Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Jun. 30, 2014 | Mar. 31, 2015 | |
Entity Information [Line Items] | |||
Entity Registrant Name | ULURU Inc. | ||
Entity Central Index Key | 1168220 | ||
Current Fiscal Year End Date | -19 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $19,745,635 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY | ||
Document Type | 10-K | ||
Amendment Flag | FALSE | ||
Document Period End Date | 31-Dec-14 | ||
Common Stock [Member] | |||
Entity Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 24,458,018 | ||
Series A Preferred Stock [Member] | |||
Entity Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 0 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Current Assets | ||
Cash and cash equivalents | $550,458 | $5,119 |
Accounts receivable, net | 3,879 | 10,771 |
Accounts receivable - related party, net | 798,147 | 174,307 |
Notes receivable and accrued interest, current portion | 0 | 777,710 |
Inventory | 325,657 | 395,605 |
Prepaid expenses and deferred charges | 137,858 | 123,812 |
Total Current Assets | 1,815,999 | 1,487,324 |
Property, Equipment and Leasehold Improvements, net | 432,110 | 638,614 |
Other Assets | ||
Intangible assets, net | 3,195,689 | 3,670,837 |
Investment in unconsolidated subsidiary | 0 | 0 |
Deferred financing costs, net | 0 | 86,770 |
Deposits | 18,069 | 18,069 |
Total Other Assets | 3,213,758 | 3,775,676 |
TOTAL ASSETS | 5,461,867 | 5,901,614 |
Current Liabilities | ||
Accounts payable | 1,536,612 | 1,734,725 |
Accrued liabilities | 273,201 | 315,963 |
Accrued interest | 0 | 13,360 |
Convertible notes payable, net of unamortized debt discount, current portion | 0 | 1,147,057 |
Deferred revenue, current portion | 58,959 | 58,959 |
Total Current Liabilities | 1,868,772 | 3,270,064 |
Long Term Liabilities | ||
Convertible notes payable, net of unamortized debt discount and current portion | 0 | 0 |
Deferred revenue, net of current portion | 839,174 | 898,133 |
Total Long Term Liabilities | 839,174 | 898,133 |
TOTAL LIABILITIES | 2,707,946 | 4,168,197 |
COMMITMENTS AND CONTINGENCIES | ||
STOCKHOLDERS' EQUITY | ||
Preferred Stock - $0.001 par value; 20,000 shares authorized; Series A Preferred Stock, 1,000 shares designated; no shares issued and outstanding at December 31, 2014 and December 31, 2013, respectively | 0 | 0 |
Common Stock - $ 0.001 par value; 200,000,000 shares authorized; 24,458,018 and 18,871,420 shares issued and outstanding at December 31, 2014 and December 31, 2013, respectively | 24,458 | 18,872 |
Additional paid-in capital | 56,289,882 | 53,336,127 |
Accumulated (deficit) | -53,560,419 | -51,621,582 |
TOTAL STOCKHOLDERS' EQUITY | 2,753,921 | 1,733,417 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $5,461,867 | $5,901,614 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
STOCKHOLDERS' EQUITY | ||
Preferred stock, par value (in dollars per share) | $0.00 | $0.00 |
Preferred stock, shares authorized (in shares) | 20,000 | 20,000 |
Common Stock, par value (in dollars per share) | $0.00 | $0.00 |
Common Stock, shares authorized (in shares) | 200,000,000 | 200,000,000 |
Common Stock, shares issued (in shares) | 24,458,018 | 18,871,420 |
Common Stock, shares outstanding (in shares) | 24,458,018 | 18,871,420 |
Preferred Stock [Member] | ||
STOCKHOLDERS' EQUITY | ||
Shares designated to Series A (in shares) | 1,000 | 1,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Revenues | ||
License fees | $58,959 | $48,688 |
Royalty income | 62,966 | 30,016 |
Product sales, net | 741,932 | 291,864 |
Total Revenues | 863,857 | 370,568 |
Costs and Expenses | ||
Cost of goods sold | 511,943 | 222,122 |
Research and development | 770,542 | 788,242 |
Selling, general and administrative | 1,773,540 | 1,288,050 |
Amortization of intangible assets | 475,148 | 475,148 |
Depreciation | 237,388 | 244,704 |
Total Costs and Expenses | 3,768,561 | 3,018,266 |
Operating (Loss) | -2,904,704 | -2,647,698 |
Other Income (Expense) | ||
Interest and miscellaneous income | 5,386 | 69,686 |
Interest expense | -50,574 | -506,529 |
Equity in earnings (loss) of unconsolidated subsidiary | 0 | 0 |
Foreign currency transaction (loss) | -53,867 | 0 |
Loss on early extinguishment of convertible note | -135,078 | 0 |
Proceeds from litigation settlement | 1,200,000 | 0 |
Gain on sale of equipment | 0 | 3,627 |
(Loss) Before Income Taxes | -1,938,837 | -3,080,914 |
Income taxes | 0 | 0 |
Net (Loss) | -1,938,837 | -3,080,914 |
Less preferred stock dividends | 0 | -30,236 |
Net (Loss) Allocable to Common Stockholders | ($1,938,837) | ($3,111,150) |
Basic and diluted net (loss) per common share (in dollars per share) | ($0.08) | ($0.21) |
Weighted average number of common shares outstanding (in shares) | 23,639,427 | 14,772,578 |
CONSOLIDATED_STATEMENTS_OF_STO
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (USD $) | Total | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Promissory Notes Receivable and Accrued Interest [Member] | Accumulated (Deficit) [Member] |
Balance at Dec. 31, 2012 | $1,851,287 | $0 | $10,075 | $51,336,931 | ($985,287) | ($48,510,432) |
Balance (in shares) at Dec. 31, 2012 | 65 | 10,074,448 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock and warrants in a private placement, net of offering costs of $4,379 (in shares) | 0 | 3,750,000 | ||||
Issuance of common stock and warrants in a private placement, net of offering costs of $4,379 | 1,495,621 | 0 | 3,750 | 1,491,871 | 0 | 0 |
Issuance of common stock and warrants in a private placement, net of offering costs of $2,175 (in shares) | 0 | 825,000 | ||||
Issuance of common stock and warrants in a private placement, net of offering costs of $2,175 | 327,825 | 0 | 825 | 327,000 | 0 | 0 |
Issuance of common stock for principle and interest due on convertible note (in shares) | 0 | 3,072,648 | ||||
Issuance of common stock for principle and interest due on convertible note | 918,330 | 0 | 3,073 | 915,257 | 0 | 0 |
Issuance of common stock for services and wages (in shares) | 0 | 423,750 | ||||
Issuance of common stock for services and wages | 178,250 | 0 | 424 | 177,826 | 0 | 0 |
Issuance of common stock - 725,274 shares for cashless exercise of warrants to purchase 1,571,428 shares (in shares) | 0 | 725,274 | ||||
Issuance of common stock - 725,274 shares for cashless exercise of warrants to purchase 1,571,428 shares | 0 | 0 | 725 | -725 | 0 | 0 |
Issuance of common stock - vesting of restricted stock (in shares) | 0 | 300 | ||||
Issuance of common stock - vesting of restricted stock | 0 | 0 | 0 | 0 | 0 | 0 |
Redemption of Series A preferred stock (in shares) | -65 | |||||
Redemption of Series A preferred stock | 1,864 | 0 | 0 | -992,430 | 994,294 | 0 |
Offering costs adjustment - Series A preferred stock sale in 2011 | 8,000 | 0 | 0 | 8,000 | 0 | 0 |
Cancellation of warrants issued for services | -48,776 | 0 | 0 | -48,776 | 0 | 0 |
Accrued interest on promissory notes for issuance of common stock | 0 | 0 | 0 | 9,007 | -9,007 | 0 |
Accrued dividends on Series A preferred stock | 0 | 0 | 0 | 30,236 | 0 | -30,236 |
Share-based compensation of employees | 15,648 | 0 | 0 | 15,648 | 0 | 0 |
Share-based compensation of non-employees | 66,282 | 0 | 0 | 66,282 | 0 | 0 |
Net (loss) | -3,080,914 | 0 | 0 | 0 | 0 | -3,080,914 |
Balance at Dec. 31, 2013 | 1,733,417 | 0 | 18,872 | 53,336,127 | 0 | -51,621,582 |
Balance (in shares) at Dec. 31, 2013 | 0 | 18,871,420 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock in a private placement (in shares) | 0 | 1,250,000 | ||||
Issuance of common stock in a private placement | 500,000 | 0 | 1,250 | 498,750 | 0 | 0 |
Issuance of common stock and warrants in a private placement (in shares) | 0 | 275,000 | ||||
Issuance of common stock and warrants in a private placement | 110,000 | 0 | 275 | 109,725 | 0 | 0 |
Issuance of common stock for principle and interest due on convertible note (in shares) | 0 | 911,690 | ||||
Issuance of common stock for principle and interest due on convertible note | 319,092 | 0 | 912 | 318,180 | 0 | 0 |
Loss on conversion of convertible note settled with common stock | -234,042 | 0 | 0 | -234,042 | 0 | 0 |
Issuance of common stock for principle due on convertible notes (in shares) | 0 | 232,408 | ||||
Issuance of common stock for principle due on convertible notes | 265,000 | 0 | 232 | 264,768 | 0 | 0 |
Issuance of common stock for services and wages (in shares) | 0 | 67,500 | ||||
Issuance of common stock for services and wages | 64,350 | 0 | 67 | 64,283 | 0 | 0 |
Issuance of common stock - 725,274 shares for cashless exercise of warrants to purchase 1,571,428 shares (in shares) | 3,000,000 | |||||
Cancellation of shares of common stock related to consulting services (in shares) | 0 | -150,000 | ||||
Cancellation of shares of common stock related to consulting services | -87,000 | 0 | -150 | -86,850 | 0 | 0 |
Issuance of common stock for exercise of warrant (in shares) | 0 | 3,000,000 | ||||
Issuance of common stock for exercise of warrant | 1,800,000 | 0 | 3,000 | 1,797,000 | ||
Warrants issued for services | 72,771 | 0 | 0 | 72,771 | 0 | 0 |
Offering costs adjustment - Series A preferred stock sale in 2011 | 0 | |||||
Share-based compensation of employees | 27,667 | 0 | 0 | 27,667 | 0 | 0 |
Share-based compensation of non-employees | 121,503 | 0 | 0 | 121,503 | 0 | 0 |
Net (loss) | -1,938,837 | 0 | 0 | 0 | 0 | -1,938,837 |
Balance at Dec. 31, 2014 | $2,753,921 | $0 | $24,458 | $56,289,882 | $0 | ($53,560,419) |
Balance (in shares) at Dec. 31, 2014 | 0 | 24,458,018 |
CONSOLIDATED_STATEMENTS_OF_STO1
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) (USD $) | 12 Months Ended |
Dec. 31, 2013 | |
Issuance of common stock and warrants in a private placement offering costs | $4,379 |
Issuance of common stock and warrants in a private placement offering costs | $2,175 |
Issuance of common stock (in shares) | 725,274 |
Cashless exercise of warrants, share purchased (in shares) | 1,571,428 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
OPERATING ACTIVITIES : | ||
Net (loss) | ($1,938,837) | ($3,080,914) |
Adjustments to reconcile net (loss) to net cash used in operating activities: | ||
Amortization of intangible assets | 475,148 | 475,148 |
Depreciation | 237,388 | 244,704 |
Share-based compensation for stock and options issued to employees | 27,667 | 15,648 |
Share-based compensation for options issued to non-employees | 121,503 | 66,282 |
Equity in earnings (loss) of unconsolidated subsidiary | 0 | 0 |
Amortization of debt discount on convertible notes | -78,078 | 178,548 |
Amortization of deferred financing costs | 7,309 | 74,000 |
Warrants issued (cancelled) for services | 72,771 | -48,776 |
Common stock issued (cancelled) for services | -22,650 | 158,250 |
Common stock issued for wages | 0 | 20,000 |
Common stock issued for interest due on convertible note | 2,063 | 127,343 |
Loss on early extinguishment of convertible note | 135,078 | 0 |
Gain on sale of equipment | 0 | -3,627 |
Change in operating assets and liabilities: | ||
Accounts receivable | -616,948 | -73,180 |
Other receivable | 0 | 0 |
Inventory | 69,949 | 132,038 |
Prepaid expenses and deferred charges | -14,046 | 70,636 |
Notes receivable and accrued interest | 777,710 | 524,510 |
Accounts payable | -198,113 | -606,057 |
Accrued liabilities | -42,762 | -57,002 |
Accrued interest | -13,360 | -27,781 |
Deferred revenue | -58,959 | 76,312 |
Total | 881,670 | 1,346,996 |
Net Cash Used in Operating Activities | -1,057,167 | -1,733,918 |
INVESTING ACTIVITIES : | ||
Purchase of property and equipment | -30,884 | -39,093 |
Proceeds from sale of equipment | 0 | 4,937 |
Net Cash Used in Investing Activities | -30,884 | -34,156 |
FINANCING ACTIVITIES : | ||
Proceeds from sale of common stock and warrants, net | 610,000 | 1,823,446 |
Proceeds from exercise of warrant | 1,800,000 | 0 |
Proceeds from redemption of preferred stock, net | 0 | 1,864 |
Repayment of principle due on convertible note | -776,610 | -81,666 |
Offering cost adjustment - preferred stock sale in 2011 | 0 | 8,000 |
Net Cash Provided by Financing Activities | 1,633,390 | 1,751,644 |
Net Increase (Decrease) in Cash | 545,339 | -16,430 |
Cash, beginning of period | 5,119 | 21,549 |
Cash, end of period | 550,458 | 5,119 |
SUPPLEMENTAL CASH FLOW DISCLOSURE: | ||
Cash paid for interest | 30,775 | 35,467 |
Non-cash investing and financing activities: | ||
Issuance of common stock for promissory note | 0 | 0 |
Issuance of common stock for principle due on convertible note | $582,029 | $790,987 |
COMPANY_OVERVIEW_AND_BASIS_OF_
COMPANY OVERVIEW AND BASIS OF PRESENTATION | 12 Months Ended | |||
Dec. 31, 2014 | ||||
COMPANY OVERVIEW AND BASIS OF PRESENTATION [Abstract] | ||||
COMPANY OVERVIEW AND BASIS OF PRESENTATION | NOTE 1. | COMPANY OVERVIEW AND BASIS OF PRESENTATION | ||
Company Overview | ||||
ULURU Inc. (hereinafter “we”, “our”, “us”, “ULURU”, or the “Company”) is a Nevada corporation. We are a diversified specialty pharmaceutical company committed to developing and commercializing a broad range of innovative wound care and mucoadhesive film products based on our patented Nanoflex® and OraDiscTM technologies, with the goal of improving outcomes for patients, health care professionals, and health care payers. | ||||
Basis of Presentation | ||||
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United State of America (“U.S. GAAP”) and include the accounts of ULURU Inc., a Nevada corporation, and its wholly-owned subsidiary, ULURU Delaware Inc., a Delaware corporation. Both companies have a December 31 fiscal year end. | ||||
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, as well as disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results may differ from those estimates and assumptions. These differences are usually minor and are included in our consolidated financial statements as soon as they are known. Our estimates, judgments, and assumptions are continually evaluated based on available information and experience. Because of the use of estimates inherent in the financial reporting process, actual results could differ from those estimates. | ||||
All intercompany transactions and balances have been eliminated in consolidation. | ||||
Liquidity and Going Concern | ||||
The Company is unable to assert that its liquidity will be sufficient to fund operations beyond the first quarter of 2015, and as a result, there is substantial doubt about our ability to continue as a going concern beyond the first quarter of 2015. These consolidated financial statements have been prepared with the assumption that we will continue as a going concern and will be able to realize its assets and discharge its liabilities in the normal course of business and do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the inability of the Company to continue as a going concern. We may not be able to raise sufficient capital on acceptable terms, or at all, to continue operations and may not be able to execute any strategic transaction. | ||||
Our liquidity, and our ability to raise additional capital or complete any strategic transaction, depends on a number of factors, including, but not limited to, the following: | ||||
• | the market price of our stock and the availability and cost of additional equity capital from existing and potential new investors; | |||
• | general economic and industry conditions affecting the availability and cost of capital; | |||
• | our financial condition, including its revenues, the amount of its indebtedness and its ability to control costs associated with its operations; | |||
• | the costs of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights; and | |||
• | the terms and conditions of our existing collaborative and licensing agreements. | |||
The sale of additional equity or convertible debt securities will likely result in substantial additional dilution to our stockholders. If we raise additional funds through the incurrence of indebtedness, the obligations related to such indebtedness would be senior to rights of holders of our capital stock and could contain covenants that would restrict our operations. We also cannot predict what consideration might be available, if any, to us or our stockholders, in connection with any strategic transaction. Should strategic alternatives or additional capital not be available to us in the near term, or not be available on acceptable terms, we may be unable to realize value from its assets and discharge its liabilities in the normal course of business which may, among other alternatives, cause us to further delay, substantially reduce or discontinue operational activities to conserve its cash resources. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended | |
Dec. 31, 2014 | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
The following is a summary of significant accounting policies used in the preparation of these consolidated financial statements: | ||
Cash and Cash Equivalents | ||
Cash and cash equivalents include highly liquid investments with original maturities of three months or less. The carrying value of these cash equivalents approximates fair value. | ||
We invest cash in excess of immediate requirements in money market accounts, certificates of deposit, corporate commercial paper with high quality ratings, and U.S. government securities taking into consideration the need for liquidity and capital preservation. These investments are not held for trading or other speculative purposes. | ||
Accounts Receivable and Allowance for Doubtful Accounts | ||
Accounts receivable are recorded at the invoiced amount and do not bear interest. We estimate the collectability of our accounts receivable. In order to assess the collectability of these receivables, we monitor the current creditworthiness of each customer and analyze the balances aged beyond the customer's credit terms. Theses evaluations may indicate a situation in which a certain customer cannot meet its financial obligations due to deterioration of its financial viability, credit ratings or bankruptcy. The allowance requirements are based on current facts and are reevaluated and adjusted as additional information is received. Accounts receivable are subject to an allowance for collection when it is probable that the balance will not be collected. As of December 31, 2014 and 2013, the allowance for doubtful accounts was $887 and $907, respectively. For the years ended December 31, 2014 and 2013, the accounts written off as uncollectible or previously written off and recovered were $779 and $(1,126), respectively. | ||
Notes Receivable | ||
Notes receivable are stated at unpaid principle balance. Interest on notes receivable is recognized over the term of the note and is calculated by the simple interest method on principle amounts outstanding. We estimate the collectability of our notes receivable. This estimate is based on similar evaluation criteria as used in estimating the collectability of our trade accounts receivable. Notes receivable are subject to an allowance for collection when it is probable that the balance, or a portion thereof, will not be collected. As of December 31, 2014 and 2013, the allowance for collection for our notes receivable was nil. | ||
Inventory | ||
Inventories are stated at the lower of cost or market value. Raw material inventory cost is determined on the first-in, first-out method. Costs of finished goods are determined by an actual cost method. We regularly review inventories on hand and write down the carrying value of our inventories for excess and potentially obsolete inventories based on historical usage and estimated future usage. In assessing the ultimate realization of our inventories, we are required to make judgments as to future demand requirements. As actual future demand or market conditions may vary from those projected by us, adjustment to inventories may be required. | ||
Prepaid Expenses and Deferred Charges | ||
From time to time fees are payable to the United States Food and Drug Administration (“FDA”) in connection with new drug applications submitted by us and annual prescription drug user fees (“PDUFA”). Such fees are being amortized ratably over the FDA’s prescribed fiscal period of twelve months ending September 30th. As of December 31, 2014 and 2013, the amount of prepaid PDUFA fees was nil. Additionally, we amortize our insurance costs ratably over the term of each policy. Typically, our insurance policies are subject to renewal in July and October of each year. | ||
Property, Equipment and Leasehold Improvements | ||
Property, equipment, and leasehold improvements are recorded at cost. Depreciation is provided over the estimated useful lives of the related assets using the straight-line method. Estimated useful lives for property, equipment, and leasehold improvements categories are as follows: | ||
Laboratory and manufacturing equipment | 7 years | |
Computers, office equipment, and furniture | 5 years | |
Computer software | 3 years | |
Leasehold improvements | Lease term | |
Intangible Assets | ||
We expense internal patent and application costs as incurred because, even though we believe the patents and underlying processes have continuing value, the amount of future benefits to be derived from them are uncertain. Purchased patents are capitalized and amortized over the life of the patent. | ||
Impairment of Assets | ||
In accordance with the provisions of Accounting Standards Codification (“ASC”) Topic 350-30, Intangibles Other than Goodwill, our policy is to evaluate whether there has been a permanent impairment in the value of long-lived assets and certain identifiable intangibles when certain events have taken place that indicate the remaining unamortized balance may not be recoverable, or at least annually to determine the current value of the intangible asset. When factors indicate that the intangible assets should be evaluated for possible impairment, we use an estimate of undiscounted cash flows. Considerable management judgment is necessary to estimate the undiscounted cash flows. Accordingly, actual results could vary significantly from management’s estimates. | ||
Deferred Financing Costs | ||
We defer financing costs associated with the issuance of our convertible notes payable and amortize those costs over the period of the convertible notes using the effective interest method. In 2012, we incurred $200,000 of financing costs related to our convertible note payable with Inter-Mountain Capital Corp. During 2014 and 2013, we recorded amortization of approximately $7,000 and $74,000, respectively, of deferred financing costs. Other assets at December 31, 2014 and 2013 included net deferred financing costs of approximately of nil and $87,000, respectively. | ||
Accrual for Clinical Study Costs | ||
We record accruals for estimated clinical study costs. Clinical study costs represent costs incurred by clinical research organizations, or CROs, and clinical sites. These costs are recorded as a component of research and development expenses. We analyze the progress of the clinical trials, including levels of patient enrollment and/or patient visits, invoices received and contracted costs when evaluating the adequacy of the accrued liabilities. Significant judgments and estimates must be made and used in determining the accrued balance in any accounting period. Actual costs incurred may or may not match the estimated costs for a given accounting period. As of December 31, 2014 and 2013, the accrual for estimated clinical study costs was nil. | ||
Shipping and Handling Costs | ||
Shipping and handling costs incurred for product shipments are included in cost of goods sold. | ||
Income Taxes | ||
We use the liability method of accounting for income taxes pursuant to ASC Topic 740, Income Taxes. Under this method, deferred income taxes are recorded to reflect the tax consequences in future periods of temporary differences between the tax basis of assets and liabilities and their financial statement amounts at year-end. | ||
Revenue Recognition and Deferred Revenue | ||
License Fees | ||
We recognize revenue from license payments not tied to achieving a specific performance milestone ratably during the period over which we are obligated to perform services. The period over which we are obligated to perform services is estimated based on available facts and circumstances. Determination of any alteration of the performance period normally indicated by the terms of such agreements involves judgment on management's part. License revenues with no specific performance criteria are recognized when received from our foreign licensee and their various foreign sub-licensees as there is no control by us over the various foreign sub-licensees and no performance criteria to which we are subject. | ||
We recognize revenue from performance payments ratably, when such performance is substantially in our control and when we believe that completion of such performance is reasonably probable, over the period during which we estimate that we will complete such performance obligations. In circumstances where the arrangement includes a refund provision, we defer revenue recognition until the refund condition is no longer applicable unless, in our judgment, the refund circumstances are within our operating control and are unlikely to occur. | ||
Substantive at-risk milestone payments, which are based on achieving a specific performance milestone when performance of such milestone is contingent on performance by others or for which achievement cannot be reasonably estimated or assured, are recognized as revenue when the milestone is achieved and the related payment is due, provided that there is no substantial future service obligation associated with the milestone. | ||
Royalty Income | ||
We receive royalty revenues under license agreements with a number of third parties that sell products based on technology we have developed or to which we have rights. The license agreements provide for the payment of royalties to us based on sales of the licensed products. We record these revenues based on estimates of the sales that occurred during the relevant period. The relevant period estimates of sales are based on interim data provided by licensees and analysis of historical royalties we have been paid (adjusted for any changes in facts and circumstances, as appropriate). | ||
We maintain regular communication with our licensees in order to gauge the reasonableness of our estimates. Differences between actual royalty revenues and estimated royalty revenues are reconciled and adjusted for in the period in which they become known, typically the following quarter. Historically, adjustments have not been material based on actual amounts paid by licensees. As it relates to royalty income, there are no future performance obligations on our part under these license agreements. To the extent we do not have sufficient ability to accurately estimate revenue; we record it on a cash basis. | ||
Product Sales | ||
