Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Aug. 14, 2018 | |
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 | 2,018 | |
Document Fiscal Period Focus | Q2 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2018 | |
Common Stock [Member] | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 201,349,431 | |
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 | 0 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Current Assets | ||
Cash and cash equivalents | $ 3,146,219 | $ 3,710,882 |
Accounts receivable, net | 221,337 | 256,123 |
Inventory | 457,917 | 497,461 |
Prepaid expenses and deferred charges | 111,653 | 170,686 |
Total Current Assets | 3,937,126 | 4,635,152 |
Property, Equipment and Leasehold Improvements, net | 42,763 | 53,723 |
Other Assets | ||
Intangible asset - patents, net | 161,367 | 179,737 |
Intangible asset - licensing rights, net | 3,450,195 | 3,656,636 |
Deposits | 4,316 | 18,069 |
Total Other Assets | 3,615,878 | 3,854,442 |
TOTAL ASSETS | 7,595,767 | 8,543,317 |
Current Liabilities | ||
Accounts payable | 1,172,368 | 1,213,246 |
Accrued liabilities | 173,807 | 163,969 |
Accrued interest | 161,644 | 99,658 |
Convertible notes payable, current portion, net of unamortized debt discount and debt issuance costs | 747,189 | 0 |
Deferred revenue, current portion | 29,227 | 35,761 |
Total Current Liabilities | 2,284,235 | 1,512,634 |
Long Term Liabilities | ||
Convertible notes payable, net of unamortized debt discount and debt issuance costs | 0 | 570,189 |
Deferred revenue, net of current portion | 331,800 | 352,698 |
Total Long Term Liabilities | 331,800 | 922,887 |
TOTAL LIABILITIES | 2,616,035 | 2,435,521 |
COMMITMENTS AND CONTINGENCIES | ||
STOCKHOLDERS' EQUITY | ||
Common Stock - $0.001 par value; 750,000,000 shares authorized; 201,349,431 and 201,349,431 shares issued and outstanding at June 30, 2018 and December 31, 2017, respectively | 201,349 | 201,349 |
Additional paid-in capital | 68,562,533 | 68,556,734 |
Accumulated (deficit) | (63,784,150) | (62,650,287) |
TOTAL STOCKHOLDERS' EQUITY | 4,979,732 | 6,107,796 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | 7,595,767 | 8,543,317 |
Series A Preferred Stock [Member] | ||
STOCKHOLDERS' EQUITY | ||
Preferred stock | 0 | 0 |
Series B Preferred Stock [Member] | ||
STOCKHOLDERS' EQUITY | ||
Preferred stock | $ 0 | $ 0 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Jun. 30, 2018 | Dec. 31, 2017 |
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) | 750,000,000 | 750,000,000 |
Common stock, shares issued (in shares) | 201,349,431 | 201,349,431 |
Common stock, shares outstanding (in shares) | 201,349,431 | 201,349,431 |
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) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Revenues | ||||
Total revenues | $ 105,550 | $ 4,314 | $ 189,345 | $ 221,431 |
Costs and Expenses | ||||
Cost of product sold | 43,756 | 3,067 | 70,111 | 105,416 |
Research and development | 37,500 | 48,192 | 84,565 | 108,321 |
Selling, general and administrative | 355,482 | 327,201 | 730,153 | 701,393 |
Amortization of intangible assets | 113,027 | 113,027 | 224,811 | 202,334 |
Depreciation | 5,481 | 32,842 | 10,961 | 65,558 |
Gain on sale of equipment | 0 | 0 | (29,179) | 0 |
Total Costs and Expenses | 555,246 | 524,329 | 1,091,422 | 1,183,022 |
Operating (Loss) | (449,696) | (520,015) | (902,077) | (961,591) |
Other Income (Expense) | ||||
Interest and miscellaneous income | 0 | 2 | 0 | 4 |
Interest expense | (126,670) | (133,864) | (252,149) | (155,141) |
Foreign currency transaction loss | (8,744) | (3,181) | (6,299) | (3,071) |
Gain on settlement of liability | 0 | 114,013 | 0 | 114,013 |
(Loss) Before Income Taxes | (585,110) | (543,045) | (1,160,525) | (1,005,786) |
Income taxes | 0 | 0 | 0 | 0 |
Net (Loss) | $ (585,110) | $ (543,045) | $ (1,160,525) | $ (1,005,786) |
Basic and diluted net (loss) per common share (in dollars per share) | $ 0 | $ (0.01) | $ (0.01) | $ (0.01) |
Weighted average number of common shares outstanding (in shares) | 201,349,431 | 76,349,431 | 201,349,431 | 69,772,774 |
License Fees [Member] | ||||
Revenues | ||||
Total revenues | $ 0 | $ 1,436 | $ 0 | $ 2,858 |
Product Sales, Net [Member] | ||||
Revenues | ||||
Total revenues | $ 105,550 | $ 2,878 | $ 189,345 | $ 218,573 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
OPERATING ACTIVITIES : | ||
Net loss | $ (1,160,525) | $ (1,005,786) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Amortization of intangible assets | 224,811 | 202,334 |
Depreciation | 10,961 | 65,558 |
Share-based compensation for stock and options issued to employees | 0 | 8,697 |
Share-based compensation for options issued to non-employees | 5,799 | 0 |
Amortization of debt discount on promissory notes | 172,671 | 87,006 |
Amortization of debt issuance costs on promissory notes | 4,329 | 1,916 |
Gain on sale of equipment | (29,179) | 0 |
Gain on settlement of liability | 0 | (114,013) |
Change in operating assets and liabilities: | ||
Accounts receivable | 34,785 | 59,177 |
Inventory | 39,544 | 9,776 |
Prepaid expenses and deferred charges | 59,033 | 97,958 |
Deposits | 13,753 | 0 |
Accounts payable | (40,878) | 218,155 |
Accrued liabilities | 9,838 | (110,347) |
Accrued interest | 61,986 | 36,591 |
Deferred revenue | (770) | (14,328) |
Total | 566,683 | 548,480 |
Net Cash Used in Operating Activities | (593,842) | (457,306) |
INVESTING ACTIVITIES : | ||
Purchase of equipment | 0 | (3,501) |
Proceeds from sale of equipment | 29,179 | 0 |
Net Cash Provided / (Used) in Investing Activities | 29,179 | (3,501) |
FINANCING ACTIVITIES : | ||
Proceeds from issuance of convertible notes and warrant, net | 0 | 983,092 |
Proceeds from sale of Series B preferred stock, net | 0 | 4,915,661 |
Proceeds from issuance of promissory notes | 0 | 120,000 |
Repayment of principle due on promissory notes | 0 | (140,000) |
Net Cash Provided by Financing Activities | 0 | 5,878,753 |
Net (Decrease) / Increase in Cash | (564,663) | 5,417,946 |
Cash, beginning of period | 3,710,882 | 36,615 |
Cash, end of period | 3,146,219 | 5,454,561 |
SUPPLEMENTAL CASH FLOW DISCLOSURE: | ||
Cash paid for interest | 0 | 2,672 |
Cash paid for income taxes | 0 | 0 |
Non-cash investing and financing activities: | ||
Issuance of common stock for acquisition of licensing rights | $ 0 | $ 869,375 |
COMPANY OVERVIEW AND BASIS OF P
COMPANY OVERVIEW AND BASIS OF PRESENTATION | 6 Months Ended |
Jun. 30, 2018 | |
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 innovative wound care and drug delivery systems based on our patented technologies. Our mission is to improve the lives of patients the world over by delivering comprehensive solutions that optimize outcomes for the key stakeholders in our healthcare systems: patients, providers, and payers. 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 June 30, 2018 and the results of its operations for the three and six months ended June 30, 2018 and 2017 and cash flows for the six months ended June 30, 2018 and 2017 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. Certain prior period amounts have been reclassified to conform to current period presentations. Operating results for the three and six months ended June 30, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018. 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, 2017, as filed with the Securities and Exchange Commission on March 30, 2018 (the “2017 Form 10-K”), including the risk factors set forth therein. |
THE EFFECT OF RECENTLY ISSUED A
THE EFFECT OF RECENTLY ISSUED ACCOUNTING STANDARDS | 6 Months Ended |
Jun. 30, 2018 | |
THE EFFECT OF RECENTLY ISSUED ACCOUNTING STANDARDS [Abstract] | |
THE EFFECT OF RECENTLY ISSUED ACCOUNTING STANDARDS | NOTE 2. THE EFFECT OF RECENTLY ISSUED ACCOUNTING STANDARDS In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (“Topic 606”) The new revenue standard (“Topic 606”) became effective for the Company on January 1, 2018, and was adopted using the modified retrospective method under which previously presented financial statements are not restated and the cumulative effect of adopting the new revenue standard on contracts in process is recognized by an adjustment to retained earnings at the effective date. The cumulative effect of applying the new revenue standard was an increase of $26,662 to stockholder’s equity as of January 1, 2018. The adoption of ASC 606 does not materially impact the Company’s revenue recognition as the Company’s revenue primarily comes from the sale of products which do not required long term contracts, contracts with multiple deliverables or performance obligations. Additionally, the Company already historically accounted for variable consideration on its product sales such as sale returns and discounts as part of revenue recognition. Topic 606 requires more robust disclosures than required by previous guidance, including disclosures related to disaggregation of revenue into appropriate categories, performance obligations, the judgements made in revenue recognition determinations, adjustments to revenue which relate to activities from previous quarters or years, any significant reversals of revenue, and costs to obtain or fulfill contracts. See Note 3, “Revenue Recognition.” In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) In March 2016, the FASB issued ASU No. 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments In November 2016, the FASB issued ASU No. 2016-18, Restricted Cash, Statement of Cash Flows (Topic 230) (“ASU 2016-18”). ASU 2016-18 requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. ASU 2016-18 is effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted. The amendments in ASU 2016-18 should be applied using a retrospective transition method to each period presented. The Company’s adoption of ASU 2016-18 did not have a material impact on its consolidated financial statements . In January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment In May 2017, the FASB issued ASU No. 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting (“ASU 2017-09”). ASU 2017-09 provides clarity when a change to terms or conditions of a share-based payment award must be accounted for as a modification. The new guidance requires modification accounting if the vesting condition, fair value or the award classification is not the same both before and after a change to the terms and conditions of the award. The new guidance is effective on a retrospective basis beginning on January 1, 2018 with early adoption permitted. T |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2018 | |
SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | NOTE 3. SIGNIFICANT ACCOUNTING POLICIES Please refer to the notes in the Company’s 2017 Form 10-K for additional details of the Company’s financial condition and a description of the Company’s accounting policies, which have been continued without change except for the Company’s Revenue Recognition accounting policy, which has been updated as a result of the Company’s adoption in the current quarter of ASU 2014-09. Revenue Recognition The Company’s product, Altrazeal®, is distributed to and through a limited number of specialty distributors internationally and a combination of wholesalers and direct to customer sales in the United States. These customers subsequently resell the Company’s product to healthcare providers and patients. The Company recognizes revenue as the transfer of control of its products to the Company’s customers in an amount reflecting the consideration the Company expects to be entitled. In order to achieve this core principle, the Company applies the following five-step approach: § identification of the contract, or contracts, with a customer; § recognition of revenue when, or as, we satisfy the performance obligations; § determination of the transaction price; § allocation of the transaction price to the performance obligations in the contract; and § recognition of revenue when, or as, we satisfy the performance obligations. The Company considers customer purchase orders, which in some cases are governed by master distribution agreements, to be the contracts with the customer. For each contract, the Company considers the promise to transfer products, each of which are distinct, to be the identified performance obligations. In determining the transaction price, the Company evaluates whether the price is subject to refund or adjustment to determine the net consideration to which the Company expects to be entitled. In addition, the Company evaluates the customer’s ability to pay as part of its consideration of the contract. As the Company’s standard payment terms are less than one year, the Company elected the practical expedient under Accounting Standards Codification (ASC) 606-10-32-18, and determined that its contracts do not have a significant financing component. The Company allocates the transaction price to each distinct product based on the relative standalone selling price. Revenue is recognized when control of the product is transferred to the customer, the customer is obligated to pay the Company, and the Company has no remaining obligations, which is typically at shipment. In certain locations, primarily outside the United States, product shipping terms may vary. Thus, in such locations, the point at which control of the product transfers to the customer and revenue recognition occurs will vary accordingly. Customer returns of non-conforming products are estimated at the time revenue is recognized. In certain customer relationships, rebates exist, which are recognized according to the terms and conditions of the contractual relationship. Customer returns, rebates, and discounts are not material to the Company’s consolidated financial statements. The Company has elected to recognize the revenue and cost for freight and shipping when control over the products has transferred to the customer. The Company has elected to immediately expense contract costs from obtaining a contract as the amortization period of the asset the Company otherwise would have recognized would have been less than a year. Reserves for Variable Consideration Revenues from product sales are recorded at the transaction price, which includes estimates of variable consideration for which reserves are established and which result from discounts, returns, and other allowances that are offered within contracts between the Company and its customers. These reserves are based on the amounts earned or to be claimed on the related sales and are classified as reductions of accounts receivable (if the amount is payable to the customer) or a current liability (if the amount is payable to a party other than a customer). Where appropriate, these estimates take into consideration a range of possible outcomes and contemplates relevant factors such as the Company’s historical experience, current contractual and statutory requirements, specific known market events and trends, industry data and forecasted customer buying and payment patterns. Overall, these reserves reflect the Company’s best estimates of the amount of consideration to which it is entitled based on the terms of the contract. The amount of variable consideration which is included in the transaction price may be constrained, and is included in the net sales price only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period. Actual amounts of consideration ultimately received may differ from the Company’s estimates. The Company believes that the reserves it has established are reasonable based upon current facts and circumstances. Applying different judgments or interpretations to the same facts and circumstances could result in the estimated amount for reserves to vary. If actual results vary with respect to the Company’s reserves, the Company may need to adjust its estimates, which could have a material effect on the Company’s results of operations in the period of adjustment. To date, such adjustments have not been material. Trade Discounts and Allowances T Other Revenues The Company enters into licensing agreements, from time to time, which are within the scope of Topic 606, under which it may license certain rights to its products or product candidates to third parties. The terms of these arrangements typically include payment to the Company of one or more of the following: non-refundable, up-front license fees; development, regulatory and commercial milestone payments; and royalties on net sales of licensed products. Each of these payments results in revenues recognized and classified as other revenues. Licenses of intellectual property: Milestone Payments: Royalties: Under the Company’s various contracts, the Company may receive up-front payments and fees, which may require deferral of revenue recognition to a future period until the Company performs its obligations under these arrangements. Amounts are recorded as accounts receivable when the Company’s right to consideration is unconditional. The Company does not assess whether a contract has a significant financing component if the expectation at contract inception is such that the period between payment by the customer and the transfer of the promised goods or services to the customer will be one year or less. We received upfront cash payments for licenses of our technology in years 2007 to 2013. The revenue was recognized straight-line over the life of the patent. Our obligation was performed at the time the license was granted. Following the revenue recognition policies in accordance with ASC 606, we decreased the accumulated deficit by $26,662 as of January 1, 2018 and decreased deferred revenue by the same amount. Effective January 1, 2018, we adopted Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers Revenue Recognition The table below presents the cumulative effect of the changes made to the consolidated January 1, 2018 balance sheet due to the adoption of ASC 606. BALANCE SHEET December 31, 2017, ASC 605 Adjustments Due to ASC 606 January 1, 2018 Under ASC 606 Liabilities Current liabilities Current portion of deferred revenue $ 35,761 $ (5,764 ) $ 29,997 Total current liabilities 1,512,634 (5,764 ) 1,506,870 Deferred revenue, net of current portion 352,698 (20,898 ) 331,800 Total liabilities 2,435,521 (26,662 ) 2,408,859 Stockholders’ Equity Accumulated deficit (62,650,287 ) 26,662 (62,623,625 ) Total equity $ 6,107,796 $ 26,662 $ 6,134,458 The table below presents the impact of the adoption of ASC 606 on our statement of operations. Six Months Ended June 30, 2018 STATEMENT OF OPERATIONS Under ASC 605 Effect of ASC 606 As Reported Under ASC 606 Revenues License revenues $ 1,422 $ (1,422 ) $ --- Total revenues 190,767 (1,422 ) 189,345 Loss from operations $ (900,655 ) $ (1,422 ) $ (902,077 ) Net loss $ (1,159,103 ) $ (1,422 ) $ (1,160,525 ) Basic and diluted loss per common share $ (0.01 ) $ (0.00 ) $ (0.01 ) The table below presents the impact of the adoption of ASC 606 on our balance sheet. June 30, 2018 BALANCE SHEET Under Effect of As Reported Liabilities and Stockholders’ Equity Current liabilities Current portion of deferred revenue $ 34,991 $ (5,764 ) $ 29,227 Total current liabilities 2,289,999 (5,764 ) 2,284,235 Deferred revenue, net of current portion 351,276 (19,476 ) 331,800 Total liabilities 2,641,275 (25,240 ) 2,616,035 Stockholders’ Equity Accumulated deficit (63,809,390 ) 25,240 (63,784,150 ) Total stockholders’ equity $ 4,954,492 $ 25,240 $ 4,979,732 Disaggregation of Revenue Revenue is disaggregated by primary geographic markets, as we believe this best depicts how the nature, amount, timing, and uncertainty of our revenue and cash flows are affected by economic factors. For more information on the Company’s disaggregated revenue, see Note 4, Segment Information . |
SEGMENT INFORMATION
SEGMENT INFORMATION | 6 Months Ended |
Jun. 30, 2018 | |
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 and six months ended June 30 are summarized as follows: Three Months Ended June 30, Six months Ended June 30, Revenues 2018 % 2017 % 2018 % 2017 % Domestic $ 2,105 2 % $ 2,878 67 % 13,102 7 % $ 5,415 2 % International 103,445 98 % 1,436 33 % 176,243 93 % 216,016 98 % Total $ 105,550 100 % $ 4,314 100 % $ 189,345 100 % $ 221,431 100 % A significant portion of our revenues are derived from a few major customers. For the three months ended June 30, 2018 and 2017, three customers and three customers, respectively, had greater than 10% of total revenues and represented in the aggregate 98% and 66%, respectively, of total revenues. For the six months ended June 30, 2018 and 2017, three customers and one customer, respectively, had greater than 10% of total revenues and represented in the aggregate 87% and 97%, respectively, of total revenues. |
INVENTORY
INVENTORY | 6 Months Ended |
Jun. 30, 2018 | |
INVENTORY [Abstract] | |
INVENTORY | NOTE 5. INVENTORY As of June 30, 2018, 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 June 30, 2018 and December 31, 2017: Inventory June 30, 2018 December 31, 2017 Raw materials $ 45,451 $ 32,329 Work-in-progress 341,073 311,632 Finished goods 71,393 153,500 Total $ 457,917 $ 497,461 |
PROPERTY, EQUIPMENT and LEASEHO
PROPERTY, EQUIPMENT and LEASEHOLD IMPROVEMENTS | 6 Months Ended |
Jun. 30, 2018 | |
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 June 30, 2018 and December 31, 2017: Property, equipment and leasehold improvements June 30, 2018 December 31, 2017 Laboratory equipment $ 424,888 $ 424,888 Manufacturing equipment 1,589,286 1,604,894 Computers, office equipment, and furniture 154,781 154,781 Computer software 4,108 4,108 Leasehold improvements 95,841 95,841 2,268,904 2,284,512 Less: accumulated depreciation and amortization (2,226,141 ) (2,230,789 ) Property, equipment and leasehold improvements, net $ 42,763 $ 53,723 Depreciation expense on property, equipment and leasehold improvements was $5,481 and $32,842 for the three months ended June 30, 2018 and 2017, respectively, and was $10,961 and $65,558 for the six months ended June 30, 2018 and 2017, respectively. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 6 Months Ended |
Jun. 30, 2018 | |
INTANGIBLE ASSETS [Abstract] | |
INTANGIBLE ASSETS | NOTE 7. INTANGIBLE ASSETS Patents Intangible patent assets are composed of patents acquired in October, 2005. Intangible assets, net consisted of the following at June 30, 2018 and December 31, 2017: Intangible assets – patents June 30, 2018 December 31, 2017 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 (7,437,261 ) (7,418,891 ) Less: reserve for impairment (2,027,310 ) (2,027,310 ) Intangible assets - patents, net $ 161,367 $ 179,737 Amortization expense for intangible patents assets was $9,236 and $9,236 for the three months ended June 30, 2018 and 2017, respectively, and was $18,370 and $18,370 for the six months ended June 30, 2018 and 2017, respectively. The future aggregate amortization expense for intangible patent assets, remaining as of June 30, 2018, is as follows: Calendar Years Future Amortization Expense 2018 (Six months) $ 18,674 2019 37,044 2020 37,145 2021 37,044 2022 31,460 Total $ 161,367 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. Refer to a description in greater detail of the financing event with Velocitas and Velo LLC in Note 9. Convertible Debt. At the second closing of the financing event with Velocitas and Velo LLC, which occurred on March 31, 2017, 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 the Altrazeal® distributor agreements from Velocitas at $869,375 based on the closing price of $0.065 per share of the Company’s Common Stock on March 31, 2017. Licensing rights, net consisted of the following at June 30, 2018 and December 31, 2017: Intangible assets - licensing rights June 30, 2018 December 31, 2017 Intangible assets – licensing rights, gross $ 4,381,881 $ 4,381,881 Less: accumulated amortization (931,686 ) (725,245 ) Intangible assets - licensing rights, net $ 3,450,195 $ 3,656,636 Amortization expense for intangible licensing rights assets was $103,791 and $103,791 for the three months ended June 30, 2018 and 2017, respectively, and was $206,441 and $183,964 for the six months ended June 30, 2018 and 2017, respectively. The future aggregate amortization expense for intangible licensing rights assets, remaining as of June 30, 2018, is as follows: Calendar Years Future Amortization Expense 2018 (Six months) $ 209,862 2019 416,303 2020 416,303 2021 416,303 2022 416,303 2023 & Beyond 1,575,121 Total $ 3,450,195 |
