Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | May 15, 2017 | |
Entity Information [Line Items] | ||
Entity Registrant Name | ULURU Inc. | |
Entity Central Index Key | 1,168,220 | |
Current Fiscal Year End Date | --12-31 | |
Entity Well-known Seasoned Issuer | No | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2017 | |
Common Stock [Member] | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 76,349,431 | |
Series A Preferred Stock [Member] | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 0 | |
Series B Preferred Stock [Member] | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 1,250 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Current Assets | ||
Cash and cash equivalents | $ 5,634,481 | $ 36,615 |
Accounts receivable, net | 2,941 | 61,788 |
Accounts receivable - related party, net | 129,701 | 0 |
Inventory | 526,308 | 559,600 |
Prepaid expenses and deferred charges | 71,667 | 135,394 |
Total Current Assets | 6,365,098 | 793,397 |
Property, Equipment and Leasehold Improvements, net | 94,025 | 126,741 |
Other Assets | ||
Intangible asset - patents, net | 207,647 | 216,781 |
Intangible asset - licensing rights, net | 3,970,289 | 3,181,087 |
Deposits | 18,069 | 18,069 |
Total Other Assets | 4,196,005 | 3,415,937 |
TOTAL ASSETS | 10,655,128 | 4,336,075 |
Current Liabilities | ||
Accounts payable | 2,038,453 | 2,026,671 |
Accrued liabilities | 366,616 | 315,300 |
Accrued interest | 5,479 | 53 |
Promissory note payable, current portion | 0 | 20,000 |
Deferred revenue, current portion | 5,764 | 45,764 |
Total Current Liabilities | 2,416,312 | 2,407,788 |
Long Term Liabilities | ||
Convertible notes payable, net of unamortized debt discount and debt issuance costs | 302,166 | 0 |
Deferred revenue, net of current portion | 357,040 | 358,462 |
Total Long Term Liabilities | 659,206 | 358,462 |
TOTAL LIABILITIES | 3,075,518 | 2,766,250 |
COMMITMENTS AND CONTINGENCIES | ||
STOCKHOLDERS' EQUITY | ||
Common Stock - $0.001 par value; 200,000,000 shares authorized 76,349,431 and 62,974,431 shares issued and outstanding at March 31, 2017 and December 31, 2016, respectively | 76,349 | 62,974 |
Additional paid-in capital | 68,679,999 | 62,220,850 |
Accumulated (deficit) | (61,176,739) | (60,713,999) |
TOTAL STOCKHOLDERS' EQUITY | 7,579,610 | 1,569,825 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | 10,655,128 | 4,336,075 |
Series A Preferred Stock [Member] | ||
STOCKHOLDERS' EQUITY | ||
Preferred stock | 0 | 0 |
Series B Preferred Stock [Member] | ||
STOCKHOLDERS' EQUITY | ||
Preferred stock | $ 1 | $ 0 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2017 | Dec. 31, 2016 |
STOCKHOLDERS' EQUITY | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 20,000 | 20,000 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock, shares issued (in shares) | 76,349,431 | 62,974,431 |
Common stock, shares outstanding (in shares) | 76,349,431 | 62,974,431 |
Series A Preferred Stock [Member] | ||
STOCKHOLDERS' EQUITY | ||
Shares designated (in shares) | 1,000 | 1,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Series B Preferred Stock [Member] | ||
STOCKHOLDERS' EQUITY | ||
Shares designated (in shares) | 1,250 | 1,250 |
Preferred stock, shares issued (in shares) | 1,250 | 0 |
Preferred stock, shares outstanding (in shares) | 1,250 | 0 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Revenues | ||
License fees | $ 1,422 | $ 101,276 |
Product sales, net | 215,695 | 7,516 |
Total Revenues | 217,117 | 108,792 |
Costs and Expenses | ||
Cost of goods sold | 81,934 | 924 |
Research and development | 60,129 | 136,159 |
Selling, general and administrative | 394,606 | 318,801 |
Amortization of intangible assets | 89,307 | 198,636 |
Depreciation | 32,716 | 33,165 |
Total Costs and Expenses | 658,692 | 687,685 |
Operating (Loss) | (441,575) | (578,893) |
Other Income (Expense) | ||
Interest and miscellaneous income | 2 | 22 |
Interest expense | (21,277) | (46,758) |
Foreign currency transaction gain | 110 | 4,286 |
Accommodation fee due on promissory note | 0 | (25,000) |
(Loss) Before Income Taxes | (462,740) | (646,343) |
Income taxes | 0 | 0 |
Net (Loss) | $ (462,740) | $ (646,343) |
Basic and diluted net (loss) per common share (in dollars per share) | $ (0.01) | $ (0.02) |
Weighted average number of common shares outstanding (in shares) | 63,123,042 | 37,658,932 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
OPERATING ACTIVITIES : | ||
Net loss | $ (462,740) | $ (646,343) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Amortization of intangible assets | 89,307 | 198,636 |
Depreciation | 32,716 | 33,165 |
Share-based compensation for stock and options issued to employees | 4,324 | 11,854 |
Share-based compensation for options issued to non-employees | 0 | 16,013 |
Amortization of debt discount on promissory note | 0 | 13,015 |
Amortization of deferred financing costs | 0 | 9,368 |
Change in operating assets and liabilities: | ||
Accounts receivable | (70,854) | 262 |
Inventory | 33,292 | (5,943) |
Prepaid expenses and deferred charges | 63,727 | 16,091 |
Accounts payable | 11,782 | 143,948 |
Accrued liabilities | 51,316 | 57,414 |
Accrued interest | 5,426 | 2,239 |
Deferred revenue | (41,422) | (101,276) |
Total | 179,614 | 394,786 |
Net Cash Used in Operating Activities | (283,126) | (251,557) |
INVESTING ACTIVITIES : | ||
Net Cash Used in Investing Activities | 0 | 0 |
FINANCING ACTIVITIES : | ||
Proceeds from issuance of convertible notes and warrant, net | 983,466 | 0 |
Proceeds from sale of preferred stock, net | 4,917,526 | 0 |
Proceeds from sale of common stock and warrants, net | 0 | 1,398,426 |
Offering costs associated with acquisition of licensing rights in 2015 | 0 | (14,178) |
Additional principle due on promissory note due to accommodation fee | 0 | 25,000 |
Proceeds from issuance of promissory notes | 120,000 | 0 |
Repayment of principle due on promissory notes | (140,000) | (135,000) |
Net Cash Provided by Financing Activities | 5,880,992 | 1,274,248 |
Net Increase in Cash | 5,597,866 | 1,022,691 |
Cash, beginning of period | 36,615 | 180,000 |
Cash, end of period | 5,634,481 | 1,202,691 |
SUPPLEMENTAL CASH FLOW DISCLOSURE: | ||
Cash paid for interest | 2,420 | 7,577 |
Non-cash investing and financing activities: | ||
Issuance of common stock for acquisition of licensing rights | 869,375 | 0 |
Issuance of common stock for principle due on promissory note | 0 | 45,000 |
Issuance of common stock for interest due on promissory note | 0 | 2,239 |
Issuance of common stock for services | $ 0 | $ 36,000 |
COMPANY OVERVIEW AND BASIS OF P
COMPANY OVERVIEW AND BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2017 | |
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 specialty medical technology company committed to developing and commercializing a range of innovative wound care and mucoadhesive film products based on our patented Nanoflex® and OraDisc TM Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and include the accounts of ULURU Inc., a Nevada corporation, and its wholly-owned subsidiary, Uluru Delaware Inc., a Delaware corporation. They do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. All adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the Company’s financial position as of March 31, 2017 and the results of its operations for the three months ended March 31, 2017 and 2016 and cash flows for the three months ended March 31, 2017 and 2016 have been made. 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. Operating results for the three months ended March 31, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017. These condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016, as filed with the Securities and Exchange Commission on April 17, 2017, including the risk factors set forth therein. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2017 | |
SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | NOTE 2. SIGNIFICANT ACCOUNTING POLICIES The significant accounting policies used in preparation of these condensed consolidated financial statements for the three months ended March 31, 2017 are consistent with those discussed in Note 2 to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2016, as filed with the Securities and Exchange Commission on April 17, 2017. |
THE EFFECT OF RECENTLY ISSUED A
THE EFFECT OF RECENTLY ISSUED ACCOUNTING STANDARDS | 3 Months Ended |
Mar. 31, 2017 | |
THE EFFECT OF RECENTLY ISSUED ACCOUNTING STANDARDS [Abstract] | |
THE EFFECT OF RECENTLY ISSUED ACCOUNTING STANDARDS | NOTE 3. THE EFFECT OF RECENTLY ISSUED ACCOUNTING STANDARDS There were no new accounting pronouncements adopted or enacted during the periods presented that had, or are expected to have, a material impact on our financial statements. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 3 Months Ended |
Mar. 31, 2017 | |
SEGMENT INFORMATION [Abstract] | |
SEGMENT INFORMATION | NOTE 4. SEGMENT INFORMATION Our entire business is managed by a single management team, which reports to the Chief Executive Officer. 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 revenues are currently derived primarily from distribution partners for international activities and our domestic sales activities for our products. Revenues per geographic area for the three months ended March 31 are summarized as follows: Revenues 2017 % 2016 % Domestic $ 2,537 1 % $ 7,516 7 % International 214,580 99 % 101,276 93 % Total $ 217,117 100 % $ 108,792 100 % A significant portion of our revenues are derived from a few major customers. For the three months ended March 31, 2017, one customer had greater than 10% of total revenues and represented 99% of total revenues. For the three months ended March 31, 2016, one customer had greater than 10% of total revenues and represented 87% of total revenues. |
INVENTORY
INVENTORY | 3 Months Ended |
Mar. 31, 2017 | |
INVENTORY [Abstract] | |
INVENTORY | NOTE 5. INVENTORY As of March 31, 2017, 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 net realizable value. 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. The components of inventory, at the different stages of production, consisted of the following at March 31, 2017 and December 31, 2016: Inventory March 31, 2017 December 31, 2016 Raw materials $ 35,059 $ 35,800 Work-in-progress 384,084 424,741 Finished goods 107,165 99,059 Total $ 526,308 $ 559,600 |
PROPERTY, EQUIPMENT and LEASEHO
PROPERTY, EQUIPMENT and LEASEHOLD IMPROVEMENTS | 3 Months Ended |
Mar. 31, 2017 | |
PROPERTY, EQUIPMENT and LEASEHOLD IMPROVEMENTS [Abstract] | |
PROPERTY, EQUIPMENT and LEASEHOLD IMPROVEMENTS | NOTE 6. PROPERTY, EQUIPMENT and LEASEHOLD IMPROVEMENTS Property, equipment and leasehold improvements, net, consisted of the following at March 31, 2017 and December 31, 2016: Property, equipment and leasehold improvements March 31, 2017 December 31, 2016 Laboratory equipment $ 424,888 $ 424,888 Manufacturing equipment 1,604,894 1,604,894 Computers, office equipment, and furniture 151,280 151,280 Computer software 4,108 4,108 Leasehold improvements 95,841 95,841 2,281,011 2,281,011 Less: accumulated depreciation and amortization (2,186,986 ) (2,154,270 ) Property, equipment and leasehold improvements, net $ 94,025 $ 126,741 Depreciation expense on property, equipment and leasehold improvements was $32,716 and $33,165 for the three months ended March 31, 2017 and 2016, respectively. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2017 | |