We recognize revenue and related costs from the sale of our products at the time the products are shipped to the customer. Provisions for returns, rebates, and discounts are established in the same period the related product sales are recorded. | ||
We review the supply levels of our products sold to major wholesalers in the U.S., primarily by reviewing reports supplied by our major wholesalers and available volume information for our products, or alternative approaches. When we believe wholesaler purchasing patterns have caused an unusual increase or decrease in the sales of a major product compared with underlying demand, we disclose this in our product sales discussion if we believe the amount is material to the product sales trend; however, we are not always able to accurately quantify the amount of stocking or destocking. Wholesaler stocking and destocking activity historically has not caused any material changes in the rate of actual product returns. | ||
We establish sales return accruals for anticipated product returns. We record the return amounts as a deduction to arrive at our net product sales. Consistent with Revenue Recognition accounting guidance, we estimate a reserve when the sales occur for future product returns related to those sales. This estimate is primarily based on historical return rates as well as specifically identified anticipated returns due to known business conditions and product expiry dates. Actual product returns have been nil over the past two years. | ||
We establish sales rebate and discount accruals in the same period as the related sales. The rebate and discount amounts are recorded as a deduction to arrive at our net product sales. We base these accruals primarily upon our historical rebate and discount payments made to our customer segment groups and the provisions of current rebate and discount contracts. | ||
Foreign currency transaction gain (loss) | ||
Our functional currency and our reporting currency is the U.S. dollar and foreign currency transactions are primarily undertaken in Euros. Monetary assets and liabilities are translated using the foreign currency exchange rate prevailing at the balance sheet date. Revenues, non-monetary assets and liabilities denominated in foreign currencies are translated at rates of foreign currency exchange in effect at the date of the transaction. Expenses are translated at average foreign currency exchange rates for the period. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of net income. | ||
Research and Development Expenses | ||
Pursuant to ASC Topic 730, Research and Development, our research and development costs are expensed as incurred. Research and development expenses include, but are not limited to, salaries and benefits, laboratory supplies, facilities expenses, preclinical development cost, clinical trial and related clinical manufacturing expenses, contract services, consulting fees and other outside expenses. The cost of materials and equipment or facilities that are acquired for research and development activities and that have alternative future uses are capitalized when acquired. There were no such capitalized materials, equipment or facilities for the years ended December 31, 2014 and 2013. | ||
Basic and Diluted Net Loss Per Common Share | ||
In accordance with ASC Topic 260, Earnings per Share, basic earnings (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Diluted earnings (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period increased to include potential dilutive common shares. The effect of outstanding stock options, restricted vesting common stock and warrants, when dilutive, is reflected in diluted earnings (loss) per common share by application of the treasury stock method. We have excluded all outstanding stock options, restricted vesting common stock and warrants from the calculation of diluted net loss per common share because all such securities are antidilutive for all periods presented. | ||
Concentrations of Credit Risk | ||
Concentration of credit risk with respect to financial instruments, consisting primarily of cash and cash equivalents, that potentially expose us to concentrations of credit risk due to the use of a limited number of banking institutions and due to maintaining cash balances in banks, which, at times, may exceed the limits of amounts insured by the Federal Deposit Insurance Corporation. During 2014 and 2013, we utilized Bank of America, N.A. as our banking institution. At December 31, 2014 and December 31, 2013 our cash and cash equivalents totaled $550,458 and $5,119, respectively. We also invest cash in excess of immediate requirements in money market accounts, certificates of deposit, corporate commercial paper with high quality ratings, and U.S. government securities. These investments are not held for trading or other speculative purposes. We are exposed to credit risk in the event of default by these high quality corporations. | ||
Concentration of credit risk with respect to trade accounts receivable are customers with balances that exceed 5% of total consolidated trade accounts receivable at December 31, 2014 and at December 31, 2013. As of December 31, 2014, three customers, each being one of our international distributors, exceeded the 5% threshold, with 71%, 19%, and 9%, respectively. Two customers, each being one of our international distributors, exceeded the 5% threshold at December 31, 2013, with 86% and 11%, respectively. To reduce risk, we routinely assess the financial strength of our most significant customers and monitor the amounts owed to us, taking appropriate action when necessary. As a result, we believe that accounts receivable credit risk exposure is limited. We maintain an allowance for doubtful accounts, but historically have not experienced any significant losses related to an individual customer or group of customers. | ||
Concentrations of Foreign Currency Risk | ||
A portion of our revenues and all of our expenses are denominated in U.S. dollars. We are experiencing an increase in revenues in international territories denominated in a foreign currency. Certain of our licensing and distribution agreements in international territories are denominated in Euros. Currently, we do not employ forward contracts or other financial instruments to mitigate foreign currency risk. As our international operations continues to grow, we may engage in hedging activities to hedge our exposure to foreign currency risk. | ||
Fair Value of Financial Instruments | ||
In accordance with portions of ASC Topic 820, Fair Value Measurements, certain assets and liabilities of the Company are required to be recorded at fair value. Fair value is determined based on the exchange price that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants. | ||
Our financial instruments, including cash, cash equivalents, accounts receivable, and accounts payable are carried at cost, which approximates their fair value because of the short-term maturity of these instruments. We believe that the carrying value of our other receivable, notes receivable and accrued interest, and convertible note payable balances approximates fair value based on a valuation methodology using the income approach and a discounted cash flow model. | ||
Derivatives | ||
We occasionally issue financial instruments that contain an embedded instrument. At inception, we assess whether the economic characteristics of the embedded derivative instrument are clearly and closely related to the economic characteristics of the financial instrument (host contract), whether the financial instrument that embodies both the embedded derivative instrument and the host contract is currently measured at fair value with changes in fair value reported in earnings, and whether a separate instrument with the same terms as the embedded instrument would meet the definition of a derivative instrument. | ||
If the embedded derivative instrument is determined not to be clearly and closely related to the host contract, is not currently measured at fair value with changes in fair value reported in earnings, and the embedded derivative instrument would qualify as a derivative instrument, the embedded derivative instrument is recorded apart from the host contract and carried at fair value with changes recorded in current-period earnings. | ||
We determined that all embedded items associated with financial instruments during 2014 and 2013 which qualify for derivative treatment, were properly separated from their host. As of December 31, 2014 and 2013, we did not have any derivative instruments. | ||
THE_EFFECT_OF_RECENTLY_ISSUED_
THE EFFECT OF RECENTLY ISSUED ACCOUNTING STANDARDS | 12 Months Ended | |
Dec. 31, 2014 | ||
THE EFFECT OF RECENTLY ISSUED ACCOUNTING STANDARDS [Abstract] | ||
THE EFFECT OF RECENTLY ISSUED ACCOUNTING STANDARDS | NOTE 3. | THE EFFECT OF RECENTLY ISSUED ACCOUNTING STANDARDS |
In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers,” which supersedes the revenue recognition requirements of Accounting Standards Codification (“ASC”) Topic 605, “Revenue Recognition” and most industry-specific guidance on revenue recognition throughout the ASC. The new standard is principles-based and provides a five step model to determine when and how revenue is recognized. The core principle of the new standard is that revenue should be recognized when a company transfers promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The new standard also requires disclosure of qualitative and quantitative information surrounding the amount, nature, timing and uncertainty of revenues and cash flows arising from contracts with customers. The new standard will be effective for us in the first quarter of the year ending December 31, 2017 and can be applied either retrospectively to all periods presented or as a cumulative-effect adjustment as of the date of adoption. Early adoption is not permitted. We are currently evaluating the impact of adoption of ASU 2014-09 on our consolidated financial statements. | ||
In August 2014, FASB issued ASU No. 2014-15, “Presentation of Financial Statements – Going Concern”. ASU No 2014-15 provides guidance regarding management’s responsibility to evaluate whether there exists substantial doubt about an organization’s ability to continue as a going concern and to provide related footnote disclosures in certain circumstances. ASU No. 2014-15 is effective for annual reporting periods beginning after December 15, 2016, and interim periods thereafter. We do not believe ASU No. 2015-15 will have a material effect on our financial position and results of operations. | ||
There are no other new accounting pronouncements adopted or enacted during the year ended December 31, 2014 that had, or are expected to have, a material impact on our financial statements. |
SEGMENT_INFORMATION
SEGMENT INFORMATION | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
SEGMENT INFORMATION [Abstract] | |||||||||||||||||
SEGMENT INFORMATION | NOTE 4. | SEGMENT INFORMATION | |||||||||||||||
We operate in one business segment: the research, development, and commercialization of pharmaceutical products. Our corporate headquarters in the United States collects proceeds from product sales, licensing fees, royalties, and sponsored research revenues from our arrangements with external customers and licensees. Our entire business is managed by a single management team, which reports to the Chief Executive Officer. | |||||||||||||||||
Our revenues are currently derived primarily from seven licensees for international activities and our domestic sales activities for Altrazeal®. | |||||||||||||||||
Revenues per geographic area, along with relative percentages of total revenues, for the year ended December 31, are summarized as follows: | |||||||||||||||||
Revenues | 2014 | % | 2013 | % | |||||||||||||
Domestic | $ | 37,465 | 4 | % | $ | 65,546 | 18 | % | |||||||||
International | 826,392 | 96 | % | 305,022 | 82 | % | |||||||||||
Total | $ | 863,857 | 100 | % | $ | 370,568 | 100 | % | |||||||||
A significant portion of our revenues are derived from a few major customers. Customers with greater than 10% of total revenues, along with their relative percentage of total revenues, for the year ended December 31 are represented on the following table: | |||||||||||||||||
Customers | Product | 2014 | 2013 | ||||||||||||||
Customer A | Altrazeal® | 80 | % | 8 | % | ||||||||||||
Customer B | Altrazeal® | 11 | % | 67 | % | ||||||||||||
Total | 91 | % | 75 | % |
NOTES_RECEIVABLE
NOTES RECEIVABLE | 12 Months Ended | |
Dec. 31, 2014 | ||
NOTES RECEIVABLE [Abstract] | ||
NOTES RECEIVABLE | NOTE 5. | NOTES RECEIVABLE |
On June 27, 2012, we entered into a Securities Purchase Agreement related to our issuance of a $2,210,000 Secured Convertible Note (the “June 2012 Note”), with Inter-Mountain Capital Corp., a Delaware corporation (“Inter-Mountain”). As part of the June 2012 Note transaction, we received $1,500,000 in the form of six promissory notes in favor of the Company, each in the principal amount of $250,000 (the “Investor Notes”) and each of which became due as the outstanding balance under the June 2012 Note was reduced to certain levels. On October 5, 2012, we and Inter-Mountain entered into a First Amendment to Buyer Trust Deed Note #1 (the “Trust Deed Note Amendment”) for the purpose of revising certain terms and conditions contained in the Buyer Trust Deed Note #1, to include receiving payments of $100,000, $100,000, and $50,000 on October 5, 2012, November 30, 2012, and December 31, 2012, respectively, and any interest thereon. As of December 31, 2013, we had $777,710 in notes receivable which was comprised of $687,500 for three Investor Notes and $90,210 for accrued interest thereon. | ||
On January 22, 2014, we provided notice to Inter-Mountain of our election to exercise our rights under the June 2012 Note and to offset amounts we owed to Inter-Mountain against amounts it owed to us under the three Investor Notes of $687,500 and accrued interest thereon of $94,456. As a result of the deduction and offset, the amounts owed to us under the June 2012 Note was reduced to zero. |
INVENTORY
INVENTORY | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
INVENTORY [Abstract] | |||||||||
INVENTORY | NOTE 6. | INVENTORY | |||||||
As of December 31, 2014 and 2013, our inventory was comprised of Altrazeal® finished goods, manufacturing costs incurred in the production of Altrazeal®, and raw materials. Inventories are stated at the lower of cost (first in, first out method) or market. We regularly review inventories on hand and write down the carrying value of our inventories for excess and potentially obsolete inventories based on historical usage and estimated future usage. In assessing the ultimate realization of our inventories, we are required to make judgments as to future demand requirements. As actual future demand or market conditions may vary from those projected by us, adjustment to inventories may be required. For the years ended December 31, 2014 and 2013, we wrote off approximately $19,000 and $60,000, respectively, in obsolete inventories. | |||||||||
The components of inventory, at the different stages of production, consisted of the following at December 31: | |||||||||
Inventory | 2014 | 2013 | |||||||
Raw materials | $ | 41,648 | $ | 10,148 | |||||
Work-in-progress | 271,571 | 299,464 | |||||||
Finished goods | 12,438 | 85,993 | |||||||
Total | $ | 325,657 | $ | 395,605 |
PROPERTY_EQUIPMENT_AND_LEASEHO
PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS [Abstract] | |||||||||
PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS | NOTE 7. | PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS | |||||||
Property, equipment and leasehold improvements, net, consisted of the following at December 31: | |||||||||
Property, equipment and leasehold improvements | 2014 | 2013 | |||||||
Laboratory equipment | $ | 424,888 | $ | 424,888 | |||||
Manufacturing equipment | 1,599,894 | 1,581,728 | |||||||
Computers, office equipment, and furniture | 153,078 | 140,360 | |||||||
Computer software | 4,108 | 4,108 | |||||||
Leasehold improvements | 95,841 | 95,841 | |||||||
2,277,809 | 2,246,925 | ||||||||
Less: accumulated depreciation and amortization | (1,845,699 | ) | (1,608,311 | ) | |||||
Property, equipment and leasehold improvements, net | $ | 432,110 | $ | 638,614 | |||||
Depreciation expense on property, equipment, and leasehold improvements was $237,388 and $244,704 for the years ended December 31, 2014 and 2013, respectively. |
INTANGIBLE_ASSETS
INTANGIBLE ASSETS | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
INTANGIBLE ASSETS [Abstract] | |||||||||
INTANGIBLE ASSETS | NOTE 8. | INTANGIBLE ASSETS | |||||||
Intangible assets are comprised of patents acquired in October 2005. Intangible assets, net consisted of the following at December 31: | |||||||||
Intangible assets | 2014 | 2013 | |||||||
Patent - Amlexanox (Aphthasol®) | $ | 2,090,000 | $ | 2,090,000 | |||||
Patent - Amlexanox (OraDisc™ A) | 6,873,080 | 6,873,080 | |||||||
Patent - OraDisc™ | 73,000 | 73,000 | |||||||
Patent - Hydrogel nanoparticle aggregate | 589,858 | 589,858 | |||||||
9,625,938 | 9,625,938 | ||||||||
Less: accumulated amortization | (6,430,249 | ) | (5,955,101 | ) | |||||
Intangible assets, net | $ | 3,195,689 | $ | 3,670,837 | |||||
We performed an evaluation of our intangible assets for purposes of determining possible impairment as of December 31, 2014. Based upon recent market conditions and comparable market transactions for similar intangible assets, we determined that an income approach using a discounted cash flow model was an appropriate valuation methodology to determine each intangible asset’s fair value. The income approach converts future amounts to a single present value amount (discounted cash flow model). Our discounted cash flow models are highly reliant on various assumptions, including estimates of future cash flow (including long-term growth rates), discount rate, and expectations about variations in the amount and timing of cash flows and the probability of achieving the estimated cash flows, all of which we consider level 3 inputs for determination of fair value. We believe we have appropriately reflected our best estimate of the assumptions that market participants would use in determining the fair value of our intangible assets at the measurement date. Upon completion of the evaluation, the fair value of our intangible assets exceeded the recorded remaining book value. | |||||||||
Amortization expense for intangible assets was $475,148 and $475,148 for the years ended December 31, 2014 and 2013, respectively. The future aggregate amortization expense for intangible assets, remaining as of December 31, 2014, is as follows: | |||||||||
Calendar Years | Future Amortization | ||||||||
Expense | |||||||||
2015 | $ | 475,148 | |||||||
2016 | 476,450 | ||||||||
2017 | 475,148 | ||||||||
2018 | 475,148 | ||||||||
2019 | 475,148 | ||||||||
2020 & Beyond | 818,647 | ||||||||
Total | $ | 3,195,689 |
INVESTMENT_IN_UNCONSOLIDATED_S
INVESTMENT IN UNCONSOLIDATED SUBSIDIARY | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
INVESTMENT IN UNCONSOLIDATED SUBSIDIARY [Abstract] | |||||
INVESTMENT IN UNCONSOLIDATED SUBSIDIARY | NOTE 9. | INVESTMENT IN UNCONSOLIDATED SUBSIDIARY | |||
We use the equity method of accounting for investments in other companies that are not controlled by us and in which our interest is generally between 20% and 50% of the voting shares or we have significant influence over the entity, or both. | |||||
Altrazeal Trading Ltd. | |||||
On January 11, 2012, we executed a shareholders’ agreement for the establishment of Altrazeal Trading Ltd., a single purpose entity to be used for the exclusive marketing of Altrazeal® throughout the European Union, Australia, New Zealand, North Africa, and the Middle East. As a result of this transaction, we received a non-dilutable 25% ownership interest in Altrazeal Trading Ltd. On February 1, 2014, Altrazeal Trading Ltd. transferred all of their rights and obligations under the existing shareholders’ agreement to Altrazeal Trading GmbH. | |||||
Audited financial statements of Altrazeal Trading Ltd. for the years ended December 31, 2014 and 2013 have not been released to us and, therefore, we have not included the effect of the financial activities of Altrazeal Trading Ltd. in our financial statements for each reporting period. We believe that our share of the cumulative losses of Altrazeal Trading Ltd. for the years ended December 31, 2014, 2013, and 2012 would exceed the carrying value of our investment, therefore the equity method of accounting would be suspended for such reporting periods and no additional losses would be charged to operations. | |||||
Based upon audited financial statements received in May 2014, our unrecorded share of Altrazeal Trading Ltd. losses for the year ended December 31, 2012 totaled $129,207. | |||||
Summarized financial information for our investment in Altrazeal Trading Ltd. assuming 100% ownership is as follows: | |||||
Altrazeal Trading Ltd. | 31-Dec-12 | ||||
Balance sheet | |||||
Total assets | $ | 136,661 | |||
Total liabilities | $ | 660,006 | |||
Total stockholders’ (deficit) | $ | (523,345 | ) | ||
Statement of operations | |||||
Revenues | $ | 61,028 | |||
Net (loss) | $ | (516,829 | ) | ||
Altrazeal Trading GmbH | |||||
On February 1, 2014, Altrazeal Trading Ltd. transferred all of their rights and obligations under the existing shareholders’ agreement to Altrazeal Trading GmbH. As a result of this transfer, we received a non-dilutable 25% ownership interest in Altrazeal Trading GmbH. | |||||
Audited financial statements of Altrazeal Trading GmbH for the years ended December 31, 2014 and 2013 have not been released to us and, therefore, we have not included the effect of the financial activities of Altrazeal Trading GmbH. in our financial statements for each reporting period. We believe that our share of the cumulative losses of Altrazeal Trading GmbH for the years ended December 31, 2014 and 2013 would exceed the carrying value of our investment, therefore the equity method of accounting would be suspended for such reporting periods and no additional losses would be charged to operations. | |||||
Based upon the unaudited financial statements for the year ended December 31, 2013, our unrecorded share of Altrazeal Trading GmbH cumulative losses as of December 31, 2013 totaled $213,370. | |||||
Summarized financial information for our investment in Altrazeal Trading GmbH assuming 100% ownership is as follows: | |||||
Altrazeal Trading GmbH | 31-Dec-13 | ||||
(Unaudited) | |||||
Balance sheet | |||||
Total assets | $ | 757,784 | |||
Total liabilities | $ | 1,563,046 | |||
Total stockholders’ (deficit) | $ | (805,262 | ) | ||
Statement of operations | |||||
Revenues | $ | --- | |||
Net (loss) | $ | (798,009 | ) | ||
ORADISC GmbH | |||||
On October 19, 2012, we executed a shareholders’ agreement for the establishment of ORADISC GmbH, a single purpose entity to be used for the exclusive development and marketing of OraDisc™ erodible film technology products. We received a non-dilutable 25% ownership interest in ORADISC GmbH. | |||||
Audited financial statements of ORADISC GmbH for the years ended December 31, 2014 and 2013 have not been released to us and, therefore, we have not included the effect of the financial activities of ORADISC GmbH. in our financial statements for each reporting period. We believe that our share of the cumulative losses of ORADISC GmbH for the years ended December 31, 2014 and 2013 would exceed the carrying value of our investment, therefore the equity method of accounting would be suspended for such reporting periods and no additional losses would be charged to operations. | |||||
Based upon the unaudited financial statements for the year ended December 31, 2013, our unrecorded share of ORADISC GmbH cumulative losses as of December 31, 2013 totaled $11,430. | |||||
Summarized financial information for our investment in ORADISC GmbH assuming 100% ownership is as follows: | |||||
ORADISC GmbH | 31-Dec-13 | ||||
(Unaudited) | |||||
Balance sheet | |||||
Total assets | $ | 305,069 | |||
Total liabilities | $ | 302,572 | |||
Total stockholders’ equity | $ | 2,497 | |||
Statement of operations | |||||
Revenues | $ | --- | |||
Net (loss) | $ | (34,671 | ) | ||
Altrazeal AG | |||||
On February 1, 2014, we executed a shareholders’ agreement with Altrazeal AG, a single purpose entity for the marketing of Altrazeal® in several territories, including Africa (markets not already licensed), Latin America, Georgia, Turkmenistan, Ukraine, the Commonwealth of Independent States, Jordan, Syria, Asia and the Pacific (excluding China, Hong Kong, Macau, Taiwan, South Korea, Japan, Australia, and New Zealand). As a result of this transaction, we received a non-dilutable 25% ownership interest in Altrazeal AG. | |||||
Audited or unaudited financial statements of Altrazeal AG for the year ended December 31, 2014 have not been released to us and, therefore, we have not included the effect of the financial activities of Altrazeal AG in our financial statements for such reporting period. We believe that our share of the cumulative losses of Altrazeal AG for the year ended December 31, 2014 would exceed the carrying value of our investment, therefore the equity method of accounting would be suspended for such reporting periods and no additional losses would be charged to operations. |
ACCRUED_LIABILITIES
ACCRUED LIABILITIES | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
ACCRUED LIABILITIES [Abstract] | |||||||||
ACCRUED LIABILITIES | NOTE 10. | ACCRUED LIABILITIES | |||||||
Accrued liabilities consisted of the following at December 31: | |||||||||
Accrued Liabilities | 2014 | 2013 | |||||||
Accrued taxes – payroll | $ | 106,299 | $ | 106,299 | |||||
Accrued compensation/benefits | 96,795 | 148,683 | |||||||
Accrued insurance payable | 69,815 | 60,113 | |||||||
Product rebates/returns | 13 | 32 | |||||||
Other | 279 | 836 | |||||||
Total accrued liabilities | $ | 273,201 | $ | 315,963 |
CONVERTIBLE_DEBT
CONVERTIBLE DEBT | 12 Months Ended | |
Dec. 31, 2014 | ||
CONVERTIBLE DEBT [Abstract] | ||
CONVERTIBLE DEBT | NOTE 11. | CONVERTIBLE DEBT |
Convertible Note – June 2012 | ||
On June 27, 2012, we entered into a Securities Purchase Agreement (the “Purchase Agreement”), related to our issuance of the June 2012 Note, with Inter-Mountain. The purchase price for the June 2012 Note was paid $500,000 at closing in cash and $1,500,000 in the form of six Investor Notes in favor of the Company, each in the principal amount of $250,000 at an interest rate of 8.0% per annum, and each of which became due as the outstanding balance under the June 2012 Note was reduced to certain levels. The purchase price of the June 2012 Note also reflected a $200,000 original issue discount and $10,000 in attorney’s fees. The Purchase Agreement also includes representations and warranties, restrictive covenants, and indemnification provisions standard for similar transactions. | ||