ACCRUED LIABILITIES
ACCRUED LIABILITIES | 6 Months Ended |
Jun. 30, 2018 | |
ACCRUED LIABILITIES [Abstract] | |
ACCRUED LIABILITIES | NOTE 8. ACCRUED LIABILITIES Accrued liabilities consisted of the following at June 30, 2018 and December 31, 2017: Accrued Liabilities June 30, 2018 December 31, 2017 Accrued compensation/benefits $ 129,006 $ 124,819 Accrued property taxes 2,850 --- Accrued royalties 41,951 39,144 Product rebates/returns 6 Total accrued liabilities $ 173,807 $ 163,969 |
CONVERTIBLE NOTE PAYABLE - RELA
CONVERTIBLE NOTE PAYABLE - RELATED PARTY | 6 Months Ended |
Jun. 30, 2018 | |
CONVERTIBLE NOTE PAYABLE - RELATED PARTY [Abstract] | |
CONVERTIBLE NOTE PAYABLE - RELATED PARTY | NOTE 9. CONVERTIBLE NOTE PAYABLE – RELATED PARTY Debt Financing – February and March 2017 On February 27, 2017, the Company entered into the Purchase Agreement with Velocitas and Velo LLC under which the Company received gross proceeds of $6,000,000 in two closings with the initial closing occurring on February 27, 2017 and the second closing occurring on March 31, 2017, which we refer to as the “March 2017 Offering”. Refer to a description in greater detail of the the Company’s related party affiliation with Velocitas and Velo LLC in Note 16. Related Party Transactions and Concentration. The first closing, which occurred on February 27, 2017, included the purchase by Velocitas at face value of a Secured Convertible Note, dated February 27, 2017, in the principal amount of $500,000 (the “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 of an additional $500,000 Secured Convertible Note, dated March 31, 2017, (the “Second Note”) with the Second Note accruing interest at 12.5% per annum and having a term of two years (subject to acceleration under certain circumstances), 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 Company received of $983,092 of net proceeds from the issuance of the Initial Note and the Second Note due to $16,908 of debt issuance costs and received of $4,915,661 of net proceeds from the sale of the Series B Convertible Preferred Stock due to $84,339 of equity issuance costs. 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 such note, unless an event of default has occurred and is continuing. 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 provided, among other things, that it would automatically convert into Common Stock when 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. Following stockholder approval of an amendment to our articles of incorporation increasing the number of authorized shares of Common Stock from 200,000,000 shares to 750,000,000 shares, the Company filed on July 26, 2017 with the State of Nevada an amendment to its articles of incorporation implementing such increase. This resulted in the conversion of all 1,250 outstanding shares of Series B Convertible Preferred Stock held by Velo LLC into 125,000,000 shares of Common Stock. 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. The Company, Velocitas, Velo LLC, and certain affiliates also 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 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 a right of first offer (or preemptive right) 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. 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 Initial Note and the Second Note is as follows: As of June 30, 2018 Transaction Initial Principal Amount Interest Rate Maturity Date Conversion Price Principal Balance Unamortized Debt Discount Unamortized Debt Issuance Costs Carrying Value Initial Note $ 500,000 12.5 % 02/27/2019 $ 0.04 $ 500,000 $ 118,425 $ 3,145 $ 378,430 Second Note $ 500,000 12.5 % 03/31/2019 $ 0.04 $ 500,000 $ 127,860 $ 3,381 $ 368,759 Total $ 1,000,000 $ 1,000,000 $ 246,285 $ 6,526 $ 747,189 As part of the Initial Note and the Second 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 Initial Note and the Second Note mature on February 27, 2019 and March 31, 2019, respectively, and on each such 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, unless an event of default has occurred and is continuing. The amount of interest cost recognized from our promissory notes and our convertible debt was $31,164 and $31,165 for the three months ended June 30, 2018 and 2017, respectively, and $61,986 and $37,341 for the six months ended June 30, 2018 and 2017, respectively. The amount of debt discount amortized from our convertible debt was $86,812 and $87,006 for the three months ended June 30, 2018 and 2017, respectively, and $172,671 and $87,006 for the six months ended June 30, 2018 and 2017, respectively. The amount of debt issuance costs amortized from our convertible debt was $2,194 and $1,916 for the three months ended June 30, 2018 and 2017, respectively, and $4,329 and $1,916 for the six months ended June 30, 2018 and 2017, respectively. |
EQUITY TRANSACTIONS
EQUITY TRANSACTIONS | 6 Months Ended |
Jun. 30, 2018 | |
EQUITY TRANSACTIONS [Abstract] | |
EQUITY TRANSACTIONS | NOTE 10. EQUITY TRANSACTIONS Preferred Stock Transaction March 2017 Offering On February 27, 2017, the Company entered into 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 second closing included, among 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. The Company received of $4,915,661 of net proceeds from the sale of the Series B Convertible Preferred Stock due to $84,339 of equity issuance costs. On July 26, 2017, all 1,250 outstanding shares of Series B Convertible Preferred Stock held by Velo LLC were converted into 125,000,000 shares of Common Stock. Refer to a description in greater detail of the financing event with Velocitas and Velo LLC in Note 9. Convertible Debt. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 6 Months Ended |
Jun. 30, 2018 | |
STOCKHOLDERS' EQUITY [Abstract] | |
STOCKHOLDERS' EQUITY | NOTE 11. STOCKHOLDERS’ EQUITY Common Stock As of June 30, 2018, we had 201,349,431 shares of Common Stock issued and outstanding. For the six months ended June 30, 2018, we did not issue or redeem any shares of Common Stock. Preferred Stock As of June 30, 2018, we had no shares of Series A Preferred Stock (the “Series A Shares”) issued and outstanding. For the six months ended June 30, 2018, we did not issue or redeem any Series A Shares. As of June 30, 2018, we had no shares of Series B Preferred Stock (the “Series B Shares”) issued and outstanding. For the three months ended June 30, 2018, we did not issue or 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 June 30, 2018 and the changes therein during the six months then ended: Number of Shares of Common Stock Subject to Exercise Weighted – Average Exercise Price Balance as of December 31, 2017 83,234,617 $ 0.06 Warrants issued --- --- Warrants exercised --- --- Warrants cancelled (660,000 ) $ 0.60 Balance as of June 30, 2018 82,574,617 $ 0.06 For the six months ended June 30, 2018, we did not issue or redeem any warrants. Of the warrant shares subject to exercise as of June 30, 2018, expiration of the right to exercise is as follows: Date of Expiration Number of Warrant Shares of Common Stock Subject to Expiration January 15, 2019 80,000 April 30, 2020 194,118 March 30, 2021 25,245,442 March 31, 2027 57,055,057 Total 82,574,617 |
EARNINGS PER SHARE
EARNINGS PER SHARE | 6 Months Ended |
Jun. 30, 2018 | |
EARNINGS PER SHARE [Abstract] | |
EARNINGS PER SHARE | NOTE 12. 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 June 30, 2018 and December 31, 2017: June 30, 2018 December 31, 2017 Warrants to purchase Common Stock 82,574,617 83,234,617 Stock options to purchase Common Stock 1,635,334 150,736 Common Stock issuable upon the assumed conversion of our convertible promissory notes (1) 31,250,000 31,250,000 Total 115,459,951 114,635,353 (1) As part of the Initial Note and the Second 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 Initial Note and the Second Note mature 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, unless an event of default has occurred and is continuing. For the purposes of this Table, we have assumed that all outstanding principal and interest will be converted on each applicable maturity date. |
SHARE BASED COMPENSATION
SHARE BASED COMPENSATION | 6 Months Ended |
Jun. 30, 2018 | |
SHARE BASED COMPENSATION [Abstract] | |
SHARE BASED COMPENSATION | NOTE 13. SHARE BASED COMPENSATION The Company maintains the 2006 Equity Incentive Plan and the 2018 Equity Incentive Plan. Each of the Equity Incentive Plans are administered by the Board of Directors, acting in lieu of a compensation committee, 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. As of March 29, 2016, the 2006 Equity Incentive Plan expired by its terms, and no additional awards may be granted thereunder. The expiration of the 2006 Equity Incentive Plan does not affect outstanding awards. On March 28, 2018, the Board of Directors approved the 2018 Equity Incentive Plan which was subsequently ratified at the Company’s 2018 Annual Meeting of Stockholders held on June 11, 2018. The 2018 Equity Incentive Plan allows for the Company to grant awards for up to 20,000,000 shares of C S C S Our Board did not granted any stock option awards for the three months ended June 30, 2018. Our Board has granted the following stock option awards for the six months ended June 30: Six Months Ended June 30, Stock Option Awards 2018 2017 Quantity 1,500,000 --- Weighted average fair value per share $ 0.03 --- Fair value $ 45,000 --- (1) The Company did not award any shared-based compensation for the three and six months ended June 30, 2017. We account for share-based compensation under FASB ASC Topic 718, Stock Compensation Six Months Ended June 30, Stock Option Awards 2018 2017 Expected volatility (1) 136.27 % --- Risk-free interest rate % (2) 2.56 % --- Expected term (in years) 5.0 --- Dividend yield (3) --- --- (1) Expected volatility assumption was based upon a combination of historical stock price volatility measured on a daily basis and an estimate of expected future stock price volatility (2) Risk-free interest rate assumption is based upon U.S. Treasury bond interest rates appropriate for the term of the stock options. (3) The Company does not currently intend to pay cash dividends, thus has assumed a 0% dividend yield. (4) The Company did not award any shared-based compensation for the three and six months ended June 30, 2017. Stock Options (Incentive and Nonstatutory) The following table summarizes share-based compensation related to stock options for the three and six months ended June 30: Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Research and development $ 5,610 $ 1,682 $ 5,799 $ 3,345 Selling, general and administrative --- 2,691 --- 5,352 Total share-based compensation expense $ 5,610 $ 4,373 $ 5,799 $ 8,697 As of June 30, 2018, 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 $39,000. The period over which the unearned share-based compensation is expected to be recognized is approximately twenty one months. The following table summarizes the stock options outstanding and the number of shares of Common Stock subject to exercise as of June 30, 2018 and the changes therein during the six months then ended: Stock Options Weighted Average Exercise Price per Share Outstanding as of December 31, 2017 150,736 $ 4.26 Granted 1,500,000 $ 0.05 Forfeited/cancelled (15,402 ) $ 29.59 Exercised --- --- Outstanding as of June 30, 2018 1,635,334 $ 0.16 Exercisable as of June 30, 2018 135,334 $ 1.38 Summary of Plans 2006 Equity Incentive Plan In March 2006, our Board adopted and our stockholders approved our 2006 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 subsequent annual meetings of the stockholders held in 2007, 2009, 2010, 2012, 2013, and 2014, our stockholders approved amendments to the 2006 Equity Incentive Plan that increased 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 June 30, 2018, we had granted options to purchase 2,061,167 shares of Common Stock since the inception of the 2006 Equity Incentive Plan, of which 135,334 were outstanding at a weighted average exercise price of $1.38 per share, and we had granted awards for 68,616 shares of restricted stock since the inception of the 2006 Equity Incentive Plan, of which none were outstanding. As of March 29, 2016, the 2006 Equity Incentive Plan expired by its terms, and no additional awards may be granted thereunder. The expiration of the 2006 Equity Incentive Plan does not affect outstanding awards. 