial statements based on their fair values. That expense will be recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period). | ||||||||
The value of each grant is estimated at the grant date using the Black-Scholes option model with the following assumptions for options granted during the years ended December 31, 2014 and 2013: | |||||||||
Years Ended December 31, | |||||||||
2014 | 2013 | ||||||||
Dividend rate | 0 | % | 0 | % | |||||
Risk free interest rate | 2.00% – 3.00 | % | 2.03% – 2.20 | % | |||||
Expected term | 10 years | 10 years | |||||||
Expected volatility | 168% – 183 | % | 135% – 177 | % | |||||
The basis for the above assumptions are as follows: the dividend rate is based upon the Company’s history of dividends; the risk-free interest rate for periods within the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of grant; the expected term was calculated based on the Company’s historical pattern of options granted and the period of time they are expected to be outstanding; and expected volatility was calculated based upon historical trends in the Company’s common stock, as well as a peer company’s historical common stock activity. | |||||||||
Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Based on historical experience of forfeitures, the Company estimated forfeitures at 0% for each of the years ended December 31, 2014 and 2013. | |||||||||
Non-employee stock-based compensation | The Company’s accounting policy for equity instruments issued to consultants and vendors in exchange for goods and services follows the provisions of ASC 505-50 Equity-Based Payments to Non-Employees. Stock-based compensation related to non-employees is accounted for based on the fair value of the related stock or options or the fair value of the services, whichever is more readily determinable. The measurement date for the fair value of the equity instruments issued is determined at the earlier of (i) the date at which a commitment for performance by the consultant or vendor is reached or (ii) the date at which the consultant or vendor’s performance is complete. In the case of equity instruments issued to consultants, the fair value of the equity instrument is recognized over the term of the consulting agreement. | ||||||||
The fair value of stock options issued to consultants in 2014 was calculated using the Black-Scholes model with the following assumptions: Expected life in years: 3 years; Estimated volatility 177%; Risk-free interest rate: 0.2%; Dividend yield: 0%.The fair value of stock options issued to consultants in 2013 was calculated using the Black-Scholes model with the following assumptions: Expected life in years: 2 years; Estimated volatility 165%; Risk-free interest rate: 0.26%; Dividend yield: 0%. The Company recognized $11,809 and $19,105 of compensation expense for stock options issued to consultants during the years ended December 31, 2014 and 2013, respectively. | |||||||||
Financial instruments | The Company accounts for financial instruments in accordance with FASB Accounting Standards Codification (ASC) 820 “Fair Value Measurements and Disclosures” (ASC 820). ASC 820 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below: | ||||||||
· | Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. | ||||||||
· | Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means. | ||||||||
· | Level 3 - Inputs that are both significant to the fair value measurement and unobservable. | ||||||||
The Company does not have any level 1, 2 or 3 financial instruments. The respective carrying values of certain on-balance sheet financial instruments approximated their fair values due to the short-term nature of these instruments. These financial instruments include cash and cash equivalents, accounts receivable, other receivables, accounts payable, accrued compensation and accrued expenses. The fair value of the Company’s related party note payable is estimated based on current rates that would be available for debt of similar terms which is not significantly different from its stated value. | |||||||||
Income taxes | Income taxes are provided for the tax effects of transactions reported in the financial statements and consist of taxes currently due plus deferred taxes resulting from temporary differences. Such temporary differences result from differences in the carrying value of assets and liabilities for tax and financial reporting purposes. The deferred tax assets and liabilities represent the future tax consequences of those differences, which will either be taxable or deductible when the assets and liabilities are recovered or settled. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. | ||||||||