The June 2012 Note beared interest at the rate of 8.0% per annum, with monthly installment payments of $83,333 commencing on the date that was the earlier of (i) thirty calendar days after the effective date of a registration statement registering the re-sale of the shares issuable upon conversion under the June 2012 Note or (ii) December 24, 2012, but in no event sooner than September 25, 2012. At our option, subject to certain volume, price, and other conditions, the monthly installment payments on the June 2012 Note may have been paid in whole, or in part, in cash or in our Common Stock. If the monthly installment was paid in Common Stock, such shares being issued would be based on a price that is 80% of the average of the three lowest volume weighted average prices of the shares of Common Stock during the preceding twenty trading days. The percentage declines to 70% if the average of the three lowest volume weighted average prices of the shares of Common Stock during the preceding twenty trading days was less than $0.05. | ||
At the option of Inter-Mountain, the outstanding principal balance of the June 2012 Note may be converted into shares of our Common Stock at a conversion price of $0.35 per share, subject to certain pricing adjustments and ownership limitations. The initial tranche was $710,000 and the six subsequent tranches were each $250,000, plus interest. At our option, the outstanding principal balance of the June 2012 Note, or a portion thereof, may have been prepaid in cash at 120% of the amount elected to be prepaid. The June 2012 Note was secured by a Security Agreement pursuant to which we granted to Inter-Mountain a first-priority security interest in the assets held by the Company. | ||
Events of default under the June 2012 Note include failure to make required payments or to deliver shares upon conversion, the entry of a $100,000 judgment not stayed within 30 days, breach of representations or covenants under the transaction documents, various events associated with insolvency or failure to pay debts, delisting of our Common Stock, a restatement of financial statements, and a default under certain other agreements. In the event of default, the interest rate under the June 2012 Note increases to 18% and the June 2012 Note becomes callable at a premium. In addition, the holder had all remedies under law and equity, including foreclosing on our assets under a Security Agreement with Inter-Mountain. | ||
As part of the convertible debt financing, Inter-Mountain also received a total of seven warrants (the “Warrants”) to purchase, if they all vested, an aggregate of 3,142,857 shares of Common Stock, which number of shares could increase based upon the terms and conditions of the Warrants. The Warrants had an exercise price of $0.35 per share, subject to certain pricing adjustments, and were exercisable, subject to vesting provisions and ownership limitations, until June 27, 2017. Warrants for 785,714, 392,857, 392,857, and 392,857 shares of Common Stock vested on June 27, 2012, December 31, 2012, February 26, 2013, and July 15, 2013, respectively. Each of the three remaining Warrants has terminated, as described below. As of December 31, 2014, we have issued 725,274 shares of Common Stock to Inter-Mountain for the cashless exercise of three warrants that vested prior to February 26, 2013 to purchase 1,571,428 shares of Common Stock. Such issuance of shares of Common Stock following the cashless exercise of three warrants by Inter-Mountain during 2013 was based upon an agreement in December 2013 with Inter-Mountain modifying the formula in the Warrants for determining the number of shares to be issued upon a cashless exercise. As of December 31, 2014, there is one warrant that remains vested but unexercised for 392,857 shares of Common Stock. Inter-Mountain delivered a notice of a cashless exercise with respect to this warrant on or about May 1, 2014 purporting to exercise it with respect to the delivery of 782,284 shares of Common Stock. We believe that, as a result of the December 2013 agreement, the warrant is exercisable, on a cashless basis, with respect to only 261,516 shares of Common Stock as of May 1, 2014 and, as a result, have not honored such warrant exercise. | ||
As part of the convertible debt financing, we entered into a Registration Rights Agreement whereby we agreed to prepare and file with the SEC a registration statement for the number of shares referred to therein no later than July 27, 2012 and to cause such registration statement to be declared effective no later than ninety days after such filing with the SEC and to keep such registration statement effective for a period of no less than one hundred and eighty days. The Registration Rights Agreement also grants Inter-Mountain piggy-back registration rights with respect to future offerings by the Company. In accordance with our obligations under the Registration Rights Agreement, we filed with the SEC a registration statement that was declared effective on July 31, 2012, which registration statement expired by rule on April 30, 2013. | ||
On October 5, 2012, we and Inter-Mountain entered into a First Amendment to Buyer Trust Deed Note #1 for the purpose of revising certain terms and conditions contained in the Buyer Trust Deed Note #1, to include an updated schedule for the timing of certain payment obligations by Inter-Mountain contained therein. | ||
On January 22, 2014, we provided notice to Inter-Mountain of our election to exercise our rights under the June 2012 Note and to offset amounts we owed to Inter-Mountain against amounts it owed to us under the Investor Notes. Our notice provided that such deduction and offset occurred on January 22, 2014, that we will not incur the 120% prepayment premium with respect to amounts paid under the June 2012 Note as a result of the deduction and offset, that no warrants will become exercisable as a result of the offset, and that any warrants unvested as of January 22, 2014 shall immediately and automatically terminate. As a result of the deduction and offset, the outstanding amount owed under the June 2012 Note was reduced to approximately $317,000 as of January 22, 2014. | ||
On February 27, 2014 and on March 3, 2014, we received conversion notices from Inter-Mountain whereby we issued an aggregate of 435,502 shares of Common Stock for the final payment of approximately $152,000 due under the June 2012 Note. | ||
Convertible Note – July 2011 | ||
On July 28, 2011, we completed a convertible debt financing for $125,000 with Mr. Kerry P. Gray, the Company’s Chairman, President, and Chief Executive Officer (the “July 2011 Note”). The July 2011 Note beared interest at the rate of 10.0% per annum, with annual payments of interest commencing on July 1, 2012. The full amount of principal and any unpaid interest was due on July 28, 2014. The outstanding principal balance of the July 2011 Note may be converted into shares of the Company’s Common Stock at a conversion price of $1.08 per share or 115,741 shares of Common Stock. The July 2011 Note was collateralized by the grant of a security interest in the inventory, accounts receivables and capital equipment held by the Company. The securities issuable on conversion have not been registered under the Securities Act of 1933 and may not be sold absent registration or an applicable exemption from the registration requirements. As part of the convertible debt financing, Mr. Gray also received a warrant to purchase up to 34,722 shares of the Company’s Common Stock. The warrant has an exercise price of $1.08 per share and is exercisable at any time until July 28, 2016. | ||
On July 3, 2012, the Company and Mr. Gray entered into a Modification Agreement for the purpose of deferring the annual payment of interest due on July 1, 2012 of $11,542 until such time as Mr. Gray provides written notice to us with such notice being no less than 15 days prior to the relevant payment date. Moreover, the parties agreed that no Event of Default under the July 2011 Note had occurred as a result of any failure by us to make the annual payment of interest due on July 1, 2012. Commencing on July 1, 2012, interest at the rate of 12.0% per annum accrued on the deferred interest payment of $11,542 until the relevant payment date. On September 5, 2013, we remitted to Mr. Gray the annual interest due on July 1, 2012 of $11,542 and accrued interest thereon of $1,643. | ||
On July 1, 2013, the Company and Mr. Gray entered into a Modification Agreement for the purpose of deferring the annual payment of interest due on July 1, 2013 of $12,501 until such time as Mr. Gray provides written notice to us with such notice being no less than 15 days prior to the relevant payment date. Moreover, the parties agreed that no Event of Default under the July 2011 Note had occurred as a result of any failure by us to make the annual payment of interest due on July 1, 2013. Commencing on July 1, 2013, interest at the rate of 12.0% per annum accrued on the deferred interest payment of $12,501 until the relevant payment date. On October 28, 2013, we remitted to Mr. Gray the annual interest due on July 1, 2013 of $12,501 and accrued interest thereon of $492. | ||
On July 28, 2014, we issued 115,741 shares of Common Stock to Mr. Gray for the conversion and final payment of $125,000 due under the July 2011 Note and remitted to Mr. Gray the annual interest due on July 28, 2014 of $13,457. | ||
Convertible Note – June 2011 | ||
On June 13, 2011, we completed a $140,000 convertible debt financing with Mr. Gray (the “June 2011 Note”). The June 2011 Note beared interest at the rate of 10% per annum, with annual payments of interest commencing on July 1, 2012. The full amount of principal and any unpaid interest was due on June 13, 2014. The outstanding principal balance of the June 2011 Note may be converted into shares of the Company’s Common Stock at a conversion price of $1.20 per share or 116,667 shares of Common Stock. The June 2011 Note was collateralized by the grant of a security interest in the inventory, accounts receivables, and capital equipment held by the Company. The securities issuable on conversion have not been registered under the Securities Act of 1933 and may not be sold absent registration or an applicable exemption from the registration requirements. As part of the convertible debt financing, Mr. Gray also received a warrant to purchase up to 35,000 shares of the Company’s Common Stock. The warrant has an exercise price of $1.20 per share and is exercisable at any time until June 13, 2016. | ||
On July 3, 2012, the Company and Mr. Gray entered into a Modification Agreement for the purpose of deferring the annual payment of interest due on July 1, 2012 of $14,653 until such time as Mr. Gray provides written notice to us with such notice being no less than 15 days prior to the relevant payment date. Moreover, the parties agreed that no Event of Default under the June 2011 Note had occurred as a result of any failure by us to make the annual payment of interest due on July 1, 2012. Commencing on July 1, 2012, interest at the rate of 12.0% per annum accrued on the deferred interest payment of $14,653 until the relevant payment date. On September 5, 2013, we remitted to Mr. Gray the annual interest due on July 1, 2012 of $14,653 and accrued interest thereon of $2,080. | ||
On July 1, 2013, the Company and Mr. Gray entered into a Modification Agreement for the purpose of deferring the annual payment of interest due on July 1, 2013 of $14,001 until such time as Mr. Gray provides written notice to us with such notice being no less than 15 days prior to the relevant payment date. Moreover, the parties agreed that no Event of Default under the June 2011 Note had occurred as a result of any failure by us to make the annual payment of interest due on July 1, 2013. Commencing on July 1, 2013, interest at the rate of 12.0% per annum accrued on the deferred interest payment of $14,001 until the relevant payment date. On October 28, 2013, we remitted to Mr. Gray the annual interest due on July 1, 2013 of $14,001 and accrued interest thereon of $553. | ||
On June 13, 2014, we issued 116,667 shares of Common Stock to Mr. Gray for the conversion and final payment of $140,000 due under the June 2011 Note and remitted to Mr. Gray the annual interest due on June 13, 2014 of $13,346. | ||
We account for convertible debt using specific guidelines in accordance with U.S. GAAP. We allocated the value of the proceeds received to the convertible instrument and to the warrant on a relative fair value basis. We calculated the fair value of the warrant issued with the convertible instrument using the Black-Scholes valuation method, using the same assumptions used for valuing employee stock options, except the contractual life of the warrant was used. Using the effective interest method, the allocated fair value was recorded as a debt discount and is being amortized over the expected term of the convertible debt to interest expense. | ||
On the date of issuance of the June 2011 Note, the July 2011 Note, and the June 2012 Note, no portion of the proceeds were attributable to a beneficial conversion feature since the conversion price of the June 2011 Note, the July 2011 Note, and the June 2012 Note exceeded the market price of the Company’s Common Stock. | ||
The amount of interest cost recognized from our convertible notes payable was $20,853 and $157,027 for years ended December 31, 2014 and 2013, respectively. | ||
The amount of debt discount amortized from our convertible notes payable was $(78,078) and $178,548 for years ended December 31, 2014 and 2013, respectively. |
EQUITY_TRANSACTIONS
EQUITY TRANSACTIONS | 12 Months Ended | |
Dec. 31, 2014 | ||
EQUITY TRANSACTIONS [Abstract] | ||
EQUITY TRANSACTIONS | NOTE 12. | EQUITY TRANSACTIONS |
Common Stock Transactions | ||
March 2013 Offering | ||
On March 14, 2013, we entered into a Securities Purchase Agreement (the “March SPA”) with Kerry P. Gray, the Company’s Chairman, President, and Chief Executive Officer and Terrance K. Wallberg, the Company’s Vice President and Chief Financial Officer (collectively, the “Investors”) relating to an equity investment of $440,000 by the Investors for 1,100,000 shares of our Common Stock (the “March Shares”) and warrants to purchase up to 660,000 shares of our Common Stock (the “March Warrants”) (the “March 2013 Offering”). Under the March SPA, the purchase and sale of the March Shares and March Warrants took place at four closings over twelve months, with $88,000 being funded at the initial closing under the March SPA, $110,000 being funded on the four-month anniversary of the initial closing, $132,000 being funded on the eight-month anniversary of the initial closing, and $110,000 being funded on the one-year anniversary of the initial closing. The March Warrants have a fixed exercise price of $0.60 per share, become exercisable in tranches on each of the four funding dates, and expire on the five-year anniversary of the initial closing. On March 14, 2013, we closed the March 2013 Offering and received the initial funding tranche of $88,000 for the purchase of 220,000 shares of our Common Stock. We received subsequent funding tranches of $110,000, $132,000, and $110,000 for the purchase of 275,000, 330,000, and 275,000 shares of our Common Stock on July 15, 2013, November 14, 2013, and March 14, 2014, respectively. | ||
January 2013 Offering | ||
On December 21, 2012, we entered into a Securities Purchase Agreement (the “SPA”) with IPMD GmbH (“IPMD”) relating to an equity investment of $2,000,000 by IPMD for 5,000,000 shares of our Common Stock (the “Shares”) and warrants to purchase up to 3,000,000 shares of our Common Stock (the “Warrants”) (the “January 2013 Offering”). Under the SPA, the purchase and sale of the Shares and Warrants took place at four closings over twelve months, with $400,000 being funded at the initial closing under the SPA, $500,000 being funded on the four-month anniversary of the initial closing, $600,000 being funded on the eight-month anniversary of the initial closing, and $500,000 being funded on the one-year anniversary of the initial closing. The Warrants have a fixed exercise price of $0.60 per share, become exercisable in tranches on each of the four funding dates, and expire on the one-year anniversary of the initial closing. On January 3, 2013, we closed the January 2013 Offering and received the initial funding tranche of $400,000 for the purchase of 1,000,000 shares of our Common Stock. We received subsequent funding tranches of $500,000, $300,000, $300,000, and $500,000 for the purchase of 1,250,000, 750,000, 750,000, and 1,250,000 shares of our Common Stock on May 7, 2013, September 6, 2013, October 24, 2013, and January 6, 2014 respectively. | ||
In the SPA, we also agree to appoint up to two directors nominated by IPMD to serve on our Board of Directors. On January 17, 2013, the Board of Directors of the Company appointed Helmut Kerschbaumer and Klaus Kuehne to each serve as a director of the Company. Messrs. Kerschbaumer and Kuehne are the designees of IPMD to serve on the Company’s Board of Directors pursuant to covenants in the SPA with IPMD. | ||
In the SPA, we also agreed that we would not issue equity securities or rights to acquire equity securities without the unanimous approval of our Board of Directors and granted IPMD a right of first offer with respect to certain offerings or issuances of securities. | ||
On January 3, 2014, the Warrants vested with respect to 3,000,000 shares of our Common Stock and were exercised by IPMD on that date pursuant to a Notice of Exercise, accepted by the Company, that provided for the issuance of 750,000 shares of Common Stock on each of January 31, 2014, February 28, 2014, March 31, 2014, and April 30, 2014 in exchange for the payment of $450,000 on each such date. | ||
On January 31, 2014, IPMD entered into an Assignment Agreement (the “Assignment Agreement”) with The Punch Trust (“TPT”) and Michael I. Sacks (“Sacks”) pursuant to which IPMD assigned to TPT and Sacks its rights and interests to purchase up to 3,000,000 shares of our Common Stock as detailed in the Warrants and the Notice of Exercise. Neither TPT nor Sacks paid any monetary consideration to IPMD in connection with the assignments under the Assignment Agreement. | ||
Concurrent with the assignment under the Assignment Agreement described above, ULURU, TPT, Sacks, and IPMD entered into an Implementation Agreement (the “Implementation Agreement”) pursuant to which we consented and agreed to the assignment of the Warrants to TPT and Sacks. We also agreed to issue and facilitate the delivery of the shares of Common Stock under the Warrants to TPT and Sacks upon their payment of the corresponding purchase price due under the Warrants. Under the terms of the Warrants, Sacks made payments of $450,000 on each of January 31, 2014 and February 28, 2014 and $150,000 on each of March 31, 2014 and April 30, 2014. The Company issued 750,000 shares of Common Stock to Sacks on each of January 31, 2014 and February 28, 2014 and 250,000 shares of Common Stock on each of March 31, 2014 and April 30, 2014. Under the terms of the Warrants, TPT made payments of $300,000 on each of March 31, 2014 and April 30, 2014 and the Company issued 500,000 shares of Common Stock to TPT on each date, respectively. | ||
On January 31, 2014, we also entered into a Registration Rights Agreement with TPT and Sacks whereby we agreed to prepare and file with the SEC a registration statement for the number of shares referred to therein within sixty days after request and to use commercially reasonable efforts to cause such registration statement to be declared effective with the SEC and to keep such registration statement effective for a period of eighty days and, if necessary, such eighty day period being extended for up to sixty additional days. |
STOCKHOLDERS_EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
STOCKHOLDERS' EQUITY [Abstract] | |||||||||
STOCKHOLDERS' EQUITY | NOTE 13. | STOCKHOLDERS’ EQUITY | |||||||
Common Stock | |||||||||
As of December 31, 2014, we had 24,458,018 shares of common stock issued and outstanding. We issued 5,586,598 shares of Common Stock for the year ended December 31, 2014 comprised of 3,000,000 shares of Common Stock issued for the exercise of warrants held by Sacks and TPT, 1,250,000 shares of Common Stock issued to IPMD pursuant to the January 2013 Offering, 275,000 shares of Common Stock issued to Messrs. Gray and Wallberg pursuant to the March 2013 Offering, 911,690 shares of Common Stock issued for installment payments and note conversion on the June 2012 Note with Inter-Mountain, 116,667 shares of Common Stock issued for the conversion and final payment of the June 2011 Note held by Mr. Gray, 115,741 shares of Common Stock issued for the conversion and final payment of the July 2011 Note held by Mr. Gray, and the net cancellation of 82,500 shares of Common Stock related to consulting services provided to the Company. | |||||||||
Preferred Stock | |||||||||
As of December 31, 2014, we had no shares of Series A Preferred Stock (the “Series A Shares”). For the year ended December 31, 2014, we did not issue any new Series A Shares. | |||||||||
On August 15, 2013, we provided notice to Ironridge Global III, LLC (“Ironridge”) for the redemption of all of the outstanding Series A Shares, a total of 65 Series A Shares. An affiliate of Ironridge, the issuer of promissory notes held by us, due 7.5 years from the issue date, in the principal amount of $969,000 (the “Notes”), agreed to accept the cancellation of the Notes held by us as full and final payment for the redemption amounts of the Series A Shares. | |||||||||
Warrants | |||||||||
The following table summarizes the warrants outstanding and the number of shares of common stock subject to exercise as of December 31, 2014 and the changes therein during the two years then ended: | |||||||||
Number of Shares of Common Stock Subject to Exercise | Weighted – Average | ||||||||
Exercise Price | |||||||||
Balance as of December 31, 2012 | 2,041,165 | $ | 0.98 | ||||||
Warrants issued | 4,445,714 | 0.56 | |||||||
Warrants exercised (1) | (1,571,428 | ) | 0.35 | ||||||
Warrants cancelled | (250,000 | ) | 0.35 | ||||||
Balance as of December 31, 2013 | 4,665,451 | $ | 0.82 | ||||||
Warrants issued | 80,000 | 1.2 | |||||||
Warrants exercised | (3,000,000 | ) | 0.6 | ||||||
Warrants cancelled | (69,050 | ) | 3.22 | ||||||
Balance as of December 31, 2014 (1) | 1,676,401 | $ | 1.14 | ||||||
-1 | As part of the June 2012 Note, Inter-Mountain received a total of seven warrants to purchase, if they all had vested, an aggregate of 3,142,857 shares of Common Stock, which number of shares could increase based upon the terms and conditions of the warrants. The warrants have an exercise price of $0.35 per share, subject to certain pricing adjustments, and are exercisable, subject to vesting provisions and ownership limitations, until June 27, 2017. Warrants for 785,714, 392,857, 392,857, and 392,857 shares of Common Stock vested on June 27, 2012, December 31, 2012, February 26, 2013, and July 15, 2013, respectively, and three warrants totaling 1,571,428 shares of Common Stock were exercised in 2013. Such issuance of shares of Common Stock following the cashless exercise of three warrants by Inter-Mountain during 2013 was based upon an agreement in December 2013 with Inter-Mountain modifying the formula in the Warrants for determining the number of shares to be issued upon a cashless exercise. On January 22, 2014, we elected to offset and deduct the three remaining Investor Notes from the principle amount due to Inter-Mountain under the June 2012 Note and as a result of the offset and deduction the three remaining warrants terminated. For the purposes of this Table, only such vested shares of Common Stock from one unexercised warrant (392,857 shares) have been included, based upon an exercise price of $0.35 per share of Common Stock. | ||||||||
For the year ended December 31, 2014, we issued warrants to purchase up to an aggregate of 80,000 shares of our common stock which consisted of a warrant to Torrey Hills Capital, Inc., at an exercise price of $1.20 per share, for consulting services. | |||||||||
Of the warrant shares subject to exercise as of December 31, 2014, expiration of the right to exercise is as follows: | |||||||||
Date of Expiration | Number of Warrant Shares of Common Stock Subject to Expiration | ||||||||
May 15, 2015 | 357,155 | ||||||||
June 13, 2016 | 35,000 | ||||||||
July 16, 2016 | 116,667 | ||||||||
July 28, 2016 | 34,722 | ||||||||
June 27, 2017 | 392,857 | ||||||||
March 14, 2018 | 660,000 | ||||||||
January 15, 2019 | 80,000 | ||||||||
Total | 1,676,401 |
EARNINGS_PER_SHARE
EARNINGS PER SHARE | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
EARNINGS PER SHARE [Abstract] | |||||||||
EARNINGS PER SHARE | NOTE 14. | EARNINGS PER SHARE | |||||||
Basic and Diluted Net Loss Per Share | |||||||||
In accordance with FASB Accounting Standards Codification (“ASC”) Topic 260, Earnings per Share, basic earnings (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Diluted earnings (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period, increased to include potential dilutive common shares. The effect of outstanding stock options, restricted vesting common stock, convertible debt, convertible preferred stock, and warrants, when dilutive, is reflected in diluted earnings (loss) per common share by application of the treasury stock method. We have excluded all outstanding stock options, restricted vesting common stock, convertible debt, convertible preferred stock, and warrants from the calculation of diluted net loss per common share because all such securities are antidilutive for all periods presented. | |||||||||
Shares used in calculating basic and diluted net loss per common share exclude these potential common shares as of December 31: | |||||||||
31-Dec-14 | 31-Dec-13 | ||||||||
Warrants to purchase Common Stock | 1,676,401 | 4,665,451 | |||||||
Stock options to purchase common stock | 1,699,907 | 1,014,907 | |||||||
Unvested restricted common stock | --- | --- | |||||||
Common stock issuable upon the assumed conversion of our convertible note payable from June 2012 (1) | --- | 3,124,680 | |||||||
Common stock issuable upon the assumed conversion of our convertible note payable from June 2011 (2) | --- | 127,712 | |||||||
Common stock issuable upon the assumed conversion of our convertible note payable from July 2011 (2) | --- | 125,603 | |||||||
Total | 3,376,308 | 9,058,353 | |||||||