2018 Equity Incentive Plan On March 28, 2018, our Board of Directors adopted and approved our 2018 Equity Incentive Plan which initially provides for the issuance of up to 20,000,000 shares of our Common Stock pursuant to stock options and other equity awards. As of June 30, 2018, we had granted options to purchase 1,500,000 shares of Common Stock since the inception of the 2018 Equity Incentive Plan, of which 1,500,000 were outstanding at a weighted average exercise price of $0.05 per share. As of June 30, 2018, there were 18,500,000 shares that remain available for future grants under the 2018 Equity Incentive Plan. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 6 Months Ended |
Jun. 30, 2018 | |
FAIR VALUE MEASUREMENTS [Abstract] | |
FAIR VALUE MEASUREMENTS | NOTE 14. 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. 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 June 30, 2018 and December 31, 2017. Description June 30, 2018 December 31, 2017 Liabilities: Convertible Note Payable – Related Party – March 2017 $ 500,000 $ 500,000 Convertible Note Payable – Related Party – February 2017 $ 500,000 $ 500,000 Total $ 1,000,000 $ 1,000,000 |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2018 | |
INCOME TAXES [Abstract] | |
INCOME TAXES | NOTE 15. INCOME TAXES There was no current federal tax provision or benefit recorded for any period since inception, nor were there any recorded deferred income tax assets and the Company has provided a full valuation allowance. As a result, the effective tax rate is zero and the net deferred tax assets are zero. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2018 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 16. 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 required a minimum monthly lease obligation of $9,436, which was inclusive of monthly operating expenses. On December 15, 2017, we entered into a Termination of Lease Agreement whereby we cancelled our existing lease for office and laboratory space and concurrently entered into a new lease agreement (the “Office Lease”) that will continue until December 2019. The Office Lease encompasses approximately 2,500 rentable square feet and currently requires a minimum monthly lease obligation of $2,729, which is inclusive of monthly operating expenses. On January 25, 2018, we entered into a lease agreement for storage and warehouse space (“Warehouse Lease”) in Carrollton, Texas. The lease commenced on January 24, 2018 and will continue until December 2019. The lease currently requires a minimum monthly lease obligation of $1,629, which is inclusive of monthly operating expenses. The future minimum lease payments under the Office Lease and the Warehouse Lease are as follows as of June 30, 2018: Calendar Years Future Lease Expense 2018 (Six months) $ 26,080 2019 52,288 2020 --- 2021 --- Total $ 78,368 Rent expense for our operating leases amounted to $15,025 and $33,596 for the three months ended June 30, 2018 and 2017, respectively, and $28,779 and $65,944 for the six months ended June 30, 2018 and 2017, 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 9. Convertible Debt. On March 31, 2017, the second closing of the Purchase Agreement included, among 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 the Altrazeal distributor agreement from Velocitas at $869,375 based on the closing price of $0.065 per share of the Company’s Common Stock on March 31, 2017. For the six months ended June 30, 2018 and 2017, the Company recorded revenues, in approximate numbers, of nil and $215,000, respectively, with Velocitas GmbH, an affiliated entity of Velocitas, which represented 0% and 97% of our total revenues, respectively. As of June 30, 2018 and December 31, 2017, Velocitas GmbH did not have any outstanding net accounts receivable. Consulting Agreement – Velocitas GmbH On April 1, 2017, the Company entered into a Consulting Agreement with 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 June 30, 2018 and December 31, 2017, the Company’s obligation to these executives for temporarily deferred compensation was approximately $72,000 which was included in accrued liabilities. 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 June 30, 2018, 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 June 30, 2018, the Company has accrued approximately $42,000 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. In November 2017, the Company negotiated a settlement payment of $400,000 with DHHS thereby cancelling certain unpaid invoices and accrued penalties and interest thereon. There continues to be a PDUFA fee and accrued penalties and interest that remains unpaid as of this Report. Since the Company has not yet reached a settlement with the DHHS on the unpaid PDUFA fee, it is possible that the Company may be subject to additional collection costs. |
LEGAL PROCEEDINGS
LEGAL PROCEEDINGS | 6 Months Ended |
Jun. 30, 2018 | |
LEGAL PROCEEDINGS [Abstract] | |
LEGAL PROCEEDINGS | NOTE 17. 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 | 6 Months Ended |
Jun. 30, 2018 | |
SUBSEQUENT EVENTS [Abstract] | |
SUBSEQUENT EVENTS | NOTE 18. SUBSEQUENT EVENTS On July 20, 2018, our Board of Directors approved the grant of two Nonstatutory stock option awards to two service providers. Each award was for the purchase of up to 500,000 shares of common stock with an exercise price of $0.05, have a term of ten years, and will vest upon the achievement of four specific performance thresholds. |
COMPANY OVERVIEW AND BASIS OF24
COMPANY OVERVIEW AND BASIS OF PRESENTATION (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
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 June 30, 2018 and the results of its operations for the three and six months ended June 30, 2018 and 2017 and cash flows for the six months ended June 30, 2018 and 2017 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. Certain prior period amounts have been reclassified to conform to current period presentations. Operating results for the three and six months ended June 30, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018. 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, 2017, as filed with the Securities and Exchange Commission on March 30, 2018 (the “2017 Form 10-K”), including the risk factors set forth therein. |
SIGNIFICANT ACCOUNTING POLICI25
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
Revenue Recognition | Revenue Recognition The Company’s product, Altrazeal®, is distributed to and through a limited number of specialty distributors internationally and a combination of wholesalers and direct to customer sales in the United States. These customers subsequently resell the Company’s product to healthcare providers and patients. The Company recognizes revenue as the transfer of control of its products to the Company’s customers in an amount reflecting the consideration the Company expects to be entitled. In order to achieve this core principle, the Company applies the following five-step approach: § identification of the contract, or contracts, with a customer; § recognition of revenue when, or as, we satisfy the performance obligations; § determination of the transaction price; § allocation of the transaction price to the performance obligations in the contract; and § recognition of revenue when, or as, we satisfy the performance obligations. The Company considers customer purchase orders, which in some cases are governed by master distribution agreements, to be the contracts with the customer. For each contract, the Company considers the promise to transfer products, each of which are distinct, to be the identified performance obligations. In determining the transaction price, the Company evaluates whether the price is subject to refund or adjustment to determine the net consideration to which the Company expects to be entitled. In addition, the Company evaluates the customer’s ability to pay as part of its consideration of the contract. As the Company’s standard payment terms are less than one year, the Company elected the practical expedient under Accounting Standards Codification (ASC) 606-10-32-18, and determined that its contracts do not have a significant financing component. The Company allocates the transaction price to each distinct product based on the relative standalone selling price. Revenue is recognized when control of the product is transferred to the customer, the customer is obligated to pay the Company, and the Company has no remaining obligations, which is typically at shipment. In certain locations, primarily outside the United States, product shipping terms may vary. Thus, in such locations, the point at which control of the product transfers to the customer and revenue recognition occurs will vary accordingly. Customer returns of non-conforming products are estimated at the time revenue is recognized. In certain customer relationships, rebates exist, which are recognized according to the terms and conditions of the contractual relationship. Customer returns, rebates, and discounts are not material to the Company’s consolidated financial statements. The Company has elected to recognize the revenue and cost for freight and shipping when control over the products has transferred to the customer. The Company has elected to immediately expense contract costs from obtaining a contract as the amortization period of the asset the Company otherwise would have recognized would have been less than a year. Reserves for Variable Consideration Revenues from product sales are recorded at the transaction price, which includes estimates of variable consideration for which reserves are established and which result from discounts, returns, and other allowances that are offered within contracts between the Company and its customers. These reserves are based on the amounts earned or to be claimed on the related sales and are classified as reductions of accounts receivable (if the amount is payable to the customer) or a current liability (if the amount is payable to a party other than a customer). Where appropriate, these estimates take into consideration a range of possible outcomes and contemplates relevant factors such as the Company’s historical experience, current contractual and statutory requirements, specific known market events and trends, industry data and forecasted customer buying and payment patterns. Overall, these reserves reflect the Company’s best estimates of the amount of consideration to which it is entitled based on the terms of the contract. The amount of variable consideration which is included in the transaction price may be constrained, and is included in the net sales price only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period. Actual amounts of consideration ultimately received may differ from the Company’s estimates. The