Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Mar. 24, 2017 | Jun. 30, 2016 | |
Document and Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2016 | ||
Entity Registrant Name | GelTech Solutions, Inc. | ||
Entity Central Index Key | 1,403,676 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,016 | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Common Stock, Shares Outstanding | 56,090,687 | ||
Entity Public Float | $ 10 | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Current Reporting Status | Yes |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
ASSETS | ||
Cash and cash equivalents | $ 151,184 | $ 135,266 |
Accounts receivable trade, net | 108,659 | 156,733 |
Inventories | 1,662,429 | 1,428,157 |
Prepaid expenses and other current assets | 109,801 | 89,808 |
Total current assets | 2,032,073 | 1,809,964 |
Furniture, fixtures and equipment, net | 253,294 | 134,259 |
Deposits | 16,086 | 16,086 |
Total assets | 2,301,453 | 1,960,309 |
LIABILITIES AND STOCKHOLDERS' DEFICIT | ||
Accounts payable | 141,794 | 271,566 |
Accrued expenses | 521,781 | 344,094 |
Deferred revenue | 6,667 | |
Accrual for settlement | 26,789 | 80,000 |
Insurance premium finance contract | 51,957 | 54,611 |
Total current liabilities | 748,988 | 750,271 |
Convertible notes - related party, net of discounts | 2,956,407 | 2,946,118 |
Convertible Line of Credit - related party, net of discounts | 4,959,674 | 2,746,336 |
Total liabilities | 8,665,069 | 6,442,725 |
Commitments and contingencies (Note 10) | ||
Stockholders' deficit | ||
Preferred stock: $0.001 par value; 5,000,000 shares authorized; no shares issued and outstanding | ||
Common stock: $0.001 par value; 150,000,000 shares authorized; 53,605,180 and 48,972,496 shares issued and outstanding as of December 31, 2016 and 2015, respectively. | 53,605 | 48,972 |
Additional paid in capital | 41,540,705 | 38,754,495 |
Accumulated deficit | (47,957,926) | (43,285,883) |
Total stockholders' deficit | (6,363,616) | (4,482,416) |
Total liabilities and stockholders' deficit | $ 2,301,453 | $ 1,960,309 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value per share | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value per share | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares issued | 53,605,180 | 48,972,496 |
Common stock, shares outstanding | 53,605,180 | 48,972,496 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Statement [Abstract] | ||
Sales | $ 1,201,322 | $ 1,310,210 |
Cost of goods sold | 384,257 | 516,034 |
Gross profit | 817,065 | 794,176 |
Operating expenses: | ||
Selling, general and administrative expenses | 4,210,080 | 5,184,762 |
Research and development | 233,939 | 192,499 |
Total operating expenses | 4,444,019 | 5,377,261 |
Loss from operations | (3,626,954) | (4,583,085) |
Other income (expense) | ||
Interest income | 12 | 13 |
Gain on settlement | 300,000 | |
Gain (loss) on conversion of interest | (72,765) | 12,841 |
Other income | 340 | 58,856 |
Loss on settlement | (347,420) | (492,867) |
Loss on extension of warrants | (206,620) | |
Loss on extinguishment of debt | (596,648) | |
Interest expense | (718,636) | (423,090) |
Total other income (expense) | (1,045,089) | (1,440,895) |
Net loss | $ (4,672,043) | $ (6,023,980) |
Net loss per common share - basic and diluted | $ (0.09) | $ (0.13) |
Weighted average shares outstanding - basic and diluted | 51,263,804 | 47,812,775 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT - USD ($) | Common Stock [Member] | Additional Paid In Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2014 | $ 46,250 | $ 35,902,286 | $ (37,261,903) | $ (1,313,367) |
Balance, shares at Dec. 31, 2014 | 46,249,719 | |||
Common stock issued for cash | $ 546 | 213,704 | 214,250 | |
Common stock issued for cash, shares | 545,865 | |||
Common stock and warrants issued for cash | $ 652 | 149,348 | 150,000 | |
Common stock and warrants issued for cash, shares | 652,174 | |||
Common stock issued for cash in connection with stock purchase agreement | $ 458 | 198,662 | 199,120 | |
Common stock issued for cash in connection with stock purchase agreement, shares | 457,797 | |||
Common stock issued for services | $ 24 | 11,603 | ||
Common stock issued for services, shares | 24,542 | |||
Common stock issued for interest | $ 529 | 211,441 | 211,970 | |
Common stock issued for interest, shares | 529,384 | |||
Common stock issued as a commitment fee | $ 291 | (291) | ||
Common stock issued as a commitment fee, shares | 291,097 | |||
Common stock issued for settlement | $ 200 | 135,800 | 136,000 | |
Common stock issued for settlement, shares | 200,000 | |||
Common stock issued to purchase vehicle | $ 22 | 15,978 | 16,000 | |
Common stock issued to purchase vehicle, shares | 21,918 | |||
Warrants issued as settlement | ||||
Options, warrants and stock appreciation rights vested | 1,356,286 | 1,356,286 | ||
Loan discount from beneficial conversion feature and warrants | 559,678 | 559,678 | ||
Net loss | (6,023,980) | (6,023,980) | ||
Balance at Dec. 31, 2015 | $ 48,972 | 38,754,495 | (43,285,883) | $ (4,482,416) |
Balance, shares at Dec. 31, 2015 | 48,972,496 | 48,972,496 | ||
Common stock issued for cash | $ 1,592 | 498,408 | $ 500,000 | |
Common stock issued for cash, shares | 1,591,700 | |||
Common stock issued for cash in connection with stock purchase agreement | $ 2,078 | 712,997 | 715,075 | |
Common stock issued for cash in connection with stock purchase agreement, shares | 2,078,008 | |||
Common stock issued for services | $ 31 | 13,036 | 13,067 | |
Common stock issued for services, shares | 30,240 | |||
Common stock issued for interest | $ 933 | 445,009 | 445,942 | |
Common stock issued for interest, shares | 932,736 | |||
Extension of warrant expiration dates | 206,620 | 206,620 | ||
Warrants issued as settlement | 70,631 | 70,631 | ||
Warrants issued for services | 44,477 | 44,477 | ||
Options, warrants and stock appreciation rights vested | 434,687 | 434,687 | ||
Loan discount from beneficial conversion feature and warrants | 360,344 | 360,344 | ||
Net loss | (4,672,043) | (4,672,043) | ||
Balance at Dec. 31, 2016 | $ 53,605 | $ 41,540,705 | $ (47,957,926) | $ (6,363,616) |
Balance, shares at Dec. 31, 2016 | 53,605,180 | 53,605,180 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Reconciliation of net loss to net cash used in operating activities: | ||
Net loss | $ (4,672,043) | $ (6,023,980) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 83,445 | 59,660 |
Bad debt expense | (21,875) | 23,900 |
Amortization of convertible debt discounts | 153,971 | 76,791 |
Warrants issued for services | 44,477 | |
Equity compensation expense | 434,687 | 1,356,286 |
Loss on extinguishment of debt | 596,648 | |
Loss on extension of warrants | 206,620 | |
(Gain) Loss on stock issued for interest | 72,765 | (12,841) |
Stock issued for services | 13,067 | |