-1 | The outstanding principal balance and the accrued and unpaid interest of the June 2012 Note may have been converted, at the option of Inter-Mountain, into shares of Common Stock at a conversion price of $0.35 per share, subject to certain pricing adjustments and ownership limitations. For the purposes of this Table, we have assumed a conversion price of $0.35 per share and no ownership limitations. On February 27, 2014 and on March 3, 2014, we received conversion notices from Inter-Mountain whereby we issued an aggregate of 435,502 shares of Common Stock for the final payment of approximately $152,000 due under the June 2012 Note. | ||||||||
-2 | On June 13, 2014, Mr. Gray elected to convert the outstanding principal balance ($140,000) of the June 2011 Note and we issued 116,667 shares of Common Stock for such conversion. On July 28, 2014, Mr. Gray elected to convert the outstanding principal balance ($125,000) of the July 2011 Note and we issued 115,741 shares of Common Stock for such conversion. |
SHARE_BASED_COMPENSATION
SHARE BASED COMPENSATION | 12 Months Ended | ||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||
SHARE BASED COMPENSATION [Abstract] | |||||||||||||||||||
SHARE BASED COMPENSATION | NOTE 15. | SHARE BASED COMPENSATION | |||||||||||||||||
The Company’s share-based compensation plan, the 2006 Equity Incentive Plan (“Incentive Plan”), is administered by the compensation committee of the Board of Directors, which selects persons to receive awards and determines the number of shares subject to each award and the terms, conditions, performance measures and other provisions of the award. | |||||||||||||||||||
Our Board of Directors granted the following incentive stock option awards to executives or employees and nonstatutory stock option awards to directors or non-employees for the years ended December 31: | |||||||||||||||||||
2014 | 2013 | ||||||||||||||||||
Incentive Stock Options | |||||||||||||||||||
Quantity | 125,000 | 232,500 | |||||||||||||||||
Weighted average fair value per share | $ | 0.81 | $ | 0.24 | |||||||||||||||
Fair value | $ | 101,171 | $ | 56,112 | |||||||||||||||
Nonstatutory Stock Options | |||||||||||||||||||
Quantity | 560,000 | 735,000 | |||||||||||||||||
Weighted average fair value per share | $ | 0.81 | $ | 0.24 | |||||||||||||||
Fair value | $ | 453,250 | $ | 177,388 | |||||||||||||||
We account for share-based compensation under ASC Topic 718, Stock Compensation, which requires the measurement and recognition of compensation expense in the financial statements for all share-based payment awards made to employees, consultants, and directors is measured based on the estimated fair value of the award on the grant date. We use the Black-Scholes option-pricing model to estimate the fair value of share-based awards with the following weighted average assumptions for the years ended December 31: | |||||||||||||||||||
2014 | 2013 | ||||||||||||||||||
Incentive Stock Options | |||||||||||||||||||
Expected volatility (1) | 107.66 | % | 103.55 | % | |||||||||||||||
Risk-fee interest rate % (2) | 1.75 | % | 0.81 | % | |||||||||||||||
Expected term (in years) | 5 | 5 | |||||||||||||||||
Dividend yield (3) | --- | --- | |||||||||||||||||
Nonstatutory Stock Options | |||||||||||||||||||
Expected volatility (1) | 107.66 | % | 103.55 | % | |||||||||||||||
Risk-fee interest rate % (2) | 1.75 | % | 0.81 | % | |||||||||||||||
Expected term (in years) | 5 | 5 | |||||||||||||||||
Dividend yield (3) | --- | --- | |||||||||||||||||
-1 | Expected volatility assumption was based upon a combination of historical stock price volatility measured on a daily basis and an estimate of expected future stock price volatility. | ||||||||||||||||||
-2 | Risk-free interest rate assumption is based upon U.S. Treasury bond interest rates appropriate for the term of the stock options. | ||||||||||||||||||
-3 | The Company does not currently intend to pay cash dividends, thus has assumed a 0% dividend yield. | ||||||||||||||||||
Stock Options (Incentive and Nonstatutory) | |||||||||||||||||||
The following table summarizes share-based compensation related to stock options for the years ended December 31: | |||||||||||||||||||
2014 | 2013 | ||||||||||||||||||
Research and development | $ | 35,861 | $ | 16,863 | |||||||||||||||
Selling, general and administrative | 113,309 | 64,076 | |||||||||||||||||
Total share-based compensation expense | $ | 149,170 | $ | 80,939 | |||||||||||||||
At December 31, 2014, the balance of unearned share-based compensation to be expensed in future periods related to unvested stock option awards, as adjusted for expected forfeitures, is approximately $557,694. The period over which the unearned share-based compensation is expected to be recognized is approximately three years. | |||||||||||||||||||
The following table summarizes the stock options outstanding and the number of shares of common stock subject to exercise as of December 31, 2014 and the changes therein during the two years then ended: | |||||||||||||||||||
Stock Options | Weighted Average Exercise Price per Share | ||||||||||||||||||
Outstanding as of December 31, 2012 | 158,409 | 12.32 | |||||||||||||||||
Granted | 967,500 | 0.33 | |||||||||||||||||
Forfeited/cancelled | (111,002 | ) | 1.03 | ||||||||||||||||
Exercised | --- | --- | |||||||||||||||||
Outstanding as of December 31, 2013 | 1,014,907 | $ | 2.12 | ||||||||||||||||
Granted | 685,000 | 1.15 | |||||||||||||||||
Forfeited/cancelled | --- | --- | |||||||||||||||||
Exercised | --- | --- | |||||||||||||||||
Outstanding as of December 31, 2014 | 1,699,907 | $ | 1.73 | ||||||||||||||||
The following table presents the stock option grants outstanding and exercisable as of December 31, 2014: | |||||||||||||||||||
Options Outstanding | Options Exercisable | ||||||||||||||||||
Stock Options Outstanding | Weighted Average Exercise Price per Share | Weighted Average Remaining Contractual Life in Years | Stock Options Exercisable | Weighted Average Exercise Price per Share | |||||||||||||||
892,500 | $ | 0.33 | 8.2 | 595,000 | $ | 0.33 | |||||||||||||
685,000 | 1.15 | 7.9 | 15,000 | 1.15 | |||||||||||||||
53,334 | 2.38 | 3.5 | 53,334 | 2.38 | |||||||||||||||
69,073 | 25.12 | 2.6 | 69,073 | 25.12 | |||||||||||||||
1,699,907 | $ | 1.73 | 7.7 | 732,407 | $ | 2.83 | |||||||||||||
Restricted Stock Awards | |||||||||||||||||||
Restricted stock awards, which typically vest over a period of six months to five years, are issued to certain key employees and are subject to forfeiture until the end of an established restriction period. We utilize the market price on the date of grant as the fair market value of restricted stock awards and expense the fair value on a straight-line basis over the vesting period. | |||||||||||||||||||
The following table summarizes share-based compensation related to restricted stock awards for the years ended December 31: | |||||||||||||||||||
2014 | 2013 | ||||||||||||||||||
Research and development | $ | --- | $ | 444 | |||||||||||||||
Selling, general and administrative | --- | 547 | |||||||||||||||||
Total share-based compensation expense | $ | --- | $ | 991 | |||||||||||||||
At December 31, 2014, the balance of unearned share-based compensation to be expensed in future periods related to restricted stock awards, as adjusted for expected forfeitures, is nil. | |||||||||||||||||||
The following table summarizes the non-vested restricted stock awards outstanding and the number of shares of common stock subject to potential issue as of December 31, 2014 and the changes therein during the two years then ended: | |||||||||||||||||||
Restricted Stock | Weighted Average Grant Date Fair Value | ||||||||||||||||||
Outstanding as of December 31, 2012 | 300 | $ | 34.59 | ||||||||||||||||
Granted | --- | --- | |||||||||||||||||
Forfeited/cancelled | --- | --- | |||||||||||||||||
Exercised/issued | (300 | ) | 34.59 | ||||||||||||||||
Outstanding as of December 31, 2013 | --- | $ | --- | ||||||||||||||||
Granted | --- | --- | |||||||||||||||||
Forfeited/cancelled | --- | --- | |||||||||||||||||
Exercised/issued | --- | --- | |||||||||||||||||
Outstanding as of December 31, 2014 | --- | $ | --- | ||||||||||||||||
Summary of Plans | |||||||||||||||||||
2006 Equity Incentive Plan | |||||||||||||||||||
In March 2006, our Board adopted and our stockholders approved our Equity Incentive Plan, which initially provided for the issuance of up to 133,333 shares of our Common Stock pursuant to stock option and other equity awards. At the annual meetings of the stockholders held on May 8, 2007, December 17, 2009, June 15, 2010, June 14, 2012, June 13, 2013, and on June 5, 2014, our stockholders approved amendments to the Equity Incentive Plan to increase the total number of shares of Common Stock issuable under the Equity Incentive Plan pursuant to stock options and other equity awards by 266,667 shares, 200,000 shares, 200,000 shares, 400,000 shares, 600,000 shares, and 1,000,000 shares, respectively, to a total of 2,800,000 shares. | |||||||||||||||||||
In December 2006, we began issuing stock options to employees, consultants, and directors. The stock options issued generally vest over a period of one to four years and have a maximum contractual term of ten years. In January 2007, we began issuing restricted stock awards to our employees. Restricted stock awards generally vest over a period of six months to five years after the date of grant. Prior to vesting, restricted stock awards do not have dividend equivalent rights, do not have voting rights and the shares underlying the restricted stock awards are not considered issued and outstanding. Shares of Common Stock are issued on the date the restricted stock awards vest. | |||||||||||||||||||
As of December 31, 2014, we had granted options to purchase 2,061,167 shares of Common Stock since the inception of the Equity Incentive Plan, of which 1,699,907 were outstanding at a weighted average exercise price of $1.73 per share, and we had granted awards for 68,616 shares of restricted stock since the inception of the Equity Incentive Plan, of which none were outstanding. As of December 31, 2014, there were 1,030,647 shares that remained available for future grants under our Equity Incentive Plan. |
EMPLOYMENT_BENEFIT_PLAN
EMPLOYMENT BENEFIT PLAN | 12 Months Ended | |
Dec. 31, 2014 | ||
EMPLOYMENT BENEFIT PLAN [Abstract] | ||
EMPLOYMENT BENEFIT PLAN | NOTE 16. | EMPLOYMENT BENEFIT PLAN |
We maintain a defined contribution or 401(k) Plan for our qualified employees. Participants may contribute a percentage of their compensation on a pre-tax basis, subject to a maximum annual contribution imposed by the Internal Revenue Code. We may make discretionary matching contributions as well as discretionary profit-sharing contributions to the 401(k) Plan. Our contributions to the 401(k) Plan are made in cash and vest immediately. The Company’s common stock is not an investment option available to participants in the 401(k) Plan. We contributed $24,674 and $20,917 to the 401(k) Plan during the years ended December 31, 2014 and 2013, respectively. |
FAIR_VALUE_MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
FAIR VALUE MEASUREMENTS [Abstract] | |||||||||
FAIR VALUE MEASUREMENTS | NOTE 17. | FAIR VALUE MEASUREMENTS | |||||||
In accordance with ASC Topic 820, Fair Value Measurements, (“ASC Topic 820”) certain assets and liabilities of the Company are required to be recorded at fair value. Fair value is determined based on the exchange price that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants. The guidance in ASC Topic 820 also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimized the use of unobservable inputs by requiring that the most observable inputs be used when available. | |||||||||
Observable inputs are based on market data obtained from independent sources, while unobservable inputs are based on our market assumptions. Unobservable inputs require significant management judgment or estimation. In some cases, the inputs used to measure an asset or liability may fall into different levels of the fair value hierarchy. In those instances, the fair value measurement is required to be classified using the lowest level of input that is significant to the fair value measurement. Such determination requires significant management judgment. | |||||||||
The three-tier value hierarchy, which prioritizes the inputs used in the valuation methodologies, is as follows: | |||||||||
Level 1 | — | Valuations based on quoted prices (unadjusted) for identical assets or liabilities in active markets. | |||||||
Level 2 | — | Valuations based on observable inputs other than quoted prices in Level 1, such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, and other inputs that are observable or can be corroborated by observable market data. | |||||||
Level 3 | — | Valuations based on unobservable inputs reflecting the Company’s own assumptions, consistent with reasonably available assumptions made by other market participants. | |||||||
Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurements. We review the fair value hierarchy classification on a quarterly basis. Changes in the observability of valuation inputs may result in a reclassification of levels for certain securities within the fair value hierarchy. | |||||||||
Our financial instruments, including cash, cash equivalents, accounts receivable, and accounts payable are carried at cost, which approximates their fair value because of the short-term maturity of these instruments. We believe that the carrying value of our notes receivable and accrued interest and convertible note payable balances approximates fair value based on a valuation methodology using the income approach and a discounted cash flow model. | |||||||||
The fair value of our financial instruments consisted of the following at December 31: | |||||||||
Description | 2014 | 2013 | |||||||
Assets: | |||||||||
Notes receivable and accrued interest | --- | $ | 777,710 | ||||||
Liabilities: | |||||||||
Convertible note – June 2011 | --- | $ | 138,220 | ||||||
Convertible note – July 2011 | --- | $ | 120,738 | ||||||
Convertible note – June 2012 | --- | $ | 888,099 |
INCOME_TAXES
INCOME TAXES | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
INCOME TAXES [Abstract] | |||||||||
INCOME TAXES | NOTE 18. | INCOME TAXES | |||||||
There was no current federal tax provision or benefit recorded for any period since inception, nor were there any recorded deferred income tax assets, as such amounts were completely offset by valuation allowances. Deferred tax assets as of December 31, 2014, of $18,989,376 were reduced to zero, after considering the valuation allowance of $18,989,376, since there is no assurance of future taxable income. As of December 31, 2014 we have consolidated net operating loss carryforwards (“NOL”) and research credit carryforwards for income tax purposes of approximately $51,347,180 and $531,440, respectively. | |||||||||
The following are the consolidated operating loss carryforwards and research credit carryforwards that will begin expiring as follows: | |||||||||
Calendar Years | Consolidated Operating Loss Carryforwards | Research Activities | |||||||
Carryforwards | |||||||||
2021 | $ | 34,248 | $ | --- | |||||
2023 | 95,666 | --- | |||||||
2024 | 910,800 | 13,584 | |||||||
2025 | 1,687,528 | 21,563 | |||||||
2026 | 11,950,281 | 60,797 | |||||||
2027 | 3,431,365 | 85,052 | |||||||
2028 | 8,824,940 | 139,753 | |||||||
2029 | 6,889,761 | 81,940 | |||||||
2030 | 5,113,583 | 41,096 | |||||||
2031 | 3,728,626 | 43,592 | |||||||
2032 | 3,695,792 | 8,690 | |||||||
2033 | 3,187,559 | 15,882 | |||||||
2034 | 1,797,031 | 19,491 | |||||||
Total | $ | 51,347,180 | $ | 531,440 | |||||
The Tax Reform Act of 1986 contains provisions, which limit the amount of NOL and tax credit carryforwards that companies may utilize in any one year in the event of cumulative changes in ownership over a three-year period in excess of 50%. Since the effective date of the Tax Reform Act of 1986, the Company has completed significant share issuances in 2003 and 2006 which may significantly limit our ability to utilize our NOL and tax credit carryforwards against taxable earnings in future periods. Ownership changes in future periods may place additional limits on our ability to utilize NOLs and tax credit carryforwards. | |||||||||
An analysis of the tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2014 and 2013 are as follows: | |||||||||
2014 | 2013 | ||||||||
Deferred tax assets: | |||||||||
Net operating loss carryforwards | $ | 18,279,724 | $ | 17,657,746 | |||||
Intangible assets | 188,944 | 247,248 | |||||||
Other | 554,404 | 512,286 | |||||||
Total gross deferred tax assets | 19,023,072 | 18,417,280 | |||||||
Deferred tax liabilities: | |||||||||
Property and equipment | 33,696 | 72,347 | |||||||
Total gross deferred tax liabilities | 33,696 | 72,347 | |||||||
Net total of deferred assets and liabilities | 18,989,376 | 18,344,933 | |||||||
Valuation allowance | (18,989,376 | ) | (18,344,933 | ) | |||||
Net deferred tax assets | $ | --- | $ | --- | |||||
The valuation allowance increased by $644,443 and $1,065,354 in 2014 and 2013, respectively. | |||||||||
The following is a reconciliation of the expected statutory federal income tax rate to our actual income tax rate for the years ended December 31: | |||||||||
2014 | 2013 | ||||||||
Expected income tax (benefit) at federal statutory tax rate -35% | $ | ( 681,109 | ) | $ | ( 1,137,320 | ) | |||
Permanent differences | 52,273 | 21,754 | |||||||
Research tax credits | (19,491 | ) | (15,882 | ) | |||||
Amortization of deferred start up costs | --- | --- | |||||||
Valuation allowance | 648,327 | 1,131,448 | |||||||
Income tax expense | $ | --- | $ | --- | |||||
Effective January 1, 2007, we adopted ASC Topic 740, Accounting for Uncertainty in Income Taxes. ASC Topic 740 is a comprehensive model for how a company should recognize, measure, present, and disclose in its financial statements uncertain tax positions that we have taken or expects to take on a tax return. If an income tax position exceeds a more likely than not (greater than 50%) probability of success upon tax audit, we will recognize an income tax benefit in its financial statements. Additionally, companies are required to accrue interest and related penalties, if applicable, on all tax exposures consistent with jurisdictional tax laws. We did not have any unrecognized tax benefits and there was no effect on our financial condition or results of operations as a result of implementing ASC Topic 740. | |||||||||
Federal income tax returns for fiscal years 2011 through 2014 remain open and subject to examination by the Internal Revenue Service. We file and remit state income taxes in various states where we have determined it is required to file state income taxes. Our filings with those states remain open for audit for the fiscal years 2011 through 2014. | |||||||||
We do not believe there will be any material changes in our unrecognized tax positions over the next 12 months. Our policy is that we recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. As of the date of adoption of ASC 740, we did not have any accrued interest or penalties associated with any unrecognized tax benefits nor was any interest expense recognized during the period. The liability for unrecognized tax benefits is zero at December 31, 2014 and 2013. |
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
COMMITMENTS AND CONTINGENCIES [Abstract] | |||||||||||||||||||||
COMMITMENTS AND CONTINGENCIES | NOTE 19. | COMMITMENTS AND CONTINGENCIES | |||||||||||||||||||
Operating Leases | |||||||||||||||||||||
On January 31, 2006 we entered into a lease agreement for office and laboratory space in Addison, Texas. The lease commenced on April 1, 2006 and originally continued until April 1, 2013. The lease required a minimum monthly lease obligation of $9,330, which was inclusive of monthly operating expenses, until April 1, 2011 and at such time increased to $9,776, which was inclusive of monthly operating expenses. On February 22, 2013, we executed an Amendment to Lease Agreement (the “Lease Amendment”) that renewed and extended our lease until March 31, 2015. The Lease Amendment required a minimum monthly lease obligation of $9,193, which was inclusive of monthly operating expenses, until March 31, 2014 and at such time, increased to $9,379, which was inclusive of monthly operating expenses. On March 17, 2015, we executed a Second Amendment to Lease Agreement (the “Second Amendment”) that renewed and extended our lease until March 31, 2018. The Second Amendment requires a minimum monthly lease obligation of $9,436, which is inclusive of monthly operating expenses. | |||||||||||||||||||||
On December 10, 2010 we entered into a lease agreement for certain office equipment that commenced on February 1, 2011 and continued until February 1, 2015 and required a minimum lease obligation of $744 per month. On January 16, 2015 we entered into a new lease agreement for certain office equipment. The new lease, which commenced on February 1, 2015 and continues until February 1, 2018, requires a minimum lease obligation of $551 per month. | |||||||||||||||||||||
The future minimum lease payments under the 2013 office lease and the 2015 equipment lease are as follows as of December 31, 2014: | |||||||||||||||||||||
Calendar Years | Future Lease Expense | ||||||||||||||||||||
2015 | $ | 120,033 | |||||||||||||||||||
2016 | 119,840 | ||||||||||||||||||||
2017 | 119,840 | ||||||||||||||||||||
2018 | 28,858 | ||||||||||||||||||||
2019 | --- | ||||||||||||||||||||
Total | $ | 388,571 | |||||||||||||||||||
Rent expense for our operating leases amounted to $123,716 and $116,488 for the years ended December 31, 2014 and 2013, respectively. | |||||||||||||||||||||
Indemnification | |||||||||||||||||||||
In the normal course of business, we enter into contracts and agreements that contain a variety of representations and warranties and provide for general indemnifications. Our exposure under these agreements is unknown because it involves claims that may be made against us in the future, but have not yet been made. To date, we have not paid any claims or been required to defend any action related to our indemnification obligations. However, we may record charges in the future as a result of these indemnification obligations. | |||||||||||||||||||||
In accordance with our restated articles of incorporation and our amended and restated bylaws, we have indemnification obligations to our officers and directors for certain events or occurrences, subject to certain limits, while they are serving at our request in their respective capacities. There have been no claims to date and we have a director and officer insurance policy that enables us to recover a portion of any amounts paid for future potential claims. We have also entered into contractual indemnification agreements with each of our officers and directors. | |||||||||||||||||||||
Related Party Transactions and Concentration | |||||||||||||||||||||
On January 17, 2013, the Board of Directors of the Company appointed Helmut Kerschbaumer and Klaus Kuehne to each serve as a director of the Company. | |||||||||||||||||||||
Mr. Kerschbaumer currently serves as a director of Altrazeal Trading GmbH, Altrazeal AG, and Melmed Holding AG (collectively, the “Altrazeal Distributors”) and Mr. Kuehne currently serves as a director of Altrazeal AG. In such capacities, Mr. Kerschbaumer may be considered, either singularly or collectively, to have control of, and make investment and business decisions on behalf of the Altrazeal Distributors and Mr. Kuehne may be considered, either singularly of collectively, to have control of, and make investment and business decisions on behalf of Altrazeal AG. | |||||||||||||||||||||
Mr. Kerschbaumer and Mr. Kuehne currently serves as a director of ORADISC GmbH and in such capacity, Mr. Kerschbaumer and Mr. Kuehne may each be considered, either singularly or collectively, to have control of, and make investment and business decisions on behalf of the ORADISC GmbH. | |||||||||||||||||||||
Currently, we are party to License and Supply Agreements with Altrazeal Trading GmbH, Altrazeal AG, and Melmed Holding AG for the marketing and distribution of Altrazeal in various international territories. We are also party to a License and Supply Agreement with ORADISC GmbH for the marketing of all applications of our OraDisc™ erodible film technology for dental applications including benzocaine (OraDisc™ B), re-mineralization dental strips, fluoride dental strips, long-acting breath freshener, amlexanox (OraDisc™ A) in certain territories, anti-psychotics, neurologic products, and actives for the treatment of erectile dysfunction. | |||||||||||||||||||||
For the years ended December 31, 2014 and 2013, the Company recorded revenues, in approximate numbers, of $802,000 and $281,000, respectively, with the various Altrazeal Distributors, which represented approximately 93% and 76% of our total revenues. | |||||||||||||||||||||
As of December 31, 2014 and 2013, Altrazeal Distributors had an outstanding net accounts receivable, in approximate numbers, of $798,000 and $174,000, respectively, which represented approximately 99% and 94% of our net outstanding accounts receivables. | |||||||||||||||||||||
Related Party Obligations | |||||||||||||||||||||
Since 2011, our named executive officers and certain key executives have temporarily deferred portions of their compensation as part of a plan to conserve the Company’s cash and financial resources. | |||||||||||||||||||||
As of December 31, 2014, the following table summarizes the compensation temporarily deferred and subsequent repayments: | |||||||||||||||||||||
Name | 2014 | 2013 | 2012 | 2011 | Total | ||||||||||||||||
Kerry P. Gray (1) (2) | $ | (119,986 | ) | $ | (91,000 | ) | $ | 220,673 | $ | 140,313 | $ | 150,000 | |||||||||
Terrance K. Wallberg | (25,000 | ) | (35,769 | ) | $ | 24,230 | $ | 36,539 | --- | ||||||||||||
Key executives | (28,239 | ) | (20,000 | ) | $ | 27,253 | $ | 20,986 | --- | ||||||||||||
Total | $ | (173,225 | ) | $ | (146,769 | ) | $ | 272,156 | $ | 197,838 | $ | 150,000 | |||||||||
-1 | During 2014, Mr. Gray temporarily deferred compensation of $150,000 which consisted of $62,500 earned as salary compensation for his duties as President of the Company and $87,500 for his duties as Chairman of the Executive Committee of the Company’s Board of Directors. During 2014, Mr. Gray was also repaid $269,986 of temporarily deferred compensation, of which $100,000 was used by Mr. Gray for funding required pursuant to the March 2013 Offering. | ||||||||||||||||||||
-2 | During 2013, Mr. Gray temporarily deferred compensation of $221,500 which consisted of $11,500 earned pursuant to a Separation Agreement and $210,000 for his duties as Chairman of the Executive Committee of the Company’s Board of Directors. During 2013, Mr. Gray was also repaid $312,500 of temporarily deferred compensation, of which $300,000 was used by Mr. Gray for funding required pursuant to the March 2013 Offering. | ||||||||||||||||||||