The Company identifies and evaluates uncertain tax positions, if any, and recognizes the impact of uncertain tax positions for which there is a less than more-likely-than-not probability of the position being upheld when reviewed by the relevant taxing authority. Such positions are deemed to be unrecognized tax benefits and a corresponding liability is established on the balance sheet. The Company has not recognized a liability for uncertain tax positions. If there were an unrecognized tax benefit, the Company would recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. The Company’s remaining open tax years subject to examination by the Internal Revenue Service generally remain open for three years from the date of filing. | |||||||||
Derivative financial instruments | The Company does not use derivative instruments to hedge exposure to cash flow, market or foreign currency risk. Terms of convertible promissory note instruments are reviewed to determine whether or not they contain embedded derivative instruments that are required under ASC 815 “Derivative and Hedging” (ASC 815) to be accounted for separately from the host contract, and recorded on the balance sheet at fair value. The fair value of derivative liabilities, if any, is required to be revalued at each reporting date, with corresponding changes in fair value recorded in current period operating results. | ||||||||
Freestanding warrants issued by the Company in connection with the issuance or sale of debt and equity instruments are considered to be derivative instruments and are evaluated and accounted for in accordance with the provisions of ASC 815. Pursuant to ASC 815, an evaluation of specifically identified conditions is made to determine whether fair value of warrants issued is required to be classified as equity or as a derivative liability. | |||||||||
Earnings (loss) per share | Basic income (loss) per share is computed by dividing net income (loss) attributable to common stockholders by the weighted average common shares outstanding for the period. Diluted income (loss) per share is computed giving effect to all potentially dilutive common shares. Potentially dilutive common shares may consist of incremental shares issuable upon the exercise of stock options and warrants and the conversion of notes payable to common stock. In periods in which a net loss has been incurred, all potentially dilutive common shares are considered anti-dilutive and thus are excluded from the calculation. Common share equivalents of 36,796,512 and 39,365,082 were excluded from the computation of diluted earnings per share for the years ended December 31, 2014 and 2013, respectively, because their effect is anti-dilutive. | ||||||||
The following sets forth the computation of basic and diluted net earnings (loss) per common share for the years ended December 31, 2014 and 2013: | |||||||||
For the Years Ended December 31, | |||||||||
2014 | 2013 | ||||||||
Numerator: | |||||||||
Net loss | $ | (1,772,366 | ) | $ | (2,121,478 | ) | |||
Denominator: | |||||||||
Weighted average basic shares outstanding | 93,876,521 | 57,542,454 | |||||||
Potential shares under stock options | - | - | |||||||
Less shares assumed repurchased under the treasury stock method | - | - | |||||||
Weighted average fully diluted shares outstanding | 93,876,521 | 57,542,454 | |||||||
Net loss per common share – basic | $ | (0.02 | ) | $ | (0.04 | ) | |||
Net loss per common share – diluted | $ | (0.02 | ) | $ | (0.04 | ) | |||
Recent accounting pronouncements | There are new accounting pronouncements issued by the Financial Accounting Standards Board ("FASB") which are not yet effective. Management does not believe any of these accounting pronouncements will have a material impact on the Company's financial position or operating results. | ||||||||
In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (ASU 2014-09), which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP. | |||||||||
The standard is effective for annual periods beginning after December 15, 2016, and interim periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption (which includes additional footnote disclosures). The Company is currently evaluating the impact of the adoption of ASU 2014-09 on its financial statements and has not yet determined the method by which it will adopt the standard in 2017. |
Significant_Accounting_Policie2