Reversal of litigation accrual | (56,956) | |
Changes in assets and liabilities: | ||
Accounts receivable | 69,949 | (116,392) |
Inventories | (234,272) | (458,972) |
Prepaid expenses and other current assets | 59,437 | 92,285 |
Accounts payable | (129,772) | 123,532 |
Deferred revenue | 6,667 | |
Settlement accrual | 17,420 | 216,000 |
Accrued expenses | 550,864 | 346,429 |
Net cash used in operating activities | (3,344,593) | (3,777,610) |
Cash flows from Investing Activities | ||
Purchases of equipment | (202,480) | (18,864) |
Net cash used in investing activities | (202,480) | (18,864) |
Cash flows from Financing Activities | ||
Proceeds from sale of stock through private placements | 214,250 | |
Proceeds from sale of stock and warrants through private placements | 500,000 | 150,000 |
Proceeds from sale of stock under stock purchase agreement | 715,075 | 199,120 |
Proceeds from advances on convertible line of credit - related party | 2,430,000 | 3,265,000 |
Payments on insurance finance contract | (82,084) | (92,245) |
Net cash provided by financing activities | 3,562,991 | 3,736,125 |
Net increase (decrease) in cash and cash equivalents | 15,918 | (60,349) |
Cash and cash equivalents - beginning | 135,266 | 195,615 |
Cash and cash equivalents - ending | 151,184 | 135,266 |
Supplemental Disclosure of Cash Flow Information: | ||
Cash paid for interest | 2,430 | 3,192 |
Cash paid for income taxes | ||
Supplementary Disclosure of Non-cash Investing and Financing Activities: | ||
Financing of prepaid insurance contracts | 79,430 | 83,999 |
Beneficial conversion feature of convertible notes | 180,172 | 279,839 |
Loan discount from issuance of warrants | 180,172 | 340,229 |
Warrants issued for settlement | 70,631 | |
Stock issued for vehicle purchase | 16,000 | |
Common stock issued for accrued interest | 445,942 | 224,811 |
Stock issued for settlement | $ 136,000 |
NATURE OF OPERATIONS, BASIS OF
NATURE OF OPERATIONS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NATURE OF OPERATIONS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 1. NATURE OF OPERATIONS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations GelTech Solutions, Inc., or GelTech or the Company, generates revenue primarily from marketing products based around the following four product categories (1) FireIce®, a water enhancing powder that can be utilized both as a fire suppressant in urban firefighting, including fires in underground utility structures, and in wildland firefighting and as a medium-term fire retardant to protect wildlands, structures and firefighters; (2) FireIce Shield®, a line of products used in industry by manufacturers, plumbers, and welders, and by police departments and first responders to protect assets from fire; (3) Soil 2 2 2 2 The Company also markets equipment that is used to apply these primary products including (1) Emergency Manhole FireIce Delivery System, or EMFIDS, an innovative system designed to deliver FireIce® into a manhole in the event of a fire or explosion. (2) FireIce® Home Defense Unit, a system for applying FireIce® to structures to protect them from wildfires and (3) the FireIce Shield® CTP unit used by contractors performing cutting and welding on communication towers to protect equipment and surrounding landscaping. On January 25, 2016, our Board of Directors approved a change in our fiscal year-end from June 30 to December 31, with the change to the calendar year reporting cycle beginning January 1, 2016. Our consolidated financial statements have been prepared on a going concern basis, and we need to generate sufficient material revenues to support the ongoing business of GelTech. (See Note 2) The corporate office is located in Jupiter, Florida. Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its three wholly-owned subsidiaries: FireIce Gel, Inc., GelTech International, Inc. and Weather Tech Innovations, Inc. There has been no activity in the subsidiaries during the years ended December 31, 2016 and 2015. All intercompany balances and transactions have been eliminated in consolidation. Cash and Cash Equivalents For the purposes of the statements of cash flows, the Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. The Company’s cash equivalents consist of a brokerage money market account. Accounts Receivable Accounts receivable are customer obligations due under normal trade terms. Senior management reviews accounts receivable on a monthly basis to determine if any receivables will potentially be uncollectible. The Company includes any accounts receivable balances that are determined to be uncollectible, along with a general reserve, in its overall allowance for doubtful accounts. After all attempts to collect a receivable have failed, the receivable is written off against the allowance. Inventories Inventories are stated at the lower of cost or market, with cost determined using a first-in, first-out method. Property and Equipment and Depreciation Property and equipment is recorded at cost. Depreciation is computed using the straight-line method based on the estimated useful lives of the related assets of 3 to 7 years. Leasehold improvements are amortized over the lesser of the lease term or the useful life of the improvements. Expenditures for maintenance and repairs are expensed as incurred. Impairment of Long-Lived Assets The Company accounts for long-lived assets in accordance with the provisions of ASC 360-10. This statement requires that long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. Fair Value of Financial Instruments and Fair Value Measurements We measure our financial assets and liabilities in accordance with ASC 820 "Fair Value Measurements and Disclosures". For certain of our financial instruments, including cash equivalents, accounts receivable, accounts payable and accrued expenses, the carrying amounts approximate fair value due to their short maturities. The carrying amount of our convertible and other debt approximates the fair value because the interest rate on those debts do not vary materially from the market rate for similar debt instruments. We adopted accounting guidance for fair value measurements of financial assets and liabilities and adopted the same guidance for non-financial assets and liabilities effective July 1, 2009. The adoption did not have a material impact on our results of operations, financial position or liquidity. The standard defines fair value, provides guidance for measuring fair value and requires certain disclosures. This standard does not require any new fair value measurements, but rather applies to all other accounting pronouncements that require or permit fair value measurements. This guidance does not apply to measurements related to share-based payments. This guidance discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). The guidance utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels: Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: Inputs other than quoted prices that are observable, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. Level 3: Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect those that a market participant would use. The Company had no financial or non-financial assets or liabilities measured at fair value and subject to this accounting standard as of December 31, 2016 or 2015. Revenue Recognition Revenue from sales of products is recognized when persuasive evidence of an arrangement exists, products have been shipped to the customer, economic risk of loss has passed to the customer, the price is fixed or determinable, collection is reasonably assured, and any future obligations of the Company are insignificant. Revenue is shown net of returns and allowances. The Company provides certain customers with the right of return for unsold product. Sales to these customers are recorded as the customer sells the product, thus removing the right of return. Products shipped from either our third-party fulfillment companies or our Jupiter, Florida or Irwindale, California locations are shipped FOB shipping point. Normal payment terms are net 30 days depending on the arrangement we have with the customer. As such, revenue is recognized when product has been shipped from either the third-party fulfillment company or from the Jupiter, Florida or Irwindale, California locations. The Company follows the guidance of ASC 605-50-25, “Revenue Recognition, Customer Payments”. Accordingly, any incentives received from vendors are recognized as a reduction of the cost of products. Promotional products or samples given to customers or potential customers are recognized as a cost of goods sold. However, products we utilize to perform demonstrations for potential customers are recorded as a marketing expense in operations. In June 2016, the Company entered into two agreements with a state forestry agency whereby the Company agreed to pay for and build two fixed airport mixing facilities in order to support the state agency’s aerial wildland firefighting operations. In connection with the agreement, the state agency has the use of the equipment in exchange for paying a premium price per bucket for our HVO-F aerial FireIce product and also making an initial minimum purchase of 200 buckets per year. As such, the Company has deferred the premium portion of the bucket price for the minimum purchase amount and will recognize the revenue related to the premium over 12 months. For the year ended December 31, 2016, the Company has recognized $9,333 in revenue and has deferred $6,667 of the minimum purchase amounts. Shipping and Handling Costs Amounts invoiced to customers for shipping and handling are included in revenues. Shipping and handling costs related to sales of products are included in cost of sales in the amount of $27,754 and $23,384 for the years ended December 31, 2016 and 2015, respectively. Research and Development In accordance with ASC 730-10 expenditures for research and development of the Company's products are expensed when incurred, and are included in operating expenses. The Company recognized research and development costs of $233,939 and $192,499 during the years ended December 31 2016 and 2015, respectively. Advertising The Company conducts advertising for the promotion of its products and services. In accordance with ASC 720-35, advertising costs are charged to operations when incurred; such amounts aggregated $11,192 and $50,684, respectively, during the years ended December 31, 2016 and 2015. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Management believes that the estimates utilized in preparing its consolidated financial statements are reasonable; however, actual results could differ materially from these estimates. Significant estimates during the years ended December 31, 2016 and 2015 include the allowance for doubtful accounts, depreciation and amortization, valuation of inventories, valuation of the beneficial conversion features associated with convertible notes, valuation of options and warrants granted for services or settlements, valuation of common stock granted for services or for debt conversion, accruals for litigation losses and the valuation of deferred tax assets. Net Earnings (Loss) per Share The Company computes net earnings (loss) per share in accordance with ASC 260-10. ASC 260-10 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period. Diluted EPS excludes all dilutive potential common shares if their effect is anti-dilutive. For the years ended December 31, 2016 and 2015, there was no separate computation of dilutive net loss per share since the common stock equivalents outstanding were anti-dilutive due to the net losses. At December 31, 2016, there were options to purchase 11,696,340 shares and warrants to purchase 15,733,564 shares of common stock outstanding which may dilute future earnings per share. In addition, there are 23,427,312 shares reserved for issuance related to convertible note agreements. Stock-Based Compensation The Company accounts for stock-based compensation in accordance with ASC 718-10 “Compensation – Stock Compensation” which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees and directors including employee stock options, restricted stock units, and stock appreciation rights are based on estimated fair values. Stock option compensation expense recognized under ASC 718-10 for the years ended December 31, 2016 and 2015 was $416,586 and $1,030,568, respectively, related to employee, director and advisory board stock options, and is included in selling, general and administrative expenses in the consolidated statements of operations. Stock-based compensation expense recognized during the period is based on the value of the portion of share-based payment awards that is ultimately expected to vest during the period. At December 31, 2016, the total compensation cost for stock options not yet recognized was $198,542. This cost will be recognized over the remaining vesting period of the options. The Company accounts for non-employee stock based awards at fair value in accordance with the measurement and recognition criteria of ASC 505-50 "Equity Based payments to Non-Employees. Stock based compensation to non-employees recognized for the years ended December 31, 2016 and 2015 was $18,101 and $325,718, respectively. 