INTANGIBLE ASSETS [Abstract] | |
INTANGIBLE ASSETS | NOTE 7. INTANGIBLE ASSETS Patents Intangible patent assets are comprised of patents acquired in October, 2005. Intangible assets, net consisted of the following at March 31, 2017 and December 31, 2016: Intangible assets – patents March 31, 2017 December 31, 2016 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 (7,390,981 ) (7,381,847 ) Less: reserve for impairment (2,027,310 ) (2,027,310 ) Intangible assets - patents, net $ 207,647 $ 216,781 Amortization expense for intangible patents assets was $9,134 and $118,463 for the three months ended March 31, 2017 and 2016, respectively. The future aggregate amortization expense for intangible patent assets, remaining as of March 31, 2017, is as follows: Calendar Years Future Amortization Expense 2017 (Nine months) $ 27,910 2018 37,044 2019 37,044 2020 37,145 2021 37,044 2022 & Beyond 31,460 Total $ 207,647 Licensing rights Acquisition of Licensing Rights – 2017 On February 27, 2017, we entered into a Note, Warrant and Preferred Stock Purchase Agreement (the “Purchase Agreement”) with Velocitas Partners, LLC (“Velocitas") and Velocitas I LLC (“Velo LLC”), an entity controlled by Velocitas, with respect to an aggregate financing of up to $6,000,000. The first closing, which occurred on February 27, 2017, included the purchase by Velocitas at face value of the $500,000 Initial Note, with the Initial Note accruing interest at 12.5% per annum and having a term of two years (subject to acceleration under certain circumstances). The second closing, which occurred on March 31, 2017, included the purchase by Velocitas at face value the additional $500,000 Second Note, and Velo LLC purchasing 1,250 shares of Series B Convertible Preferred Stock of the Company for gross proceeds of $5,000,000, at an as-converted-to-Common Stock purchase price of $0.04 per share. Also occurring at the second closing was the issuance of a warrant to Velocitas for the purchase of up to 57,055,057 shares of Common Stock (the “Warrant”). The Warrant has an exercise price of $0.04 per share, a 10-year term and is subject to cashless exercise. The Initial Note and the Second Note are convertible into shares of Common Stock at a conversion price of $0.04 per share, subject to equitable adjustments, with mandatory conversion of all unpaid principal and interest required on the second anniversary of each Note. The Initial Note and the Second Note are secured by all of the assets of the Company and its subsidiaries pursuant to a Security Agreement executed at the initial closing. In addition, at the second closing, the Company acquired the Altrazeal distributor agreements Velocitas had with its sub-distributors in exchange for the issuance of 13,375,000 shares of Common Stock. The Company has valued the acquisition of Altrazeal distributor agreement from Velocitas at $869,375 based on the closing price of the Company’s Common Stock on March 31, 2017. Licensing rights, net consisted of the following at March 31, 2017 and December 31, 2016: Intangible assets - licensing rights March 31, 2017 December 31, 2016 Intangible assets – licensing rights, gross $ 4,381,881 $ 3,512,506 Less: accumulated amortization (411,592 ) (331,419 ) Intangible assets - licensing rights, net $ 3,970,289 $ 3,181,087 Amortization expense for intangible licensing rights assets was $80,173 and $80,173 for the three months ended March 31, 2017 and 2016, respectively. The future aggregate amortization expense for intangible licensing rights assets, remaining as of March 31, 2017, is as follows: Calendar Years Future Amortization Expense 2017 (Nine months) $ 313,653 2018 416,303 2019 416,303 2020 416,303 2021 416,303 2022 & Beyond 1,991,424 Total $ 3,970,289 |
ACCRUED LIABILITIES
ACCRUED LIABILITIES | 3 Months Ended |
Mar. 31, 2017 | |
ACCRUED LIABILITIES [Abstract] | |
ACCRUED LIABILITIES | NOTE 8. ACCRUED LIABILITIES Accrued liabilities consisted of the following at March 31, 2017 and December 31, 2016: Accrued Liabilities March 31, 2017 December 31, 2016 Accrued compensation/benefits $ 310,027 $ 274,874 Accrued insurance payable 23,485 40,422 Accrued property taxes 1,350 --- Accrued royalties 31,754 --- Product rebates/returns --- 4 Total accrued liabilities $ 366,616 $ 315,300 |
PROMISSORY NOTES PAYABLE
PROMISSORY NOTES PAYABLE | 3 Months Ended |
Mar. 31, 2017 | |
PROMISSORY NOTES PAYABLE [Abstract] | |
PROMISSORY NOTES PAYABLE | NOTE 9. PROMISSORY NOTES PAYABLE On December 15, 2016, January 18, 2017, and February 16, 2017, we issued Promissory Notes to Velocitas with purchase prices of $20,000, $65,000, and $30,000, respectively. Each of the Promissory Notes bore interest at the rate of 6.0% per annum with payment of principal and interest due on the earlier of (i) 180 days from the date of issuance, (ii) the date of closing of any debt or equity financing transaction by and between Uluru and Velocitas, or (iii) the payment to Uluru of certain invoices due from selected Company’s distributors. Each of the Promissory Notes was secured by a pledge of certain product inventory and there were no debt issuance costs incurred by the Company. On February 27, 2017, each of the Promissory Notes was repaid in connection with the issuance of the Initial Note under the Purchase Agreement with Velocitas. On February 21, 2017, we issued a promissory note to Kirkwood Investors, Inc. (“Kirkwood”) with a purchase price of $25,000. The promissory note bears interest at the rate of 6.0% per annum with payment of principal and interest due on the earlier of (i) 60 days from the date of issuance, (ii) the date of closing of any debt or equity financing transaction by Uluru, or (iii) no later than two days after receiving written request by Kirkwood. The promissory note is secured by a pledge of certain product inventory and accounts receivables and there were no debt issuance costs incurred by the Company. The Company’s Vice President and Chief Financial Officer, Terrance K. Wallberg, is President and sole shareholder of Kirkwood. On February 27, 2017, the outstanding promissory note to Kirkwood was repaid in connection with the issuance of the Initial Note under the Purchase Agreement with Velocitas. |
CONVERTIBLE DEBT
CONVERTIBLE DEBT | 3 Months Ended |
Mar. 31, 2017 | |
CONVERTIBLE DEBT [Abstract] | |
CONVERTIBLE DEBT | NOTE 10. CONVERTIBLE DEBT Debt Financing – February and March 2017 On February 27, 2017, the Company entered into a Note, Warrant and Preferred Stock Purchase Agreement (the “Purchase Agreement”) with Velocitas and Velo LLC under which the Company received gross proceeds of $6,000,000, in two closing with the initial closing occurring on February 27, 2017 and the second closing occurring on March 31, 2017 (the “March 2017 Offering”). The first closing, which occurred on February 27, 2017, included the purchase by Velocitas at face value of the $500,000 Initial Note, with the Initial Note accruing interest at 12.5% per annum and having a term of two years (subject to acceleration under certain circumstances). The second closing, which occurred on March 31, 2017, included the purchase by Velocitas at face value the additional $500,000 Second Note, and Velo LLC purchasing 1,250 shares of Series B Convertible Preferred Stock of the Company for gross proceeds of $5,000,000, at an as-converted-to-Common Stock purchase price of $0.04 per share. The Initial Note and the Second Note are convertible into shares of Common Stock at a conversion price of $0.04 per share, subject to equitable adjustments, with mandatory conversion of all unpaid principal and interest required on the second anniversary of each Note. The Initial Note and the Second Note are secured by all of the assets of the Company and its subsidiaries pursuant to a Security Agreement executed at the initial closing. The Series B Convertible Preferred Stock that was issued in connection with the second closing, (a) votes together with the Common Stock as a single class (subject to standard protective provisions for the Series B Convertible Preferred Stock), (b) has the same dividend rights as the Common Stock, (c) has a liquidation preference equal to the greater of its purchase price and its as converted-to-Common Stock value, (d) automatically converts into Common Stock if the number of authorized shares of Common Stock is increased within 190 days of the second closing as necessary to permit all outstanding convertible or exercisable securities (including the Series B Convertible Preferred Stock) to convert to Common Stock, and (e) is convertible into Common Stock at the discretion of the holder, subject to the availability of authorized shares. As a condition of the March 2017 Offering, the Company issued to Velocitas at the second closing a warrant to purchase up to 57,055,057 shares of Common Stock (the “Warrant”). The Warrant has an exercise price of $0.04 per share, a 10-year term and is subject to cashless exercise. In addition, at the second closing, the Company acquired the Altrazeal distributor agreements Velocitas had with its sub-distributors in exchange for the issuance of 13,375,000 shares of Common Stock. In addition, the Company, Velocitas, Velo LLC, and certain affiliates signed a Voting Agreement (the “Voting Agreement”) pursuant to which the parties agreed to set the size of the Board of Directors at six directors, and agreed to vote for the election to the Board of Directors of four persons designated by Velocitas (initially to be Anish Shah, Oksana Tiedt, Vaidehi Shah and Arindam Bose), one director designated by Bradley J. Sacks and one additional director designated by a major investor or by the Board of Directors. In addition, the parties to the Voting Agreement have agreed to vote in favor of a proposal to amend the Company’s articles of incorporation to increase the authorized shares as required to permit the conversion of the Series B Convertible Preferred Stock. In addition, the Company, Velocitas, Velo LLC, and certain affiliates entered into an Investor Rights Agreement (the “Investor Rights Agreement”) that provides the parties thereto with demand Form S-3 and piggy back registration rights, Rule 144 information rights, and right of first offer (or preemptive rights) in connection with future sales of securities by the Company (subject to standard exceptions). The Investor Rights Agreement includes indemnification obligations associated with the registration rights. Michael I. Sacks and Bradley Sacks and affiliates are parties to the Investor Rights Agreement, in part in exchange for the termination by certain of such persons and The Punch Trust of a Registration Rights Agreement dated as of January 31, 2014. As required by the Purchase Agreement, at the initial closing, the Company appointed Ms. Vaidehi Shah to