As of December 31, 2014, the Company’s obligation for temporarily deferred compensation was $150,000 of which $62,500 was included in accrued liabilities and $87,500 was included in accounts payable, respectively. As of December 31, 2013, the Company’s obligation for temporarily deferred compensation was $323,225 of which $207,500 was included in accounts payable and $115,725 was included in accrued liabilities, respectively | |||||||||||||||||||||
Contingent Milestone Obligations | |||||||||||||||||||||
We are subject to paying Access Pharmaceuticals, Inc. (“Access”) for certain milestones based on our achievement of certain annual net sales, cumulative net sales, and/or our having reached certain defined technology milestones including licensing agreements and advancing products to clinical development. As of December 31, 2014, the future milestone obligations that we are subject to paying Access, if the milestones related thereto are achieved, total $4,750,000. Such milestones are based on total annual sales of 20 and 40 million dollars of certain products, annual sales of 20 million dollars of any one certain product, and cumulative sales of such products of 50 and 100 million dollars. | |||||||||||||||||||||
On March 7, 2008, we terminated the license agreement with ProStrakan Ltd. for Amlexanox-related products in the United Kingdom and Ireland. As part of the termination, we agreed to pay ProStrakan Ltd. a royalty of 30% on any future payments received by us from a new licensee in the United Kingdom and Ireland territories, up to a maximum of $1,400,000. On November 17, 2008, we entered into a licensing agreement for Amlexanox-related product rights to the United Kingdom and Ireland territories with MEDA AB. |
LEGAL_PROCEEDINGS
LEGAL PROCEEDINGS | 12 Months Ended | |
Dec. 31, 2014 | ||
LEGAL PROCEEDINGS [Abstract] | ||
LEGAL PROCEEDINGS | NOTE 20. | LEGAL PROCEEDINGS |
On or about August 22, 2014, Inter-Mountain filed a Complaint against ULURU in a matter now pending in the U.S. Federal Court for the District of Utah, Central Division. The Complaint relates to Inter-Mountain’s delivery of a notice of a cashless exercise with respect to its last remaining warrant to purchase Common Stock on or about May 1, 2014 purporting to exercise it with respect to the delivery of 782,284 shares of Common Stock under the non-standard cashless exercise or conversion provisions in the warrant. ULURU declined to honor the exercise on the basis that, as a result of an amendment to the warrant agreed to in December 2013, the warrant was exercisable, on a cashless basis, with respect to only 261,516 shares of Common Stock as of May 1, 2014. Inter-Mountain alleges that ULURU’s refusal to honor the exercise constitutes a breach of the warrant, breach of implied covenant of good faith and fair dealing, unjust enrichment, a violation of securities laws and common law fraud and seeks actual damages, consequential damages, treble damages, specific performance, attorneys’ fees and costs and other relief. Answers and counterclaims have been filed. A preliminary settlement has been reached and is in the process of being documented. All proceedings have been placed on hold pending documentation of the settlement. | ||
On or about November 6, 2012, Discus Dental, LLC (“Discus”) and Philips Oral Healthcare Inc. (“Philips”) filed a Complaint against ULURU in the United States District Court, Central District of California (the “Action”). Discus, a subsidiary of Philips’ parent company, was party to a license agreement under which ULURU’s predecessor granted it a defined license. The license contractually required that Discus use commercially reasonable efforts to, market and sell Aphthasol® paste, a prescription pharmaceutical. Prior to the filing of the Action, ULURU sent a demand letter contending that Discus did not fulfill its obligations under the license agreement, including the obligation to retain an adequate selling organization and otherwise use commercially reasonable efforts to market and sell Aphthasol® paste. In response to ULURU’s demand letter, the Plaintiffs instituted the Action seeking a declaratory judgment that Discus did not breach the license agreement. On November 20, 2012, the Plaintiffs filed Amended Complaint adding a claim requesting that ULURU be ordered to return certain royalty payments that Discus paid to ULURU after the expiration of the license period. On October 7, 2014, Discus filed a Second Amended Complaint, withdrawing Philips as a plaintiff and adding claims that ULURU breached the license by allegedly making a profit from the manufacture of Aphthasol® paste. ULURU denied liability with regard to Discus’s claims and asserted counterclaims for breach of contract against Discus, seeking compensatory damages and attorneys’ fees. On November 18, 2014, ULURU and Discus agreed to settle, resolve, and dismiss the claims asserted in the Action, with the terms and conditions of the settlement subject to an agreement of confidentiality. The settlement included a release by each party in favor of the other and a settlement payment in favor of ULURU. |
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 12 Months Ended | |
Dec. 31, 2014 | ||
SUBSEQUENT EVENTS [Abstract] | ||
SUBSEQUENT EVENTS | NOTE 21. | SUBSEQUENT EVENTS |
None. |
COMPANY_OVERVIEW_AND_BASIS_OF_1
COMPANY OVERVIEW AND BASIS OF PRESENTATION (Policies) | 12 Months Ended | |||
Dec. 31, 2014 | ||||
COMPANY OVERVIEW AND BASIS OF PRESENTATION [Abstract] | ||||
Basis of Presentation | Basis of Presentation | |||
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United State of America (“U.S. GAAP”) and include the accounts of ULURU Inc., a Nevada corporation, and its wholly-owned subsidiary, ULURU Delaware Inc., a Delaware corporation. Both companies have a December 31 fiscal year end. | ||||
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, as well as disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results may differ from those estimates and assumptions. These differences are usually minor and are included in our consolidated financial statements as soon as they are known. Our estimates, judgments, and assumptions are continually evaluated based on available information and experience. Because of the use of estimates inherent in the financial reporting process, actual results could differ from those estimates. | ||||
All intercompany transactions and balances have been eliminated in consolidation. | ||||
Liquidity and Going Concern | Liquidity and Going Concern | |||
The Company is unable to assert that its liquidity will be sufficient to fund operations beyond the first quarter of 2015, and as a result, there is substantial doubt about our ability to continue as a going concern beyond the first quarter of 2015. These consolidated financial statements have been prepared with the assumption that we will continue as a going concern and will be able to realize its assets and discharge its liabilities in the normal course of business and do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the inability of the Company to continue as a going concern. We may not be able to raise sufficient capital on acceptable terms, or at all, to continue operations and may not be able to execute any strategic transaction. | ||||
Our liquidity, and our ability to raise additional capital or complete any strategic transaction, depends on a number of factors, including, but not limited to, the following: | ||||
• | the market price of our stock and the availability and cost of additional equity capital from existing and potential new investors; | |||
• | general economic and industry conditions affecting the availability and cost of capital; | |||
• | our financial condition, including its revenues, the amount of its indebtedness and its ability to control costs associated with its operations; | |||
• | the costs of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights; and | |||
• | the terms and conditions of our existing collaborative and licensing agreements. | |||
The sale of additional equity or convertible debt securities will likely result in substantial additional dilution to our stockholders. If we raise additional funds through the incurrence of indebtedness, the obligations related to such indebtedness would be senior to rights of holders of our capital stock and could contain covenants that would restrict our operations. We also cannot predict what consideration might be available, if any, to us or our stockholders, in connection with any strategic transaction. Should strategic alternatives or additional capital not be available to us in the near term, or not be available on acceptable terms, we may be unable to realize value from its assets and discharge its liabilities in the normal course of business which may, among other alternatives, cause us to further delay, substantially reduce or discontinue operational activities to conserve its cash resources. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended | |
Dec. 31, 2014 | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ||
Cash and Cash Equivalents | Cash and Cash Equivalents | |
Cash and cash equivalents include highly liquid investments with original maturities of three months or less. The carrying value of these cash equivalents approximates fair value. | ||
We invest cash in excess of immediate requirements in money market accounts, certificates of deposit, corporate commercial paper with high quality ratings, and U.S. government securities taking into consideration the need for liquidity and capital preservation. These investments are not held for trading or other speculative purposes. | ||
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts | |
Accounts receivable are recorded at the invoiced amount and do not bear interest. We estimate the collectability of our accounts receivable. In order to assess the collectability of these receivables, we monitor the current creditworthiness of each customer and analyze the balances aged beyond the customer's credit terms. Theses evaluations may indicate a situation in which a certain customer cannot meet its financial obligations due to deterioration of its financial viability, credit ratings or bankruptcy. The allowance requirements are based on current facts and are reevaluated and adjusted as additional information is received. Accounts receivable are subject to an allowance for collection when it is probable that the balance will not be collected. As of December 31, 2014 and 2013, the allowance for doubtful accounts was $887 and $907, respectively. For the years ended December 31, 2014 and 2013, the accounts written off as uncollectible or previously written off and recovered were $779 and $(1,126), respectively. | ||
Notes Receivable | Notes Receivable | |
Notes receivable are stated at unpaid principle balance. Interest on notes receivable is recognized over the term of the note and is calculated by the simple interest method on principle amounts outstanding. We estimate the collectability of our notes receivable. This estimate is based on similar evaluation criteria as used in estimating the collectability of our trade accounts receivable. Notes receivable are subject to an allowance for collection when it is probable that the balance, or a portion thereof, will not be collected. As of December 31, 2014 and 2013, the allowance for collection for our notes receivable was nil. | ||
Inventory | Inventory | |
Inventories are stated at the lower of cost or market value. Raw material inventory cost is determined on the first-in, first-out method. Costs of finished goods are determined by an actual cost method. We regularly review inventories on hand and write down the carrying value of our inventories for excess and potentially obsolete inventories based on historical usage and estimated future usage. In assessing the ultimate realization of our inventories, we are required to make judgments as to future demand requirements. As actual future demand or market conditions may vary from those projected by us, adjustment to inventories may be required. | ||
Prepaid Expenses and Deferred Charges | Prepaid Expenses and Deferred Charges | |
From time to time fees are payable to the United States Food and Drug Administration (“FDA”) in connection with new drug applications submitted by us and annual prescription drug user fees (“PDUFA”). Such fees are being amortized ratably over the FDA’s prescribed fiscal period of twelve months ending September 30th. As of December 31, 2014 and 2013, the amount of prepaid PDUFA fees was nil. Additionally, we amortize our insurance costs ratably over the term of each policy. Typically, our insurance policies are subject to renewal in July and October of each year. | ||
Property, Equipment and Leasehold Improvements | Property, Equipment and Leasehold Improvements | |
Property, equipment, and leasehold improvements are recorded at cost. Depreciation is provided over the estimated useful lives of the related assets using the straight-line method. Estimated useful lives for property, equipment, and leasehold improvements categories are as follows: | ||
Laboratory and manufacturing equipment | 7 years | |
Computers, office equipment, and furniture | 5 years | |
Computer software | 3 years | |
Leasehold improvements | Lease term | |
Intangible Assets | Intangible Assets | |
We expense internal patent and application costs as incurred because, even though we believe the patents and underlying processes have continuing value, the amount of future benefits to be derived from them are uncertain. Purchased patents are capitalized and amortized over the life of the patent. | ||
Impairment of Assets | Impairment of Assets | |
In accordance with the provisions of Accounting Standards Codification (“ASC”) Topic 350-30, Intangibles Other than Goodwill, our policy is to evaluate whether there has been a permanent impairment in the value of long-lived assets and certain identifiable intangibles when certain events have taken place that indicate the remaining unamortized balance may not be recoverable, or at least annually to determine the current value of the intangible asset. When factors indicate that the intangible assets should be evaluated for possible impairment, we use an estimate of undiscounted cash flows. Considerable management judgment is necessary to estimate the undiscounted cash flows. Accordingly, actual results could vary significantly from management’s estimates. | ||
Deferred Financing Costs | Deferred Financing Costs | |
We defer financing costs associated with the issuance of our convertible notes payable and amortize those costs over the period of the convertible notes using the effective interest method. In 2012, we incurred $200,000 of financing costs related to our convertible note payable with Inter-Mountain Capital Corp. During 2014 and 2013, we recorded amortization of approximately $7,000 and $74,000, respectively, of deferred financing costs. Other assets at December 31, 2014 and 2013 included net deferred financing costs of approximately of nil and $87,000, respectively. | ||
Accrual for Clinical Study Costs | Accrual for Clinical Study Costs | |
We record accruals for estimated clinical study costs. Clinical study costs represent costs incurred by clinical research organizations, or CROs, and clinical sites. These costs are recorded as a component of research and development expenses. We analyze the progress of the clinical trials, including levels of patient enrollment and/or patient visits, invoices received and contracted costs when evaluating the adequacy of the accrued liabilities. Significant judgments and estimates must be made and used in determining the accrued balance in any accounting period. Actual costs incurred may or may not match the estimated costs for a given accounting period. As of December 31, 2014 and 2013, the accrual for estimated clinical study costs was nil. | ||
Shipping and Handling Costs | Shipping and Handling Costs | |
Shipping and handling costs incurred for product shipments are included in cost of goods sold. | ||
Income Taxes | Income Taxes | |
We use the liability method of accounting for income taxes pursuant to ASC Topic 740, Income Taxes. Under this method, deferred income taxes are recorded to reflect the tax consequences in future periods of temporary differences between the tax basis of assets and liabilities and their financial statement amounts at year-end. | ||
Revenue Recognition and Deferred Revenue | Revenue Recognition and Deferred Revenue | |
License Fees | ||
We recognize revenue from license payments not tied to achieving a specific performance milestone ratably during the period over which we are obligated to perform services. The period over which we are obligated to perform services is estimated based on available facts and circumstances. Determination of any alteration of the performance period normally indicated by the terms of such agreements involves judgment on management's part. License revenues with no specific performance criteria are recognized when received from our foreign licensee and their various foreign sub-licensees as there is no control by us over the various foreign sub-licensees and no performance criteria to which we are subject. | ||
We recognize revenue from performance payments ratably, when such performance is substantially in our control and when we believe that completion of such performance is reasonably probable, over the period during which we estimate that we will complete such performance obligations. In circumstances where the arrangement includes a refund provision, we defer revenue recognition until the refund condition is no longer applicable unless, in our judgment, the refund circumstances are within our operating control and are unlikely to occur. | ||
Substantive at-risk milestone payments, which are based on achieving a specific performance milestone when performance of such milestone is contingent on performance by others or for which achievement cannot be reasonably estimated or assured, are recognized as revenue when the milestone is achieved and the related payment is due, provided that there is no substantial future service obligation associated with the milestone. | ||
Royalty Income | ||
We receive royalty revenues under license agreements with a number of third parties that sell products based on technology we have developed or to which we have rights. The license agreements provide for the payment of royalties to us based on sales of the licensed products. We record these revenues based on estimates of the sales that occurred during the relevant period. The relevant period estimates of sales are based on interim data provided by licensees and analysis of historical royalties we have been paid (adjusted for any changes in facts and circumstances, as appropriate). | ||
We maintain regular communication with our licensees in order to gauge the reasonableness of our estimates. Differences between actual royalty revenues and estimated royalty revenues are reconciled and adjusted for in the period in which they become known, typically the following quarter. Historically, adjustments have not been material based on actual amounts paid by licensees. As it relates to royalty income, there are no future performance obligations on our part under these license agreements. To the extent we do not have sufficient ability to accurately estimate revenue; we record it on a cash basis. | ||
Product Sales | ||
We recognize revenue and related costs from the sale of our products at the time the products are shipped to the customer. Provisions for returns, rebates, and discounts are established in the same period the related product sales are recorded. | ||
We review the supply levels of our products sold to major wholesalers in the U.S., primarily by reviewing reports supplied by our major wholesalers and available volume information for our products, or alternative approaches. When we believe wholesaler purchasing patterns have caused an unusual increase or decrease in the sales of a major product compared with underlying demand, we disclose this in our product sales discussion if we believe the amount is material to the product sales trend; however, we are not always able to accurately quantify the amount of stocking or destocking. Wholesaler stocking and destocking activity historically has not caused any material changes in the rate of actual product returns. | ||
We establish sales return accruals for anticipated product returns. We record the return amounts as a deduction to arrive at our net product sales. Consistent with Revenue Recognition accounting guidance, we estimate a reserve when the sales occur for future product returns related to those sales. This estimate is primarily based on historical return rates as well as specifically identified anticipated returns due to known business conditions and product expiry dates. Actual product returns have been nil over the past two years. | ||
We establish sales rebate and discount accruals in the same period as the related sales. The rebate and discount amounts are recorded as a deduction to arrive at our net product sales. We base these accruals primarily upon our historical rebate and discount payments made to our customer segment groups and the provisions of current rebate and discount contracts. | ||
Foreign currency transaction gain (loss) | Foreign currency transaction gain (loss) | |
Our functional currency and our reporting currency is the U.S. dollar and foreign currency transactions are primarily undertaken in Euros. Monetary assets and liabilities are translated using the foreign currency exchange rate prevailing at the balance sheet date. Revenues, non-monetary assets and liabilities denominated in foreign currencies are translated at rates of foreign currency exchange in effect at the date of the transaction. Expenses are translated at average foreign currency exchange rates for the period. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of net income. | ||
Research and Development Expenses | Research and Development Expenses | |
Pursuant to ASC Topic 730, Research and Development, our research and development costs are expensed as incurred. Research and development expenses include, but are not limited to, salaries and benefits, laboratory supplies, facilities expenses, preclinical development cost, clinical trial and related clinical manufacturing expenses, contract services, consulting fees and other outside expenses. The cost of materials and equipment or facilities that are acquired for research and development activities and that have alternative future uses are capitalized when acquired. There were no such capitalized materials, equipment or facilities for the years ended December 31, 2014 and 2013. | ||
Basic and Diluted Net Loss Per Common Share | Basic and Diluted Net Loss Per Common Share | |
In accordance with ASC Topic 260, Earnings per Share, basic earnings (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Diluted earnings (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period increased to include potential dilutive common shares. The effect of outstanding stock options, restricted vesting common stock and warrants, when dilutive, is reflected in diluted earnings (loss) per common share by application of the treasury stock method. We have excluded all outstanding stock options, restricted vesting common stock and warrants from the calculation of diluted net loss per common share because all such securities are antidilutive for all periods presented. | ||
Concentrations of Credit Risk | Concentrations of Credit Risk | |
Concentration of credit risk with respect to financial instruments, consisting primarily of cash and cash equivalents, that potentially expose us to concentrations of credit risk due to the use of a limited number of banking institutions and due to maintaining cash balances in banks, which, at times, may exceed the limits of amounts insured by the Federal Deposit Insurance Corporation. During 2014 and 2013, we utilized Bank of America, N.A. as our banking institution. At December 31, 2014 and December 31, 2013 our cash and cash equivalents totaled $550,458 and $5,119, respectively. We also invest cash in excess of immediate requirements in money market accounts, certificates of deposit, corporate commercial paper with high quality ratings, and U.S. government securities. These investments are not held for trading or other speculative purposes. We are exposed to credit risk in the event of default by these high quality corporations. | ||
Concentration of credit risk with respect to trade accounts receivable are customers with balances that exceed 5% of total consolidated trade accounts receivable at December 31, 2014 and at December 31, 2013. As of December 31, 2014, three customers, each being one of our international distributors, exceeded the 5% threshold, with 71%, 19%, and 9%, respectively. Two customers, each being one of our international distributors, exceeded the 5% threshold at December 31, 2013, with 86% and 11%, respectively. To reduce risk, we routinely assess the financial strength of our most significant customers and monitor the amounts owed to us, taking appropriate action when necessary. As a result, we believe that accounts receivable credit risk exposure is limited. We maintain an allowance for doubtful accounts, but historically have not experienced any significant losses related to an individual customer or group of customers. | ||
Concentrations of Foreign Currency Risk | Concentrations of Foreign Currency Risk | |
A portion of our revenues and all of our expenses are denominated in U.S. dollars. We are experiencing an increase in revenues in international territories denominated in a foreign currency. Certain of our licensing and distribution agreements in international territories are denominated in Euros. Currently, we do not employ forward contracts or other financial instruments to mitigate foreign currency risk. As our international operations continues to grow, we may engage in hedging activities to hedge our exposure to foreign currency risk. | ||
Fair Value of Financial Instruments | Fair Value of Financial Instruments | |
In accordance with portions of ASC Topic 820, Fair Value Measurements, certain assets and liabilities of the Company are required to be recorded at fair value. Fair value is determined based on the exchange price that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants. | ||
Our financial instruments, including cash, cash equivalents, accounts receivable, and accounts payable are carried at cost, which approximates their fair value because of the short-term maturity of these instruments. We believe that the carrying value of our other receivable, notes receivable and accrued interest, and convertible note payable balances approximates fair value based on a valuation methodology using the income approach and a discounted cash flow model. | ||