2007 Equity Incentive Plan In January 2007, the Company established the 2007 Equity Incentive Plan under which provided for the issuance of up to 1,500,000 stock options, stock appreciation rights, restricted stock or restricted stock units to our directors, employees and consultants. In September 2008, the Board of Directors approved an amendment to the Company’s 2007 Equity Incentive Plan to increase the number of shares authorized by the plan from 1,500,000 to 3,500,000. In fiscal 2012, Board of Directors increased the number of share authorized under the Plan to 4,500,000. In June 2013, the Board of Directors approved an amendment to increase the number of shares authorized by the plan to 15,000,000. Under the Equity Incentive Plan, all directors who are not employees or own 10% or more of the Company’s outstanding stock at the time of grant shall automatically receive a grant of stock options as follows: Initial Grants A – Chairman of the Board - 50,000 options B – Director - 30,000 options C – Chair of a Committee - 10,000 options D – Member of a Committee - 5,000 options In June 2013, the Board of Directors increased the annual grants to the following amounts: Annual Grants A – Chairman of the Board - 70,000 options B – Director - 100,000 options C – Chair of a Committee - 20,000 options D – Member of a Committee - 10,000 options All initial grants of options to new non-employee directors and committee members vest annually over a three year period on the anniversary date of the grant, subject to continuing service as a director, Committee member, Chairman of the Board or Chairman of a Committee on the applicable vesting date. Options automatically granted annually under the 2007 Equity Incentive Plan vest the following June 30th, subject to continuing service as a director. The exercise price of options or stock appreciation rights granted under the 2007 Equity Incentive Plan shall not be less than the fair market value of the underlying common stock at the time of grant. In the case of incentive stock options, the exercise price may not be less than 110% of the fair market value in the case of 10% shareholders. Options and stock appreciation rights granted under the 2007 Equity Incentive Plan shall expire no later than ten years after the date of grant. The option price may be paid in United States dollars by check or wire transfer or, at the discretion of the Board of Directors or Compensation Committee, by delivery of shares of our common stock having fair market value equal as of the date of exercise to the cash exercise price, or a combination thereof. The identification of individuals entitled to receive awards, the terms of the awards, and the number of shares subject to individual awards, are determined by the Board of Directors or the Compensation Committee, in their sole discretion. The purchase price per share, if applicable, shall be adjusted for any increase or decrease in the number of issued shares resulting from a recapitalization, reorganization, merger, consolidation, exchange of shares, stock dividend, stock split, reverse stock split, or other subdivision or consolidation of shares. The Board of Directors or the Compensation Committee may from time to time alter, amend, suspend, or discontinue the Equity Incentive Plan with respect to any shares as to which awards of stock rights have not been granted. However no rights granted with respect to any awards under this Equity Incentive Plan before the amendment or alteration shall be impaired by any such amendment, except with the written consent of the grantee. Under the terms of the Equity Incentive Plan, the Board of Directors or the Compensation Committee may also grant awards which will be subject to vesting under certain conditions. The vesting may be time-based or based upon meeting performance standards, or both. In April 2010, the Company amended the 2007 Equity Incentive Plan to increase the number of stock options granted annually to directors from 20,000 to 50,000. In June 2013, the Company amended the 2007 Equity Incentive Plan to increase the number of stock options granted annually to directors to 100,000. All of our Stock Option Agreements provide for “clawback” provisions, which enable our Board of Directors to cancel stock awards and recover past profits if the person is dismissed for cause or commits certain acts which harm us. Determining Fair Value under ASC 718-10 The Company estimates the fair value of stock options granted using the Black-Scholes option-pricing formula. This fair value is then amortized on a straight-line basis over the requisite service periods of the awards, which is generally the vesting period. The Company’s determination of fair value using an option-pricing model is affected by the stock price as well as assumptions regarding the number of highly subjective variables. Income Taxes The Company accounts for income taxes pursuant to the provisions of ASC 740-10, "Accounting for Income Taxes," which requires, among other things, an asset and liability approach to calculating deferred income taxes. The asset and liability approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. A valuation allowance is provided to offset any net deferred tax assets for which management believes it is more likely than not that the net deferred asset will not be realized. The Company follows the provisions of the ASC 740 -10 related to, Accounting for Uncertain Income Tax Positions. Effective July 1, 2007, the Company adopted ASC 740-10-25 Definition of Settlement, Legal Costs and Contingencies In the normal course of business, the Company incurs costs to hire and retain external legal counsel to advise it on regulatory, litigation and other matters. The Company expenses these costs as the related services are received. If a loss is considered probable and the amount can be reasonably estimated, the Company recognizes an expense for the estimated loss. If the Company has the potential to recover a portion of the estimated loss from a third party, the Company makes a separate assessment of recoverability and reduces the estimated loss, if recovery is also deemed probable. New Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued an update ("ASU 2014-09") establishing Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers Deferral of the Effective Date Principal versus Agent Considerations (Reporting Revenue Gross versus Net), , Identifying Performance Obligations and Licensing, Narrow-Scope Improvements and Practical Expedients, In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory In February 2016, the FASB issued (“ASU 2016-02”) Leases No other Accounting Standards Updates (ASUs) which were not effective until after December 31, 2016 are expected to have a significant effect on the Company's consolidated financial position or results of operations. |
GOING CONCERN
GOING CONCERN | 12 Months Ended |
Dec. 31, 2016 | |
GOING CONCERN [Abstract] | |