serve as the Company’s Chief Executive Officer and to also serve as a member of the Company’s Board of Directors. Concurrent with the initial closing and as a condition of the March 2017 Offering, the Company received resignation notices from Helmut Kerschbaumer, the Company’s Interim President, Chief Executive and Director, and Klaus Kuehne, a member of the Company’s Board of Directors. As required by the Purchase Agreement, at the second closing, the Company appointed Mr. Anish Shah and Ms. Oksana Tiedt to join the Company and to serve as part of the Company’s executive management team and together with Mr. Arindam Bose to join the Company’s Board of Directors. Concurrent with the second closing and as a condition of the Financing, the Company received resignation notices from Robert F. Goldrich and Terrance K. Wallberg, each being a member of the Company’s Board of Directors. Mr. Wallberg continues to serve as the Company’s Vice President, Chief Financial Officer, Secretary, and Treasurer. Also occurring at the second closing, Mr. Bradley J. Sacks stepped down as Chairman of the Board of Directors and Ms. Vaidehi Shah, the Company’s Chief Executive Officer and Director, assumed such duties. Mr. Sacks continues to serve as a Director of the Company. Using specific guidelines in accordance with U.S. GAAP, we allocated the value of the proceeds received to the promissory note and to the warrant on a relative fair value basis. We calculated the fair value of the warrant issued with the debt 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 of the warrant was recorded as a debt discount and is being amortized over the expected term of the promissory note to interest expense. Information relating to the February 2017 Note and the March 2017 Note is as follows: As of March 31, 2017 Transaction Initial Principal Amount Interest Rate Maturity Date Conversion Price Principal Balance Unamortized Debt Discount Unamortized Debt Issuance Costs Carrying Value February 2017 Note $ 500,000 12.5 % 02/27/2019 $ 0.04 $ 500,000 $ 340,650 $ 8,267 $ 151,083 March 2017 Note $ 500,000 12.5 % 03/31/2019 $ 0.04 $ 500,000 $ 340,650 $ 8,267 $ 151,083 Total $ 1,000,000 $ 1,000,000 $ 681,300 $ 16,534 $ 302,166 As part of the February 2017 Note and the March 2017 Note, at the holder’s option, all unpaid principle and interest due under each convertible promissory note may be converted into shares of Common Stock based on a conversion price of $0.04 per share. The February 2017 Note and the March 2017 Note matures on February 27, 2019 and March 31, 2019, respectively, and on each maturity date each convertible promissory note, and accrued interest thereon, is subject to mandatory conversion based on a conversion price of $0.04 per share. The amount of interest cost recognized from our promissory notes and our convertible debt was $6,176 and $8,226 for the three months ended March 31, 2017 and 2016, respectively. The amount of debt discount amortized from our promissory note and our convertible debt was nil and $13,015 for the three months ended March 31, 2017 and 2016, respectively. The amount of debt issuance costs amortized from our promissory note was nil and $9,368 for the three months ended March 31, 2017 and 2016, respectively. |
EQUITY TRANSACTIONS
EQUITY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2017 | |
EQUITY TRANSACTIONS [Abstract] | |
EQUITY TRANSACTIONS | NOTE 11. EQUITY TRANSACTIONS Preferred Stock Transaction March 2017 Offering On February 27, 2017, the Company entered into a Note, Warrant and Preferred Stock Purchase Agreement (the “Purchase Agreement”) with Velocitas and Velo LLC under which the Company received gross proceeds of $6,000,000, in two closing with the initial closing occurring on February 27, 2017 and the second closing occurring on March 31, 2017 (the “March 2017 Offering”). The second closing included, amongst other transaction components, the purchase by Velo LLC of 1,250 shares of Series B Convertible Preferred Stock of the Company for $5,000,000. Refer to a description in greater detail of the financing event with Velocitas and Velo LLC in Note 10. Convertible Debt. Common Stock Transaction March 2016 Offering On March 29, 2016, we entered into a Stock Purchase Agreement with fifteen investors for the offer and sale of 25,245,442 shares of Common Stock and warrants to purchase an additional 25,245,442 shares of Common Stock at a purchase price of $0.0713 per unit, with each unit consisting of one share and one warrant to purchase Common Stock, for an aggregate purchase price of $1,800,000 (the “March 2016 Offering). The issue price of the shares sold was based on a 10% discount to the average closing price between March 7, 2016 and March 11, 2016 and the warrant exercise price was based on a 10% premium to the same average closing price. As of the date of this Report, the March 2016 Offering has resulted in gross proceeds of $1,800,000, of which $1,439,000 was received in March 2016 and $361,000 was received in April 2016. As part of the offering expenses, we paid to a European placement agent a referral fee of $26,000 which is equal to 10% of the gross proceeds, provided that the investors referred by such placement agent are not U.S. Persons and were solicited outside the United States. Purchasers in the March 2016 Offering include Michael I. Sacks ($1,000,000), the father of Bradley J. Sacks, the former Chairman of our Board of Directors, Centric Capital Ventures, LLC ($19,000), an investment entity controlled by Bradley J. Sacks, Terrance K. Wallberg ($50,000), our Vice President and Chief Financial Officer, and Daniel G. Moro ($10,000), our Vice President of Polymer Drug Delivery. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 3 Months Ended |
Mar. 31, 2017 | |
STOCKHOLDERS' EQUITY [Abstract] | |
STOCKHOLDERS' EQUITY | NOTE 12. STOCKHOLDERS’ EQUITY Common Stock As of March 31, 2017, we had 76,349,431 shares of Common Stock issued and outstanding. For the three months ended March 31, 2017, we issued 13,375,000 shares of Common Stock to Velocitas for the acquisition of licensing rights. Preferred Stock As of March 31, 2017, we had no shares of Series A Preferred Stock (the “Series A Shares”) issued and outstanding. For the three months ended March 31, 2017, we did not issue or redeem any Series A Shares. As of March 31, 2017, we had 1,250 shares of Series B Preferred Stock (the “Series B Shares”) issued and outstanding. For the three months ended March 31, 2017, we issued 1,250 Series B Shares to Velocitas and did not redeem any Series B Shares. Warrants The following table summarizes the warrants outstanding and the number of shares of Common Stock subject to exercise as of March 31, 2017 and the changes therein during the three months then ended: Number of Shares of Common Stock Subject to Exercise Weighted – Average Exercise Price Balance as of December 31, 2016 26,179,560 $ 0.11 Warrants issued 57,055,057 $ 0.04 Warrants exercised --- --- Warrants cancelled --- --- Balance as of March 31, 2017 83,234,617 $ 0.06 For the three months ended March 31, 2017, we issued a warrant to purchase up to an aggregate of 57,055,057 shares of our Common Stock at an exercise price of $0.04 per share pursuant to the March 2017 Offering. Of the warrant shares subject to exercise as of March 31, 2017, expiration of the right to exercise is as follows: Date of Expiration Number of Warrant Shares of Common Stock Subject to Expiration March 14, 2018 660,000 January 15, 2019 80,000 April 30, 2020 194,118 March 30, 2021 25,245,442 March 31, 2027 57,055,057 Total 83,234,617 |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Mar. 31, 2017 | |
EARNINGS PER SHARE [Abstract] | |
EARNINGS PER SHARE | NOTE 13. EARNINGS PER SHARE Basic and Diluted Net Loss Per Share In accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 260, Earnings per Share Shares used in calculating basic and diluted net loss per common share exclude these potential common shares as of March 31, 2017 and December 31, 2016: March 31, 2017 December 31, 2016 Warrants to purchase Common Stock 83,234,617 26,179,560 Stock options to purchase Common Stock 578,403 691,237 Common stock issuable upon the assumed conversion of our convertible promissory notes (1) 31,250,000 --- Common stock issuable upon the assumed conversion of our Series B preferred stock (2) 125,000,000 --- Total 240,063,020 26,870,797 (1) As part of the February 2017 Note and the March 2017 Note, at the holder’s option, all unpaid principle and interest due under each convertible promissory note may be converted into shares of Common Stock based on a conversion price of $0.04 per share. The February 2017 Note and the March 2017 Note matures on February 27, 2019 and March 31, 2019, respectively, and on each maturity date each convertible promissory note, and accrued interest thereon, is subject to mandatory conversion based on a conversion price of $0.04 per share. For the purposes of this Table, we have assumed that all outstanding principal and interest will be converted on each applicable maturity date. (2) Pursuant to the March 2017 Offering, Velo LLC purchased 1,250 shares of Series B Convertible Preferred Stock of the Company for $5,000,000. The Series B Convertible Preferred Stock that was issued in the March 2017 Offering, (a) votes together with the Common Stock as a single class (subject to standard protective provisions for the Series B Convertible Preferred Stock), (b) has the same dividend rights as the Common Stock, (c) has a liquidation preference equal to the greater of its purchase price and its as converted-to-Common Stock value, (d) automatically converts into Common Stock if the number of authorized shares of Common Stock is increased within 190 days of the second closing as necessary to permit all outstanding convertible or exercisable securities (including the Series B Convertible Preferred Stock) to convert to Common Stock, and (e) is convertible into Common Stock at the discretion of the holder, subject to the availability of authorized shares, at an as-converted-to-Common Stock purchase price of $0.04 per share. |
SHARE BASED COMPENSATION
SHARE BASED COMPENSATION | 3 Months Ended |
Mar. 31, 2017 | |
SHARE BASED COMPENSATION [Abstract] | |