Derivatives | Derivatives | |
We occasionally issue financial instruments that contain an embedded instrument. At inception, we assess whether the economic characteristics of the embedded derivative instrument are clearly and closely related to the economic characteristics of the financial instrument (host contract), whether the financial instrument that embodies both the embedded derivative instrument and the host contract is currently measured at fair value with changes in fair value reported in earnings, and whether a separate instrument with the same terms as the embedded instrument would meet the definition of a derivative instrument. | ||
If the embedded derivative instrument is determined not to be clearly and closely related to the host contract, is not currently measured at fair value with changes in fair value reported in earnings, and the embedded derivative instrument would qualify as a derivative instrument, the embedded derivative instrument is recorded apart from the host contract and carried at fair value with changes recorded in current-period earnings. | ||
We determined that all embedded items associated with financial instruments during 2014 and 2013 which qualify for derivative treatment, were properly separated from their host. As of December 31, 2014 and 2013, we did not have any derivative instruments. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended | |
Dec. 31, 2014 | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ||
Estimated useful lives for property and equipment | Estimated useful lives for property, equipment, and leasehold improvements categories are as follows: | |
Laboratory and manufacturing equipment | 7 years | |
Computers, office equipment, and furniture | 5 years | |
Computer software | 3 years | |
Leasehold improvements | Lease term |
SEGMENT_INFORMATION_Tables
SEGMENT INFORMATION (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
SEGMENT INFORMATION [Abstract] | |||||||||||||||||
Revenues per geographic area | Revenues per geographic area, along with relative percentages of total revenues, for the year ended December 31, are summarized as follows: | ||||||||||||||||
Revenues | 2014 | % | 2013 | % | |||||||||||||
Domestic | $ | 37,465 | 4 | % | $ | 65,546 | 18 | % | |||||||||
International | 826,392 | 96 | % | 305,022 | 82 | % | |||||||||||
Total | $ | 863,857 | 100 | % | $ | 370,568 | 100 | % | |||||||||
Customers with greater than 10% of total sales | Customers with greater than 10% of total revenues, along with their relative percentage of total revenues, for the year ended December 31 are represented on the following table: | ||||||||||||||||
Customers | Product | 2014 | 2013 | ||||||||||||||
Customer A | Altrazeal® | 80 | % | 8 | % | ||||||||||||
Customer B | Altrazeal® | 11 | % | 67 | % | ||||||||||||
Total | 91 | % | 75 | % |
INVENTORY_Tables
INVENTORY (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
INVENTORY [Abstract] | |||||||||
Inventory | The components of inventory, at the different stages of production, consisted of the following at December 31: | ||||||||
Inventory | 2014 | 2013 | |||||||
Raw materials | $ | 41,648 | $ | 10,148 | |||||
Work-in-progress | 271,571 | 299,464 | |||||||
Finished goods | 12,438 | 85,993 | |||||||
Total | $ | 325,657 | $ | 395,605 |
PROPERTY_EQUIPMENT_AND_LEASEHO1
PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS [Abstract] | |||||||||
Property, equipment and leasehold improvements | Property, equipment and leasehold improvements, net, consisted of the following at December 31: | ||||||||
Property, equipment and leasehold improvements | 2014 | 2013 | |||||||
Laboratory equipment | $ | 424,888 | $ | 424,888 | |||||
Manufacturing equipment | 1,599,894 | 1,581,728 | |||||||
Computers, office equipment, and furniture | 153,078 | 140,360 | |||||||
Computer software | 4,108 | 4,108 | |||||||
Leasehold improvements | 95,841 | 95,841 | |||||||
2,277,809 | 2,246,925 | ||||||||
Less: accumulated depreciation and amortization | (1,845,699 | ) | (1,608,311 | ) | |||||
Property, equipment and leasehold improvements, net | $ | 432,110 | $ | 638,614 |
INTANGIBLE_ASSETS_Tables
INTANGIBLE ASSETS (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
INTANGIBLE ASSETS [Abstract] | |||||||||
Intangible assets | Intangible assets, net consisted of the following at December 31: | ||||||||
Intangible assets | 2014 | 2013 | |||||||
Patent - Amlexanox (Aphthasol®) | $ | 2,090,000 | $ | 2,090,000 | |||||
Patent - Amlexanox (OraDisc™ A) | 6,873,080 | 6,873,080 | |||||||
Patent - OraDisc™ | 73,000 | 73,000 | |||||||
Patent - Hydrogel nanoparticle aggregate | 589,858 | 589,858 | |||||||
9,625,938 | 9,625,938 | ||||||||
Less: accumulated amortization | (6,430,249 | ) | (5,955,101 | ) | |||||
Intangible assets, net | $ | 3,195,689 | $ | 3,670,837 | |||||
Future aggregate amortization expense for intangible assets | The future aggregate amortization expense for intangible assets, remaining as of December 31, 2014, is as follows: | ||||||||
Calendar Years | Future Amortization | ||||||||
Expense | |||||||||
2015 | $ | 475,148 | |||||||
2016 | 476,450 | ||||||||
2017 | 475,148 | ||||||||
2018 | 475,148 | ||||||||
2019 | 475,148 | ||||||||
2020 & Beyond | 818,647 | ||||||||
Total | $ | 3,195,689 |
INVESTMENT_IN_UNCONSOLIDATED_S1
INVESTMENT IN UNCONSOLIDATED SUBSIDIARY (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Altrazeal Trading Ltd. [Member] | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Summarized financial information for investment | Summarized financial information for our investment in Altrazeal Trading Ltd. assuming 100% ownership is as follows: | ||||
Altrazeal Trading Ltd. | 31-Dec-12 | ||||
Balance sheet | |||||
Total assets | $ | 136,661 | |||
Total liabilities | $ | 660,006 | |||
Total stockholders’ (deficit) | $ | (523,345 | ) | ||
Statement of operations | |||||
Revenues | $ | 61,028 | |||
Net (loss) | $ | (516,829 | ) | ||
Altrazeal Trading GmbH [Member] | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Summarized financial information for investment | Summarized financial information for our investment in Altrazeal Trading GmbH assuming 100% ownership is as follows: | ||||
Altrazeal Trading GmbH | 31-Dec-13 | ||||
(Unaudited) | |||||
Balance sheet | |||||
Total assets | $ | 757,784 | |||
Total liabilities | $ | 1,563,046 | |||
Total stockholders’ (deficit) | $ | (805,262 | ) | ||
Statement of operations | |||||
Revenues | $ | --- | |||
Net (loss) | $ | (798,009 | ) | ||
ORADISC GmbH [Member] | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Summarized financial information for investment | Summarized financial information for our investment in ORADISC GmbH assuming 100% ownership is as follows: | ||||
ORADISC GmbH | 31-Dec-13 | ||||
(Unaudited) | |||||
Balance sheet | |||||
Total assets | $ | 305,069 | |||
Total liabilities | $ | 302,572 | |||
Total stockholders’ equity | $ | 2,497 | |||
Statement of operations | |||||
Revenues | $ | --- | |||
Net (loss) | $ | (34,671 | ) |
ACCRUED_LIABILITIES_Tables
ACCRUED LIABILITIES (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
ACCRUED LIABILITIES [Abstract] | |||||||||
Accrued liabilities | Accrued liabilities consisted of the following at December 31: | ||||||||
Accrued Liabilities | 2014 | 2013 | |||||||
Accrued taxes – payroll | $ | 106,299 | $ | 106,299 | |||||
Accrued compensation/benefits | 96,795 | 148,683 | |||||||
Accrued insurance payable | 69,815 | 60,113 | |||||||
Product rebates/returns | 13 | 32 | |||||||
Other | 279 | 836 | |||||||
Total accrued liabilities | $ | 273,201 | $ | 315,963 |
STOCKHOLDERS_EQUITY_Tables
STOCKHOLDERS' EQUITY (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
STOCKHOLDERS' EQUITY [Abstract] | |||||||||
Warrants outstanding and number of shares of common stock subject to exercise | The following table summarizes the warrants outstanding and the number of shares of common stock subject to exercise as of December 31, 2014 and the changes therein during the two years then ended: | ||||||||
Number of Shares of Common Stock Subject to Exercise | Weighted – Average | ||||||||
Exercise Price | |||||||||
Balance as of December 31, 2012 | 2,041,165 | $ | 0.98 | ||||||
Warrants issued | 4,445,714 | 0.56 | |||||||
Warrants exercised (1) | (1,571,428 | ) | 0.35 | ||||||
Warrants cancelled | (250,000 | ) | 0.35 | ||||||
Balance as of December 31, 2013 | 4,665,451 | $ | 0.82 | ||||||
Warrants issued | 80,000 | 1.2 | |||||||
Warrants exercised | (3,000,000 | ) | 0.6 | ||||||
Warrants cancelled | (69,050 | ) | 3.22 | ||||||
Balance as of December 31, 2014 (1) | 1,676,401 | $ | 1.14 | ||||||
-1 | As part of the June 2012 Note, Inter-Mountain received a total of seven warrants to purchase, if they all had vested, an aggregate of 3,142,857 shares of Common Stock, which number of shares could increase based upon the terms and conditions of the warrants. The warrants have an exercise price of $0.35 per share, subject to certain pricing adjustments, and are exercisable, subject to vesting provisions and ownership limitations, until June 27, 2017. Warrants for 785,714, 392,857, 392,857, and 392,857 shares of Common Stock vested on June 27, 2012, December 31, 2012, February 26, 2013, and July 15, 2013, respectively, and three warrants totaling 1,571,428 shares of Common Stock were exercised in 2013. Such issuance of shares of Common Stock following the cashless exercise of three warrants by Inter-Mountain during 2013 was based upon an agreement in December 2013 with Inter-Mountain modifying the formula in the Warrants for determining the number of shares to be issued upon a cashless exercise. On January 22, 2014, we elected to offset and deduct the three remaining Investor Notes from the principle amount due to Inter-Mountain under the June 2012 Note and as a result of the offset and deduction the three remaining warrants terminated. For the purposes of this Table, only such vested shares of Common Stock from one unexercised warrant (392,857 shares) have been included, based upon an exercise price of $0.35 per share of Common Stock. | ||||||||
Expiration dates for warrants subject to exercise | Of the warrant shares subject to exercise as of December 31, 2014, expiration of the right to exercise is as follows: | ||||||||
Date of Expiration | Number of Warrant Shares of Common Stock Subject to Expiration | ||||||||
May 15, 2015 | 357,155 | ||||||||
June 13, 2016 | 35,000 | ||||||||
July 16, 2016 | 116,667 | ||||||||
July 28, 2016 | 34,722 | ||||||||
June 27, 2017 | 392,857 | ||||||||
March 14, 2018 | 660,000 | ||||||||
January 15, 2019 | 80,000 | ||||||||
Total | 1,676,401 |
EARNINGS_PER_SHARE_Tables
EARNINGS PER SHARE (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
EARNINGS PER SHARE [Abstract] | |||||||||
Common shares excluded from calculating basic and diluted net loss per common share | Shares used in calculating basic and diluted net loss per common share exclude these potential common shares as of December 31: | ||||||||
31-Dec-14 | 31-Dec-13 | ||||||||
Warrants to purchase Common Stock | 1,676,401 | 4,665,451 | |||||||
Stock options to purchase common stock | 1,699,907 | 1,014,907 | |||||||
Unvested restricted common stock | --- | --- | |||||||
Common stock issuable upon the assumed conversion of our convertible note payable from June 2012 (1) | --- | 3,124,680 | |||||||
Common stock issuable upon the assumed conversion of our convertible note payable from June 2011 (2) | --- | 127,712 | |||||||
Common stock issuable upon the assumed conversion of our convertible note payable from July 2011 (2) | --- | 125,603 | |||||||
Total | 3,376,308 | 9,058,353 | |||||||
-1 | The outstanding principal balance and the accrued and unpaid interest of the June 2012 Note may have been converted, at the option of Inter-Mountain, into shares of Common Stock at a conversion price of $0.35 per share, subject to certain pricing adjustments and ownership limitations. For the purposes of this Table, we have assumed a conversion price of $0.35 per share and no ownership limitations. On February 27, 2014 and on March 3, 2014, we received conversion notices from Inter-Mountain whereby we issued an aggregate of 435,502 shares of Common Stock for the final payment of approximately $152,000 due under the June 2012 Note. | ||||||||
-2 | On June 13, 2014, Mr. Gray elected to convert the outstanding principal balance ($140,000) of the June 2011 Note and we issued 116,667 shares of Common Stock for such conversion. On July 28, 2014, Mr. Gray elected to convert the outstanding principal balance ($125,000) of the July 2011 Note and we issued 115,741 shares of Common Stock for such conversion. |
SHARE_BASED_COMPENSATION_Table
SHARE BASED COMPENSATION (Tables) | 12 Months Ended | ||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||
SHARE BASED COMPENSATION [Abstract] | |||||||||||||||||||
Stock option awards granted | Our Board of Directors granted the following incentive stock option awards to executives or employees and nonstatutory stock option awards to directors or non-employees for the years ended December 31: | ||||||||||||||||||
2014 | 2013 | ||||||||||||||||||
Incentive Stock Options | |||||||||||||||||||
Quantity | 125,000 | 232,500 | |||||||||||||||||
Weighted average fair value per share | $ | 0.81 | $ | 0.24 | |||||||||||||||
Fair value | $ | 101,171 | $ | 56,112 | |||||||||||||||
Nonstatutory Stock Options | |||||||||||||||||||
Quantity | 560,000 | 735,000 | |||||||||||||||||
Weighted average fair value per share | $ | 0.81 | $ | 0.24 | |||||||||||||||
Fair value | $ | 453,250 | $ | 177,388 | |||||||||||||||
Weighted average assumptions to estimate the fair value of share based awards | We use the Black-Scholes option-pricing model to estimate the fair value of share-based awards with the following weighted average assumptions for the years ended December 31: | ||||||||||||||||||
2014 | 2013 | ||||||||||||||||||
Incentive Stock Options | |||||||||||||||||||
Expected volatility (1) | 107.66 | % | 103.55 | % | |||||||||||||||
Risk-fee interest rate % (2) | 1.75 | % | 0.81 | % | |||||||||||||||
Expected term (in years) | 5 | 5 | |||||||||||||||||
Dividend yield (3) | --- | --- | |||||||||||||||||
Nonstatutory Stock Options | |||||||||||||||||||
Expected volatility (1) | 107.66 | % | 103.55 | % | |||||||||||||||
Risk-fee interest rate % (2) | 1.75 | % | 0.81 | % | |||||||||||||||
Expected term (in years) | 5 | 5 | |||||||||||||||||
Dividend yield (3) | --- | --- | |||||||||||||||||
-1 | Expected volatility assumption was based upon a combination of historical stock price volatility measured on a daily basis and an estimate of expected future stock price volatility. | ||||||||||||||||||
-2 | Risk-free interest rate assumption is based upon U.S. Treasury bond interest rates appropriate for the term of the stock options. | ||||||||||||||||||
-3 | The Company does not currently intend to pay cash dividends, thus has assumed a 0% dividend yield. | ||||||||||||||||||
Allocated share-based compensation expense | The following table summarizes share-based compensation related to stock options for the years ended December 31: | ||||||||||||||||||
2014 | 2013 | ||||||||||||||||||
Research and development | $ | 35,861 | $ | 16,863 | |||||||||||||||
Selling, general and administrative | 113,309 | 64,076 | |||||||||||||||||
Total share-based compensation expense | $ | 149,170 | $ | 80,939 | |||||||||||||||
The following table summarizes share-based compensation related to restricted stock awards for the years ended December 31: | |||||||||||||||||||
2014 | 2013 | ||||||||||||||||||
Research and development | $ | --- | $ | 444 | |||||||||||||||
Selling, general and administrative | --- | 547 | |||||||||||||||||
Total share-based compensation expense | $ | --- | $ | 991 | |||||||||||||||
Stock option activity | The following table summarizes the stock options outstanding and the number of shares of common stock subject to exercise as of December 31, 2014 and the changes therein during the two years then ended: | ||||||||||||||||||
Stock Options | Weighted Average Exercise Price per Share | ||||||||||||||||||
Outstanding as of December 31, 2012 | 158,409 | 12.32 | |||||||||||||||||
Granted | 967,500 | 0.33 | |||||||||||||||||
Forfeited/cancelled | (111,002 | ) | 1.03 | ||||||||||||||||
Exercised | --- | --- | |||||||||||||||||
Outstanding as of December 31, 2013 | 1,014,907 | $ | 2.12 | ||||||||||||||||
Granted | 685,000 | 1.15 | |||||||||||||||||
Forfeited/cancelled | --- | --- | |||||||||||||||||
Exercised | --- | --- | |||||||||||||||||
Outstanding as of December 31, 2014 | 1,699,907 | $ | 1.73 | ||||||||||||||||
Stock option grants outstanding and exercisable | The following table presents the stock option grants outstanding and exercisable as of December 31, 2014: | ||||||||||||||||||
Options Outstanding | Options Exercisable | ||||||||||||||||||
Stock Options Outstanding | Weighted Average Exercise Price per Share | Weighted Average Remaining Contractual Life in Years | Stock Options Exercisable | Weighted Average Exercise Price per Share | |||||||||||||||
892,500 | $ | 0.33 | 8.2 | 595,000 | $ | 0.33 | |||||||||||||
685,000 | 1.15 | 7.9 | 15,000 | 1.15 | |||||||||||||||
53,334 | 2.38 | 3.5 | 53,334 | 2.38 | |||||||||||||||
69,073 | 25.12 | 2.6 | 69,073 | 25.12 | |||||||||||||||
1,699,907 | $ | 1.73 | 7.7 | 732,407 | $ | 2.83 | |||||||||||||
Nonvested restricted stock awards | The following table summarizes the non-vested restricted stock awards outstanding and the number of shares of common stock subject to potential issue as of December 31, 2014 and the changes therein during the two years then ended: | ||||||||||||||||||
Restricted Stock | Weighted Average Grant Date Fair Value | ||||||||||||||||||
Outstanding as of December 31, 2012 | 300 | $ | 34.59 | ||||||||||||||||
Granted | --- | --- | |||||||||||||||||
Forfeited/cancelled | --- | --- | |||||||||||||||||
Exercised/issued | (300 | ) | 34.59 | ||||||||||||||||
Outstanding as of December 31, 2013 | --- | $ | --- | ||||||||||||||||
Granted | --- | --- | |||||||||||||||||
Forfeited/cancelled | --- | --- | |||||||||||||||||
Exercised/issued | --- | --- | |||||||||||||||||
Outstanding as of December 31, 2014 | --- | $ | --- |
FAIR_VALUE_MEASUREMENTS_Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
FAIR VALUE MEASUREMENTS [Abstract] | |||||||||
Fair value of our financial instruments | The fair value of our financial instruments consisted of the following at December 31: | ||||||||
Description | 2014 | 2013 | |||||||
Assets: | |||||||||
Notes receivable and accrued interest | --- | $ | 777,710 | ||||||
Liabilities: | |||||||||
Convertible note – June 2011 | --- | $ | 138,220 | ||||||
Convertible note – July 2011 | --- | $ | 120,738 | ||||||
Convertible note – June 2012 | --- | $ | 888,099 |
INCOME_TAXES_Tables
INCOME TAXES (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
INCOME TAXES [Abstract] | |||||||||
Expiration of consolidated operating loss carryforwards and research credit carryforwards | The following are the consolidated operating loss carryforwards and research credit carryforwards that will begin expiring as follows: | ||||||||
Calendar Years | Consolidated Operating Loss Carryforwards | Research Activities | |||||||
Carryforwards | |||||||||
2021 | $ | 34,248 | $ | --- | |||||
2023 | 95,666 | --- | |||||||
2024 | 910,800 | 13,584 | |||||||
2025 | 1,687,528 | 21,563 | |||||||
2026 | 11,950,281 | 60,797 | |||||||
2027 | 3,431,365 | 85,052 | |||||||
2028 | 8,824,940 | 139,753 | |||||||
2029 | 6,889,761 | 81,940 | |||||||
2030 | 5,113,583 | 41,096 | |||||||
2031 | 3,728,626 | 43,592 | |||||||
2032 | 3,695,792 | 8,690 | |||||||
2033 | 3,187,559 | 15,882 | |||||||
2034 | 1,797,031 | 19,491 | |||||||
Total | $ | 51,347,180 | $ | 531,440 | |||||
Deferred tax assets and deferred tax liabilities | An analysis of the tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2014 and 2013 are as follows: | ||||||||
2014 | 2013 | ||||||||
Deferred tax assets: | |||||||||
Net operating loss carryforwards | $ | 18,279,724 | $ | 17,657,746 | |||||
Intangible assets | 188,944 | 247,248 | |||||||
Other | 554,404 | 512,286 | |||||||
Total gross deferred tax assets | 19,023,072 | 18,417,280 | |||||||
Deferred tax liabilities: | |||||||||
Property and equipment | 33,696 | 72,347 | |||||||
Total gross deferred tax liabilities | 33,696 | 72,347 | |||||||
Net total of deferred assets and liabilities | 18,989,376 | 18,344,933 | |||||||
Valuation allowance | (18,989,376 | ) | (18,344,933 | ) | |||||
Net deferred tax assets | $ | --- | $ | --- | |||||
Reconciliation of expected statutory federal income tax rate to actual income tax rate | The following is a reconciliation of the expected statutory federal income tax rate to our actual income tax rate for the years ended December 31: | ||||||||
2014 | 2013 | ||||||||
Expected income tax (benefit) at federal statutory tax rate -35% | $ | ( 681,109 | ) | $ | ( 1,137,320 | ) | |||
Permanent differences | 52,273 | 21,754 | |||||||
Research tax credits | (19,491 | ) | (15,882 | ) | |||||
Amortization of deferred start up costs | --- | --- | |||||||
Valuation allowance | 648,327 | 1,131,448 | |||||||
Income tax expense | $ | --- | $ | --- |
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
COMMITMENTS AND CONTINGENCIES [Abstract] | |||||||||||||||||||||
Future minimum lease payments | The future minimum lease payments under the 2013 office lease and the 2015 equipment lease are as follows as of December 31, 2014: | ||||||||||||||||||||
Calendar Years | Future Lease Expense | ||||||||||||||||||||
2015 | $ | 120,033 | |||||||||||||||||||
2016 | 119,840 | ||||||||||||||||||||
2017 | 119,840 | ||||||||||||||||||||
2018 | 28,858 | ||||||||||||||||||||
2019 | --- | ||||||||||||||||||||
Total | $ | 388,571 | |||||||||||||||||||
Summary of compensation earned, compensation paid in cash, and compensation temporarily deferred | As of December 31, 2014, the following table summarizes the compensation temporarily deferred and subsequent repayments: | ||||||||||||||||||||
Name | 2014 | 2013 | 2012 | 2011 | Total | ||||||||||||||||
Kerry P. Gray (1) (2) | $ | (119,986 | ) | $ | (91,000 | ) | $ | 220,673 | $ | 140,313 | $ | 150,000 | |||||||||
Terrance K. Wallberg | (25,000 | ) | (35,769 | ) | $ | 24,230 | $ | 36,539 | --- | ||||||||||||
Key executives | (28,239 | ) | (20,000 | ) | $ | 27,253 | $ | 20,986 | --- | ||||||||||||
Total | $ | (173,225 | ) | $ | (146,769 | ) | $ | 272,156 | $ | 197,838 | $ | 150,000 | |||||||||
-1 | During 2014, Mr. Gray temporarily deferred compensation of $150,000 which consisted of $62,500 earned as salary compensation for his duties as President of the Company and $87,500 for his duties as Chairman of the Executive Committee of the Company’s Board of Directors. During 2014, Mr. Gray was also repaid $269,986 of temporarily deferred compensation, of which $100,000 was used by Mr. Gray for funding required pursuant to the March 2013 Offering. | ||||||||||||||||||||
-2 | During 2013, Mr. Gray temporarily deferred compensation of $221,500 which consisted of $11,500 earned pursuant to a Separation Agreement and $210,000 for his duties as Chairman of the Executive Committee of the Company’s Board of Directors. During 2013, Mr. Gray was also repaid $312,500 of temporarily deferred compensation, of which $300,000 was used by Mr. Gray for funding required pursuant to the March 2013 Offering. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Customer | Customer | ||
Trade Accounts Receivable and Allowance for Doubtful Accounts [Abstract] | |||
Allowance for doubtful accounts | $887 | $907 | |
Accounts written off as uncollectible | 779 | -1,126 | |
Prepaid Expenses and Deferred Charges [Abstract] | |||
Prepaid PDUFA fees | 0 | 0 | |
Deferred Financing Costs [Abstract] | |||
Financing costs related to convertible notes payable | 200,000 | ||
Amortization costs | 7,309 | 74,000 | |
Deferred financing cost included in other assets | 87,000 | 87,000 | |
Product Sales [Abstract] | |||
Period over which no actual product returns occurred | 2 years | ||
Concentrations of Credit Risk [Abstract] | |||
Cash and cash equivalents | $550,458 | $5,119 | $21,549 |
Concentration Risk [Line Items] | |||
Minimum threshold limit of trade accounts receivable (in hundredths) | 5.00% | 5.00% | |
Number of customers exceeds threshold limit of 5% | 2 | 2 | |
Concentration risk percentage (in hundredths) | 91.00% | 75.00% | |
Accounts Receivable [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage (in hundredths) | 99.00% | 94.00% | |
Accounts Receivable [Member] | Customer One [Member] | Credit Concentration Risk [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage (in hundredths) | 71.00% | 84.00% | |
Accounts Receivable [Member] | Customer Two [Member] | Credit Concentration Risk [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage (in hundredths) | 19.00% | 10.00% | |
Accounts Receivable [Member] | Customer Three [Member] | Credit Concentration Risk [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage (in hundredths) | 9.00% | ||
Laboratory and Manufacturing Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful life of property and equipment | 7 years | ||
Computers, Office Equipment, and Furniture [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful life of property and equipment | 5 years | ||
Computer Software [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful life of property and equipment | 3 years | ||
Leasehold Improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful life of property and equipment, description | Lease term |
SEGMENT_INFORMATION_Details
SEGMENT INFORMATION (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Licensee | ||
Segment | ||
SEGMENT INFORMATION [Abstract] | ||
Number of business segments | 1 | |
Number of international licensees | 7 | |
Revenues per geographic area [Abstract] | ||
Total Revenues | $863,857 | $370,568 |
Total Revenue, percentage (in hundredths) | 100.00% | 100.00% |
Revenue, Major Customer [Line Items] | ||
Sales from major customer, percentage (in hundredths) | 91.00% | 75.00% |
Customer A [Member] | Altrazeal [Member] | ||
Revenue, Major Customer [Line Items] | ||
Sales from major customer, percentage (in hundredths) | 80.00% | 8.00% |
Customer B [Member] | Altrazeal [Member] | ||
Revenue, Major Customer [Line Items] | ||
Sales from major customer, percentage (in hundredths) | 11.00% | 67.00% |
Reportable Geographical Components [Member] | Domestic [Member] | ||
Revenues per geographic area [Abstract] | ||
Total Revenues | 37,465 | 65,546 |
Total Revenue, percentage (in hundredths) | 4.00% | 18.00% |
Reportable Geographical Components [Member] | International [Member] | ||
Revenues per geographic area [Abstract] | ||
Total Revenues | $826,392 | $305,022 |
Total Revenue, percentage (in hundredths) | 96.00% | 82.00% |
NOTES_RECEIVABLE_Details
NOTES RECEIVABLE (Details) (June 2012 Note [Member], USD $) | 0 Months Ended | 12 Months Ended | |||||