GOING CONCERN | 2. GOING CONCERN These consolidated financial statements have been prepared on a going concern basis, which implies the Company will continue to realize it assets and discharge its liabilities in the normal course of business. The Company has a net loss and net cash used in operating activities of $4,672,043 and $3,344,593, respectively, for the year ended December 31, 2016 and has an accumulated deficit and stockholdersÂ’ deficit of $47,957,926 and $6,363,616, respectively, at December 31, 2016. In addition, the Company has not yet generated revenue sufficient to support ongoing operations. These factors raise substantial doubt regarding the CompanyÂ’s ability to continue as a going concern. The continuation of the Company as a going concern is dependent upon the continued financial support from its stockholders, the ability of the Company to obtain necessary debt or equity financing to continue operations, and the attainment of profitable operations. These consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. During the year ended December 31, 2016, the Company received $2,430,000 in advances from its convertible line of credit with its president and principal shareholder. The Company also received $715,075 from Lincoln Park Capital Fund LLC in connection with a $10 million stock purchase agreement entered into in August 2015. See Note 7. Management believes that the Lincoln Park Equity Line, additional fundings from its president and principal shareholder and the revenue prospects from the Wildland industry provide the opportunity for the Company to continue as a going concern. Ultimately, the continuation of the Company as a going concern is dependent upon the ability of the Company to generate sufficient revenue to attain profitable operations. |
ACCOUNTS RECEIVABLE
ACCOUNTS RECEIVABLE | 12 Months Ended |
Dec. 31, 2016 | |
Accounts Receivable, Net [Abstract] | |
ACCOUNTS RECEIVABLE | 3. ACCOUNTS RECEIVABLE Accounts receivable at December 31, 2016 and 2015 was as follows: As of 2016 2015 Accounts receivable $ 108,659 $ 178,608 Allowance for doubtful accounts — (21,875 ) $ 108,659 $ 156,733 Bad debt expense on trade accounts receivable for the years ended December 31, 2016 and 2015 was $-0- and $21,875, respectively. During the year ended December 31, 2016, the company recognized a bad debt recovery amounting to $21,875. |
INVENTORIES
INVENTORIES | 12 Months Ended |
Dec. 31, 2016 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | 4. INVENTORIES Inventories consisted of the following at December 31, 2016 and 2015: As of 2016 2015 Finished goods $ 741,588 $ 967,800 Raw materials 920,841 460,357 $ 1,662,429 $ 1,428,157 As of December 31, 2016, the Company had approximately $3,100 of consignment inventory consisting of FireIce 561 with a certain customer. No inventory was held on consignment as of December 31, 2015. Cost of goods sold for the year ended December 31, 2015 included $67,439 related to inventory written off for obsolescence. There were no inventory obsolescence writes-offs during the year ended December 31, 2016. |
FURNITURE, FIXTURES AND EQUIPME
FURNITURE, FIXTURES AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
FURNITURE, FIXTURES AND EQUIPMENT | 5. FURNITURE, FIXTURES AND EQUIPMENT Furniture, fixtures and Estimated December 31, Useful Life 2016 2015 Wildland equipment 3 - 5 years $ 155,659 $ 11,274 Wildland vehicles 5 - 7 years 204,117 158,185 Equipment 3 - 5 years 125,530 123,086 Storage facilities 3 years 38,986 29,266 Other vehicles 5 years 63,545 63,545 Furniture and fixtures 5 years 20,420 20,420 608,256 405,776 Accumulated depreciation (354,962 ) (271,517 ) $ 253,294 $ 134,259 Depreciation expense was $83,445 and $59,660, respectively, for the years ended December 31, 2016 and 2015. |
SECURED CONVERTIBLE NOTE AGREEM
SECURED CONVERTIBLE NOTE AGREEMENTS | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
CONVERTIBLE AND NON-CONVERTIBLE NOTE AGREEMENTS | 6. SECURED CONVERTIBLE NOTE AGREEMENTS The Company currently has three debt facilities outstanding, all of them held by its president and principal shareholder. One convertible note in the amount of $1,997,483, dated February 1, 2013 was a consolidation of prior debt instruments. The note bore annual interest of 7.5%, was convertible at $0.35 per share and due December 31, 2016. On February 12, 2015, this note was modified by securing the note with all the assets of the Company and by extending the due date of the note from December 31, 2016 to December 31, 2020. The modification was accounted for as a debt extinguishment in accordance with ASC 470. As a result of the modification the Company recorded a loss on extinguishment of debt of $34,586. As of December 31, 2016, the principal balance of the note is $1,997,483 and accrued interest amounted to $137,088. A second convertible note in the amount of $1,000,000 dated July 11, 2013 related to a new funding on that date. The note bore annual interest of 7.5%, was convertible at $1.00 per share and was due July 10, 2018. In connection with the note, the Company issued five–year warrants to purchase 500,000 shares of common stock at an exercise price of $1.30 per share. On February 12, 2015, this note was modified by securing the note with all the assets of the Company, by extending the due date of the note from July 10, 2018 to December 31, 2020 and by reducing the conversion rate of the note from $1.00 to $0.35 per share. The modification was accounted for as a debt extinguishment in accordance with ASC 470. As a result of the modification, the Company recorded a loss on extinguishment of debt of $562,062. Also, in connection with the modification the Company recorded a note discount of $60,390, related to the relative fair value of the warrants attached to the note. This discount will be amortized over the remaining term of the note. For the year ended December 31, 2016 the Company recorded interest expense of $10,290 related to the amortization of the discounts related to the warrants. As of December 31, 2016, the balance of the unamortized discount related to the warrants was $41,075. As of December 31, 2015, the principal balance on this note is $1,000,000 and accrued interest amounted to $35,041. In July 2016, the Company issued 208,333 shares of common stock to its president and principal shareholder in payment of accrued interest of $75,000 on this convertible note. In connection with the debt modifications described above, the Company entered into a secured convertible line of credit agreement for up to $4 million with its president and principal shareholder. On April 8, 2016, the Company and its president and principal shareholder entered into the First Amendment to Secured Revolving Convertible Promissory Note Agreement increasing the credit facility from $4 million to $5 million. On September 27, 2016, the Company and its president and principal shareholder entered into the Second Amendment to Secured Revolving Convertible Promissory Note Agreement increasing the credit facility from $5 million to $6 million. Under the agreements, the Company may, with the prior approval of its president and principal