SHARE BASED COMPENSATION | NOTE 14. SHARE BASED COMPENSATION The Company’s share-based compensation plan, the 2006 Equity Incentive Plan, as amended (“Equity Incentive Plan”), is administered by the Board of Directors (“Board”), 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 did not grant any incentive stock option awards to executives or employees or any nonstatutory stock option awards to directors or non-employees for the three months ended March 31, 2017 and 2016, respectively. We account for share-based compensation under FASB ASC Topic 718, Stock Compensation Stock Options (Incentive and Nonstatutory) The following table summarizes share-based compensation related to stock options for the three months ended March 31: Three Months Ended March 31, 2017 2016 Research and development $ 1,663 $ 8,670 Selling, general and administrative 2,661 19,197 Total share-based compensation expense $ 4,324 $ 27,867 As of March 31, 2017, 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 $8,500. The period over which the unearned share-based compensation is expected to be recognized is approximately six months. The following table summarizes the stock options outstanding and the number of shares of Common Stock subject to exercise as of March 31, 2017 and the changes therein during the three months then ended: Stock Options Weighted Average Exercise Price per Share Outstanding as of December 31, 2016 691,237 $ 1.94 Granted --- --- Forfeited/cancelled (112,834 ) $ 2.13 Exercised --- --- Outstanding as of March 31, 2017 578,403 $ 1.91 The following table presents the stock option grants outstanding and exercisable as of March 31, 2017: 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 340,000 $ 0.33 6.0 340,000 $ 0.33 215,000 1.15 7.5 215,000 1.15 23,403 31.75 1.0 23,403 31.75 578,403 $ 1.91 6.3 578,403 $ 1.91 Restricted Stock Awards Restricted stock awards, which typically vest over a period of two 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. For the three months ended March 31, 2017 and 2016, we did not grant any restricted stock awards. 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 March 31, 2017, we had granted options to purchase 2,061,167 shares of Common Stock since the inception of the Equity Incentive Plan, of which 578,403 were outstanding at a weighted average exercise price of $1.91 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 March 31, 2017, there were 2,152,151 shares that remained available for future grants under our Equity Incentive Plan. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Mar. 31, 2017 | |
FAIR VALUE MEASUREMENTS [Abstract] | |
FAIR VALUE MEASUREMENTS | NOTE 15. FAIR VALUE MEASUREMENTS In accordance with FASB ASC Topic 820, Fair Value Measurements 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 promissory note payable balances approximates fair value based on a valuation methodology using the income approach and a discounted cash flow model. The following table summarizes the fair value of our financial instruments at March 31, 2017 and December 31, 2016. Description March 31, 2017 December 31, 2016 Liabilities: Convertible promissory note – March 2017 $ 500,000 --- Convertible promissory note – February 2017 $ 500,000 --- Promissory note – December 2016 --- $ 20,000 Total $ 1,000,000 $ 20,000 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 promissory notes and our convertible promissory note balances approximates fair value based on a valuation methodology using the income approach and a discounted cash flow model. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2017 | |
INCOME TAXES [Abstract] | |
INCOME TAXES | NOTE 16. INCOME TAXES For the quarter ended March 31, 2017, the Company incurred a consolidated tax loss of approximately $558,000. As of March 31, 2017, the Company has consolidated net operating loss carryforwards (“NOL”) and research credit carryforwards for income tax purposes of approximately $57,010,000 and $555,000 respectively. The Company has provided a full valuation allowance for all of its deferred tax assets. As a result, the effective tax rate is zero and the net deferred tax assets are zero. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2017 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 17. 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 January 16, 2015 we entered into a lease agreement for certain office equipment. The office equipment lease, that 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 2015 office lease and the 2015 equipment lease are as follows as of March 31, 2017: Calendar Years Future Lease Expense 2017 (Nine months) $ 90,031 2018 28,908 2019 --- 2020 --- Total $ 118,939 Rent expense for our operating leases amounted to $32,348 and $29,960 for the three ended March 31, 2017 and 2016, respectively. Indemnification 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. 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 Note, Warrant and Preferred Stock Purchase Agreement On February 27, 2017, we entered into the Purchase Agreement with Velocitas and Velo LLC, an entity controlled by Velocitas, with respect to an aggregate financing of up to $6,000,000. Refer to a description in greater detail of the financing event with Velocitas and Velo LLC in Note 10. Convertible Debt. On March 31, 2017, the second closing of the Purchase Agreement included, amongst other transaction components, the Company acquiring the Altrazeal distributor agreements Velocitas had with its sub-distributors in exchange for the issuance of 13,375,000 shares of Common Stock. The Company has valued the acquisition of Altrazeal distributor agreement from Velocitas at $869,375 based on the closing price of the Company’s Common Stock on March 31, 2017. For the three months ended March 31, 2017 and 2016, the Company recorded revenues, in approximate numbers, of $215,000 and nil, respectively, with Velocitas GmbH, an affiliated entity of Velocitas, which represented 99% and 0% of our total revenues, respectively. As of March 31, 2017 and December 31, 2016, Velocitas GmbH had an outstanding net accounts receivable, in approximate numbers, of $130,000 and nil, respectively, which represented 98% and 0% of our net outstanding accounts receivables. Temporary Advances On December 15, 2016, January 18, 2017, and February 16, 2017, we issued Promissory Notes to Velocitas with purchase prices of $20,000, $65,000, and $30,000, respectively. Each of the Promissory Notes bore interest at the rate of 6.0% per annum with payment of principal and interest due on the earlier of (i) 180 days from the date of issuance, (ii) the date of closing of any debt or equity financing transaction by and between Uluru and Velocitas, or (iii) the payment to Uluru of certain invoices due from selected Company’s distributors. Each of the Promissory Notes was secured by a pledge of certain product inventory and there were no debt issuance costs incurred by the Company. On February 27, 2017, each of the Promissory Notes was repaid in connection with the issuance of the Initial Note under the Purchase Agreement with Velocitas. On February 21, 2017, we issued a promissory note to Kirkwood Investors, Inc. (“Kirkwood”) with a purchase price of $25,000. The promissory note bears interest at the rate of 6.0% per annum with payment of principal and interest due on the earlier of (i) 60 days from the date of issuance, (ii) the date of closing of any debt or equity financing transaction by Uluru, or (iii) no later than two days after receiving written request by Kirkwood. The promissory note is secured by a pledge of certain product inventory and accounts receivables and there were no debt issuance costs incurred by the Company. The Company’s Vice President and Chief Financial Officer, Terrance K. Wallberg, is President and sole shareholder of Kirkwood. On February 27, 2017, the outstanding promissory note to Kirkwood was repaid in connection with the issuance of the Initial Note under the Purchase Agreement with Velocitas. 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 and manage the Company’s cash and financial resources. As of March 31, 2017, the following table summarizes the amounts recognized in the Company’s financial statements related to obligations for compensation temporarily deferred by our employees. Name 2017 2016 2015 2014 – 2011 Total Kerry P. Gray (1) (2) (3) (4) $ --- $ --- $ 275,153 $ 150,000 $ 425,153 Terrance K. Wallberg 23,334 (5,207 ) 53,540 --- 71,667 Other employees --- (54,871 ) 54,871 --- --- Total $ 23,334 $ (60,078 ) $ 383,564 $ 150,000 $ 496,820 (1) On November 19, 2015, Mr. Gray resigned as the Company’s President and Chief Executive Officer and on February 18, 2016 resigned as a director for the Company. (2) The Company is asserting in a dispute with Mr. Gray that certain amounts recorded as being owed to Mr. Gray are not in fact owed to Mr. Gray or are offset by amounts Mr. Gray owes to the Company. (3) During 2015, Mr. Gray temporarily deferred compensation of $275,153 which consisted of $51,770 earned as salary compensation for his duties as President of the Company, $186,083 for his duties as Chairman of the Executive Committee of the Company’s Board of Directors, and $37,300 as a temporary advance of working capital. (4) 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 a Securities Purchase Agreement, dated March 14, 2013 (the “March 2013 Offering”). Prior to 2014, over a three year period Mr. Gray temporarily deferred, at various times, aggregate compensation of $582,486 and during the same time period 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 March 31, 2017, the Company has recognized an obligation for temporarily deferred compensation of $496,820 of which $223,237 was included in accrued liabilities and $273,583 was included in accounts payable, respectively. As of December 31, 2016, the Company has recognized an obligation for temporarily deferred compensation of $473,486 of which $199,903 was included in accrued liabilities and $273,583 was included in accounts payable, 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 March 31, 2017, 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. As of March 31, 2017, the Company has accrued $31,754 of expense relating to future milestone payments to Access. 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. Prescription Drug User Fee Obligation The Company was assessed prescription drug user fees (“PDUFA”) of approximately $535,000 by the United States Department of Health and Human Services (the “DHHS”) for the sale and manufacture of Aphthasol® from 2009 to 2012. The Company had contested the assessments as it believed such fees should be waived because the Company should qualify for abatement of the PDUFA fees. However, the Company’s challenge has been denied by the DHHS. As of March 31, 2017, the Company has accrued potential penalties and interest of approximately $506,000 related to the unpaid PDUFA fees. The PDUFA fees remain unpaid as of the date of this Report. Since the Company has not yet reached a settlement with the DHHS, it is possible that the Company may be subject to additional collection costs. |
LEGAL PROCEEDINGS
LEGAL PROCEEDINGS | 3 Months Ended |
Mar. 31, 2017 | |
LEGAL PROCEEDINGS [Abstract] | |
LEGAL PROCEEDINGS | NOTE 18. LEGAL PROCEEDINGS From time to time, we may be involved in litigation relating to claims arising out of our operations in the normal course of business. We are not currently a party to any legal proceedings, the adverse outcome of which, in management’s opinion, individually or in the aggregate, would have a material adverse effect on the results of our operations or financial position. There are no material proceedings to which any director, officer or any of our affiliates, any owner of record or beneficially of more than five percent of any class of our voting securities, or any associate of any such director, officer, our affiliates, or security holder, is a party adverse to us or our consolidated subsidiary or has a material interest adverse thereto; however, one or more events may lead to a formal dispute or proceeding in the future. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2017 | |