Jan. 22, 2014 | Dec. 31, 2012 | Nov. 30, 2012 | Oct. 05, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
InvestorNote | PromissoryNote | InvestorNote | PromissoryNote | ||||
Information relating to convertible notes payable [Abstract] | |||||||
Initial principal amount | $2,210,000 | ||||||
Secured Convertible Note [Member] | |||||||
Information relating to convertible notes payable [Abstract] | |||||||
Purchase price paid in the form of promissory notes | 1,500,000 | 1,500,000 | |||||
Number of promissory notes issued under purchase agreement | 6 | 6 | |||||
Principal amount of promissory notes | 250,000 | 250,000 | 250,000 | ||||
Payment received | 50,000 | 100,000 | 100,000 | ||||
Notes receivable and accrued interest | 777,710 | ||||||
Notes receivable | 687,500 | 687,500 | |||||
Accrued interest | $94,456 | $90,210 | |||||
Number of investor notes | 3 | 3 |
INVENTORY_Details
INVENTORY (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
INVENTORY [Abstract] | ||
Obsolete finished goods | $19,000 | $60,000 |
Components of inventory [Abstract] | ||
Raw materials | 41,648 | 10,148 |
Work-in-progress | 271,571 | 299,464 |
Finished goods | 12,438 | 85,993 |
Total | $325,657 | $395,605 |
PROPERTY_EQUIPMENT_AND_LEASEHO2
PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Property, equipment and leasehold improvements, net [Abstract] | ||
Property, equipment and leasehold improvements, gross | $2,277,809 | $2,246,925 |
Less: accumulated depreciation and amortization | -1,845,699 | -1,608,311 |
Property, equipment and leasehold improvements, net | 432,110 | 638,614 |
Depreciation expense | 237,388 | 244,704 |
Laboratory Equipment [Member] | ||
Property, equipment and leasehold improvements, net [Abstract] | ||
Property, equipment and leasehold improvements, gross | 424,888 | 424,888 |
Manufacturing Equipment [Member] | ||
Property, equipment and leasehold improvements, net [Abstract] | ||
Property, equipment and leasehold improvements, gross | 1,599,894 | 1,581,728 |
Computers, Office Equipment, and Furniture [Member] | ||
Property, equipment and leasehold improvements, net [Abstract] | ||
Property, equipment and leasehold improvements, gross | 153,078 | 140,360 |
Computer Software [Member] | ||
Property, equipment and leasehold improvements, net [Abstract] | ||
Property, equipment and leasehold improvements, gross | 4,108 | 4,108 |
Leasehold Improvements [Member] | ||
Property, equipment and leasehold improvements, net [Abstract] | ||
Property, equipment and leasehold improvements, gross | $95,841 | $95,841 |
INTANGIBLE_ASSETS_Details
INTANGIBLE ASSETS (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | $9,625,938 | $9,625,938 |
Less: accumulated amortization | -6,430,249 | -5,955,101 |
Intangible assets, net | 3,195,689 | 3,670,837 |
Amortization expense | 475,148 | 475,148 |
Future aggregate amortization expense for intangible assets [Abstract] | ||
2015 | 475,148 | |
2016 | 476,450 | |
2017 | 475,148 | |
2018 | 475,148 | |
2019 | 475,148 | |
2020 & Beyond | 818,647 | |
Total | 3,195,689 | |
Patents [Member] | Amlexanox (Aphthasol) [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | 2,090,000 | 2,090,000 |
Patents [Member] | Amlexanox (OraDiscA) [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | 6,873,080 | 6,873,080 |
Patents [Member] | OraDisc [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | 73,000 | 73,000 |
Patents [Member] | Hydrogel Nanoparticle Aggregate [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | $589,858 | $589,858 |
INVESTMENT_IN_UNCONSOLIDATED_S2
INVESTMENT IN UNCONSOLIDATED SUBSIDIARY (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Schedule Of Equity Method Investments [Line Items] | |||
Gains losses on equity method investments | $0 | $0 | |
Minimum [Member] | |||
Schedule Of Equity Method Investments [Line Items] | |||
Percentage of noncontrolling interest (in hundredths) | 20.00% | ||
Maximum [Member] | |||
Schedule Of Equity Method Investments [Line Items] | |||
Percentage of noncontrolling interest (in hundredths) | 50.00% | ||
Altrazeal Trading Ltd. [Member] | |||
Schedule Of Equity Method Investments [Line Items] | |||
Non-dilutable ownership interest (in hundredths) | 25.00% | ||
Unrecorded profit (loss) | 129,207 | ||
Gains losses on equity method investments | 0 | 0 | 0 |
Balance sheet [Abstract] | |||
Total assets | 136,661 | ||
Total liabilities | 660,006 | ||
Total stockholders' equity (deficit) | -523,345 | ||
Statement of operations [Abstract] | |||
Revenues | 61,028 | ||
Net (loss) | -516,829 | ||
Altrazeal Trading GmbH [Member] | |||
Schedule Of Equity Method Investments [Line Items] | |||
Non-dilutable ownership interest (in hundredths) | 25.00% | ||
Unrecorded profit (loss) | 213,370 | ||
Gains losses on equity method investments | 0 | 0 | |
Balance sheet [Abstract] | |||
Total assets | 757,784 | ||
Total liabilities | 1,563,046 | ||
Total stockholders' equity (deficit) | -805,262 | ||
Statement of operations [Abstract] | |||
Revenues | 0 | ||
Net (loss) | -798,009 | ||
ORADISC GmbH [Member] | |||
Schedule Of Equity Method Investments [Line Items] | |||
Non-dilutable ownership interest (in hundredths) | 25.00% | ||
Unrecorded profit (loss) | 11,430 | ||
Gains losses on equity method investments | 0 | 0 | |
Balance sheet [Abstract] | |||
Total assets | 305,069 | ||
Total liabilities | 302,572 | ||
Total stockholders' equity (deficit) | 2,497 | ||
Statement of operations [Abstract] | |||
Revenues | 0 | ||
Net (loss) | -34,671 | ||
Altrazeal AG [Member] | |||
Schedule Of Equity Method Investments [Line Items] | |||
Non-dilutable ownership interest (in hundredths) | 25.00% | ||
Gains losses on equity method investments | $0 |
ACCRUED_LIABILITIES_Details
ACCRUED LIABILITIES (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Accrued liabilities [Abstract] | ||
Accrued taxes - payroll | $106,299 | $106,299 |
Accrued compensation/benefits | 96,795 | 148,683 |
Accrued insurance payable | 69,815 | 60,113 |
Product rebates/returns | 13 | 32 |
Other | 279 | 836 |
Total accrued liabilities | $273,201 | $315,963 |
CONVERTIBLE_DEBT_Details
CONVERTIBLE DEBT (Details) (USD $) | 12 Months Ended | 0 Months Ended | 1 Months Ended | 0 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2014 | Dec. 31, 2013 | Jun. 13, 2014 | Jul. 31, 2013 | Jul. 31, 2012 | Jul. 28, 2014 | Jan. 22, 2014 | Dec. 31, 2012 | Jun. 13, 2011 | Jul. 31, 2011 | Jun. 27, 2012 | Jul. 15, 2013 | Feb. 26, 2013 | ||
Tranche | ||||||||||||||
PromissoryNote | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Amortization of debt discount on convertible notes | ($78,078) | $178,548 | ||||||||||||
Information relating to convertible notes payable [Abstract] | ||||||||||||||
Interest cost recognized | 20,853 | 157,027 | ||||||||||||
Class of Warrant or Right [Line Items] | ||||||||||||||
Number of securities called by warrants (in shares) | 1,571,428 | |||||||||||||
Exercise price of warrants (in dollars per share) | $0.35 | |||||||||||||
Number of warrants that vest upon payment of notes (in shares) | 3 | |||||||||||||
Shares issued on exercise of warrants (in shares) | 3,000,000 | |||||||||||||
Warrants exercised (in shares) | 3,000,000 | 1,571,428 | [1] | |||||||||||
Number of warrants that vest upon payment of notes but unexercised (in shares) | 1 | |||||||||||||
Minimum period during which registration statement is to be declared effective after filing with the SEC | 90 days | |||||||||||||
Maximum period during which registration statement is to be declared effective after filing with SEC | 180 days | |||||||||||||
Warrant - June 2011 Debt Offering [Member] | ||||||||||||||
Class of Warrant or Right [Line Items] | ||||||||||||||
Number of securities called by warrants (in shares) | 35,000 | |||||||||||||
Exercise price of warrants (in dollars per share) | $1.20 | |||||||||||||
Warrant - July 2011 Debt Offering [Member] | ||||||||||||||
Class of Warrant or Right [Line Items] | ||||||||||||||
Number of securities called by warrants (in shares) | 34,722 | |||||||||||||
Exercise price of warrants (in dollars per share) | $1.08 | |||||||||||||
Warrant - June 2012 Debt Offering [Member] | ||||||||||||||
Class of Warrant or Right [Line Items] | ||||||||||||||
Number of warrants | 7 | |||||||||||||
Number of securities called by warrants (in shares) | 3,142,857 | |||||||||||||
Exercise price of warrants (in dollars per share) | $0.35 | |||||||||||||
Number of securities vested (in shares) | 785,714 | |||||||||||||
Common Stock [Member] | ||||||||||||||
Class of Warrant or Right [Line Items] | ||||||||||||||
Number of securities vested (in shares) | 392,857 | 392,857 | 392,857 | |||||||||||
Inter-Mountain [Member] | ||||||||||||||
Class of Warrant or Right [Line Items] | ||||||||||||||
Number of securities called by warrants (in shares) | 3,142,857 | |||||||||||||
Shares issued on exercise of warrants (in shares) | 725,274 | |||||||||||||
Warrants exercised (in shares) | 1,571,428 | |||||||||||||
Cashless exercise of warrants (in shares) | 1 | |||||||||||||
Maximum contingent issue of shares to be issued on cashless exercise of warrants (in shares) | 782,284 | |||||||||||||
Minimum contingent issue of shares to be issued on cashless exercise of warrants (in shares) | 261,516 | |||||||||||||
June 2012 Note [Member] | ||||||||||||||
Information relating to convertible notes payable [Abstract] | ||||||||||||||
Initial principal amount | 2,210,000 | |||||||||||||
Secured Convertible Note [Member] | June 2011 Note [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Conversion number of equity instruments (in shares) | 116,667 | |||||||||||||
Annual principal payment | 140,000 | 14,001 | 14,653 | |||||||||||
Notice prior to the relevant payment date | 15 days | 15 days | ||||||||||||
Information relating to convertible notes payable [Abstract] | ||||||||||||||
Initial principal amount | 140,000 | |||||||||||||
Interest Rate (in hundredths) | 10.00% | 12.00% | 12.00% | |||||||||||
Maturity Date | 13-Jun-14 | |||||||||||||
Conversion Price (in dollars per share) | $1.20 | |||||||||||||
Interest payable | 13,346 | 553 | 2,080 | |||||||||||
Deferred Interest Payable | 14,001 | 14,653 | ||||||||||||
Shares issued (in shares) | 116,667 | |||||||||||||
Secured Convertible Note [Member] | July 2011 Note [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Conversion number of equity instruments (in shares) | 115,741 | |||||||||||||
Annual principal payment | 12,501 | 11,542 | 125,000 | |||||||||||
Notice prior to the relevant payment date | 15 days | 15 days | ||||||||||||
Information relating to convertible notes payable [Abstract] | ||||||||||||||
Initial principal amount | 125,000 | |||||||||||||
Interest Rate (in hundredths) | 10.00% | 12.00% | 12.00% | |||||||||||
Maturity Date | 28-Jul-14 | |||||||||||||
Conversion Price (in dollars per share) | $1.08 | |||||||||||||
Interest payable | 492 | 1,643 | 13,457 | |||||||||||
Deferred Interest Payable | 12,501 | 11,542 | ||||||||||||
Shares issued (in shares) | 115,741 | |||||||||||||
Secured Convertible Note [Member] | June 2012 Note [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Purchase price paid in cash | 500,000 | |||||||||||||
Purchase price paid in the form of promissory notes | 1,500,000 | 1,500,000 | ||||||||||||
Number of promissory notes issued under purchase agreement | 6 | 6 | ||||||||||||
Principal amount of promissory notes | 250,000 | 250,000 | ||||||||||||
Original issue discount reflected in purchase price | 200,000 | |||||||||||||
Attorney's fees reflected in purchase price | 10,000 | |||||||||||||
Amount of monthly installment | 83,333 | |||||||||||||
Number of calendar days after the date of registration to commence monthly installment | 30 days | |||||||||||||
Monthly installment payment terms | If the monthly installment is paid in common stock, such shares being issued will be based on a price that is 80% of the average of the three lowest volume weighted average prices of the shares of common stock during the preceding twenty trading days. The percentage declines to 70% if the average of the three lowest volume weighted average prices of the shares of common stock during the preceding twenty trading days is less than $0.05. | |||||||||||||
Percentage of weighted average prices of shares of common stock (in hundredths) | 80.00% | |||||||||||||
Declined percentage of weighted average prices of shares of common stock (in hundredths) | 70.00% | |||||||||||||
Preceding number of trading days to calculate weighted average common stock price | 20 days | |||||||||||||
Weighted average price of shares of common stock, Maximum (in dollars per share) | $0.05 | |||||||||||||
Amount convertible under initial tranche | 710,000 | |||||||||||||
Number of subsequent tranches | 6 | |||||||||||||
Amount of each subsequent tranche plus interest | 250,000 | |||||||||||||
Percentage of outstanding principal balance prepaid in cash (in hundredths) | 120.00% | |||||||||||||
Entry amount of judgment not stayed | 100,000 | |||||||||||||
Period with in which judgment not stayed | 30 days | |||||||||||||
Increased interest rate in the event of default (in hundredths) | 18.00% | |||||||||||||
Information relating to convertible notes payable [Abstract] | ||||||||||||||
Interest Rate (in hundredths) | 8.00% | |||||||||||||
Conversion Price (in dollars per share) | $0.35 | |||||||||||||
Percentage of prepayment premium not incurred as per notice (in hundredths) | 120.00% | |||||||||||||
Reduction of notes payable | 317,000 | |||||||||||||
Shares issued (in shares) | 435,502 | |||||||||||||
Current maturity of long-term debt | $152,000 | |||||||||||||
[1] | As part of the June 2012 Note, Inter-Mountain received a total of seven warrants to purchase, if they all vest, an aggregate of 3,142,857 shares of common stock, which number of shares could increase based upon the terms and conditions of the warrants. The warrants have an exercise price of $0.35 per share, subject to certain pricing adjustments, and are exercisable, subject to vesting provisions and ownership limitations, until June 27, 2017. Warrants for 785,714, 392,857, 392,857, and 392,857 shares of Common Stock vested on June 27, 2012, December 31, 2012, February 26, 2013, and July 15, 2013, respectively, and three warrants totaling 1,571,428 shares of Common Stock were exercised in 2013. Such issuance of shares of Common Stock following the cashless exercise of three warrants by Inter-Mountain during 2013 was based upon an agreement in December 2013 with Inter-Mountain modifying the formula in the Warrants for determining the number of shares to be issued upon a cashless exercise. On January 22, 2014, we elected to offset and deduct the three remaining Investor Notes from the principle amount due to Inter-Mountain under the June 2012 Note and as a result of the offset and deduction the three remaining warrants terminated. For the purposes of this Table, only such vested shares of Common Stock from one unexercised warrant (392,857 shares) have been included, based upon an exercise price of $0.35 per share of Common Stock. |
EQUITY_TRANSACTIONS_Details
EQUITY TRANSACTIONS (Details) (USD $) | 0 Months Ended | 12 Months Ended | 0 Months Ended | ||||||||||||||
Jan. 31, 2014 | Dec. 31, 2014 | Apr. 30, 2014 | Mar. 31, 2014 | Mar. 14, 2014 | Feb. 28, 2014 | Jan. 06, 2014 | Nov. 14, 2013 | Oct. 24, 2013 | Sep. 06, 2013 | Jul. 15, 2013 | Mar. 14, 2013 | Mar. 07, 2013 | Jan. 03, 2013 | Dec. 31, 2013 | Jan. 03, 2014 | Dec. 21, 2012 | |
Common Stock Transactions [Abstract] | |||||||||||||||||
Number of securities called by warrants (in shares) | 1,571,428 | ||||||||||||||||
Shares issued on exercise of warrants (in shares) | 3,000,000 | ||||||||||||||||
Number of days within which request is declared effective | 60 days | ||||||||||||||||
Number of days for which statement is effective | 80 days | ||||||||||||||||
Number of additional days for which filing of statement can be done | 60 days | ||||||||||||||||
SPA [Member] | |||||||||||||||||
Common Stock Transactions [Abstract] | |||||||||||||||||
Number of maximum directors that could be appointed | 2 | ||||||||||||||||
Common Stock [Member] | |||||||||||||||||
Common Stock Transactions [Abstract] | |||||||||||||||||
Number of securities called by warrants (in shares) | 3,000,000 | ||||||||||||||||
Proceeds from offering | 450,000 | $450,000 | $450,000 | $110,000 | $450,000 | $500,000 | $132,000 | $300,000 | $300,000 | $110,000 | $88,000 | $500,000 | $400,000 | ||||
Shares purchased under stock purchased agreement (in shares) | 275,000 | 1,250,000 | 330,000 | 750,000 | 750,000 | 275,000 | 220,000 | 1,250,000 | 1,000,000 | ||||||||
Shares issued on exercise of warrants (in shares) | 750,000 | 750,000 | 750,000 | 750,000 | |||||||||||||
Common Stock [Member] | March SPA [Member] | |||||||||||||||||
Common Stock Transactions [Abstract] | |||||||||||||||||
Equity investment | 440,000 | ||||||||||||||||
Maximum amount of common stock purchased under Common Stock Purchase Agreement | 88,000 | ||||||||||||||||
Share price (in dollars per share) | $0.60 | ||||||||||||||||
Issuance of shares of common stock under securities purchase agreement (in shares) | 1,100,000 | ||||||||||||||||
Number of securities called by warrants (in shares) | 660,000 | ||||||||||||||||
Common Stock [Member] | March SPA [Member] | Four-month anniversary [Member] | |||||||||||||||||
Common Stock Transactions [Abstract] | |||||||||||||||||
Maximum amount of common stock purchased under Common Stock Purchase Agreement | 110,000 | ||||||||||||||||
Common Stock [Member] | March SPA [Member] | Eight-month anniversary [Member] | |||||||||||||||||
Common Stock Transactions [Abstract] | |||||||||||||||||
Maximum amount of common stock purchased under Common Stock Purchase Agreement | 132,000 | ||||||||||||||||
Common Stock [Member] | March SPA [Member] | One-year anniversary [Member] | |||||||||||||||||
Common Stock Transactions [Abstract] | |||||||||||||||||
Maximum amount of common stock purchased under Common Stock Purchase Agreement | 110,000 | ||||||||||||||||
Common Stock [Member] | SPA [Member] | |||||||||||||||||
Common Stock Transactions [Abstract] | |||||||||||||||||
Equity investment | 2,000,000 | ||||||||||||||||
Maximum amount of common stock purchased under Common Stock Purchase Agreement | 400,000 | ||||||||||||||||
Share price (in dollars per share) | $0.60 | ||||||||||||||||
Issuance of shares of common stock under securities purchase agreement (in shares) | 5,000,000 | ||||||||||||||||
Number of securities called by warrants (in shares) | 3,000,000 | ||||||||||||||||
Common Stock [Member] | SPA [Member] | Four-month anniversary [Member] | |||||||||||||||||
Common Stock Transactions [Abstract] | |||||||||||||||||
Maximum amount of common stock purchased under Common Stock Purchase Agreement | 500,000 | ||||||||||||||||
Common Stock [Member] | SPA [Member] | Eight-month anniversary [Member] | |||||||||||||||||
Common Stock Transactions [Abstract] | |||||||||||||||||
Maximum amount of common stock purchased under Common Stock Purchase Agreement | 600,000 | ||||||||||||||||
Common Stock [Member] | SPA [Member] | One-year anniversary [Member] | |||||||||||||||||
Common Stock Transactions [Abstract] | |||||||||||||||||
Maximum amount of common stock purchased under Common Stock Purchase Agreement | 500,000 | ||||||||||||||||
Common Stock [Member] | Sacks [Member] | |||||||||||||||||
Common Stock Transactions [Abstract] | |||||||||||||||||
Proceeds from offering | 450,000 | 150,000 | 150,000 | 450,000 | |||||||||||||
Issuance of shares of common stock under assignment agreement | 750,000 | 250,000 | 250,000 | 750,000 | |||||||||||||
Common Stock [Member] | TPT [Member] | |||||||||||||||||
Common Stock Transactions [Abstract] | |||||||||||||||||
Proceeds from offering | $300,000 | $300,000 | |||||||||||||||
Issuance of shares of common stock under assignment agreement | 500,000 | 500,000 |
STOCKHOLDERS_EQUITY_Details
STOCKHOLDERS' EQUITY (Details) (USD $) | 12 Months Ended | 0 Months Ended | |||||||
Dec. 31, 2014 | Dec. 31, 2013 | Jan. 22, 2014 | Jul. 15, 2013 | Feb. 26, 2013 | Dec. 31, 2012 | Jun. 27, 2012 | |||
Warrant | |||||||||
Common Stock [Abstract] | |||||||||
Common Stock, shares issued (in shares) | 24,458,018 | 18,871,420 | |||||||
Common Stock, shares outstanding (in shares) | 24,458,018 | 18,871,420 | |||||||
Common stock issued during period (in shares) | 5,586,598 | ||||||||
Number of shares of common stock issued for IPMD pursuant (in shares) | 1,250,000 | ||||||||
Stock issued in lieu of offering agreement (in shares) | 275,000 | ||||||||
Shares issued on exercise of warrants (in shares) | 3,000,000 | ||||||||
Common stock issued for consulting services (in shares) | 82,500 | ||||||||
Warrants and number of shares of common stock subject to exercise [Roll Forward] | |||||||||
Balance (in shares) | 4,665,451 | 2,041,165 | |||||||
Warrants issued (in shares) | 80,000 | 4,445,714 | |||||||
Warrants exercised (in shares) | -3,000,000 | -1,571,428 | [1] | ||||||
Warrants cancelled (in shares) | -69,050 | -250,000 | |||||||
Balance (in shares) | 1,676,401 | [1] | 4,665,451 | ||||||
Warrants, weighted-average exercise price [Abstract] | |||||||||
Balance (in dollars per share) | $0.82 | $0.98 | |||||||
Warrants issued (in dollars per share) | $1.20 | $0.56 | |||||||
Warrants exercised (in dollars per share) | $0.60 | $0.35 | [1] | ||||||
Warrants cancelled (in dollars per share) | $3.22 | $0.35 | |||||||
Balance (in dollars per share) | $1.14 | [1] | $0.82 | ||||||
Warrant shares subject to expiration [Abstract] | |||||||||
Number of warrant shares of common stock subject to expiration (in shares) | 1,676,401 | [1] | 4,665,451 | ||||||
Number of warrants to purchase common stock (in shares) | 7 | ||||||||
Number of warrants exercised (in shares) | 3 | ||||||||
Aggregate shares of common stock issued upon exercise of warrants (in shares) | 1,571,428 | ||||||||
Common stock vested upon initial warrant (in shares) | 1,676,401 | [1] | 4,665,451 | ||||||
Exercise price of warrants (in dollars per share) | $0.35 | ||||||||
Warrant - June 2012 Debt Offering [Member] | |||||||||
Warrant shares subject to expiration [Abstract] | |||||||||
Aggregate shares of common stock issued upon exercise of warrants (in shares) | 3,142,857 | ||||||||
Exercise price of warrants (in dollars per share) | $0.35 | ||||||||
May 15, 2015 [Member] | |||||||||
Warrants and number of shares of common stock subject to exercise [Roll Forward] | |||||||||
Balance (in shares) | 357,155 | ||||||||
Warrant shares subject to expiration [Abstract] | |||||||||
Number of warrant shares of common stock subject to expiration (in shares) | 357,155 | ||||||||
Common stock vested upon initial warrant (in shares) | 357,155 | ||||||||
June 13, 2016 [Member] | |||||||||
Warrants and number of shares of common stock subject to exercise [Roll Forward] | |||||||||
Balance (in shares) | 35,000 | ||||||||
Warrant shares subject to expiration [Abstract] | |||||||||
Number of warrant shares of common stock subject to expiration (in shares) | 35,000 | ||||||||
Common stock vested upon initial warrant (in shares) | 35,000 | ||||||||
July 16, 2016 [Member] | |||||||||
Warrants and number of shares of common stock subject to exercise [Roll Forward] | |||||||||
Balance (in shares) | 116,667 | ||||||||
Warrant shares subject to expiration [Abstract] | |||||||||
Number of warrant shares of common stock subject to expiration (in shares) | 116,667 | ||||||||
Common stock vested upon initial warrant (in shares) | 116,667 | ||||||||
July 28, 2016 [Member] | |||||||||
Warrants and number of shares of common stock subject to exercise [Roll Forward] | |||||||||
Balance (in shares) | 34,722 | ||||||||
Warrant shares subject to expiration [Abstract] | |||||||||
Number of warrant shares of common stock subject to expiration (in shares) | 34,722 | ||||||||
Common stock vested upon initial warrant (in shares) | 34,722 | ||||||||
June 27, 2017 [Member] | |||||||||
Warrants and number of shares of common stock subject to exercise [Roll Forward] | |||||||||
Balance (in shares) | 392,857 | ||||||||
Warrant shares subject to expiration [Abstract] | |||||||||
Number of warrant shares of common stock subject to expiration (in shares) | 392,857 | ||||||||
Common stock vested upon initial warrant (in shares) | 392,857 | ||||||||
March 14, 2018 [Member] | |||||||||
Warrants and number of shares of common stock subject to exercise [Roll Forward] | |||||||||
Balance (in shares) | 660,000 | ||||||||
Warrant shares subject to expiration [Abstract] | |||||||||
Number of warrant shares of common stock subject to expiration (in shares) | 660,000 | ||||||||
Common stock vested upon initial warrant (in shares) | 660,000 | ||||||||
January 15, 2019 [Member] | |||||||||
Warrants and number of shares of common stock subject to exercise [Roll Forward] | |||||||||
Balance (in shares) | 80,000 | ||||||||
Warrant shares subject to expiration [Abstract] | |||||||||
Number of warrant shares of common stock subject to expiration (in shares) | 80,000 | ||||||||
Common stock vested upon initial warrant (in shares) | 80,000 | ||||||||
Private Placement [Member] | Warrant - June 2012 Debt Offering [Member] | |||||||||
Warrants and number of shares of common stock subject to exercise [Roll Forward] | |||||||||
Balance (in shares) | 392,857 | 392,857 | 392,857 | 785,714 | |||||
Balance (in shares) | 392,857 | 392,857 | 392,857 | 785,714 | |||||
Warrant shares subject to expiration [Abstract] | |||||||||
Number of warrant shares of common stock subject to expiration (in shares) | 392,857 | 392,857 | 392,857 | 785,714 | |||||
Common stock vested upon initial warrant (in shares) | 392,857 | 392,857 | 392,857 | 785,714 | |||||
Kerry P. Gray [Member] | June 2011 Note [Member] | |||||||||
Common Stock [Abstract] | |||||||||
Number shares of common stock issued for installment payments (in shares) | 116,667 | ||||||||
Kerry P. Gray [Member] | July 2011 Note [Member] | |||||||||
Common Stock [Abstract] | |||||||||
Number shares of common stock issued for installment payments (in shares) | 115,741 | ||||||||
Inter-Mountain [Member] | |||||||||
Common Stock [Abstract] | |||||||||
Shares issued on exercise of warrants (in shares) | 725,274 | ||||||||
Warrants and number of shares of common stock subject to exercise [Roll Forward] | |||||||||
Warrants exercised (in shares) | -1,571,428 | ||||||||
Warrant shares subject to expiration [Abstract] | |||||||||
Aggregate shares of common stock issued upon exercise of warrants (in shares) | 3,142,857 | ||||||||
Inter-Mountain [Member] | Warrant - June 2012 Debt Offering [Member] | |||||||||
Warrant shares subject to expiration [Abstract] | |||||||||
Number of warrants terminated (in shares) | 3 | ||||||||
Inter-Mountain [Member] | June 2012 Note [Member] | |||||||||
Common Stock [Abstract] | |||||||||
Number shares of common stock issued for installment payments (in shares) | 911,690 | ||||||||
Torrey Hills Capital, Inc. [Member] | |||||||||