Company believes that the reserves it has established are reasonable based upon current facts and circumstances. Applying different judgments or interpretations to the same facts and circumstances could result in the estimated amount for reserves to vary. If actual results vary with respect to the Company’s reserves, the Company may need to adjust its estimates, which could have a material effect on the Company’s results of operations in the period of adjustment. To date, such adjustments have not been material. Trade Discounts and Allowances T Other Revenues The Company enters into licensing agreements, from time to time, which are within the scope of Topic 606, under which it may license certain rights to its products or product candidates to third parties. The terms of these arrangements typically include payment to the Company of one or more of the following: non-refundable, up-front license fees; development, regulatory and commercial milestone payments; and royalties on net sales of licensed products. Each of these payments results in revenues recognized and classified as other revenues. Licenses of intellectual property: Milestone Payments: Royalties: Under the Company’s various contracts, the Company may receive up-front payments and fees, which may require deferral of revenue recognition to a future period until the Company performs its obligations under these arrangements. Amounts are recorded as accounts receivable when the Company’s right to consideration is unconditional. The Company does not assess whether a contract has a significant financing component if the expectation at contract inception is such that the period between payment by the customer and the transfer of the promised goods or services to the customer will be one year or less. We received upfront cash payments for licenses of our technology in years 2007 to 2013. The revenue was recognized straight-line over the life of the patent. Our obligation was performed at the time the license was granted. Following the revenue recognition policies in accordance with ASC 606, we decreased the accumulated deficit by $26,662 as of January 1, 2018 and decreased deferred revenue by the same amount. Effective January 1, 2018, we adopted Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers Revenue Recognition The table below presents the cumulative effect of the changes made to the consolidated January 1, 2018 balance sheet due to the adoption of ASC 606. BALANCE SHEET December 31, 2017, ASC 605 Adjustments Due to ASC 606 January 1, 2018 Under ASC 606 Liabilities Current liabilities Current portion of deferred revenue $ 35,761 $ (5,764 ) $ 29,997 Total current liabilities 1,512,634 (5,764 ) 1,506,870 Deferred revenue, net of current portion 352,698 (20,898 ) 331,800 Total liabilities 2,435,521 (26,662 ) 2,408,859 Stockholders’ Equity Accumulated deficit (62,650,287 ) 26,662 (62,623,625 ) Total equity $ 6,107,796 $ 26,662 $ 6,134,458 The table below presents the impact of the adoption of ASC 606 on our statement of operations. Six Months Ended June 30, 2018 STATEMENT OF OPERATIONS Under ASC 605 Effect of ASC 606 As Reported Under ASC 606 Revenues License revenues $ 1,422 $ (1,422 ) $ --- Total revenues 190,767 (1,422 ) 189,345 Loss from operations $ (900,655 ) $ (1,422 ) $ (902,077 ) Net loss $ (1,159,103 ) $ (1,422 ) $ (1,160,525 ) Basic and diluted loss per common share $ (0.01 ) $ (0.00 ) $ (0.01 ) The table below presents the impact of the adoption of ASC 606 on our balance sheet. June 30, 2018 BALANCE SHEET Under Effect of As Reported Liabilities and Stockholders’ Equity Current liabilities Current portion of deferred revenue $ 34,991 $ (5,764 ) $ 29,227 Total current liabilities 2,289,999 (5,764 ) 2,284,235 Deferred revenue, net of current portion 351,276 (19,476 ) 331,800 Total liabilities 2,641,275 (25,240 ) 2,616,035 Stockholders’ Equity Accumulated deficit (63,809,390 ) 25,240 (63,784,150 ) Total stockholders’ equity $ 4,954,492 $ 25,240 $ 4,979,732 Disaggregation of Revenue Revenue is disaggregated by primary geographic markets, as we believe this best depicts how the nature, amount, timing, and uncertainty of our revenue and cash flows are affected by economic factors. For more information on the Company’s disaggregated revenue, see Note 4, Segment Information . |
SIGNIFICANT ACCOUNTING POLICI26
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
Cumulative Effect of Changes Made to Consolidated Balance Sheet | The table below presents the cumulative effect of the changes made to the consolidated January 1, 2018 balance sheet due to the adoption of ASC 606. BALANCE SHEET December 31, 2017, ASC 605 Adjustments Due to ASC 606 January 1, 2018 Under ASC 606 Liabilities Current liabilities Current portion of deferred revenue $ 35,761 $ (5,764 ) $ 29,997 Total current liabilities 1,512,634 (5,764 ) 1,506,870 Deferred revenue, net of current portion 352,698 (20,898 ) 331,800 Total liabilities 2,435,521 (26,662 ) 2,408,859 Stockholders’ Equity Accumulated deficit (62,650,287 ) 26,662 (62,623,625 ) Total equity $ 6,107,796 $ 26,662 $ 6,134,458 |
Impact of Adoption of ASC 606 on Balance Sheet and Statement of Operations | The table below presents the impact of the adoption of ASC 606 on our statement of operations. Six Months Ended June 30, 2018 STATEMENT OF OPERATIONS Under ASC 605 Effect of ASC 606 As Reported Under ASC 606 Revenues License revenues $ 1,422 $ (1,422 ) $ --- Total revenues 190,767 (1,422 ) 189,345 Loss from operations $ (900,655 ) $ (1,422 ) $ (902,077 ) Net loss $ (1,159,103 ) $ (1,422 ) $ (1,160,525 ) Basic and diluted loss per common share $ (0.01 ) $ (0.00 ) $ (0.01 ) The table below presents the impact of the adoption of ASC 606 on our balance sheet. June 30, 2018 BALANCE SHEET Under Effect of As Reported Liabilities and Stockholders’ Equity Current liabilities Current portion of deferred revenue $ 34,991 $ (5,764 ) $ 29,227 Total current liabilities 2,289,999 (5,764 ) 2,284,235 Deferred revenue, net of current portion 351,276 (19,476 ) 331,800 Total liabilities 2,641,275 (25,240 ) 2,616,035 Stockholders’ Equity Accumulated deficit (63,809,390 ) 25,240 (63,784,150 ) Total stockholders’ equity $ 4,954,492 $ 25,240 $ 4,979,732 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
SEGMENT INFORMATION [Abstract] | |
Revenues per Geographic Area | Revenues per geographic area for the three and six months ended June 30 are summarized as follows: Three Months Ended June 30, Six months Ended June 30, Revenues 2018 % 2017 % 2018 % 2017 % Domestic $ 2,105 2 % $ 2,878 67 % 13,102 7 % $ 5,415 2 % International 103,445 98 % 1,436 33 % 176,243 93 % 216,016 98 % Total $ 105,550 100 % $ 4,314 100 % $ 189,345 100 % $ 221,431 100 % |
INVENTORY (Tables)
INVENTORY (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
INVENTORY [Abstract] | |
Components of Inventory | The components of inventory, at the different stages of production, consisted of the following at June 30, 2018 and December 31, 2017: Inventory June 30, 2018 December 31, 2017 Raw materials $ 45,451 $ 32,329 Work-in-progress 341,073 311,632 Finished goods 71,393 153,500 Total $ 457,917 $ 497,461 |
PROPERTY, EQUIPMENT and LEASE29
PROPERTY, EQUIPMENT and LEASEHOLD IMPROVEMENTS (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
PROPERTY, EQUIPMENT and LEASEHOLD IMPROVEMENTS [Abstract] | |
Property, Equipment and Leasehold Improvements | Property, equipment and leasehold improvements, net, consisted of the following at June 30, 2018 and December 31, 2017: Property, equipment and leasehold improvements June 30, 2018 December 31, 2017 Laboratory equipment $ 424,888 $ 424,888 Manufacturing equipment 1,589,286 1,604,894 Computers, office equipment, and furniture 154,781 154,781 Computer software 4,108 4,108 Leasehold improvements 95,841 95,841 2,268,904 2,284,512 Less: accumulated depreciation and amortization (2,226,141 ) (2,230,789 ) Property, equipment and leasehold improvements, net $ 42,763 $ 53,723 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Patents [Member] | |
Intangible Assets [Abstract] | |
Intangible Assets | Intangible patent assets are composed of patents acquired in October, 2005. Intangible assets, net consisted of the following at June 30, 2018 and December 31, 2017: Intangible assets – patents June 30, 2018 December 31, 2017 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 (7,437,261 ) (7,418,891 ) Less: reserve for impairment (2,027,310 ) (2,027,310 ) Intangible assets - patents, net $ 161,367 $ 179,737 |
Future Aggregate Amortization Expense for Intangible Assets | The future aggregate amortization expense for intangible patent assets, remaining as of June 30, 2018, is as follows: Calendar Years Future Amortization Expense 2018 (Six months) $ 18,674 2019 37,044 2020 37,145 2021 37,044 2022 31,460 Total $ 161,367 |
Licensing Rights [Member] | |
Intangible Assets [Abstract] | |
Intangible Assets | Licensing rights, net consisted of the following at June 30, 2018 and December 31, 2017: Intangible assets - licensing rights June 30, 2018 December 31, 2017 Intangible assets – licensing rights, gross $ 4,381,881 $ 4,381,881 Less: accumulated amortization (931,686 ) (725,245 ) Intangible assets - licensing rights, net $ 3,450,195 $ 3,656,636 |
Future Aggregate Amortization Expense for Intangible Assets | The future aggregate amortization expense for intangible licensing rights assets, remaining as of June 30, 2018, is as follows: Calendar Years Future Amortization Expense 2018 (Six months) $ 209,862 2019 416,303 2020 416,303 2021 416,303 2022 416,303 2023 & Beyond 1,575,121 Total $ 3,450,195 |
ACCRUED LIABILITIES (Tables)
ACCRUED LIABILITIES (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
ACCRUED LIABILITIES [Abstract] | |
Accrued Liabilities | Accrued liabilities consisted of the following at June 30, 2018 and December 31, 2017: Accrued Liabilities June 30, 2018 December 31, 2017 Accrued compensation/benefits $ 129,006 $ 124,819 Accrued property taxes 2,850 --- Accrued royalties 41,951 39,144 Product rebates/returns 6 Total accrued liabilities $ 173,807 $ 163,969 |
CONVERTIBLE NOTE PAYABLE - RE32
CONVERTIBLE NOTE PAYABLE - RELATED PARTY (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
CONVERTIBLE NOTE PAYABLE - RELATED PARTY [Abstract] | |
Information Relating to Convertible Debt | Information relating to the Initial Note and the Second Note is as follows: As of June 30, 2018 Transaction Initial Principal Amount Interest Rate Maturity Date Conversion Price Principal Balance Unamortized Debt Discount Unamortized Debt Issuance Costs Carrying Value Initial Note $ 500,000 12.5 % 02/27/2019 $ 0.04 $ 500,000 $ 118,425 $ 3,145 $ 378,430 Second Note $ 500,000 12.5 % 03/31/2019 $ 0.04 $ 500,000 $ 127,860 $ 3,381 $ 368,759 Total $ 1,000,000 $ 1,000,000 $ 246,285 $ 6,526 $ 747,189 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
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 June 30, 2018 and the changes therein during the six months then ended: Number of Shares of Common Stock Subject to Exercise Weighted – Average Exercise Price Balance as of December 31, 2017 83,234,617 $ 0.06 Warrants issued --- --- Warrants exercised --- --- Warrants cancelled (660,000 ) $ 0.60 Balance as of June 30, 2018 82,574,617 $ 0.06 |
Expiration Dates for Warrants Subject to Exercise | Of the warrant shares subject to exercise as of June 30, 2018, expiration of the right to exercise is as follows: Date of Expiration Number of Warrant Shares of Common Stock Subject to Expiration January 15, 2019 80,000 April 30, 2020 194,118 March 30, 2021 25,245,442 March 31, 2027 57,055,057 Total 82,574,617 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