SUBSEQUENT EVENTS [Abstract] | |
SUBSEQUENT EVENTS | NOTE 19. SUBSEQUENT EVENTS None. |
COMPANY OVERVIEW AND BASIS OF25
COMPANY OVERVIEW AND BASIS OF PRESENTATION (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
COMPANY OVERVIEW AND BASIS OF PRESENTATION [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and include the accounts of ULURU Inc., a Nevada corporation, and its wholly-owned subsidiary, Uluru Delaware Inc., a Delaware corporation. They do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. All adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the Company’s financial position as of March 31, 2017 and the results of its operations for the three months ended March 31, 2017 and 2016 and cash flows for the three months ended March 31, 2017 and 2016 have been made. 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. Operating results for the three months ended March 31, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017. These condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016, as filed with the Securities and Exchange Commission on April 17, 2017, including the risk factors set forth therein. |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
SEGMENT INFORMATION [Abstract] | |
Revenues per geographic area | Revenues per geographic area for the three months ended March 31 are summarized as follows: Revenues 2017 % 2016 % Domestic $ 2,537 1 % $ 7,516 7 % International 214,580 99 % 101,276 93 % Total $ 217,117 100 % $ 108,792 100 % |
INVENTORY (Tables)
INVENTORY (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
INVENTORY [Abstract] | |
Components of inventory | The components of inventory, at the different stages of production, consisted of the following at March 31, 2017 and December 31, 2016: Inventory March 31, 2017 December 31, 2016 Raw materials $ 35,059 $ 35,800 Work-in-progress 384,084 424,741 Finished goods 107,165 99,059 Total $ 526,308 $ 559,600 |
PROPERTY, EQUIPMENT and LEASE28
PROPERTY, EQUIPMENT and LEASEHOLD IMPROVEMENTS (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
PROPERTY, EQUIPMENT and LEASEHOLD IMPROVEMENTS [Abstract] | |
Property, equipment and leasehold improvements | Property, equipment and leasehold improvements, net, consisted of the following at March 31, 2017 and December 31, 2016: Property, equipment and leasehold improvements March 31, 2017 December 31, 2016 Laboratory equipment $ 424,888 $ 424,888 Manufacturing equipment 1,604,894 1,604,894 Computers, office equipment, and furniture 151,280 151,280 Computer software 4,108 4,108 Leasehold improvements 95,841 95,841 2,281,011 2,281,011 Less: accumulated depreciation and amortization (2,186,986 ) (2,154,270 ) Property, equipment and leasehold improvements, net $ 94,025 $ 126,741 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Patents [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Intangible assets | Intangible patent assets are comprised of patents acquired in October, 2005. Intangible assets, net consisted of the following at March 31, 2017 and December 31, 2016: Intangible assets – patents March 31, 2017 December 31, 2016 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 (7,390,981 ) (7,381,847 ) Less: reserve for impairment (2,027,310 ) (2,027,310 ) Intangible assets - patents, net $ 207,647 $ 216,781 |
Future aggregate amortization expense for intangible assets | The future aggregate amortization expense for intangible patent assets, remaining as of March 31, 2017, is as follows: Calendar Years Future Amortization Expense 2017 (Nine months) $ 27,910 2018 37,044 2019 37,044 2020 37,145 2021 37,044 2022 & Beyond 31,460 Total $ 207,647 |
Licensing Rights [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Intangible assets | Licensing rights, net consisted of the following at March 31, 2017 and December 31, 2016: Intangible assets - licensing rights March 31, 2017 December 31, 2016 Intangible assets – licensing rights, gross $ 4,381,881 $ 3,512,506 Less: accumulated amortization (411,592 ) (331,419 ) Intangible assets - licensing rights, net $ 3,970,289 $ 3,181,087 |
Future aggregate amortization expense for intangible assets | The future aggregate amortization expense for intangible licensing rights assets, remaining as of March 31, 2017, is as follows: Calendar Years Future Amortization Expense 2017 (Nine months) $ 313,653 2018 416,303 2019 416,303 2020 416,303 2021 416,303 2022 & Beyond 1,991,424 Total $ 3,970,289 |
ACCRUED LIABILITIES (Tables)
ACCRUED LIABILITIES (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
ACCRUED LIABILITIES [Abstract] | |
Accrued liabilities | Accrued liabilities consisted of the following at March 31, 2017 and December 31, 2016: Accrued Liabilities March 31, 2017 December 31, 2016 Accrued compensation/benefits $ 310,027 $ 274,874 Accrued insurance payable 23,485 40,422 Accrued property taxes 1,350 --- Accrued royalties 31,754 --- Product rebates/returns --- 4 Total accrued liabilities $ 366,616 $ 315,300 |
CONVERTIBLE DEBT (Tables)
CONVERTIBLE DEBT (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
CONVERTIBLE DEBT [Abstract] | |
Information relating to convertible debt | Information relating to the February 2017 Note and the March 2017 Note is as follows: As of March 31, 2017 Transaction Initial Principal Amount Interest Rate Maturity Date Conversion Price Principal Balance Unamortized Debt Discount Unamortized Debt Issuance Costs Carrying Value February 2017 Note $ 500,000 12.5 % 02/27/2019 $ 0.04 $ 500,000 $ 340,650 $ 8,267 $ 151,083 March 2017 Note $ 500,000 12.5 % 03/31/2019 $ 0.04 $ 500,000 $ 340,650 $ 8,267 $ 151,083 Total $ 1,000,000 $ 1,000,000 $ 681,300 $ 16,534 $ 302,166 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
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 March 31, 2017 and the changes therein during the three months then ended: Number of Shares of Common Stock Subject to Exercise Weighted – Average Exercise Price Balance as of December 31, 2016 26,179,560 $ 0.11 Warrants issued 57,055,057 $ 0.04 Warrants exercised --- --- Warrants cancelled --- --- Balance as of March 31, 2017 83,234,617 $ 0.06 |
Expiration dates for warrants subject to exercise | Of the warrant shares subject to exercise as of March 31, 2017, expiration of the right to exercise is as follows: Date of Expiration Number of Warrant Shares of Common Stock Subject to Expiration March 14, 2018 660,000 January 15, 2019 80,000 April 30, 2020 194,118 March 30, 2021 25,245,442 March 31, 2027 57,055,057 Total 83,234,617 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
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 March 31, 2017 and December 31, 2016: March 31, 2017 December 31, 2016 Warrants to purchase Common Stock 83,234,617 26,179,560 Stock options to purchase Common Stock 578,403 691,237 Common stock issuable upon the assumed conversion of our convertible promissory notes (1) 31,250,000 --- Common stock issuable upon the assumed conversion of our Series B preferred stock (2) 125,000,000 --- Total 240,063,020 26,870,797 (1) As part of the February 2017 Note and the March 2017 Note, at the holder’s option, all unpaid principle and interest due under each convertible promissory note may be converted into shares of Common Stock based on a conversion price of $0.04 per share. The February 2017 Note and the March 2017 Note matures on February 27, 2019 and March 31, 2019, respectively, and on each maturity date each convertible promissory note, and accrued interest thereon, is subject to mandatory conversion based on a conversion price of $0.04 per share. For the purposes of this Table, we have assumed that all outstanding principal and interest will be converted on each applicable maturity date. (2) Pursuant to the March 2017 Offering, Velo LLC purchased 1,250 shares of Series B Convertible Preferred Stock of the Company for $5,000,000. The Series B Convertible Preferred Stock that was issued in the March 2017 Offering, (a) votes together with the Common Stock as a single class (subject to standard protective provisions for the Series B Convertible Preferred Stock), (b) has the same dividend rights as the Common Stock, (c) has a liquidation preference equal to the greater of its purchase price and its as converted-to-Common Stock value, (d) automatically converts into Common Stock if the number of authorized shares of Common Stock is increased within 190 days of the second closing as necessary to permit all outstanding convertible or exercisable securities (including the Series B Convertible Preferred Stock) to convert to Common Stock, and (e) is convertible into Common Stock at the discretion of the holder, subject to the availability of authorized shares, at an as-converted-to-Common Stock purchase price of $0.04 per share. |
SHARE BASED COMPENSATION (Table
SHARE BASED COMPENSATION (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
SHARE BASED COMPENSATION [Abstract] | |
Allocated share-based compensation expense | The following table summarizes share-based compensation related to stock options for the three months ended March 31: Three Months Ended March 31, 2017 2016 Research and development $ 1,663 $ 8,670 Selling, general and administrative 2,661 19,197 Total share-based compensation expense $ 4,324 $ 27,867 |
Stock option activity | The following table summarizes the stock options outstanding and the number of shares of Common Stock subject to exercise as of March 31, 2017 and the changes therein during the three months then ended: Stock Options Weighted Average Exercise Price per Share Outstanding as of December 31, 2016 691,237 $ 1.94 Granted --- --- Forfeited/cancelled (112,834 ) $ 2.13 Exercised --- --- Outstanding as of March 31, 2017 578,403 $ 1.91 |
Stock option grants outstanding and exercisable | The following table presents the stock option grants outstanding and exercisable as of March 31, 2017: 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 340,000 $ 0.33 6.0 340,000 $ 0.33 215,000 1.15 7.5 215,000 1.15 23,403 31.75 1.0 23,403 31.75 578,403 $ 1.91 6.3 578,403 $ 1.91 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
FAIR VALUE MEASUREMENTS [Abstract] | |
Fair value of our financial instruments | The following table summarizes the fair value of our financial instruments at March 31, 2017 and December 31, 2016. Description March 31, 2017 December 31, 2016 Liabilities: Convertible promissory note – March 2017 $ 500,000 --- Convertible promissory note – February 2017 $ 500,000 --- Promissory note – December 2016 --- $ 20,000 Total $ 1,000,000 $ 20,000 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | |
Future minimum lease payments | The future minimum lease payments under the 2015 office lease and the 2015 equipment lease are as follows as of March 31, 2017: Calendar Years Future Lease Expense 2017 (Nine months) $ 90,031 2018 28,908 2019 --- 2020 --- Total $ 118,939 |