Significant Accounting Policies (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Significant Accounting Policies Tables | |||||||||
Stock based compensation | The value of each grant is estimated at the grant date using the Black-Scholes option model with the following assumptions for options granted during the years ended December 31, 2014 and 2013: | ||||||||
Years Ended December 31, | |||||||||
2014 | 2013 | ||||||||
Dividend rate | 0 | % | 0 | % | |||||
Risk free interest rate | 2.00% – 3.00 | % | 2.03% – 2.20 | % | |||||
Expected term | 10 years | 10 years | |||||||
Expected volatility | 168% – 183 | % | 135% – 177 | % | |||||
Computation of basic and diluted net earnings (loss) per common share | The following sets forth the computation of basic and diluted net earnings (loss) per common share for the years ended December 31, 2014 and 2013: | ||||||||
For the Years Ended December 31, | |||||||||
2014 | 2013 | ||||||||
Numerator: | |||||||||
Net loss | $ | (1,772,366 | ) | $ | (2,121,478 | ) | |||
Denominator: | |||||||||
Weighted average basic shares outstanding | 93,876,521 | 57,542,454 | |||||||
Potential shares under stock options | - | - | |||||||
Less shares assumed repurchased under the treasury stock method | - | - | |||||||
Weighted average fully diluted shares outstanding | 93,876,521 | 57,542,454 | |||||||
Net loss per common share – basic | $ | (0.02 | ) | $ | (0.04 | ) | |||
Net loss per common share – diluted | $ | (0.02 | ) | $ | (0.04 | ) |
Property_and_Equipment_Tables
Property and Equipment (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Property And Equipment Tables | |||||||||
Property and equipment | Property and equipment consist of the following: | ||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Furniture and fixtures | $ | 38,764 | $ | 38,764 | |||||
Computer equipment | 64,305 | 64,305 | |||||||
Demonstration equipment | 92,733 | 92,733 | |||||||
Office and lab equipment | 223,666 | 224,174 | |||||||
Leasehold improvements | 9,708 | - | |||||||
Property and equipment, gross | 429,176 | 419,976 | |||||||
Less accumulated depreciation | 364,625 | 322,995 | |||||||
Property and equipment, net | $ | 64,551 | $ | 96,981 |
Prepaid_Expenses_Tables
Prepaid Expenses (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Prepaid Expenses Tables | |||||||||
Prepaid expenses | Prepaid expenses consist of the following: | ||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Prepaid expenses | $ | 500 | $ | 11,700 | |||||
Prepaid insurance | 16,042 | 35,840 | |||||||
$ | 16,542 | $ | 47,540 |
Accrued_Expenses_Other_Tables
Accrued Expenses, Other (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Accrued Expenses Other Tables | |||||||||
Accrued expenses and other expenses | Accrued expenses, other consists of the following: | ||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Accrued expenses, other | $ | 19,445 | $ | 34,890 | |||||
Accrued warranty costs | 91,531 | 92,100 | |||||||
$ | 110,976 | $ | 126,990 |
Stock_Options_and_Warrants_Tab
Stock Options and Warrants (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Stock Options And Warrants Tables | |||||||||||||||||
Outstanding stock options activity | The following summarizes the information relating to outstanding stock options granted pursuant to the above plans as well as outside of the plans during 2014 and 2013: | ||||||||||||||||
Common Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value | ||||||||||||||
Outstanding at December 31, 2012 | 18,647,332 | $ | 0.29 | 6.06 | $ | 26,345 | |||||||||||
Granted | 5,468,000 | 0.14 | |||||||||||||||
Forfeited or expired | (2,583,916 | ) | 0.14 | ||||||||||||||
Outstanding at December 31, 2013 | 21,531,416 | 0.26 | 5.91 | - | |||||||||||||
Granted | 2,240,000 | 0.3 | |||||||||||||||
Forfeited or expired | (2,409,300 | ) | 0.25 | ||||||||||||||
Outstanding at December 31, 2014 | 21,362,116 | $ | 0.27 | 5.57 | $ | 1,579,657 | |||||||||||
Exercisable at December 31, 2014 | 21,182,949 | $ | 0.27 | 5.55 | $ | 1,545,915 | |||||||||||
Non vested share-based payment activity | The following table represents our non vested share-based payment activity for the years ended December 31, 2014 and 2013: | ||||||||||||||||
Number of | Weighted Average Grant Date Fair Value | ||||||||||||||||
Options | |||||||||||||||||
Nonvested options - December 31, 2012 | 1,235,555 | $ | 0.16 | ||||||||||||||
Granted | 5,468,000 | 0.16 | |||||||||||||||
Forfeited | (1,392,915 | ) | 0.24 | ||||||||||||||
Vested | (4,705,500 | ) | 0.17 | ||||||||||||||
Nonvested options - December 31, 2013 | 605,140 | 0.13 | |||||||||||||||