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 June 30, 2018 and December 31, 2017: June 30, 2018 December 31, 2017 Warrants to purchase Common Stock 82,574,617 83,234,617 Stock options to purchase Common Stock 1,635,334 150,736 Common Stock issuable upon the assumed conversion of our convertible promissory notes (1) 31,250,000 31,250,000 Total 115,459,951 114,635,353 (1) As part of the Initial Note and the Second 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 Initial Note and the Second Note mature 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, unless an event of default has occurred and is continuing. For the purposes of this Table, we have assumed that all outstanding principal and interest will be converted on each applicable maturity date. |
SHARE BASED COMPENSATION (Table
SHARE BASED COMPENSATION (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
SHARE BASED COMPENSATION [Abstract] | |
Stock Option Awards Granted | Our Board has granted the following stock option awards for the six months ended June 30: Six Months Ended June 30, Stock Option Awards 2018 2017 Quantity 1,500,000 --- Weighted average fair value per share $ 0.03 --- Fair value $ 45,000 --- (1) The Company did not award any shared-based compensation for the three and six months ended June 30, 2017. |
Weighted Average Assumptions | We use the Black-Scholes option-pricing model to estimate the fair value of share-based awards with the following weighted average assumptions for the six months ended June 30: Six Months Ended June 30, Stock Option Awards 2018 2017 Expected volatility (1) 136.27 % --- Risk-free interest rate % (2) 2.56 % --- Expected term (in years) 5.0 --- Dividend yield (3) --- --- (1) Expected volatility assumption was based upon a combination of historical stock price volatility measured on a daily basis and an estimate of expected future stock price volatility (2) Risk-free interest rate assumption is based upon U.S. Treasury bond interest rates appropriate for the term of the stock options. (3) The Company does not currently intend to pay cash dividends, thus has assumed a 0% dividend yield. (4) The Company did not award any shared-based compensation for the three and six months ended June 30, 2017. |
Allocated Share-based Compensation Expense | The following table summarizes share-based compensation related to stock options for the three and six months ended June 30: Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Research and development $ 5,610 $ 1,682 $ 5,799 $ 3,345 Selling, general and administrative --- 2,691 --- 5,352 Total share-based compensation expense $ 5,610 $ 4,373 $ 5,799 $ 8,697 |
Stock Option Activity | The following table summarizes the stock options outstanding and the number of shares of Common Stock subject to exercise as of June 30, 2018 and the changes therein during the six months then ended: Stock Options Weighted Average Exercise Price per Share Outstanding as of December 31, 2017 150,736 $ 4.26 Granted 1,500,000 $ 0.05 Forfeited/cancelled (15,402 ) $ 29.59 Exercised --- --- Outstanding as of June 30, 2018 1,635,334 $ 0.16 Exercisable as of June 30, 2018 135,334 $ 1.38 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
FAIR VALUE MEASUREMENTS [Abstract] | |
Fair Value of Financial Instruments | The following table summarizes the fair value of our financial instruments at June 30, 2018 and December 31, 2017. Description June 30, 2018 December 31, 2017 Liabilities: Convertible Note Payable – Related Party – March 2017 $ 500,000 $ 500,000 Convertible Note Payable – Related Party – February 2017 $ 500,000 $ 500,000 Total $ 1,000,000 $ 1,000,000 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | |
Future Minimum Lease Payments | The future minimum lease payments under the Office Lease and the Warehouse Lease are as follows as of June 30, 2018: Calendar Years Future Lease Expense 2018 (Six months) $ 26,080 2019 52,288 2020 --- 2021 --- Total $ 78,368 |
THE EFFECT OF RECENTLY ISSUED38
THE EFFECT OF RECENTLY ISSUED ACCOUNTING STANDARDS (Details) | Dec. 31, 2017USD ($) |
ASU 2014-09 [Member] | |
Revenue, Initial Application Period Cumulative Effect Transition [Abstract] | |
Cumulative effect of new accounting principle in period of adoption | $ 26,662 |
SIGNIFICANT ACCOUNTING POLICI39
SIGNIFICANT ACCOUNTING POLICIES, Cumulative Effect of Changes made to Consolidated Balance Sheet (Details) (Details) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Revenue, Initial Application Period Cumulative Effect Transition [Abstract] | ||
Accumulated deficit | $ (63,784,150) | $ (62,650,287) |
Current liabilities [Abstract] | ||
Current portion of deferred revenue | 29,227 | 35,761 |
Total current liabilities | 2,284,235 | 1,512,634 |
Deferred revenue, net of current portion | 331,800 | 352,698 |
Total liabilities | 2,616,035 | 2,435,521 |
Stockholders' Equity [Abstract] | ||
Accumulated deficit | (63,784,150) | (62,650,287) |
Total equity | 4,979,732 | 6,107,796 |
ASU 2014-09 [Member] | ||
Revenue, Initial Application Period Cumulative Effect Transition [Abstract] | ||
Accumulated deficit | 26,662 | |
Stockholders' Equity [Abstract] | ||
Accumulated deficit | 26,662 | |
Adjustments Due to ASC 606 [Member] | ASU 2014-09 [Member] | ||
Revenue, Initial Application Period Cumulative Effect Transition [Abstract] | ||
Deferred revenue | (26,662) | |
Accumulated deficit | 25,240 | 26,662 |
Current liabilities [Abstract] | ||
Current portion of deferred revenue | (5,764) | (5,764) |
Total current liabilities | (5,764) | (5,764) |
Deferred revenue, net of current portion | (19,476) | (20,898) |
Total liabilities | (25,240) | (26,662) |
Stockholders' Equity [Abstract] | ||
Accumulated deficit | 25,240 | 26,662 |
Total equity | 25,240 | 26,662 |
As Adjusted Under ASC 606 [Member] | ||
Revenue, Initial Application Period Cumulative Effect Transition [Abstract] | ||
Accumulated deficit | (63,809,390) | (62,623,625) |
Current liabilities [Abstract] | ||
Current portion of deferred revenue | 34,991 | 29,997 |
Total current liabilities | 2,289,999 | 1,506,870 |
Deferred revenue, net of current portion | 351,276 | 331,800 |
Total liabilities | 2,641,275 | 2,408,859 |
Stockholders' Equity [Abstract] | ||
Accumulated deficit | (63,809,390) | (62,623,625) |
Total equity | $ 4,954,492 | $ 6,134,458 |
SIGNIFICANT ACCOUNTING POLICI40
SIGNIFICANT ACCOUNTING POLICIES, Impact of Adoption on Statement of Operations and Balance Sheet (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Revenues [Abstract] | |||||
Revenues | $ 105,550 | $ 4,314 | $ 189,345 | $ 221,431 | |
Loss from operations | (449,696) | (520,015) | (902,077) | (961,591) | |
Net loss | $ (585,110) | $ (543,045) | $ (1,160,525) | $ (1,005,786) | |
Basic and diluted loss per common share (in dollars per share) | $ 0 | $ (0.01) | $ (0.01) | $ (0.01) | |
Current liabilities [Abstract] | |||||
Current portion of deferred revenue | $ 29,227 | $ 29,227 | $ 35,761 | ||
Total current liabilities | 2,284,235 | 2,284,235 | 1,512,634 | ||
Deferred revenue, net of current portion | 331,800 | 331,800 | 352,698 | ||
Total liabilities | 2,616,035 | 2,616,035 | 2,435,521 | ||
Stockholders' Equity [Abstract] | |||||
Accumulated deficit | (63,784,150) | (63,784,150) | (62,650,287) | ||
Total equity | 4,979,732 | 4,979,732 | 6,107,796 | ||
License Revenues [Member] | |||||
Revenues [Abstract] | |||||
Revenues | 0 | $ 1,436 | 0 | $ 2,858 | |
ASU 2014-09 [Member] | |||||
Stockholders' Equity [Abstract] | |||||
Accumulated deficit | 26,662 | ||||
Under ASC 605 [Member] | |||||
Revenues [Abstract] | |||||
Revenues | 190,767 | ||||
Loss from operations | (900,655) | ||||
Net loss | $ (1,159,103) | ||||
Basic and diluted loss per common share (in dollars per share) | $ (0.01) | ||||
Current liabilities [Abstract] | |||||
Current portion of deferred revenue | 34,991 | $ 34,991 | 29,997 | ||
Total current liabilities | 2,289,999 | 2,289,999 | 1,506,870 | ||
Deferred revenue, net of current portion | 351,276 | 351,276 | 331,800 | ||
Total liabilities | 2,641,275 | 2,641,275 | 2,408,859 | ||
Stockholders' Equity [Abstract] | |||||
Accumulated deficit | (63,809,390) | (63,809,390) | (62,623,625) | ||
Total equity | 4,954,492 | 4,954,492 | 6,134,458 | ||
Under ASC 605 [Member] | License Revenues [Member] | |||||
Revenues [Abstract] | |||||
Revenues | 1,422 | ||||
Effect of ASU 606 [Member] | ASU 2014-09 [Member] | |||||
Revenues [Abstract] | |||||
Revenues | (1,422) | ||||
Loss from operations | (1,422) | ||||
Net loss | $ (1,422) | ||||
Basic and diluted loss per common share (in dollars per share) | $ 0 | ||||
Current liabilities [Abstract] | |||||
Current portion of deferred revenue | (5,764) | $ (5,764) | (5,764) | ||
Total current liabilities | (5,764) | (5,764) | (5,764) | ||
Deferred revenue, net of current portion | (19,476) | (19,476) | (20,898) | ||
Total liabilities | (25,240) | (25,240) | (26,662) | ||
Stockholders' Equity [Abstract] | |||||
Accumulated deficit | 25,240 | 25,240 | 26,662 | ||
Total equity | $ 25,240 | 25,240 | $ 26,662 | ||
Effect of ASU 606 [Member] | ASU 2014-09 [Member] | License Revenues [Member] | |||||
Revenues [Abstract] | |||||
Revenues | $ (1,422) |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018USD ($)Customer | Jun. 30, 2017USD ($)Customer | Jun. 30, 2018USD ($)Customer | Jun. 30, 2017USD ($)Customer | |
Revenues per geographic area [Abstract] | ||||
Total revenues | $ 105,550 | $ 4,314 | $ 189,345 | $ 221,431 |
Total revenue, percentage | 100.00% | 100.00% | 100.00% | 100.00% |
Revenue [Member] | Customer Concentration Risk [Member] | ||||
Revenues per geographic area [Abstract] | ||||
Total revenue, percentage | 98.00% | 66.00% | 87.00% | 97.00% |
Number of major customers | Customer | 3 | 3 | 1 | 1 |
Reportable Geographical Components [Member] | Domestic [Member] | ||||
Revenues per geographic area [Abstract] | ||||
Total revenues | $ 2,105 | $ 2,878 | $ 13,102 | $ 5,415 |
Total revenue, percentage | 2.00% | 67.00% | 7.00% | 2.00% |
Reportable Geographical Components [Member] | International [Member] | ||||
Revenues per geographic area [Abstract] | ||||
Total revenues | $ 103,445 | $ 1,436 | $ 176,243 | $ 216,016 |
Total revenue, percentage | 98.00% | 33.00% | 93.00% | 98.00% |
INVENTORY (Details)
INVENTORY (Details) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Components of inventory [Abstract] | ||
Raw materials | $ 45,451 | $ 32,329 |
Work-in-progress | 341,073 | 311,632 |
Finished goods | 71,393 | 153,500 |
Total | $ 457,917 | $ 497,461 |
PROPERTY, EQUIPMENT and LEASE43
PROPERTY, EQUIPMENT and LEASEHOLD IMPROVEMENTS (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Property, equipment and leasehold improvements, net [Abstract] | |||||
Property, equipment and leasehold improvements, gross | $ 2,268,904 | $ 2,268,904 | $ 2,284,512 | ||
Less: accumulated depreciation and amortization | (2,226,141) | (2,226,141) | (2,230,789) | ||
Property, equipment and leasehold improvements, net | 42,763 | 42,763 | 53,723 | ||
Depreciation expense | 5,481 | $ 32,842 | 10,961 | $ 65,558 | |
Laboratory Equipment [Member] | |||||
Property, equipment and leasehold improvements, net [Abstract] | |||||
Property, equipment and leasehold improvements, gross | 424,888 | 424,888 | 424,888 | ||
Manufacturing Equipment [Member] | |||||
Property, equipment and leasehold improvements, net [Abstract] | |||||
Property, equipment and leasehold improvements, gross | 1,589,286 | 1,589,286 | 1,604,894 | ||
Computers, Office Equipment, and Furniture [Member] | |||||
Property, equipment and leasehold improvements, net [Abstract] | |||||
Property, equipment and leasehold improvements, gross | 154,781 | 154,781 | 154,781 | ||
Computer Software [Member] | |||||
Property, equipment and leasehold improvements, net [Abstract] | |||||
Property, equipment and leasehold improvements, gross | 4,108 | 4,108 | 4,108 | ||
Leasehold Improvements [Member] | |||||
Property, equipment and leasehold improvements, net [Abstract] | |||||
Property, equipment and leasehold improvements, gross | $ 95,841 | $ 95,841 | $ 95,841 |
INTANGIBLE ASSETS, Patents (Det
INTANGIBLE ASSETS, Patents (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Intangible assets, net [Abstract] | |||||