Summary of compensation earned, compensation paid in cash, and compensation temporarily deferred | As of March 31, 2017, the following table summarizes the amounts recognized in the Company’s financial statements related to obligations for compensation temporarily deferred by our employees. Name 2017 2016 2015 2014 – 2011 Total Kerry P. Gray (1) (2) (3) (4) $ --- $ --- $ 275,153 $ 150,000 $ 425,153 Terrance K. Wallberg 23,334 (5,207 ) 53,540 --- 71,667 Other employees --- (54,871 ) 54,871 --- --- Total $ 23,334 $ (60,078 ) $ 383,564 $ 150,000 $ 496,820 (1) On November 19, 2015, Mr. Gray resigned as the Company’s President and Chief Executive Officer and on February 18, 2016 resigned as a director for the Company. (2) The Company is asserting in a dispute with Mr. Gray that certain amounts recorded as being owed to Mr. Gray are not in fact owed to Mr. Gray or are offset by amounts Mr. Gray owes to the Company. (3) During 2015, Mr. Gray temporarily deferred compensation of $275,153 which consisted of $51,770 earned as salary compensation for his duties as President of the Company, $186,083 for his duties as Chairman of the Executive Committee of the Company’s Board of Directors, and $37,300 as a temporary advance of working capital. (4) 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 a Securities Purchase Agreement, dated March 14, 2013 (the “March 2013 Offering”). Prior to 2014, over a three year period Mr. Gray temporarily deferred, at various times, aggregate compensation of $582,486 and during the same time period was also repaid $312,500 of temporarily deferred compensation, of which $300,000 was used by Mr. Gray for funding required pursuant to the March 2013 Offering. |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) | 3 Months Ended | |
Mar. 31, 2017USD ($)Customer | Mar. 31, 2016USD ($)Customer | |
Revenues per geographic area [Abstract] | ||
Total revenues | $ 217,117 | $ 108,792 |
Total revenue, percentage | 100.00% | 100.00% |
Revenue [Member] | Customer Concentration Risk [Member] | ||
Revenues per geographic area [Abstract] | ||
Total revenue, percentage | 99.00% | 87.00% |
Number of major customers | Customer | 1 | 1 |
Reportable Geographical Components [Member] | Domestic [Member] | ||
Revenues per geographic area [Abstract] | ||
Total revenues | $ 2,537 | $ 7,516 |
Total revenue, percentage | 1.00% | 7.00% |
Reportable Geographical Components [Member] | International [Member] | ||
Revenues per geographic area [Abstract] | ||
Total revenues | $ 214,580 | $ 101,276 |
Total revenue, percentage | 99.00% | 93.00% |
INVENTORY (Details)
INVENTORY (Details) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Components of inventory [Abstract] | ||
Raw materials | $ 35,059 | $ 35,800 |
Work-in-progress | 384,084 | 424,741 |
Finished goods | 107,165 | 99,059 |
Total | $ 526,308 | $ 559,600 |
PROPERTY, EQUIPMENT and LEASE39
PROPERTY, EQUIPMENT and LEASEHOLD IMPROVEMENTS (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Property, equipment and leasehold improvements, net [Abstract] | |||
Property, equipment and leasehold improvements, gross | $ 2,281,011 | $ 2,281,011 | |
Less: accumulated depreciation and amortization | (2,186,986) | (2,154,270) | |
Property, equipment and leasehold improvements, net | 94,025 | 126,741 | |
Depreciation expense | 32,716 | $ 33,165 | |
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 | 1,604,894 | 1,604,894 | |
Computers, Office Equipment, and Furniture [Member] | |||
Property, equipment and leasehold improvements, net [Abstract] | |||
Property, equipment and leasehold improvements, gross | 151,280 | 151,280 | |
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, Patents (Det
INTANGIBLE ASSETS, Patents (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Finite-Lived Intangible Assets [Line Items] | |||
Total | $ 207,647 | $ 216,781 | |
Amortization expense | 89,307 | $ 198,636 | |
Future aggregate amortization expense for intangible assets [Abstract] | |||
Total | 207,647 | 216,781 | |
Patents [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets, gross | 9,625,938 | 9,625,938 | |
Less: accumulated amortization | (7,390,981) | (7,381,847) | |
Less: reserve for impairment | (2,027,310) | (2,027,310) | |
Total | 207,647 | 216,781 | |
Amortization expense | 9,134 | $ 118,463 | |
Future aggregate amortization expense for intangible assets [Abstract] | |||
2017 (Nine months) | 27,910 | ||
2,018 | 37,044 | ||
2,019 | 37,044 | ||
2,020 | 37,145 | ||
2,021 | 37,044 | ||
2022 & Beyond | 31,460 | ||
Total | 207,647 | 216,781 | |
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 |
INTANGIBLE ASSETS, Licensing Ri
INTANGIBLE ASSETS, Licensing Rights (Details) - USD ($) | Feb. 27, 2017 | Mar. 31, 2017 | Mar. 31, 2016 | Feb. 16, 2017 | Jan. 18, 2017 | Dec. 31, 2016 | Dec. 15, 2016 |
Finite-Lived Intangible Assets [Line Items] | |||||||
Debt instrument face value | $ 302,166 | ||||||
Amortization expense | 89,307 | $ 198,636 | |||||
Total | 207,647 | $ 216,781 | |||||
Future aggregate amortization expense for intangible assets [Abstract] | |||||||
Total | $ 207,647 | $ 216,781 | |||||
Series B Preferred Stock [Member] | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Number of shares issued (in shares) | 1,250 | 0 | |||||
Licensing Rights [Member] | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Amortization expense | $ 80,173 | $ 80,173 | |||||
Intangible assets - licensing rights, gross | 4,381,881 | $ 3,512,506 | |||||
Less: accumulated amortization | (411,592) | (331,419) | |||||
Total | 3,970,289 | 3,181,087 | |||||
Future aggregate amortization expense for intangible assets [Abstract] | |||||||
2017 (Nine months) | 313,653 | ||||||
2,018 | 416,303 | ||||||
2,019 | 416,303 | ||||||
2,020 | 416,303 | ||||||
2,021 | 416,303 | ||||||
2022 & Beyond | 1,991,424 | ||||||
Total | $ 3,970,289 | $ 3,181,087 | |||||
Altrazeal Trading GmbH [Member] | Second Closing [Member] | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Warrants to purchase shares of common stock (in shares) | 13,375,000 | ||||||
Acquisition value | $ 869,375 | ||||||
Velocitas Partners, LLC [Member] | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Interest rate | 6.00% | 6.00% | 6.00% | ||||
Expected gross proceeds | $ 6,000,000 | ||||||
Velocitas Partners, LLC [Member] | First Closing [Member] | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Interest rate | 12.50% | ||||||
Debt instrument face value | $ 500,000 | ||||||
Debt instrument term | 2 years | ||||||
Debt instrument conversion price (in dollars per share) | $ 0.04 | ||||||
Velocitas Partners, LLC [Member] | Second Closing [Member] | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Debt instrument face value | $ 500,000 | ||||||
Debt instrument conversion price (in dollars per share) | $ 0.04 | ||||||
Proceeds from issuance of preferred stock | $ 5,000,000 | ||||||
Warrants exercise price (in dollars per share) | $ 0.04 | ||||||
Term of warrants | 10 years | ||||||
Velocitas Partners, LLC [Member] | Second Closing [Member] | Maximum [Member] | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Warrants to purchase shares of common stock (in shares) | 57,055,057 | ||||||
Velocitas Partners, LLC [Member] | Second Closing [Member] | Series B Preferred Stock [Member] | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Number of shares issued (in shares) | 1,250 |
ACCRUED LIABILITIES (Details)
ACCRUED LIABILITIES (Details) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Accrued liabilities [Abstract] | ||
Accrued compensation/benefits | $ 310,027 | $ 274,874 |
Accrued insurance payable | 23,485 | 40,422 |
Accrued property taxes | 1,350 | 0 |
Accrued royalties | 31,754 | 0 |
Product rebates/returns | 0 | 4 |
Total accrued liabilities | $ 366,616 | $ 315,300 |
PROMISSORY NOTES PAYABLE (Detai
PROMISSORY NOTES PAYABLE (Details) - USD ($) | Feb. 21, 2017 | Feb. 16, 2017 | Jan. 18, 2017 | Dec. 15, 2016 | Mar. 31, 2017 |
Debt Instrument [Line Items] | |||||
Initial principal amount | $ 1,000,000 | ||||
Velocitas Partners, LLC [Member] | |||||
Debt Instrument [Line Items] | |||||
Initial principal amount | $ 30,000 | $ 65,000 | $ 20,000 | ||
Interest rate | 6.00% | 6.00% | 6.00% | ||
Monthly installment payments commencing period | 180 days | 180 days | 180 days | ||
Kirkwood Investors, Inc [Member] | |||||
Debt Instrument [Line Items] | |||||
Initial principal amount | $ 25,000 | ||||
Interest rate | 6.00% | ||||
Monthly installment payments commencing period | 60 days | ||||
Number of days for registration effective for a period | 2 days |
CONVERTIBLE DEBT (Details)
CONVERTIBLE DEBT (Details) | Feb. 27, 2017USD ($)Closing | Mar. 31, 2017USD ($)Director$ / sharesshares | Mar. 31, 2016USD ($) | Feb. 16, 2017USD ($) | Jan. 18, 2017USD ($) | Dec. 15, 2016USD ($) |
Information relating to convertible notes payable [Abstract] | ||||||
Initial principal amount | $ 1,000,000 | |||||
Principal balance | 1,000,000 | |||||
Unamortized debt discount | 681,300 | |||||
Unamortized debt issuance costs | 16,534 | |||||
Carrying value | 302,166 | |||||
Interest cost recognized for promissory note and convertible debt | 6,176 | $ 8,226 | ||||
Amortization of debt discount for promissory note and convertible debt | 0 | 13,015 | ||||
Amortization of debt issuance costs for promissory note | $ 0 | $ 9,368 | ||||
Second Closing [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Number of Board of Directors | Director | 6 | |||||
Second Closing [Member] | Bradley J. Sacks [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Number of Board of Directors | Director | 1 | |||||
Second Closing [Member] | Major Investor or Board of Directors [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Number of Board of Directors | Director | 1 | |||||
Velocitas Partners, LLC [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Gross proceeds | $ 6,000,000 | |||||
Number of closings | Closing | 2 | |||||
Information relating to convertible notes payable [Abstract] | ||||||
Initial principal amount | $ 30,000 | $ 65,000 | $ 20,000 | |||
Interest rate | 6.00% | 6.00% | 6.00% | |||
Velocitas Partners, LLC [Member] | First Closing [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument term | 2 years | |||||
Velocitas Partners, LLC [Member] | Second Closing [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Proceeds from issuance of preferred stock | $ 5,000,000 | |||||
Purchase price (in dollars per share) | $ / shares | $ 0.04 | |||||
Number of days taken to automatically convert to common stock | 190 days | |||||
Warrants to purchase shares of common stock (in shares) | shares | 13,375,000 | |||||
Warrants exercise price (in dollars per share) | $ / shares | $ 0.04 | |||||
Term of warrants | 10 years | |||||
Number of Board of Directors | Director | 4 | |||||
Velocitas Partners, LLC [Member] | Second Closing [Member] | Maximum [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Warrants to purchase shares of common stock (in shares) | shares | 57,055,057 | |||||
Velocitas Partners, LLC [Member] | Second Closing [Member] | Series B Convertible Preferred Stock [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Number of shares issued (in shares) | shares | 1,250 | |||||