shareholder, receive advances under the secured convertible line of credit. Each advance bears an annual interest rate of 7.5%, is due December 31, 2020 and is convertible at the rate equal to the closing price of the Company’s common stock on the day prior to the date the parties agree to the advance. In addition, the Company will issue the Company’s president and principal shareholder two year warrants to purchase shares of common stock at an exercise price of $2.00 per share. The number of warrants issued equals 50% of the number of shares issuable upon the conversion of the related advance. The Company received 16 advances totaling $2,430,000 with conversion rates between $0.2108 and $0.55 per share, and issued two year warrants to purchase 3,795,498 shares of common stock at an exercise price of $2.00 per share. In connection with these advances, the Company has recorded loan discounts related to the warrants and the beneficial conversion features of the advances amounting to $180,172 and $180,172, respectively. During the year ended December 31, 2016, the Company has recognized interest expense of $143,681 related to the amortization of these loan discounts. As of December 31, 2016, the principal balance of the advances is $5,695,000 and the balance of the unamortized discounts related to the warrants and the beneficial conversion feature was $367,663 and $367,663, respectively. In addition, accrued interest due on these advances amounted to $310,122 at December 31, 2016. The calculated loan discounts were based on the relative fair value of the warrants which was calculated by the Company using the Black Scholes option pricing model loan discount, using volatilities of between 99.01% and 105.41%, based on the Company’s historical stock price, discount rates from 0.58% to 1.22%, and expected terms of 2 years, the term of the warrants. A summary of notes payable and related discounts as of December 31, 2016 is as follows: Principal Unamortized Discount Debt, Net of Discount Related parties Secured Convertible notes payable $ 2,997,483 $ (41,076 ) $ 2,956,407 Secured Convertible Line of Credit 5,695,000 (735,326 ) 4,959,674 Less current portion — — — Secured convertible notes payable and line of credit, net of current portion $ 8,692,483 $ (776,402 ) $ 7,916,081 A summary of notes payable and related discounts as of December 31, 2015 is as follows: Principal Unamortized Discount Debt, Net of Discount Related parties Secured Convertible notes payable $ 2,997,483 $ (51,365 ) $ 2,946,118 Secured Convertible Line of Credit 3,265,000 (518,664 ) 2,746,336 Less current portion — — — Secured convertible notes payable and line of credit, net of current portion $ 6,262,483 $ (570,029 ) $ 5,692,454 |
STOCKHOLDERS' DEFICIT
STOCKHOLDERS' DEFICIT | 12 Months Ended |
Dec. 31, 2016 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS' DEFICIT | 7. STOCKHOLDERS’ DEFICIT Preferred Stock The Company has authorized 5,000,000 shares of preferred stock, par value $0.001 per share with such rights, preferences and limitations as may be set from time to time by resolution of the board of directors and the filing of a certificate of designation as required by Delaware General Corporation law. Common Stock Common Stock Issued for Cash On August 12, 2015, the Company signed a $10 million Purchase Agreement with Lincoln Park and entered into a Registration Rights Agreement with Lincoln Park whereby we agreed to file a registration statement related to the transaction with the SEC covering the shares that may be issued to Lincoln Park under the Purchase Agreement. Under the terms and subject to the conditions of the Purchase Agreement, GelTech has the right to sell, and Lincoln Park is obligated to purchase, up to $10 million in shares of the Company’s common stock, subject to certain limitations, from time to time, over the 30-month period commencing on the date that a registration statement, which the Company agreed to file with the SEC pursuant to the Registration Rights Agreement, is declared effective by the SEC. The Company filed the registration statement with the SEC on October 5, 2015 and it was declared effective by the SEC on October 16, 2015. In consideration for entering into the $10 million Purchase Agreement, in August 2015 the Company issued 291,097 shares of common stock to Lincoln Park as a commitment fee. The shares were valued at $189,213, based upon the closing price of the common stock on the day preceding the execution of the agreement and were recorded as a reduction of the offering proceeds. During the year ended December 31, 2015, the Company issued 457,797 shares of common stock, including 7,797 commitment shares, to Lincoln Park in exchange for $199,120. During the year ended December 31, 2016, the Company issued 2,078,008 shares of common stock, including 28,008 commitment shares, to Lincoln Park in exchange for $715,075. Private Placements During the year ended December 31, 2015, the Company issued 545,865 shares of common stock in exchange for $214,250 in private placements with three accredited investors. Issuances of Common Stock and Warrants for Cash During the year ended December 31, 2015, the Company issued 652,174 shares of common stock and two year warrants to purchase 326,087 shares of common stock at an exercise price of $2.00 per share in exchange for $150,000 in connection with a private placement with its president and principal shareholder. During the year ended December 31, 2016 the Company issued 1,591,700 shares of common stock and two year warrants to purchase 795,850 shares of common stock at an exercise price of $2.00 per share in exchange for $500,000 in connection with private placements with three accredited investors, including issuances of 428,572 shares and two year warrants to purchase 214,286 shares of common stock to a director and his wife in exchange for $150,000. C ommon Stock Issued for Interest In February 2015, the Company issued 428,032 shares of common stock to its president and principal shareholder as payment for annual accrued interest of $149,811 related to convertible note agreement dated February 1, 2013. In accordance with the convertible note, the conversion rate for the accrued interest was $0.35 per share. The fair market value of the Company’s common stock was $0.32, or $136,970, on the date of conversion. As such the Company recorded other income of $12,841 for the year ended December 31, 2015 in connection with the interest conversion. In July 2015, the Company issued 101,352 shares of common stock valued at $75,000 to its president and principal shareholder in payment of accrued interest of $75,000 on a $1 million convertible note. In February 2016, the Company issued 428,032 shares of common stock to its president and principal shareholder as payment for annual accrued interest of $149, 811 related