Granted | 2,240,000 | 0.29 | |||||||||||||||
Vested | (2,477,916 | ) | 0.29 | ||||||||||||||
Forfeited | (188,057 | ) | 0.12 | ||||||||||||||
Nonvested options - December 31, 2014 | 179,167 | $ | 0.11 | ||||||||||||||
Warrants | Warrants | Remaining Number Outstanding | Weighted Average Remaining Life (Years) | Weighted Average Exercise Price | |||||||||||||
Warrants-Financing | 7,000,000 | 1.22 | $ | 0.34 | |||||||||||||
Warrants-Consulting Agreement | 425,000 | 0.07 | $ | 0.28 | |||||||||||||
Warrants-Note Conversions | 1,061,538 | 1.2 | $ | 0.28 | |||||||||||||
Warrants-Stock Purchases | 6,547,858 | 2.77 | $ | 0.36 | |||||||||||||
Warrants-Services | 400,000 | 0.06 | $ | 0.5 | |||||||||||||
Total | 15,434,396 |
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Income Taxes Tables | |||||||||
Provision for income taxes | Year ended December 31, | ||||||||
2014 | 2013 | ||||||||
Tax (benefit) at U.S. statutory rate | $ | (610,000 | ) | $ | (721,000 | ) | |||
State income tax (benefit), net of federal benefit | (65,000 | ) | (77,000 | ) | |||||
Employee stock-based compensation | 157,000 | 284,000 | |||||||
Other adjustments | (20,000 | ) | (39,000 | ) | |||||
Expiration of net operating loss | - | - | |||||||
Change in valuation allowance | 538,000 | 553,000 | |||||||
$ | - | $ | - | ||||||
Deferred tax assets and deferred tax liabilities | The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are as follows: | ||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Deferred tax assets (liabilities), current: | |||||||||
Allowance for doubtful accounts | $ | 2,200 | $ | 2,200 | |||||
Stock warrant consideration and other | 118,800 | 114,100 | |||||||
Accrued shareholder interest | 120,600 | 120,600 | |||||||
Deferred license revenue | 81,700 | 81,800 | |||||||
Valuation allowance | (323,300 | ) | (318,700 | ) | |||||
$ | — | $ | — | ||||||
Deferred tax assets (liabilities), noncurrent: | |||||||||
Deferred revenue | $ | 692,700 | $ | 662,000 | |||||
Depreciation | 18,900 | 7,500 | |||||||
Bonus payable | - | 108,300 | |||||||
Accrued deferred compensation payable | 636,100 | 523,500 | |||||||
Research and development credit | 94,600 | 45,400 | |||||||
Stock Compensation | 84,000 | - | |||||||
Net operating loss carryforward | 8,541,500 | 8,187,700 | |||||||
Valuation allowance | (10,067,800 | ) | (9,534,400 | ) | |||||
$ | — | $ | — |
Background_Information_Details
Background Information (Details Narrative) | 12 Months Ended |
Dec. 31, 2014 | |
Multistack, LLC [Member] | |
Percentage of company's revenues for two customers | 60.00% |
Percentage of amount due from two customers of account receivables | 67.00% |
Customers accounted for percentages of Company's revenue | 83.00% |
Customers accounted for percentages of accounts receivable | 63.00% |
Soex [Member] | |
Percentage of company's revenues for two customers | 27.00% |
Percentage of amount due from two customers of account receivables | 0.00% |
Going_Concern_and_Managements_1
Going Concern and Management's Plans (Details Narrative) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Going Concern And Managements Plans Details Narrative | |||
Net loss | ($1,772,366) | ($2,121,478) | |
Accumulated deficit | -41,845,671 | -40,073,305 | |
Working capital | 1,575,885 | ||
Stockholders' deficit | 1,135,700 | 3,749,512 | 2,928,934 |
Net cash used by operating activities | -1,313,400 | -650,184 | |
Proceeds for stock to be issued | 2,199,960 | ||
Cash and cash equivalents, end of period | $2,343,523 | $27,125 | $294,150 |
Significant_Accounting_Policie3
Significant Accounting Policies (Details) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Expected term | 10 years | 10 years |
Minimum [Member] | ||
Risk free interest rate | 2.00% | 2.03% |
Expected volatility | 168.00% | 135.00% |
Maximum [Member] | ||
Risk free interest rate | 3.00% | 2.20% |
Expected volatility | 183.00% | 177.00% |
Significant_Accounting_Policie4
Significant Accounting Policies (Details 1) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Significant Accounting Policies Details 1 | ||
Net loss | ($1,772,366) | ($2,121,478) |
Denominator: | ||
Weighted average basic shares outstanding | 93,876,521 | 57,542,454 |
Potential shares under stock options | ||
Less shares assumed repurchased under the treasury stock method | ||
Weighted average fully diluted shares outstanding | 93,876,521 | 57,542,454 |
Net income (loss) per common share - basic | ($0.02) | ($0.04) |
Net income (loss) per common share - diluted | ($0.02) | ($0.04) |
Significant_Accounting_Policie5