February 2017 Note [Member] | ||||||
Information relating to convertible notes payable [Abstract] | ||||||
Initial principal amount | $ 500,000 | |||||
Interest rate | 12.50% | |||||
Maturity date | Feb. 27, 2019 | |||||
Conversion price (in dollars per share) | $ / shares | $ 0.04 | |||||
Principal balance | $ 500,000 | |||||
Unamortized debt discount | 340,650 | |||||
Unamortized debt issuance costs | 8,267 | |||||
Carrying value | 151,083 | |||||
March 2017 Note [Member] | ||||||
Information relating to convertible notes payable [Abstract] | ||||||
Initial principal amount | $ 500,000 | |||||
Interest rate | 12.50% | |||||
Maturity date | Mar. 31, 2019 | |||||
Conversion price (in dollars per share) | $ / shares | $ 0.04 | |||||
Principal balance | $ 500,000 | |||||
Unamortized debt discount | 340,650 | |||||
Unamortized debt issuance costs | 8,267 | |||||
Carrying value | $ 151,083 |
EQUITY TRANSACTIONS (Details)
EQUITY TRANSACTIONS (Details) | Feb. 27, 2017USD ($)Closing | Mar. 29, 2016USD ($)Investor$ / sharesshares | Apr. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Mar. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2016shares |
Velocitas Partners, LLC [Member] | ||||||
Class of Stock [Line Items] | ||||||
Expected gross proceeds | $ 6,000,000 | |||||
Number of closings | Closing | 2 | |||||
Series B Preferred Stock [Member] | ||||||
Class of Stock [Line Items] | ||||||
Number of shares issued (in shares) | shares | 1,250 | 0 | ||||
Common stock issued during period (in shares) | shares | 1,250 | |||||
March 2016 Offering [Member] | ||||||
Class of Stock [Line Items] | ||||||
Number of investors entered into stock purchase | Investor | 15 | |||||
Common stock issued during period (in shares) | shares | 25,245,442 | |||||
Aggregate shares of common stock issued upon exercise of warrants (in shares) | shares | 25,245,442 | |||||
Purchase price (in dollars per share) | $ / shares | $ 0.0713 | |||||
Proceeds from issuance or sale of equity | $ 1,800,000 | |||||
Percentage of discount on average closing price for share issue price | 10.00% | |||||
Percentage of premium on average closing price for warrant exercise price | 10.00% | |||||
Exercise price of warrants (in dollars per share) | $ / shares | $ 0.0871 | |||||
Term of warrants | 5 years | |||||
Proceeds from offering | $ 361,000 | $ 1,439,000 | $ 1,800,000 | |||
Referral fee paid to european placement agent | $ 26,000 | |||||
Percentage of referral fee to european placement agent | 10.00% | |||||
March 2016 Offering [Member] | Michael I. Sacks [Member] | ||||||
Class of Stock [Line Items] | ||||||
Proceeds from offering | $ 1,000,000 | |||||
March 2016 Offering [Member] | Bradley J. Sacks [Member] | ||||||
Class of Stock [Line Items] | ||||||
Proceeds from offering | 19,000 | |||||
March 2016 Offering [Member] | Terrance K. Wallberg [Member] | ||||||
Class of Stock [Line Items] | ||||||
Proceeds from offering | 50,000 | |||||
March 2016 Offering [Member] | Daniel G. Moro [Member] | ||||||
Class of Stock [Line Items] | ||||||
Proceeds from offering | 10,000 | |||||
Second Closing [Member] | Velocitas Partners, LLC [Member] | ||||||
Class of Stock [Line Items] | ||||||
Proceeds from issuance of preferred stock | $ 5,000,000 | |||||
Aggregate shares of common stock issued upon exercise of warrants (in shares) | shares | 13,375,000 | |||||
Purchase price (in dollars per share) | $ / shares | $ 0.04 | |||||
Exercise price of warrants (in dollars per share) | $ / shares | $ 0.04 | |||||
Term of warrants | 10 years | |||||
Second Closing [Member] | Series B Preferred Stock [Member] | Velocitas Partners, LLC [Member] | ||||||
Class of Stock [Line Items] | ||||||
Number of shares issued (in shares) | shares | 1,250 |
STOCKHOLDERS' EQUITY (Details)
STOCKHOLDERS' EQUITY (Details) - shares | 3 Months Ended | |
Mar. 31, 2017 | Dec. 31, 2016 | |
Common Stock [Abstract] | ||
Common stock, shares issued (in shares) | 76,349,431 | 62,974,431 |
Common stock, shares outstanding (in shares) | 76,349,431 | 62,974,431 |
Series A Preferred Stock [Member] | ||
Preferred Stock [Abstract] | ||
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Series B Preferred Stock [Member] | ||
Class of Stock [Line Items] | ||
Stock issued during period (in shares) | 1,250 | |
Preferred Stock [Abstract] | ||
Preferred stock, shares issued (in shares) | 1,250 | 0 |
Preferred stock, shares outstanding (in shares) | 1,250 | 0 |
Common Stock [Member] | ||
Class of Stock [Line Items] | ||
Stock issued during period (in shares) | 13,375,000 |
STOCKHOLDERS' EQUITY, Warrants
STOCKHOLDERS' EQUITY, Warrants (Details) | 3 Months Ended |
Mar. 31, 2017$ / sharesshares | |
Warrants and Number of Shares of Common Stock Subject to Exercise [Roll Forward] | |
Balance (in shares) | 26,179,560 |
Warrants issued (in shares) | 57,055,057 |
Warrants exercised (in shares) | 0 |
Warrants cancelled (in shares) | 0 |
Balance (in shares) | 83,234,617 |
Warrants, Weighted-Average Exercise Price [Abstract] | |
Balance (in dollars per share) | $ / shares | 0.11 |
Warrants issued (in dollars per share) | $ / shares | 0.04 |
Warrants exercised (in dollars per share) | $ / shares | 0 |
Warrants cancelled (in dollars per share) | $ / shares | 0 |
Balance (in dollars per share) | $ / shares | 0.06 |
March 14, 2018 [Member] | |
Warrants and Number of Shares of Common Stock Subject to Exercise [Roll Forward] | |
Balance (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 |
April 30, 2020 [Member] | |
Warrants and Number of Shares of Common Stock Subject to Exercise [Roll Forward] | |
Balance (in shares) | 194,118 |
March 30, 2021 [Member] | |
Warrants and Number of Shares of Common Stock Subject to Exercise [Roll Forward] | |
Balance (in shares) | 25,245,442 |
March 31, 2027 [Member] | |
Warrants and Number of Shares of Common Stock Subject to Exercise [Roll Forward] | |
Balance (in shares) | 57,055,057 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2017 | Dec. 31, 2016 | ||
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) | 240,063,020 | 26,870,797 | |
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) | 83,234,617 | 26,179,560 | |
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) | 578,403 | 691,237 | |
Common Stock Issuable Upon the Assumed Conversion of Our Convertible Promissory Notes [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] | 31,250,000 | 0 |
Conversion price (in dollars per share) | $ 0.04 | ||
Common Stock Issuable Upon the Assumed Conversion of Our Series B Preferred 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) | [2] | 125,000,000 | 0 |
Common Stock Issuable Upon the Assumed Conversion of Our Series B Preferred Stock [Member] | Second Closing [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Number of shares issued (in shares) | 1,250 | ||
Proceeds from issuance of preferred stock | $ 5,000,000 | ||
Number of days taken to automatically convert to common stock | 190 days | ||
Purchase price (in dollars per share) | $ 0.04 | ||
[1] | As part of the February 2017 Note and the March 2017 Note, at the holder's option, all unpaid principle and interest due under each convertible promissory note may be converted into shares of Common Stock based on a conversion price of $0.04 per share. The February 2017 Note and the March 2017 Note matures on February 27, 2019 and March 31, 2019, respectively, and on each maturity date each convertible promissory note, and accrued interest thereon, is subject to mandatory conversion based on a conversion price of $0.04 per share. For the purposes of this Table, we have assumed that all outstanding principal and interest will be converted on each applicable maturity date. | ||
[2] | Pursuant to the March 2017 Offering, Velo LLC purchased 1,250 shares of Series B Convertible Preferred Stock of the Company for $5,000,000. The Series B Convertible Preferred Stock that was issued in the March 2017 Offering, (a) votes together with the Common Stock as a single class (subject to standard protective provisions for the Series B Convertible Preferred Stock), (b) has the same dividend rights as the Common Stock, (c) has a liquidation preference equal to the greater of its purchase price and its as converted-to-Common Stock value, (d) automatically converts into Common Stock if the number of authorized shares of Common Stock is increased within 190 days of the second closing as necessary to permit all outstanding convertible or exercisable securities (including the Series B Convertible Preferred Stock) to convert to Common Stock, and (e) is convertible into Common Stock at the discretion of the holder, subject to the availability of authorized shares, at an as-converted-to-Common Stock purchase price of $0.04 per share. |
SHARE BASED COMPENSATION, Alloc
SHARE BASED COMPENSATION, Allocated compensation expense (Details) - Stock Options [Member] - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Share-based compensation expense | $ 4,324 | $ 27,867 |
Research and Development [Member] | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Share-based compensation expense | 1,663 | 8,670 |
Selling, General and Administrative [Member] | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Share-based compensation expense | $ 2,661 | $ 19,197 |
SHARE BASED COMPENSATION, Stock
SHARE BASED COMPENSATION, Stock option, restricted stock and summary of plans (Details) - USD ($) | Jun. 05, 2014 | Jun. 13, 2013 | Jun. 14, 2012 | Jun. 15, 2010 | Dec. 17, 2009 | May 08, 2007 | Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2006 |
Stock Options [Member] | |||||||||
Options, Outstanding [Roll Forward] | |||||||||
Outstanding, beginning of period (in shares) | 691,237 | ||||||||
Granted (in shares) | 0 | ||||||||
Forfeited/cancelled (in shares) | (112,834) | ||||||||
Exercised (in shares) | 0 | ||||||||
Outstanding, end of period (in shares) | 578,403 | ||||||||
Outstanding, Weighted Average Exercise Price [Roll Forward] | |||||||||
Outstanding, beginning of period (in dollars per share) | $ 1.94 | ||||||||
Granted (in dollars per share) | 0 | ||||||||
Forfeited/cancelled (in dollars per share) | 2.13 | ||||||||
Exercised (in dollars per share) | 0 | ||||||||
Outstanding, end of period (in dollars per share) | $ 1.91 | ||||||||
Nonvested Awards, unearned share-based compensation [Abstract] | |||||||||
Unearned share-based compensation expense | $ 8,500 | ||||||||
Unearned share-based compensation, recognition period | 6 months | ||||||||
Restricted Stock [Member] | |||||||||
Options, Outstanding [Roll Forward] | |||||||||
Granted (in shares) | 0 | 0 | |||||||
Restricted Stock [Member] | Minimum [Member] | |||||||||
Additional disclosures [Abstract] | |||||||||
Vesting period | 2 years | ||||||||
Restricted Stock [Member] | Maximum [Member] | |||||||||
Additional disclosures [Abstract] | |||||||||
Vesting period | 5 years | ||||||||
2006 Equity Incentive Plan [Member] | |||||||||
Additional disclosures [Abstract] | |||||||||
Number of shares authorized (in shares) | 2,800,000 | 133,333 | |||||||