to convertible note agreement dated February 1, 2013. In accordance with the convertible note, the conversion rate for the accrued interest was $0.35 per share. The fair market value of the Company’s common stock was $0.52, or $222,577, on the date of conversion. As such the Company recorded other expense of $72,765 for the year ended December 31, 2016 in connection with the interest conversion. In April 2016, the Company issued 296,371 shares of common stock valued at $148,365 to its president and principal shareholder in payment of accrued interest on the secured convertible line of credit as of February 13, 2016 of $148,365. In July 2016, the Company issued 208,333 shares of common stock valued at $75,000 to its president and principal shareholder in payment of accrued interest of $75,000 on a $1 million convertible note. Other Issuances of Common Stock During the year ended December 31, 2015, the Company issued 12,307 shares of common stock, valued at $5,627, to a consultant in exchange for services. In June 2015, the Company issued 21,918 shares of common stock to its President and principal shareholder to purchase a vehicle, valued at $16,000, to be used by the Company. In August 2015, the Company issued 200,000 shares of common stock in connection with a settlement with a former executive chairman and director of the Company. The shares were valued at $0.68 per share, the closing price of the Company’s common stock on the date of the settlement. The value of the shares issued was recorded as a reduction of the settlement accrual. During the year ended December 31, 2015, the Company issued 12,235 shares of common stock valued at between $0.35 and $0.60 per share in exchange for investor relations services valued at $6,000. During the year ended December 31, 2016, the Company issued 12,126 shares of common stock, valued at $5,067, to a consultant in exchange for services. During the year ended December 31, 2016 the Company issued 18,114 shares of common stock valued at between $0.36 and $0.52 per share in exchange for investor relations services valued at $8,000. Options and Warrants to Purchase Common Stock The fair value of stock option grants for the year ended December 31, 2016 and 2015 were estimated using the following weighted- average assumptions: For the Years Ended 2016 2015 Risk free interest rate 0.58% – 1.90% 0.54% – 2.28% Expected term in years 2.0 – 10.0 2.0 – 10.0 Dividend yield — — Volatility of common stock 99.01% – 105.08% 79.66% – 99.31% Estimated annual forfeitures — — The Black-Scholes option-pricing model was developed for use in estimating the fair value of non-traded options, which have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions including the expected stock price volatility. Because the Company's stock options and warrants have characteristics different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management's opinion, the existing models do not necessarily provide a reliable single measure of the fair value of such stock options. During the years ended December 31, 2016 and 2015, the Company used the Company’s trading prices in calculating the stock price volatility and based its volatility on historical volatility. The expected term was estimated using the simplified method for employee stock options since the Company does not have adequate historical exercise data to estimate the expected term. Options to Purchase Common Stock A summary of stock option transactions issued to employees under the 2007 Plan for the year ended December 31, 2015 and the fiscal years ended June 30, 2015 and 2014 is as follows: Employee Options and Stock Appreciation Rights Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life Aggregate Intrinsic Value Balance at December 31, 2014 7,784,507 $ 0.85 5.44 Granted 367,500 $ 0.41 5.0 Exercised — $ — — Forfeited — $ — — Expired — $ — — Outstanding at December 31, 2015 8,152,007 $ 0.85 5.36 $ 6,000 Exercisable at December 31, 2015 5,006,675 $ 0.94 4.65 $ 1,500 Weighted average fair value of options granted during the year ended December 31, 2015 $ 0.26 Balance at December 31, 2015 8,152,007 $ 0.85 5.36 Granted 301,000 $ 0.22 5.00 Exercised — $ — — Forfeited — $ — — Expired (257,500 ) $ 1.88 — Outstanding at December 31, 2016 8,195,507 $ 0.82 4.71 $ — Exercisable at December 31, 2016 5,107,679 $ 0.92 4.12 $ — Weighted average fair value of options granted during the year ended December 31, 2016 $ 0.15 In May 2015, the Company granted three employees five year options to purchase a total of 62,500 shares of common stock at an exercise price of $0.70 per share. The options vested immediately. The Company valued the options at $24,590 using the Black-Scholes option pricing model using a volatility of 97.15%, based upon the historical price of the Company’s common stock, an estimated term of 2.5 years, using the Simplified Method and a discount rate of 0.82%. In September 2015, the Company granted a new employee five year options to purchase 5,000 shares of common stock at an exercise price of $0.64 per share. The options vest one year from the date of the grant. The Company valued the options at $1,913 using the Black-Scholes option pricing model using a volatility of 95.65%, based upon the historical price of the Company’s common stock, an estimated term of 3.0 years, using the Simplified Method and a discount rate of 0.88%. In December 2015, the Company issued five year options to purchase 300,000 shares of common stock at an exercise price of $0.34 per share to employees. The options vest 25% immediately with 25% vesting annually over three years from the date of the grant, subject to continued employment. The options were valued using the Black-Scholes model using a volatility of 99.26%, derived using the historical market price for the Company’s common stock, an expected term of 4.0 years (using the simplified method) and a discount rate of 1.53%. The value of these options, $70,258, will be recognized as expense over the three year vesting period. In December 2015, the Company extended the expiration date on two grants of options for an additional five years, Each of the grants allowed the purchase of 750,000 shares of common stock, were issued to our CEO and our former CEO’s wife, and are exercisable at $1.22 per share. The options were valued using the Black-Scholes model using a volatility of 98.68%, derived using the historical market price for the Company’s common stock, an expected term of 2.5 years (using the simplified method) and a discount rate of 1.10%. The value of these options, $271,118, was recognized as expense during the year ended December 31, 2015. In November 2016, the Company issued five year options to purchase 25,000 shares of common stock at an exercise price of $0.26 per share to a new employee. The options vest ratably over a one year period. The options