Warrant shares subject to expiration [Abstract] | |||||||||
Aggregate shares of common stock issued upon exercise of warrants (in shares) | 80,000 | ||||||||
Exercise price of warrants (in dollars per share) | $1.20 | ||||||||
Preferred Stock [Member] | |||||||||
Preferred Stock [Abstract] | |||||||||
Preferred stock, shares issued (in shares) | 0 | ||||||||
Preferred stock, shares outstanding (in shares) | 0 | ||||||||
Preference shares redeemed by offset of promissory note receivable (in shares) | 65 | ||||||||
Promissory note offset on preference share redemption | ($969,000) | ||||||||
Term of note | 7 years 6 months | ||||||||
[1] | As part of the June 2012 Note, Inter-Mountain received a total of seven warrants to purchase, if they all vest, an aggregate of 3,142,857 shares of common stock, which number of shares could increase based upon the terms and conditions of the warrants. The warrants have an exercise price of $0.35 per share, subject to certain pricing adjustments, and are exercisable, subject to vesting provisions and ownership limitations, until June 27, 2017. Warrants for 785,714, 392,857, 392,857, and 392,857 shares of Common Stock vested on June 27, 2012, December 31, 2012, February 26, 2013, and July 15, 2013, respectively, and three warrants totaling 1,571,428 shares of Common Stock were exercised in 2013. Such issuance of shares of Common Stock following the cashless exercise of three warrants by Inter-Mountain during 2013 was based upon an agreement in December 2013 with Inter-Mountain modifying the formula in the Warrants for determining the number of shares to be issued upon a cashless exercise. On January 22, 2014, we elected to offset and deduct the three remaining Investor Notes from the principle amount due to Inter-Mountain under the June 2012 Note and as a result of the offset and deduction the three remaining warrants terminated. For the purposes of this Table, only such vested shares of Common Stock from one unexercised warrant (392,857 shares) have been included, based upon an exercise price of $0.35 per share of Common Stock. |
EARNINGS_PER_SHARE_Details
EARNINGS PER SHARE (Details) (USD $) | 12 Months Ended | 0 Months Ended | ||||||
Dec. 31, 2014 | Dec. 31, 2013 | Jun. 13, 2014 | Jul. 28, 2014 | Jul. 31, 2013 | Jul. 31, 2012 | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||||
Antidilutive securities excluded from calculating basic and diluted net loss per common share (in shares) | 3,376,308 | 9,058,353 | ||||||
June 2012 Note [Member] | ||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||||
Conversion price (in dollars per share) | 0.35 | |||||||
Common stock issued from convertible note payable | 435,502 | |||||||
Value of convertible notes for which shares were issued | 152,000 | |||||||
Secured Convertible Note [Member] | June 2011 Note [Member] | ||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||||
Common stock issued from convertible note payable | 116,667 | |||||||
Annual principal payment | 140,000 | |||||||
Secured Convertible Note [Member] | July 2011 Note [Member] | ||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||||
Conversion price (in dollars per share) | 1.08 | |||||||
Common stock issued from convertible note payable | 115,741 | |||||||
Annual principal payment | $125,000 | $12,501 | $11,542 | |||||
Warrants to Purchase Common Stock [Member] | ||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||||
Antidilutive securities excluded from calculating basic and diluted net loss per common share (in shares) | 1,676,401 | 4,665,451 | ||||||
Stock Options to Purchase Common Stock [Member] | ||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||||
Antidilutive securities excluded from calculating basic and diluted net loss per common share (in shares) | 1,699,907 | 1,014,907 | ||||||
Unvested Restricted Common Stock [Member] | ||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||||
Antidilutive securities excluded from calculating basic and diluted net loss per common share (in shares) | 0 | 0 | ||||||
Common Stock Issuable upon the Assumed Conversion of our Convertible Note Payable from June 2012 [Member] | ||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||||
Antidilutive securities excluded from calculating basic and diluted net loss per common share (in shares) | 0 | [1] | 3,124,680 | [1] | ||||
Common Stock Issuable upon the Assumed Conversion of our Convertible Note Payable from June 2011 [Member] | ||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||||
Antidilutive securities excluded from calculating basic and diluted net loss per common share (in shares) | 0 | [2] | 127,712 | [2] | ||||
Common Stock Issuable upon the Assumed Conversion of our Convertible Note Payable from July 2011 [Member] | ||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||||
Antidilutive securities excluded from calculating basic and diluted net loss per common share (in shares) | 0 | [2] | 125,603 | [2] | ||||
[1] | The outstanding principal balance and the accrued and unpaid interest of the June 2012 Note may have been converted, at the option of Inter-Mountain, into shares of Common Stock at a conversion price of $0.35 per share, subject to certain pricing adjustments and ownership limitations. For the purposes of this Table, we have assumed a conversion price of $0.35 per share and no ownership limitations. On February 27, 2014 and on March 3, 2014, we received conversion notices from Inter-Mountain whereby we issued an aggregate of 435,502 shares of Common Stock for the final payment of approximately $152,000 due under the June 2012 Note. | |||||||
[2] | On June 13, 2014, Mr. Gray elected to convert the outstanding principal balance ($140,000) of the June 2011 Note and we issued 116,667 shares of Common Stock for such conversion. On July 28, 2014, Mr. Gray elected to convert the outstanding principal balance ($125,000) of the July 2011 Note and we issued 115,741 shares of Common Stock for such conversion. |
SHARE_BASED_COMPENSATION_Detai
SHARE BASED COMPENSATION (Details) (USD $) | 12 Months Ended | 0 Months Ended | ||||||||
Dec. 31, 2014 | Dec. 31, 2013 | Jun. 05, 2014 | Jun. 13, 2013 | Jun. 14, 2012 | Jun. 15, 2010 | Dec. 17, 2009 | 8-May-07 | |||
Incentive Stock Options [Member] | ||||||||||
Options Granted [Abstract] | ||||||||||
Quantity (in shares) | 125,000 | 232,500 | ||||||||
Weighted average fair value per share (in dollars per share) | $0.81 | $0.24 | ||||||||
Fair value | $101,171 | $56,112 | ||||||||
Weighted average assumptions to estimate the fair value of share-based awards [Abstract] | ||||||||||
Expected volatility (in hundredths) | 107.66% | [1] | 103.55% | [1] | ||||||
Risk-fee interest rate % (in hundredths) | 1.75% | [2] | 0.81% | [2] | ||||||
Expected term (in years) | 5 years | 5 years | ||||||||
Dividend yield (in hundredths) | 0.00% | [3] | 0.00% | [3] | ||||||
Options, Outstanding [Roll Forward] | ||||||||||
Granted (in shares) | 125,000 | 232,500 | ||||||||
Non-statutory Stock Options [Member] | ||||||||||
Options Granted [Abstract] | ||||||||||
Quantity (in shares) | 560,000 | 735,000 | ||||||||
Weighted average fair value per share (in dollars per share) | $0.81 | $0.24 | ||||||||
Fair value | 453,250 | 177,388 | ||||||||
Weighted average assumptions to estimate the fair value of share-based awards [Abstract] | ||||||||||
Expected volatility (in hundredths) | 107.66% | [1] | 103.55% | [1] | ||||||
Risk-fee interest rate % (in hundredths) | 1.75% | [2] | 0.81% | [2] | ||||||
Expected term (in years) | 5 years | 5 years | ||||||||
Dividend yield (in hundredths) | 0.00% | [3] | 0.00% | [3] | ||||||
Options, Outstanding [Roll Forward] | ||||||||||
Granted (in shares) | 560,000 | 735,000 | ||||||||
Stock Options [Member] | ||||||||||
Options Granted [Abstract] | ||||||||||
Quantity (in shares) | 685,000 | 967,500 | ||||||||
Options, Outstanding [Roll Forward] | ||||||||||
Outstanding, beginning of period (in shares) | 1,014,907 | 158,409 | ||||||||
Granted (in shares) | 685,000 | 967,500 | ||||||||
Forfeited/cancelled (in shares) | 0 | -111,002 | ||||||||
Exercised (in shares) | 0 | 0 | ||||||||
Outstanding, end of period (in shares) | 1,699,907 | 1,014,907 | ||||||||
Outstanding, Weighted Average Exercise Price [Roll Forward] | ||||||||||
Outstanding, beginning of period (in dollars per share) | $2.12 | $12.32 | ||||||||
Granted (in dollars per share) | $1.15 | $0.33 | ||||||||
Forfeited/cancelled (in dollars per share) | $0 | $1.03 | ||||||||
Exercised (in dollars per share) | $0 | $0 | ||||||||
Outstanding, end of period (in dollars per share) | $1.73 | $2.12 | ||||||||
Nonvested Awards, unearned share-based compensation [Abstract] | ||||||||||
Unearned share-based compensation expense | 557,694 | |||||||||
Unearned share-based compensation, recognition period | 3 years | |||||||||
Restricted Stock [Member] | ||||||||||
Nonvested restricted stock awards, Number of Shares [Roll Forward] | ||||||||||
Outstanding, beginning of period (in shares) | 0 | 300 | ||||||||
Granted (in shares) | 0 | 0 | ||||||||
Forfeited/cancelled (in shares) | 0 | 0 | ||||||||
Exercised/issued (in shares) | 0 | -300 | ||||||||
Outstanding, end of period (in shares) | 0 | 0 | ||||||||
Nonvested restricted stock awards, Weighted Average Grant Date Fair Value [Roll Forward] | ||||||||||
Outstanding, beginning of period (in dollars per share) | $0 | $34.59 | ||||||||
Granted (in dollars per share) | $0 | $0 | ||||||||
Forfeited/cancelled (in dollars per share) | $0 | $0 | ||||||||
Exercised/issued (in dollars per share) | $0 | $34.59 | ||||||||
Outstanding, end of period (in dollars per share) | $0 | $0 | ||||||||
Nonvested Awards, unearned share-based compensation [Abstract] | ||||||||||
Unearned share-based compensation expense | $0 | |||||||||
Restricted Stock [Member] | Minimum [Member] | ||||||||||
Additional disclosures [Abstract] | ||||||||||
Vesting period | 6 months | |||||||||
Restricted Stock [Member] | Maximum [Member] | ||||||||||
Additional disclosures [Abstract] | ||||||||||
Vesting period | 5 years | |||||||||
Contractual term | 10 years | |||||||||
2006 Equity Incentive Plan [Member] | ||||||||||
Additional disclosures [Abstract] | ||||||||||
Number of shares authorized (in shares) | 133,333 | |||||||||
Number of additional shares authorized (in shares) | 2,800,000 | 1,000,000 | 600,000 | 400,000 | 200,000 | 200,000 | 266,667 | |||
Number of shares available for grant (in shares) | 1,030,647 | |||||||||
2006 Equity Incentive Plan [Member] | Stock Options [Member] | ||||||||||
Additional disclosures [Abstract] | ||||||||||
Number of options granted to date (in shares) | 2,061,167 | |||||||||
2006 Equity Incentive Plan [Member] | Stock Options [Member] | Minimum [Member] | ||||||||||
Additional disclosures [Abstract] | ||||||||||
Vesting period | 1 year | |||||||||
2006 Equity Incentive Plan [Member] | Stock Options [Member] | Maximum [Member] | ||||||||||
Additional disclosures [Abstract] | ||||||||||
Vesting period | 4 years | |||||||||
2006 Equity Incentive Plan [Member] | Restricted Stock [Member] | ||||||||||
Additional disclosures [Abstract] | ||||||||||
Number of restricted shares granted to date (in shares) | 68,616 | |||||||||
2006 Equity Incentive Plan [Member] | Restricted Stock [Member] | Minimum [Member] | ||||||||||
Additional disclosures [Abstract] | ||||||||||
Vesting period | 6 months | |||||||||
2006 Equity Incentive Plan [Member] | Restricted Stock [Member] | Maximum [Member] | ||||||||||
Additional disclosures [Abstract] | ||||||||||
Vesting period | 5 years | |||||||||
[1] | Expected volatility assumption was based upon a combination of historical stock price volatility measured on a daily basis and an estimate of expected future stock price volatility. | |||||||||
[2] | Risk-free interest rate assumption is based upon U.S. Treasury bond interest rates appropriate for the term of the stock options. | |||||||||
[3] | The Company does not currently intend to pay cash dividends, thus has assumed a 0% dividend yield. |
SHARE_BASED_COMPENSATION_Alloc
SHARE BASED COMPENSATION, Allocated Compensation expense (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Stock Options [Member] | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Share-based compensation expense | $149,170 | $80,939 |
Stock Options [Member] | Research and Development [Member] | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Share-based compensation expense | 35,861 | 16,863 |
Stock Options [Member] | Selling, General and Administrative [Member] | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Share-based compensation expense | 113,309 | 64,076 |
Restricted Stock [Member] | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Share-based compensation expense | 0 | 991 |
Restricted Stock [Member] | Research and Development [Member] | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Share-based compensation expense | 0 | 444 |
Restricted Stock [Member] | Selling, General and Administrative [Member] | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Share-based compensation expense | $0 | $547 |
SHARE_BASED_COMPENSATION_Stock
SHARE BASED COMPENSATION, Stock options grant outstanding and excercisable (Details) (USD $) | 12 Months Ended |
Dec. 31, 2014 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Stock Options Outstanding (in shares) | 1,699,907 |
Options Outstanding, Weighted Average Exercise Price per Share (in dollars per share) | $1.73 |
Options Outstanding, Weighted Average Remaining Contractual Life in Years | 7 years 8 months 12 days |
Stock Options Exercisable (in shares) | 732,407 |
Options Exercisable, Weighted Average Exercise Price per Share (in dollars per share) | $2.83 |
Exercise Price Range 1 [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Stock Options Outstanding (in shares) | 892,500 |
Options Outstanding, Weighted Average Exercise Price per Share (in dollars per share) | $0.33 |
Options Outstanding, Weighted Average Remaining Contractual Life in Years | 8 years 2 months 12 days |
Stock Options Exercisable (in shares) | 595,000 |
Options Exercisable, Weighted Average Exercise Price per Share (in dollars per share) | $0.33 |
Exercise Price Range 2 [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Stock Options Outstanding (in shares) | 685,000 |
Options Outstanding, Weighted Average Exercise Price per Share (in dollars per share) | $1.15 |
Options Outstanding, Weighted Average Remaining Contractual Life in Years | 7 years 10 months 24 days |
Stock Options Exercisable (in shares) | 15,000 |
Options Exercisable, Weighted Average Exercise Price per Share (in dollars per share) | $1.15 |
Exercise Price Range 3 [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Stock Options Outstanding (in shares) | 53,334 |
Options Outstanding, Weighted Average Exercise Price per Share (in dollars per share) | $2.38 |
Options Outstanding, Weighted Average Remaining Contractual Life in Years | 3 years 6 months |
Stock Options Exercisable (in shares) | 53,334 |
Options Exercisable, Weighted Average Exercise Price per Share (in dollars per share) | $2.38 |
Exercise Price Range 4 [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Stock Options Outstanding (in shares) | 69,073 |
Options Outstanding, Weighted Average Exercise Price per Share (in dollars per share) | $25.12 |
Options Outstanding, Weighted Average Remaining Contractual Life in Years | 2 years 7 months 6 days |
Stock Options Exercisable (in shares) | 69,073 |
Options Exercisable, Weighted Average Exercise Price per Share (in dollars per share) | $25.12 |
EMPLOYMENT_BENEFIT_PLAN_Detail
EMPLOYMENT BENEFIT PLAN (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
EMPLOYMENT BENEFIT PLAN [Abstract] | ||
Contributions made to 401(k) plan | $24,674 | $20,917 |
FAIR_VALUE_MEASUREMENTS_Detail
FAIR VALUE MEASUREMENTS (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Assets [Abstract] | ||
Notes receivable and accrued interest | $0 | $777,710 |
Convertible Note - June 2011 [Member] | ||
Liabilities [Abstract] | ||
Convertible note payable | 0 | 138,220 |
Convertible Note - July 2011 [Member] | ||
Liabilities [Abstract] | ||
Convertible note payable | 0 | 120,738 |
Convertible Note - June 2012 [Member] | ||
Liabilities [Abstract] | ||
Convertible note payable | $0 | $888,099 |
INCOME_TAXES_Details
INCOME TAXES (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Expiration of Operating Loss Carryforwards and Research Credit Carryforwards [Line Items] | ||
Consolidated Operating Loss Carryforwards | $51,347,180 | |
Research Activities Carryforwards | 531,440 | |
Period of cumulative changes in ownership considered for limit on operating loss and tax credit carryforwards | 3 years | |
Minimum percentage of cumulative changes in ownership considered for limit on operating loss and tax credit carryforwards (in hundredths) | 50.00% | |
Deferred tax assets [Abstract] | ||
Net operating loss carryforwards | 18,279,724 | 17,657,746 |
Intangible assets | 188,944 | 247,248 |
Other | 554,404 | 512,286 |
Total gross deferred tax assets | 19,023,072 | 18,417,280 |
Deferred tax liabilities [Abstract] | ||
Property and equipment | 33,696 | 72,347 |
Total gross deferred tax liabilities | 33,696 | 72,347 |
Net total of deferred assets and liabilities | 18,989,376 | 18,344,933 |
Valuation allowance | -18,989,376 | -18,344,933 |
Net deferred tax assets | 0 | 0 |
Increase in valuation allowance | 644,443 | 1,065,354 |
Reconciliation of expected statutory federal income tax rate to actual income tax rate [Abstract] | ||
Expected income tax (benefit) at federal statutory tax rate -35% | -681,109 | -1,137,320 |
Permanent differences | 52,273 | 21,754 |
Research tax credits | -19,491 | -15,882 |
Amortization of deferred start up costs | 0 | 0 |
Valuation allowance | 648,327 | 1,131,448 |
Income tax expense | 0 | 0 |
Federal statutory tax rate (in hundredths) | 35.00% | |
Liability for unrecognized tax benefits | 0 | 0 |
2021 [Member] | ||
Expiration of Operating Loss Carryforwards and Research Credit Carryforwards [Line Items] | ||
Consolidated Operating Loss Carryforwards | 34,248 | |
Research Activities Carryforwards | 0 | |
2023 [Member] | ||
Expiration of Operating Loss Carryforwards and Research Credit Carryforwards [Line Items] | ||
Consolidated Operating Loss Carryforwards | 95,666 | |
Research Activities Carryforwards | 0 | |
2024 [Member] | ||
Expiration of Operating Loss Carryforwards and Research Credit Carryforwards [Line Items] | ||
Consolidated Operating Loss Carryforwards | 910,800 | |
Research Activities Carryforwards | 13,584 | |
2025 [Member] | ||
Expiration of Operating Loss Carryforwards and Research Credit Carryforwards [Line Items] | ||
Consolidated Operating Loss Carryforwards | 1,687,528 | |
Research Activities Carryforwards | 21,563 | |
2026 [Member] | ||
Expiration of Operating Loss Carryforwards and Research Credit Carryforwards [Line Items] | ||
Consolidated Operating Loss Carryforwards | 11,950,281 | |
Research Activities Carryforwards | 60,797 | |
2027 [Member] | ||
Expiration of Operating Loss Carryforwards and Research Credit Carryforwards [Line Items] | ||
Consolidated Operating Loss Carryforwards | 3,431,365 | |
Research Activities Carryforwards | 85,052 | |
2028 [Member] | ||
Expiration of Operating Loss Carryforwards and Research Credit Carryforwards [Line Items] | ||
Consolidated Operating Loss Carryforwards | 8,824,940 | |
Research Activities Carryforwards | 139,753 | |
2029 [Member] | ||
Expiration of Operating Loss Carryforwards and Research Credit Carryforwards [Line Items] | ||
Consolidated Operating Loss Carryforwards | 6,889,761 | |
Research Activities Carryforwards | 81,940 | |
2030 [Member] | ||
Expiration of Operating Loss Carryforwards and Research Credit Carryforwards [Line Items] | ||
Consolidated Operating Loss Carryforwards | 5,113,583 | |
Research Activities Carryforwards | 41,096 | |
2031 [Member] | ||
Expiration of Operating Loss Carryforwards and Research Credit Carryforwards [Line Items] | ||
Consolidated Operating Loss Carryforwards | 3,728,626 | |
Research Activities Carryforwards | 43,592 | |
2032 [Member] | ||
Expiration of Operating Loss Carryforwards and Research Credit Carryforwards [Line Items] | ||
Consolidated Operating Loss Carryforwards | 3,695,792 | |
Research Activities Carryforwards | 8,690 | |
2033 [Member] | ||
Expiration of Operating Loss Carryforwards and Research Credit Carryforwards [Line Items] | ||
Consolidated Operating Loss Carryforwards | 3,187,559 | |
Research Activities Carryforwards | 15,882 | |
2034 [Member] | ||
Expiration of Operating Loss Carryforwards and Research Credit Carryforwards [Line Items] | ||
Consolidated Operating Loss Carryforwards | 1,797,031 | |
Research Activities Carryforwards | $19,491 |
COMMITMENTS_AND_CONTINGENCIES_1
COMMITMENTS AND CONTINGENCIES (Details) (USD $) | 12 Months Ended | 0 Months Ended | 12 Months Ended | 24 Months Ended | 60 Months Ended | 36 Months Ended | ||||||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Aug. 01, 2014 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2011 | Feb. 01, 2018 | Mar. 07, 2008 | |||||
Future minimum lease payments [Abstract] | ||||||||||||||
2015 | $120,033 | |||||||||||||
2016 | 119,840 | |||||||||||||
2017 | 119,840 | |||||||||||||
2018 | 28,858 | |||||||||||||
2019 | 0 | |||||||||||||
Total | 388,571 | |||||||||||||
Rent expense for operating lease | 123,716 | 116,488 | ||||||||||||
Related Party Obligations [Abstract] | ||||||||||||||
Related party sales | 802,000 | 281,000 | ||||||||||||
Outstanding accounts receivable | 798,147 | 174,307 | ||||||||||||
Concentration risk, percentage (in hundredths) | 91.00% | 75.00% | ||||||||||||
Summary of compensation earned, compensation paid in cash, and compensation temporarily deferred [Abstract] | ||||||||||||||
Deferred compensation liability | -173,225 | -146,769 | 272,156 | 197,838 | ||||||||||
Compensation - deferred | 150,000 | 323,225 | ||||||||||||
Compensation accounts payable | 87,500 | 207,500 | ||||||||||||
Compensation accrued liabilities | 62,500 | 115,725 | ||||||||||||
Access Pharmaceuticals [Member] | ||||||||||||||
Milestone payments [Line Items] | ||||||||||||||
Future milestone obligations | 4,750,000 | |||||||||||||
Access Pharmaceuticals [Member] | Annual Sales, Certain Products [Member] | Minimum [Member] | ||||||||||||||
Milestone payments [Line Items] | ||||||||||||||
Milestone for payment | 20,000,000 | |||||||||||||
Access Pharmaceuticals [Member] | Annual Sales, Certain Products [Member] | Maximum [Member] | ||||||||||||||
Milestone payments [Line Items] | ||||||||||||||
Milestone for payment | 40,000,000 | |||||||||||||
Access Pharmaceuticals [Member] | Annual Sales, Any One Certain Product [Member] | ||||||||||||||
Milestone payments [Line Items] | ||||||||||||||
Milestone for payment | 20,000,000 | |||||||||||||
Access Pharmaceuticals [Member] | Cumulative Sales, Certain Products [Member] | Minimum [Member] | ||||||||||||||
Milestone payments [Line Items] | ||||||||||||||
Milestone for payment | 50,000,000 | |||||||||||||
Access Pharmaceuticals [Member] | Cumulative Sales, Certain Products [Member] | Maximum [Member] | ||||||||||||||
Milestone payments [Line Items] | ||||||||||||||
Milestone for payment | 100,000,000 | |||||||||||||
ProStrakan Ltd [Member] | ||||||||||||||
Milestone payments [Line Items] | ||||||||||||||
Royalty percentage (in hundredths) | 30.00% | |||||||||||||
ProStrakan Ltd [Member] | Maximum [Member] | ||||||||||||||
Milestone payments [Line Items] | ||||||||||||||
Future milestone obligations | 1,400,000 | |||||||||||||
Accounts Receivable [Member] | ||||||||||||||
Related Party Obligations [Abstract] | ||||||||||||||
Concentration risk, percentage (in hundredths) | 99.00% | 94.00% | ||||||||||||
Sales Revenue, Net [Member] | ||||||||||||||
Related Party Obligations [Abstract] | ||||||||||||||
Concentration risk, percentage (in hundredths) | 93.00% | 76.00% | ||||||||||||
Kerry P. Gray [Member] | ||||||||||||||
Summary of compensation earned, compensation paid in cash, and compensation temporarily deferred [Abstract] | ||||||||||||||
Deferred compensation liability | -119,986 | [1],[2] | -91,000 | [1],[2] | 220,673 | [1],[2] | 140,313 | [1],[2] | ||||||
Compensation - deferred | 150,000 | [1],[2] | 221,500 | |||||||||||
Deferred compensation liability pursuant to separation agreement | 62,500 | 11,500 | ||||||||||||
Deferred compensation liability pursuant to duties as chairman | 87,500 | 210,000 | ||||||||||||
Repayment of temporarily deferred compensation | -269,986 | -312,500 | ||||||||||||
Proceeds from issuance of common stock under March 2013 offering | -100,000 | -300,000 | ||||||||||||
Terrance K. Wallberg [Member] | ||||||||||||||
Summary of compensation earned, compensation paid in cash, and compensation temporarily deferred [Abstract] | ||||||||||||||
Deferred compensation liability | -25,000 | -35,769 | 24,230 | 36,539 | ||||||||||
Compensation - deferred | 0 | |||||||||||||
Key Executives [Member] | ||||||||||||||
Summary of compensation earned, compensation paid in cash, and compensation temporarily deferred [Abstract] | ||||||||||||||
Deferred compensation liability | -28,239 | -20,000 | 27,253 | 20,986 | ||||||||||
Compensation - deferred | 0 | |||||||||||||
Office and Laboratory Space [Member] | ||||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||||
Minimum monthly lease obligation | 9,436 | 9,193 | 9,776 | 9,330 | ||||||||||
Future minimum monthly lease obligation after specified period | 9,379 | |||||||||||||
Office Equipment [Member] | ||||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||||
Minimum monthly lease obligation | 744 | |||||||||||||
Office Equipment [Member] | Subsequent Event [Member] | ||||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||||
Minimum monthly lease obligation | $551 | |||||||||||||
[1] | During 2014, Mr. Gray temporarily deferred compensation of $150,000 which consisted of $62,500 earned as salary compensation for his duties as President of the Company and $87,500 for his duties as Chairman of the Executive Committee of the Company's Board of Directors. During 2014, Mr. Gray was also repaid $269,986 of temporarily deferred compensation, of which $100,000 was used by Mr. Gray for funding required pursuant to the March 2013 Offering. | |||||||||||||
[2] | During 2013, Mr. Gray temporarily deferred compensation of $221,500 which consisted of $11,500 earned pursuant to a Separation Agreement and $210,000 for his duties as Chairman of the Executive Committee of the Company's Board of Directors. During 2013, Mr. Gray was also repaid $312,500 of temporarily deferred compensation, of which $300,000 was used by Mr. Gray for funding required pursuant to the March 2013 Offering. |
LEGAL_PROCEEDINGS_Details
LEGAL PROCEEDINGS (Details) | 12 Months Ended |
Dec. 31, 2014 | |
LEGAL PROCEEDINGS [Abstract] | |
Number of shares under non-standard cashless exercise (in shares) | 782,284 |
Number of shares exercisable on cashless basis (in shares) | 261,516 |