Number of additional shares authorized (in shares) | 1,000,000 | 600,000 | 400,000 | 200,000 | 200,000 | 266,667 | |||
Number of shares available for grant (in shares) | 2,152,151 | ||||||||
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 | ||||||||
Contractual term | 10 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 |
SHARE BASED COMPENSATION, Sto51
SHARE BASED COMPENSATION, Stock options grant outstanding and exercisable (Details) | 3 Months Ended |
Mar. 31, 2017$ / sharesshares | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Stock Options Outstanding (in shares) | shares | 578,403 |
Options Outstanding, Weighted Average Exercise Price per Share (in dollars per share) | $ / shares | $ 1.91 |
Options Outstanding, Weighted Average Remaining Contractual Life | 6 years 3 months 18 days |
Stock Options Exercisable (in shares) | shares | 578,403 |
Options Exercisable, Weighted Average Exercise Price per Share (in dollars per share) | $ / shares | $ 1.91 |
Exercise Price Range 1 [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Stock Options Outstanding (in shares) | shares | 340,000 |
Options Outstanding, Weighted Average Exercise Price per Share (in dollars per share) | $ / shares | $ 0.33 |
Options Outstanding, Weighted Average Remaining Contractual Life | 6 years |
Stock Options Exercisable (in shares) | shares | 340,000 |
Options Exercisable, Weighted Average Exercise Price per Share (in dollars per share) | $ / shares | $ 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) | shares | 215,000 |
Options Outstanding, Weighted Average Exercise Price per Share (in dollars per share) | $ / shares | $ 1.15 |
Options Outstanding, Weighted Average Remaining Contractual Life | 7 years 6 months |
Stock Options Exercisable (in shares) | shares | 215,000 |
Options Exercisable, Weighted Average Exercise Price per Share (in dollars per share) | $ / shares | $ 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) | shares | 23,403 |
Options Outstanding, Weighted Average Exercise Price per Share (in dollars per share) | $ / shares | $ 31.75 |
Options Outstanding, Weighted Average Remaining Contractual Life | 1 year |
Stock Options Exercisable (in shares) | shares | 23,403 |
Options Exercisable, Weighted Average Exercise Price per Share (in dollars per share) | $ / shares | $ 31.75 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Liabilities [Abstract] | ||
Note payable | $ 1,000,000 | $ 20,000 |
Convertible Promissory Note - March 2017 [Member] | ||
Liabilities [Abstract] | ||
Note payable | 500,000 | 0 |
Convertible Promissory Note - February 2017 [Member] | ||
Liabilities [Abstract] | ||
Note payable | 500,000 | 0 |
Promissory Note - December 2016 [Member] | ||
Liabilities [Abstract] | ||
Note payable | $ 0 | $ 20,000 |
INCOME TAXES (Details)
INCOME TAXES (Details) | 3 Months Ended |
Mar. 31, 2017USD ($) | |
INCOME TAXES [Abstract] | |
Increase in net operating loss | $ 558,000 |
Consolidated operating loss carryforwards | 57,010,000 |
Research credit carryforwards | $ 555,000 |
Effective tax rate | 0.00% |
Deferred tax assets | $ 0 |
COMMITMENTS AND CONTINGENCIES54
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) | 3 Months Ended | 12 Months Ended | 13 Months Ended | 23 Months Ended | 24 Months Ended | 26 Months Ended | 60 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 16, 2015 | Mar. 31, 2014 | Feb. 22, 2013 | Mar. 31, 2017 | Mar. 31, 2017 | Mar. 31, 2011 | |
Future minimum lease payments [Abstract] | ||||||||
2017 (Nine months) | $ 90,031 | $ 90,031 | $ 90,031 | |||||
2,018 | 28,908 | 28,908 | 28,908 | |||||
2,019 | 0 | 0 | 0 | |||||
2,020 | 0 | 0 | 0 | |||||
Total | 118,939 | 118,939 | 118,939 | |||||
Rent expense for operating lease | $ 32,348 | $ 29,960 | ||||||
Office and Laboratory Space [Member] | ||||||||
Operating Leased Assets [Line Items] | ||||||||
Minimum monthly lease obligation | $ 9,379 | $ 9,193 | $ 9,776 | $ 9,436 | $ 9,330 | |||
Office Equipment [Member] | ||||||||
Operating Leased Assets [Line Items] | ||||||||
Minimum monthly lease obligation | $ 551 |
COMMITMENTS AND CONTINGENCIES,
COMMITMENTS AND CONTINGENCIES, Related Party (Details) - USD ($) | Feb. 27, 2017 | Feb. 21, 2017 | Feb. 16, 2017 | Jan. 18, 2017 | Dec. 15, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2015 | Dec. 31, 2012 | Dec. 31, 2011 | |
Related Party Obligations [Abstract] | ||||||||||||||
Outstanding accounts receivable | $ 129,701 | $ 0 | ||||||||||||
Concentration risk, percentage | 100.00% | 100.00% | ||||||||||||
Initial principal amount | $ 1,000,000 | |||||||||||||
Summary of compensation earned, compensation paid in cash, and compensation temporarily deferred [Abstract] | ||||||||||||||
Deferred compensation liability | 23,334 | (60,078) | $ 150,000 | $ 150,000 | $ 383,564 | $ 150,000 | $ 150,000 | |||||||
Deferred compensation | 496,820 | 473,486 | ||||||||||||
Compensation accrued liabilities | 223,237 | 199,903 | ||||||||||||
Compensation accounts payable | $ 273,583 | 273,583 | ||||||||||||
Velocitas Partners, LLC [Member] | ||||||||||||||
Related Party Obligations [Abstract] | ||||||||||||||
Expected gross proceeds | $ 6,000,000 | |||||||||||||
Initial principal amount | $ 30,000 | $ 65,000 | $ 20,000 | |||||||||||
Interest rate | 6.00% | 6.00% | 6.00% | |||||||||||
Monthly installment payments commencing period | 180 days | 180 days | 180 days | |||||||||||
Velocitas Partners, LLC [Member] | Second Closing [Member] | Maximum [Member] | ||||||||||||||
Related Party Obligations [Abstract] | ||||||||||||||
Warrants to purchase shares of common stock (in shares) | 57,055,057 | |||||||||||||
Kirkwood Investors, Inc [Member] | ||||||||||||||
Related Party Obligations [Abstract] | ||||||||||||||
Initial principal amount | $ 25,000 | |||||||||||||
Interest rate | 6.00% | |||||||||||||
Monthly installment payments commencing period | 60 days | |||||||||||||
Number of days after receiving interest rate | 2 days | |||||||||||||
Kerry P. Gray [Member] | ||||||||||||||
Summary of compensation earned, compensation paid in cash, and compensation temporarily deferred [Abstract] | ||||||||||||||
Deferred compensation liability | [1],[2],[3],[4] | $ 0 | 0 | 150,000 | 150,000 | 275,153 | 150,000 | 150,000 | ||||||
Deferred compensation | [1],[2],[3],[4] | $ 425,153 | ||||||||||||
Repayment of temporarily deferred compensation | 269,986 | 312,500 | ||||||||||||
Proceeds from issuance of common stock under March 2013 offering | 100,000 | 300,000 | ||||||||||||
Temporary advance of working capital | 37,300 | |||||||||||||
Kerry P. Gray [Member] | Temporarily Deferred Compensation [Member] | ||||||||||||||
Summary of compensation earned, compensation paid in cash, and compensation temporarily deferred [Abstract] | ||||||||||||||
Deferred compensation | 150,000 | 582,486 | 275,153 | |||||||||||
Period of deferred compensation | 3 years | |||||||||||||
Kerry P. Gray [Member] | President [Member] | ||||||||||||||
Summary of compensation earned, compensation paid in cash, and compensation temporarily deferred [Abstract] | ||||||||||||||
Deferred compensation | 62,500 | 51,770 | ||||||||||||
Kerry P. Gray [Member] | Board of Directors Chairman [Member] | ||||||||||||||
Summary of compensation earned, compensation paid in cash, and compensation temporarily deferred [Abstract] | ||||||||||||||
Deferred compensation | 87,500 | 186,083 | ||||||||||||
Terrance K. Wallberg [Member] | ||||||||||||||
Summary of compensation earned, compensation paid in cash, and compensation temporarily deferred [Abstract] | ||||||||||||||
Deferred compensation liability | $ 23,334 | (5,207) | 0 | 0 | 53,540 | 0 | 0 | |||||||
Deferred compensation | 71,667 | |||||||||||||
Other Employees [Member] | ||||||||||||||
Summary of compensation earned, compensation paid in cash, and compensation temporarily deferred [Abstract] | ||||||||||||||
Deferred compensation liability | 0 | (54,871) | $ 0 | $ 0 | $ 54,871 | $ 0 | $ 0 | |||||||
Deferred compensation | $ 0 | |||||||||||||
Altrazeal Trading GmbH [Member] | Second Closing [Member] | ||||||||||||||
Related Party Obligations [Abstract] | ||||||||||||||
Warrants to purchase shares of common stock (in shares) | 13,375,000 | |||||||||||||
Acquisition value | $ 869,375 | |||||||||||||
Altrazeal Distributors [Member] | Second Closing [Member] | ||||||||||||||
Related Party Obligations [Abstract] | ||||||||||||||
Warrants to purchase shares of common stock (in shares) | 13,375,000 | |||||||||||||
Acquisition value | $ 869,375 | |||||||||||||
Velocitas GmbH [Member] | Revenue [Member] | ||||||||||||||
Related Party Obligations [Abstract] | ||||||||||||||
Related party sales | $ 215,000 | $ 0 | ||||||||||||
Concentration risk, percentage | 99.00% | 0.00% | ||||||||||||
Velocitas GmbH [Member] | Accounts Receivable [Member] | ||||||||||||||
Related Party Obligations [Abstract] | ||||||||||||||
Outstanding accounts receivable | $ 130,000 | $ 0 | ||||||||||||
Concentration risk, percentage | 98.00% | 0.00% | ||||||||||||
[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 a Securities Purchase Agreement, dated March 14, 2013 (the "March 2013 Offering"). Prior to 2014, over a three year period Mr. Gray temporarily deferred, at various times, aggregate compensation of $582,486 and during the same time period 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. | |||||||||||||
[2] | During 2015, Mr. Gray temporarily deferred compensation of $275,153 which consisted of $51,770 earned as salary compensation for his duties as President of the Company, $186,083 for his duties as Chairman of the Executive Committee of the Company's Board of Directors, and $37,300 as a temporary advance of working capital. | |||||||||||||
[3] | On November 19, 2015, Mr. Gray resigned as the Company's President and Chief Executive Officer and on February 18, 2016 resigned as a director for the Company. | |||||||||||||
[4] | The Company is asserting in a dispute with Mr. Gray that certain amounts recorded as being owed to Mr. Gray are not in fact owed to Mr. Gray or are offset by amounts Mr. Gray owes to the Company. |
COMMITMENTS AND CONTINGENCIES56
COMMITMENTS AND CONTINGENCIES, Contingent Milestone Obligations (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 07, 2008 | |
Access Pharmaceuticals [Member] | ||
Milestone payments [Line Items] | ||
Future milestone obligations | $ 4,750,000 | |
Accrued expenses related to future milestone payments | 31,754 | |
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 | 30.00% | |
ProStrakan Ltd [Member] | Maximum [Member] | ||
Milestone payments [Line Items] | ||
Future milestone obligations | $ 1,400,000 |
COMMITMENTS AND CONTINGENCIES57
COMMITMENTS AND CONTINGENCIES, Prescription Drug User Fee Obligation (Details) - Assessed Prescription Drug User Fee [Member] | Mar. 31, 2017USD ($) |
Loss Contingencies [Line Items] | |
Prescription drug user fees | $ 535,000 |
Accrued potential penalties and interest | $ 506,000 |
LEGAL PROCEEDINGS (Details)
LEGAL PROCEEDINGS (Details) | 3 Months Ended |
Mar. 31, 2017 | |
LEGAL PROCEEDINGS [Abstract] | |
Maximum percentage of material proceedings/interest | 5.00% |