Significant Accounting Policies (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Allowance for doubtful accounts | $739 | $831 |
In-process inventory | 5,325 | 78,240 |
Property and equipment estimated useful life | 3 years | 7 years |
Depreciation expense | 41,600 | 84,300 |
Patents estimated useful life | 17 years | 20 years |
Patent amortization expense | 25,400 | 22,400 |
Future amortization expense, 2015 | 18,000 | |
Future amortization expense, 2016 | 18,000 | |
Future amortization expense, 2017 | 18,000 | |
Future amortization expense, 2018 | 18,000 | |
Future amortization expense, 2019 | 18,000 | |
Future amortization expense thereafter | 23,000 | |
Impairment costs | 0 | 2,672 |
Research and development costs, incurred | 763,100 | 676,100 |
Grant proceeds against research and development expenses | 355,000 | 181,000 |
Expenses | 334,000 | |
Reduction to research to development expense | 267,000 | |
Warranty accrual | 91,500 | 92,100 |
Revenue recognition from license agreements | 121,935 | 189,100 |
Revenue recognition from royalties | 60,000 | 26,512 |
Forfeiture | 0.00% | 0.00% |
compensation expense for stock options issued to consultants | 11,809 | 19,105 |
SBIR [Member] | ||
Reduction to research to development expense | $88,000 |
Property_and_Equipment_Details
Property and Equipment (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Property And Equipment Details | ||
Furniture and fixtures | $38,764 | $38,764 |
Computer equipment | 64,305 | 64,305 |
Demonstration equipment | 92,733 | 92,733 |
Office and lab equipment | 223,666 | 224,174 |
Leasehold improvements | 9,708 | |
Property and Equipment total | 429,176 | 419,976 |
Less accumulated depreciation | 364,625 | 322,995 |
Property and Equipment net | $64,551 | $96,981 |
Prepaid_Expenses_Details
Prepaid Expenses (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Prepaid Expenses Details | ||
Prepaid expenses | $500 | $11,700 |
Prepaid insurance | 16,042 | 35,840 |
Prepaid Expenses and Other Current Assets | $16,542 | $47,540 |
Accrued_Expenses_Other_Details
Accrued Expenses, Other (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Accrued Expenses Other Details | ||
Accrued expenses, other | $19,445 | $34,890 |
Accrued warranty costs | 91,531 | 92,100 |
Accrued Expenses | $110,976 | $126,990 |
Related_Party_Transactions_Det
Related Party Transactions (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Related Party Transactions Details Narrative | ||
Rent expense recognized | $49,000 | $49,000 |
Accounts payable for rent | 124,917 | |
Accrued compensation | 1,292,410 | 1,254,122 |
Accrued compensation for deferred salaries earned and unpaid | $400,772 | $418,772 |
Equity_Transactions_Details_Na
Equity Transactions (Details Narrative) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Equity Transactions Details Narrative | ||
Common stock, par value | $0.01 | $0.01 |
Common stock shares, authorized | 200,000,000 | 200,000,000 |
Preferred stock par value | $0.01 | $0.01 |
Preferred stock shares authorized | 10,000,000 | 10,000,000 |
Stock_Options_and_Warrants_Det
Stock Options and Warrants (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Stock Options And Warrants Details | ||
Common shares outstanding | 21,531,416 | 18,647,332 |
Common shares granted | 2,240,000 | 5,468,000 |
Common shares expired/forfeited | -2,409,300 | -2,583,916 |
Outstanding at December 31, 2013 | 21,362,116 | 21,531,416 |
Exercisable at December 31, 2013 | 21,182,949 | |
Weighted average exercise price of shares outstanding | $0.26 | $0.29 |
Weighted average exercise price of shares Granted | $0.30 | $0.14 |
Weighted average exercise price of shares expired/forfeited | $0.25 | $0.14 |
Weighted average exercise price of shares outstanding at December 31, 2013 | $0.27 | $0.26 |
Weighted average exercise price of shares exercisable December 31, 2013 | $0.27 | |
Weighted average remaining contractual term (in years) of shares outstanding, Begining Balance | 5 years 10 months 28 days | 6 years 22 days |
Weighted average remaining contractual term (in years) of shares outstanding, Ending Balance | 5 years 6 months 26 days | |
Weighted average remaining contractual term (in years) of shares exercisable, Ending Balance | 5 years 6 months 18 days | |
Aggregate intrinsic value of shares outstanding, Beggining Balance | $26,345 | |
Aggregate intrinsic value of shares outstanding, Ending Balance | 1,579,657 | |
Aggregate intrinsic value of shares exerciseable | $1,545,915 |
Stock_Options_and_Warrants_Det1