Total | $ 161,367 | $ 161,367 | $ 179,737 | ||
Amortization expense | 113,027 | $ 113,027 | 224,811 | $ 202,334 | |
Future aggregate amortization expense for intangible assets [Abstract] | |||||
Total | 161,367 | 161,367 | 179,737 | ||
Patents [Member] | |||||
Intangible assets, net [Abstract] | |||||
Intangible assets, gross | 9,625,938 | 9,625,938 | 9,625,938 | ||
Less: accumulated amortization | (7,437,261) | (7,437,261) | (7,418,891) | ||
Less: reserve for impairment | (2,027,310) | (2,027,310) | (2,027,310) | ||
Total | 161,367 | 161,367 | 179,737 | ||
Amortization expense | 9,236 | $ 9,236 | 18,370 | $ 18,370 | |
Future aggregate amortization expense for intangible assets [Abstract] | |||||
2018 (Six months) | 18,674 | 18,674 | |||
2,019 | 37,044 | 37,044 | |||
2,020 | 37,145 | 37,145 | |||
2,021 | 37,044 | 37,044 | |||
2,022 | 31,460 | 31,460 | |||
Total | 161,367 | 161,367 | 179,737 | ||
Patents [Member] | Amlexanox (Aphthasol) [Member] | |||||
Intangible assets, net [Abstract] | |||||
Intangible assets, gross | 2,090,000 | 2,090,000 | 2,090,000 | ||
Patents [Member] | Amlexanox (OraDiscA) [Member] | |||||
Intangible assets, net [Abstract] | |||||
Intangible assets, gross | 6,873,080 | 6,873,080 | 6,873,080 | ||
Patents [Member] | OraDisc [Member] | |||||
Intangible assets, net [Abstract] | |||||
Intangible assets, gross | 73,000 | 73,000 | 73,000 | ||
Patents [Member] | Hydrogel Nanoparticle Aggregate [Member] | |||||
Intangible assets, net [Abstract] | |||||
Intangible assets, gross | $ 589,858 | $ 589,858 | $ 589,858 |
INTANGIBLE ASSETS, Licensing Ri
INTANGIBLE ASSETS, Licensing Rights (Details) - USD ($) | Feb. 27, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Mar. 31, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 |
Finite-lived Intangible Assets [Abstract] | |||||||
Total | $ 161,367 | $ 161,367 | $ 179,737 | ||||
Amortization expense | 113,027 | $ 113,027 | 224,811 | $ 202,334 | |||
Future aggregate amortization expense for intangible assets [Abstract] | |||||||
Total | 161,367 | 161,367 | 179,737 | ||||
Licensing Rights [Member] | |||||||
Finite-lived Intangible Assets [Abstract] | |||||||
Intangible assets - licensing rights, gross | 4,381,881 | 4,381,881 | 4,381,881 | ||||
Less: accumulated amortization | (931,686) | (931,686) | (725,245) | ||||
Total | 3,450,195 | 3,450,195 | 3,656,636 | ||||
Amortization expense | 103,791 | $ 103,791 | 206,441 | $ 183,964 | |||
Future aggregate amortization expense for intangible assets [Abstract] | |||||||
2018 (Six months) | 209,862 | 209,862 | |||||
2,019 | 416,303 | 416,303 | |||||
2,020 | 416,303 | 416,303 | |||||
2,021 | 416,303 | 416,303 | |||||
2,022 | 416,303 | 416,303 | |||||
2023 & Beyond | 1,575,121 | 1,575,121 | |||||
Total | $ 3,450,195 | $ 3,450,195 | $ 3,656,636 | ||||
Velocitas Partners, LLC [Member] | |||||||
Finite-lived Intangible Assets [Abstract] | |||||||
Expected gross proceeds | $ 6,000,000 | ||||||
Velocitas Partners, LLC [Member] | Maximum [Member] | |||||||
Finite-lived Intangible Assets [Abstract] | |||||||
Expected gross proceeds | $ 6,000,000 | ||||||
Velocitas Partners, LLC [Member] | Second Closing [Member] | |||||||
Finite-lived Intangible Assets [Abstract] | |||||||
Warrants to purchase shares of common stock (in shares) | 13,375,000 | ||||||
Velocitas Partners, LLC [Member] | Second Closing [Member] | Maximum [Member] | |||||||
Finite-lived Intangible Assets [Abstract] | |||||||
Warrants to purchase shares of common stock (in shares) | 57,055,057 | ||||||
Altrazeal Trading GmbH [Member] | Second Closing [Member] | |||||||
Finite-lived Intangible Assets [Abstract] | |||||||
Warrants to purchase shares of common stock (in shares) | 13,375,000 | ||||||
Acquisition value | $ 869,375 | ||||||
Closing price of common stock (in dollars per share) | $ 0.065 |
ACCRUED LIABILITIES (Details)
ACCRUED LIABILITIES (Details) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Accrued liabilities [Abstract] | ||
Accrued compensation/benefits | $ 129,006 | $ 124,819 |
Accrued property taxes | 2,850 | 0 |
Accrued royalties | 41,951 | 39,144 |
Product rebates/returns | 0 | 6 |
Total accrued liabilities | $ 173,807 | $ 163,969 |
CONVERTIBLE NOTE PAYABLE - RE47
CONVERTIBLE NOTE PAYABLE - RELATED PARTY (Details) | Feb. 27, 2017USD ($)Closing | Jun. 30, 2018USD ($)$ / sharesshares | Jun. 30, 2017USD ($)shares | Mar. 31, 2017USD ($)Director$ / sharesshares | Jun. 30, 2018USD ($)$ / sharesshares | Jun. 30, 2017USD ($)shares | Dec. 31, 2017shares | Jul. 26, 2017shares | Jul. 25, 2017shares |
Debt Instruments [Abstract] | |||||||||
Proceeds from issuance of convertible notes and warrant, net | $ 0 | $ 983,092 | |||||||
Proceeds from sale of Series B preferred stock, net | $ 0 | $ 4,915,661 | |||||||
Authorized shares of common stock (in shares) | shares | 750,000,000 | 200,000,000 | 750,000,000 | 200,000,000 | 750,000,000 | 750,000,000 | |||
Information relating to convertible notes payable [Abstract] | |||||||||
Initial principal amount and purchase price | $ 1,000,000 | $ 1,000,000 | |||||||
Principal balance | 1,000,000 | 1,000,000 | |||||||
Unamortized debt discount | 246,285 | 246,285 | |||||||
Unamortized debt issuance costs | 6,526 | 6,526 | |||||||
Carrying value | 747,189 | 747,189 | |||||||
Interest cost recognized for promissory note and convertible debt | 31,164 | $ 31,165 | 61,986 | $ 37,341 | |||||
Amortization of debt discount for promissory note and convertible debt | 86,812 | 87,006 | 172,671 | 87,006 | |||||
Amortization of debt issuance costs for convertible debt | 2,194 | $ 1,916 | $ 4,329 | $ 1,916 | |||||
Second Closing [Member] | |||||||||
Debt Instruments [Abstract] | |||||||||
Number of board of directors | Director | 6 | ||||||||
Second Closing [Member] | Bradley J. Sacks [Member] | |||||||||
Debt Instruments [Abstract] | |||||||||
Number of board of directors | Director | 1 | ||||||||
Second Closing [Member] | Major Investor or Board of Directors [Member] | |||||||||
Debt Instruments [Abstract] | |||||||||
Number of board of directors | Director | 1 | ||||||||
Velocitas Partners, LLC [Member] | |||||||||
Debt Instruments [Abstract] | |||||||||
Gross proceeds | $ 6,000,000 | ||||||||
Number of closings | Closing | 2 | ||||||||
Velocitas Partners, LLC [Member] | Maximum [Member] | |||||||||
Debt Instruments [Abstract] | |||||||||
Gross proceeds | $ 6,000,000 | ||||||||
Velocitas Partners, LLC [Member] | Common Stock [Member] | |||||||||
Debt Instruments [Abstract] | |||||||||
Convertible preferred stock shares issued upon conversion (in shares) | shares | 125,000,000 | ||||||||
Velocitas Partners, LLC [Member] | Series B Convertible Preferred Stock [Member] | |||||||||
Debt Instruments [Abstract] | |||||||||
Preferred stock, shares outstanding (in shares) | shares | 1,250 | ||||||||
Velocitas Partners, LLC [Member] | First Closing [Member] | |||||||||
Debt Instruments [Abstract] | |||||||||
Debt instrument term | 2 years | ||||||||
Velocitas Partners, LLC [Member] | Second Closing [Member] | |||||||||
Debt Instruments [Abstract] | |||||||||
Debt instrument term | 2 years | ||||||||
Proceeds from issuance of convertible notes and warrant, net | $ 983,092 | ||||||||
Debt issuance costs | $ 16,908 | ||||||||
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 Instruments [Abstract] | |||||||||
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 Instruments [Abstract] | |||||||||
Number of shares issued (in shares) | shares | 1,250 | ||||||||
Gross proceeds from issuance of preferred stock | $ 5,000,000 | ||||||||
Proceeds from sale of Series B preferred stock, net | 4,915,661 | ||||||||
Equity issuance costs | $ 84,339 | ||||||||
Initial Note [Member] | |||||||||
Information relating to convertible notes payable [Abstract] | |||||||||
Initial principal amount and purchase price | $ 500,000 | $ 500,000 | |||||||
Interest rate | 12.50% | 12.50% | |||||||
Maturity date | Feb. 27, 2019 | ||||||||
Conversion price (in dollars per share) | $ / shares | $ 0.04 | $ 0.04 | |||||||
Principal balance | $ 500,000 | $ 500,000 | |||||||
Unamortized debt discount | 118,425 | 118,425 | |||||||
Unamortized debt issuance costs | 3,145 | 3,145 | |||||||
Carrying value | 378,430 | 378,430 | |||||||
Second Note [Member] | |||||||||
Information relating to convertible notes payable [Abstract] | |||||||||
Initial principal amount and purchase price | $ 500,000 | $ 500,000 | |||||||
Interest rate | 12.50% | 12.50% | |||||||
Maturity date | Mar. 31, 2019 | ||||||||
Conversion price (in dollars per share) | $ / shares | $ 0.04 | $ 0.04 | |||||||
Principal balance | $ 500,000 | $ 500,000 | |||||||
Unamortized debt discount | 127,860 | 127,860 | |||||||
Unamortized debt issuance costs | 3,381 | 3,381 | |||||||
Carrying value | $ 368,759 | $ 368,759 |
EQUITY TRANSACTIONS (Details)
EQUITY TRANSACTIONS (Details) | Feb. 27, 2017USD ($)Closing | Mar. 31, 2017USD ($) | Jun. 30, 2018USD ($)shares | Jun. 30, 2017USD ($) | Jul. 26, 2017shares |
Class of Stock Disclosures [Abstract] | |||||
Proceeds from sale of Series B convertible preferred stock, net | $ 0 | $ 4,915,661 | |||
Velocitas Partners, LLC [Member] | |||||
Class of Stock Disclosures [Abstract] | |||||
Proceeds from issuance or sale of equity | $ 6,000,000 | ||||
Number of closings | Closing | 2 | ||||
Common Stock [Member] | Velocitas Partners, LLC [Member] | |||||
Class of Stock Disclosures [Abstract] | |||||
Convertible preferred stock shares issued upon conversion (in shares) | shares | 125,000,000 | ||||
Series B Convertible Preferred Stock [Member] | Velocitas Partners, LLC [Member] | |||||
Class of Stock Disclosures [Abstract] | |||||
Preferred stock, shares outstanding (in shares) | shares | 1,250 | ||||
March 2017 Offering [Member] | Velocitas Partners, LLC [Member] | |||||
Class of Stock Disclosures [Abstract] | |||||
Proceeds from issuance or sale of equity | $ 6,000,000 | ||||
Number of closings | Closing | 2 | ||||
March 2017 Offering [Member] | Common Stock [Member] | Velocitas Partners, LLC [Member] | |||||
Class of Stock Disclosures [Abstract] | |||||
Convertible preferred stock shares issued upon conversion (in shares) | shares | 125,000,000 | ||||
March 2017 Offering [Member] | Series B Convertible Preferred Stock [Member] | Velocitas Partners, LLC [Member] | |||||
Class of Stock Disclosures [Abstract] | |||||
Number of shares issued (in shares) | shares | 1,250 | ||||
Gross proceeds from issuance of preferred stock | $ 5,000,000 | ||||
Proceeds from sale of Series B convertible preferred stock, net | 4,915,661 | ||||
Equity issuance costs | $ 84,339 | ||||
Preferred stock, shares outstanding (in shares) | shares | 1,250 |
STOCKHOLDERS' EQUITY (Details)
STOCKHOLDERS' EQUITY (Details) - shares | Jun. 30, 2018 | Dec. 31, 2017 |
Common Stock [Abstract] | ||
Common stock, shares issued (in shares) | 201,349,431 | 201,349,431 |
Common stock, shares outstanding (in shares) | 201,349,431 | 201,349,431 |
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] | ||
Preferred Stock [Abstract] | ||
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
STOCKHOLDERS' EQUITY, Warrants
STOCKHOLDERS' EQUITY, Warrants (Details) | 6 Months Ended |
Jun. 30, 2018$ / sharesshares | |
Warrants and Number of Shares of Common Stock Subject to Exercise [Roll Forward] | |
Balance (in shares) | 83,234,617 |
Warrants issued (in shares) | 0 |
Warrants exercised (in shares) | 0 |
Warrants cancelled (in shares) | (660,000) |
Balance (in shares) | 82,574,617 |
Warrants, Weighted-Average Exercise Price [Abstract] | |
Balance (in dollars per share) | $ / shares | 0.06 |
Warrants issued (in dollars per share) | $ / shares | 0 |
Warrants exercised (in dollars per share) | $ / shares | 0 |
Warrants cancelled (in dollars per share) | $ / shares | 0.60 |
Balance (in dollars per share) | $ / shares | 0.06 |
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) - $ / shares | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2018 | Dec. 31, 2017 | ||