Stock Options and Warrants (Details 1) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Non vested share-based payment activity with employees | ||
Nonvested options, Number of Options | 605,140 | 1,235,555 |
Granted, Number of Options | 2,240,000 | 5,468,000 |
Forfeited, Number of Options | -188,057 | -1,392,915 |
Vested, Number of Options | -2,477,916 | -4,705,500 |
Nonvested options, Number of Options | 179,167 | 605,140 |
Nonvested options beginning, Weighted Average Grant Date Fair Value | $0.13 | $0.16 |
Granted, Weighted Average Grant Date Fair Value | $0.29 | $0.16 |
Forfeited, Weighted Average Grant Date Fair Value | $0.29 | $0.24 |
Vested, Weighted Average Grant Date Fair Value | $0.12 | $0.17 |
Nonvested options ending, Weighted Average Grant Date Fair Value | $0.11 | $0.13 |
Stock_Options_and_Warrants_Det2
Stock Options and Warrants (Details 2) (USD $) | 12 Months Ended |
Dec. 31, 2014 | |
Remaining Number Outstanding | $15,434,396 |
Weighted Average Remaining Life | 5 years 6 months 26 days |
Warrants Financing [Member] | |
Remaining Number Outstanding | 7,000,000 |
Weighted Average Remaining Life | 1 year 2 months 19 days |
Weighted Average Exercise Price | $0.34 |
Warrants Consulting Agreement [Member] | |
Remaining Number Outstanding | 425,000 |
Weighted Average Remaining Life | 26 days |
Weighted Average Exercise Price | $0.28 |
Warrants Note Conversions [Member] | |
Remaining Number Outstanding | 1,061,538 |
Weighted Average Remaining Life | 1 year 2 months 12 days |
Weighted Average Exercise Price | $0.28 |
Warrants Stock Purchases [Member] | |
Remaining Number Outstanding | 6,547,858 |
Weighted Average Remaining Life | 2 years 9 months 7 days |
Weighted Average Exercise Price | $0.36 |
Warrants Services [Member] | |
Remaining Number Outstanding | $400,000 |
Weighted Average Remaining Life | 22 days |
Weighted Average Exercise Price | $0.50 |
Stock_Options_and_Warrants_Det3
Stock Options and Warrants (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Stock Options And Warrants Details Narrative | ||
Fair value of options granted at market value, per option | $0.29 | $0.14 |
Iintrinsic value of options exercised | $0 | $0 |
Stock compensation expense for options granted | 686,000 | 836,000 |
Total fair value of shares vested | 703,000 | 778,000 |
Unrecognized employee stock-based compensation expense related to non vested stock options | $11,700 |
Deferred_Revenue_Details_Narra
Deferred Revenue (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
License and royalty revenue | $180,000 | $120,000 |
Deferred revenue | 1,775,000 | 1,895,000 |
License revenue | 181,935 | 215,606 |
Multistack, LLC [Member] | ||
Percentage of revenue | 60.00% | 83.00% |
Percentage of accounts receivable | 67.00% | 63.00% |
Biomedical entity [Member] | ||
License revenue | 1,400 | 5,000 |
Soex Industry & Investment Co. [Member] | ||
License revenue | $1,000 | $39,000 |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Income Taxes Details | ||
Tax (benefit) at U.S. statutory rate | ($610,000) | ($721,000) |
State income tax (benefit), net of federal benefit | -65,000 | -77,000 |
Employee stock-based compensation | 157,000 | 284,000 |
Other adjustments | -20,000 | -39,000 |
Expiration of net operating loss | ||
Change in valuation allowance | 538,000 | 553,000 |
Income taxes |
Income_Taxes_Details_1
Income Taxes (Details 1) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Deferred tax assets (liabilities), current: | ||
Allowance for doubtful accounts | $2,200 | $2,200 |
Stock warrant consideration and other | 118,800 | 114,100 |
Accrued shareholder interest | 120,600 | 120,600 |
Deferred license revenue | 81,700 | 81,800 |
Valuation allowance | -323,300 | -318,700 |
Deferred tax assets (liabilities), current | ||
Deferred tax assets (liabilities), noncurrent: | ||
Deferred license revenue | 692,700 | 662,000 |
Depreciation | 18,900 | 7,500 |
Bonus payable | 108,300 | |
Accrued deferred compensation payable | 636,100 | 523,500 |
Research and development credit | 94,600 | 45,400 |
Stock Compensation | 84,000 | |
Net operating loss carryforward | 8,541,500 | 8,187,700 |
Valuation allowance | -10,067,800 | -9,534,400 |
Deferred tax assets (liabilities), noncurrent |
Income_Taxes_Details_Narrative
Income Taxes (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Income Taxes Details Narrative | ||
Federal and state net operating loss carry-forwards | $22,700,000 | $21,800,000 |
Expiration date of federal and state net operating loss carry forwards | 2034 | |
Change in the valuation allowance | $538,000 | $553,000 |