Earnings Per Share, Diluted [Abstract] | |||
Antidilutive securities excluded from calculating basic and diluted net loss per common share (in shares) | 115,459,951 | 114,635,353 | |
Initial Note [Member] | |||
Earnings Per Share, Diluted [Abstract] | |||
Conversion price (in dollars per share) | $ 0.04 | ||
Maturity date | Feb. 27, 2019 | ||
Second Note [Member] | |||
Earnings Per Share, Diluted [Abstract] | |||
Conversion price (in dollars per share) | $ 0.04 | ||
Maturity date | Mar. 31, 2019 | ||
Warrants to Purchase Common Stock [Member] | |||
Earnings Per Share, Diluted [Abstract] | |||
Antidilutive securities excluded from calculating basic and diluted net loss per common share (in shares) | 82,574,617 | 83,234,617 | |
Stock Options to Purchase Common Stock [Member] | |||
Earnings Per Share, Diluted [Abstract] | |||
Antidilutive securities excluded from calculating basic and diluted net loss per common share (in shares) | 1,635,334 | 150,736 | |
Common Stock Issuable Upon the Assumed Conversion of Our Convertible Promissory Notes [Member] | |||
Earnings Per Share, Diluted [Abstract] | |||
Antidilutive securities excluded from calculating basic and diluted net loss per common share (in shares) | [1] | 31,250,000 | 31,250,000 |
Conversion price (in dollars per share) | $ 0.04 | ||
[1] | As part of the Initial Note and the Second 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 Initial Note and the Second Note mature 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 $0.04 per share, unless an event of default has occurred and is continuing. For the purposes of this Table, we have assumed that all outstanding principal and interest will be converted on each applicable maturity date. |
SHARE BASED COMPENSATION, Stock
SHARE BASED COMPENSATION, Stock option, restricted stock and summary of plans (Details) - USD ($) | 6 Months Ended | |||||
Jun. 30, 2018 | Jun. 30, 2017 | [1] | Mar. 28, 2018 | Mar. 31, 2006 | ||
Options Granted [Abstract] | ||||||
Quantity (in shares) | 1,500,000 | 0 | ||||
Weighted average fair value per share (in dollars per share) | $ 0.03 | $ 0 | ||||
Fair value | $ 45,000,000 | $ 0 | ||||
Weighted average assumptions to estimate the fair value of share-based awards [Abstract] | ||||||
Expected volatility | [2] | 136.27% | 0.00% | |||
Risk-fee interest rate % | [3] | 2.56% | 0.00% | |||
Expected term | 5 years | 0 years | ||||
Dividend yield | [4] | 0.00% | 0.00% | |||
Options, Outstanding [Roll Forward] | ||||||
Granted (in shares) | 1,500,000 | 0 | ||||
Stock Options [Member] | ||||||
Options Granted [Abstract] | ||||||
Quantity (in shares) | 1,500,000 | |||||
Nonvested Awards, unearned share-based compensation [Abstract] | ||||||
Unearned share-based compensation expense | $ 39,000 | |||||
Unearned share-based compensation, recognition period | 21 months | |||||
Options, Outstanding [Roll Forward] | ||||||
Outstanding, beginning of period (in shares) | 150,736 | |||||
Granted (in shares) | 1,500,000 | |||||
Forfeited/cancelled (in shares) | (15,402) | |||||
Exercised (in shares) | 0 | |||||
Outstanding, end of period (in shares) | 1,635,334 | |||||
Exercisable (in shares) | 135,334 | |||||
Outstanding, Weighted Average Exercise Price [Roll Forward] | ||||||
Outstanding, beginning of period (in dollars per share) | $ 4.26 | |||||
Granted (in dollars per share) | 0.05 | |||||
Forfeited/cancelled (in dollars per share) | 29.59 | |||||
Exercised (in dollars per share) | 0 | |||||
Outstanding, end of period (in dollars per share) | 0.16 | |||||
Exercisable (in dollars per share) | $ 1.38 | |||||
2006 Equity Incentive Plan [Member] | ||||||
Additional disclosures [Abstract] | ||||||
Number of shares authorized (in shares) | 2,800,000 | 133,333 | ||||
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 | |||||
2018 Equity Incentive Plan [Member] | ||||||
Additional disclosures [Abstract] | ||||||
Number of shares authorized (in shares) | 20,000,000 | |||||
Number of shares available for grant (in shares) | 18,500,000 | |||||
2018 Equity Incentive Plan [Member] | Stock Options [Member] | ||||||
Options Granted [Abstract] | ||||||
Quantity (in shares) | 1,500,000 | |||||
Options, Outstanding [Roll Forward] | ||||||
Granted (in shares) | 1,500,000 | |||||
Outstanding, Weighted Average Exercise Price [Roll Forward] | ||||||
Granted (in dollars per share) | $ 0.05 | |||||
Additional disclosures [Abstract] | ||||||
Number of options granted to date (in shares) | 1,500,000 | |||||
2018 Equity Incentive Plan [Member] | Stock Options [Member] | Maximum [Member] | ||||||
Options Granted [Abstract] | ||||||
Quantity (in shares) | 20,000,000 | |||||
Options, Outstanding [Roll Forward] | ||||||
Granted (in shares) | 20,000,000 | |||||
[1] | The Company did not award any shared-based compensation for the three and six months ended June 30, 2017. | |||||
[2] | Expected volatility assumption was based upon a combination of historical stock price volatility measured on a daily basis and an estimate of expected future stock price volatility | |||||
[3] | Risk-free interest rate assumption is based upon U.S. Treasury bond interest rates appropriate for the term of the stock options. | |||||
[4] | The Company does not currently intend to pay cash dividends, thus has assumed a 0% dividend yield. |
SHARE BASED COMPENSATION, Alloc
SHARE BASED COMPENSATION, Allocated compensation expense (Details) - Stock Options [Member] - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Employee Service Share-based Compensation, Aggregate Disclosures [Abstract] | ||||
Share-based compensation expense | $ 5,610 | $ 4,373 | $ 5,799 | $ 8,697 |
Research and Development [Member] | ||||
Employee Service Share-based Compensation, Aggregate Disclosures [Abstract] | ||||
Share-based compensation expense | 5,610 | 1,682 | 5,799 | 3,345 |
Selling, General and Administrative [Member] | ||||
Employee Service Share-based Compensation, Aggregate Disclosures [Abstract] | ||||
Share-based compensation expense | $ 0 | $ 2,691 | $ 0 | $ 5,352 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Liabilities [Abstract] | ||
Note payable | $ 1,000,000 | $ 1,000,000 |
Convertible Note Payable - Related Party - March 2017 [Member] | ||
Liabilities [Abstract] | ||
Note payable | 500,000 | 500,000 |
Convertible Note Payable - Related Party - February 2017 [Member] | ||
Liabilities [Abstract] | ||
Note payable | $ 500,000 | $ 500,000 |
COMMITMENTS AND CONTINGENCIES55
COMMITMENTS AND CONTINGENCIES (Details) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | 13 Months Ended | 23 Months Ended | 36 Months Ended | 60 Months Ended | |||
Dec. 31, 2017USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Mar. 16, 2015USD ($) | Mar. 31, 2014USD ($) | Feb. 22, 2013USD ($) | Mar. 31, 2018USD ($) | Mar. 31, 2011USD ($) | Dec. 15, 2017ft² | |
Future minimum lease payments [Abstract] | |||||||||||
2018 (Six months) | $ 26,080 | $ 26,080 | |||||||||
2,019 | 52,288 | 52,288 | |||||||||
2,020 | 0 | 0 | |||||||||
2,021 | 0 | 0 | |||||||||
Total | 78,368 | 78,368 | |||||||||
Rent expense for operating lease | 15,025 | $ 33,596 | $ 28,779 | $ 65,944 | |||||||
Storage and Warehouse [Member] | |||||||||||
Leases [Abstract] | |||||||||||
Minimum monthly lease obligation | $ 1,629 | ||||||||||
Office and Laboratory Space [Member] | |||||||||||
Leases [Abstract] | |||||||||||
Minimum monthly lease obligation | $ 2,729 | $ 9,379 | $ 9,193 | $ 9,776 | $ 9,436 | $ 9,330 | |||||
Office rentable square feet | ft² | 2,500 |
COMMITMENTS AND CONTINGENCIES,
COMMITMENTS AND CONTINGENCIES, Related Party (Details) - USD ($) | Feb. 27, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Mar. 31, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | Apr. 02, 2017 |
Related Party Obligations [Abstract] | ||||||||
Concentration risk, percentage | 100.00% | 100.00% | 100.00% | 100.00% | ||||
Summary of compensation earned, compensation paid in cash, and compensation temporarily deferred [Abstract] | ||||||||
Deferred compensation | $ 72,000 | $ 72,000 | $ 72,000 | |||||
Velocitas Partners, LLC [Member] | ||||||||
Related Party Obligations [Abstract] | ||||||||
Expected gross proceeds | $ 6,000,000 | |||||||
Velocitas Partners, LLC [Member] | Maximum [Member] | ||||||||
Related Party Obligations [Abstract] | ||||||||
Expected gross proceeds | $ 6,000,000 | |||||||
Velocitas Partners, LLC [Member] | Second Closing [Member] | ||||||||
Related Party Obligations [Abstract] | ||||||||
Warrants to purchase shares of common stock (in shares) | 13,375,000 | |||||||
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 | |||||||
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 | |||||||
Closing price of common stock (in dollars per share) | $ 0.065 | |||||||
Velocitas GmbH [Member] | ||||||||
Related Party Obligations [Abstract] | ||||||||
Monthly payment | $ 25,833 | |||||||
Velocitas GmbH [Member] | Revenue [Member] | ||||||||
Related Party Obligations [Abstract] | ||||||||
Related party sales | $ 0 | $ 215,000 | ||||||
Concentration risk, percentage | 0.00% | 97.00% | ||||||
Velocitas GmbH [Member] | Accounts Receivable [Member] | ||||||||
Related Party Obligations [Abstract] | ||||||||
Outstanding accounts receivable | $ 0 | $ 0 | $ 0 |
COMMITMENTS AND CONTINGENCIES57
COMMITMENTS AND CONTINGENCIES, Contingent Milestone Obligations (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2018 | Mar. 07, 2008 | |
Access Pharmaceuticals [Member] | ||
Loss Contingency [Abstract] | ||
Future milestone obligations | $ 4,750,000 | |
Accrued expenses related to future milestone payments | 42,000 | |
Access Pharmaceuticals [Member] | Annual Sales, Certain Products [Member] | Minimum [Member] | ||
Loss Contingency [Abstract] | ||
Milestone for payment | 20,000,000 | |
Access Pharmaceuticals [Member] | Annual Sales, Certain Products [Member] | Maximum [Member] | ||
Loss Contingency [Abstract] | ||
Milestone for payment | 40,000,000 | |
Access Pharmaceuticals [Member] | Annual Sales, Any One Certain Product [Member] | ||
Loss Contingency [Abstract] | ||
Milestone for payment | 20,000,000 | |
Access Pharmaceuticals [Member] | Cumulative Sales, Certain Products [Member] | Minimum [Member] | ||
Loss Contingency [Abstract] | ||
Milestone for payment | 50,000,000 | |
Access Pharmaceuticals [Member] | Cumulative Sales, Certain Products [Member] | Maximum [Member] | ||
Loss Contingency [Abstract] | ||
Milestone for payment | $ 100,000,000 | |
ProStrakan Ltd [Member] | ||
Loss Contingency [Abstract] | ||
Royalty percentage | 30.00% | |
ProStrakan Ltd [Member] | Maximum [Member] | ||
Loss Contingency [Abstract] | ||
Future milestone obligations | $ 1,400,000 |
COMMITMENTS AND CONTINGENCIES58
COMMITMENTS AND CONTINGENCIES, Prescription Drug User Fee Obligation (Details) - USD ($) | 1 Months Ended | |
Nov. 30, 2017 | Jun. 30, 2018 | |
Loss Contingency [Abstract] | ||
Settlement payment amount to DHHS | $ 400,000 | |
Assessed Prescription Drug User Fee [Member] | ||
Loss Contingency [Abstract] | ||
Prescription drug user fees | $ 535,000 |
LEGAL PROCEEDINGS (Details)
LEGAL PROCEEDINGS (Details) | 6 Months Ended |
Jun. 30, 2018 | |
LEGAL PROCEEDINGS [Abstract] | |
Maximum percentage of material proceedings/interest | 5.00% |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - Stock Options [Member] | Jul. 20, 2018AwardServiceProviderThreshold$ / sharesshares | Jun. 30, 2018$ / shares |
Stock option awards [Abstract] | ||
Exercise price (in dollars per share) | $ 0.05 | |
Subsequent Event [Member] | ||
Stock option awards [Abstract] | ||
Number of stock option awards approved for grant | Award | 2 | |
Number of service providers | ServiceProvider | 2 | |
Exercise price (in dollars per share) | $ 0.05 | |
Term of stock option award | 10 years | |
Number of performance thresholds | Threshold | 4 | |
Subsequent Event [Member] | Maximum [Member] | ||
Stock option awards [Abstract] | ||
Maximum number of shares purchased per award (in shares) | shares | 500,000 |