were valued using the Black-Scholes model using a volatility of 102.8%, derived using the historical market price for the Company’s common stock, an expected term of 3.0 years (using the simplified method) and a discount rate of 1.27%. The value of these options, $4,119, will be recognized as expense over the vesting period. In December 2016, the Company issued five year options to purchase 25,000 shares of common stock at an exercise price of $0.23 per share to a new employee. The options vest ratably over a one year period. The options were valued using the Black-Scholes model using a volatility of 99.28%, derived using the historical market price for the Company’s common stock, an expected term of 3.0 years (using the simplified method) and a discount rate of 1.44%. The value of these options, $3,556, will be recognized as expense over the vesting period. In December 2016, the Company issued five year options to purchase 251,000 shares of common stock at an exercise price of $0.22 per share to employees. The options vest 25% immediately with 25% vesting annually over three years from the date of the grant, subject to continued employment. The options were valued using the Black-Scholes model using a volatility of 99.29%, derived using the historical market price for the Company’s common stock, an expected term of 4.0 years (using the simplified method) and a discount rate of 1.67%. The value of these options, $38,092, will be recognized as expense over the three year vesting period. A summary of options issued to directors under the 2007 Plan and changes for the year ended December 31, 2015 and for the years ended December 31, 2016 and 2015 is as follows: Options Issued to Directors Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life Aggregate Intrinsic Value Balance at December 31, 2014 2,145,833 $ 1.03 7.65 Granted 620,000 $ 0.79 10.00 Exercised — $ — — Forfeited — $ — — Expired — $ — — Outstanding at December 31, 2015 2,765,833 $ 0.98 7.28 $ 900 Exercisable at December 31, 2015 1,377,501 $ 1.15 6.6 $ 900 Weighted average fair value of options granted during the year ended December 31, 2015 $ 0.76 Balance at December 31, 2015 2,765,833 $ 0.98 7.28 Granted 715,000 $ 0.37 10.00 Exercised — $ — — Forfeited — $ — — Expired — $ — — Outstanding at December 31, 2016 3,480,833 $ 0.86 6.93 $ — Exercisable at December 31, 2016 2,812,500 $ 0.98 6.31 $ — Weighted average fair value of options granted during the year ended December 31, 2016 $ 0.29 On January 23, 2015, the Company issued 10 year options to purchase 10,000 shares of the Company’s common stock at an exercise price of $0.27 per share to a director in connection with his appointment as audit committee chairman. The options vest annually over a three year period on the anniversary of the grant, subject to continued service as the audit committee chairman. The Company valued the options at $1,974 using the Black-Scholes option pricing model using a volatility of 84.16%, based upon the historical price of the Company’s common stock, an estimated term of 6.5 years, using the Simplified Method, and a discount rate of 1.61%. The fair value will be recognized in expense over the vesting period of the options. In June 2015, the Company issued ten year options to purchase 30,000 shares of common stock at an exercise price of $0.76 per share to a new director. The options vest annually over three years subject to continued service. The options were valued using the Black-Scholes model using a volatility of 97.97% (derived using the historical market price for the Company’s common stock since it began trading in June 2008), an expected term of 6.5 years (using the simplified method) and a discount rate of 2.03%. The value of these options, $18,283 will be recognized as expense over the vesting period. As prescribed by the Company's 2007 Equity Incentive Plan, on July 1, 2015, the Company issued options to purchase 580,000 shares of common stock to directors. The options have an exercise price of $0.80 per share, vest on June 30, 2016¸ subject to continuing service as a director and bear a ten year term. The options were valued using the Black-Scholes model using a volatility of 98.15%, derived using the historical market price for the Company’s common stock, an expected term of 5.5 years (using the simplified method) and a discount rate of 1.74%. The value of these options, $353,553, will be recognized as expense over the one year vesting period. In April 2016, the Company issued ten year options to purchase 30,000 shares of common stock at an exercise price of $0.39 per share to a new director. The options vest annually over three years, subject to the continued service on the board. The options were valued using the Black-Scholes option pricing model using a volatility of 103.79% based upon the historical price of the company’s stock, a term of 6.5 years, using the simplified method and a risk free rate of 1.52%. The calculated fair value, $9,631 will be recognized over the requisite service period. As prescribed by the Company's 2007 Equity Incentive Plan, on July 1, 2016, the Company issued options to purchase 680,000 shares of common stock to directors. The options have an exercise price of $0.37 per share, vest on June 30, 2017¸ subject to continuing service as a director and bear a ten year term. The options were valued using the Black-Scholes model using a volatility of 104.37%, derived using the historical market price for the Company’s common stock, an expected term of 5.5 years (using the simplified method) and a discount rate of 1.49%. The value of these options, $198,236, will be recognized as expense over the one year vesting period. On October 24, 2016, the Company issued 10 year options to purchase 5,000 shares of the Company’s common stock at an exercise price of $0.27 per share to a director in connection with his appointment to the compensation committee. The options vest annually over a three year period on the anniversary of the grant, subject to continued service as the audit committee chairman. The Company valued the options at $1,117 using the Black-Scholes option pricing model using a volatility of 105.08 %, based upon the historical price of the Company’s common stock, an estimated term of 6.5 years, using the Simplified Method, and a discount rate of 1.42%. The fair value will be recognized in expense over the vesting period of the options. Non-Employee, Non-Director Options A summary of options issued to non-employees, non-directors under the 2007 Plan and changes during the year ended December 31, 2016 and 2015 is as follows: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life Aggregate Intrinsic Value Balance at December 31, 2014 270,00 $ 1.21 1.2 Granted — $ — — Exercised — $ — — Forfeited — $ — — Expired (250,000 ) $ — — Outstanding at December 31. 2015 20,000 $ 1.18 2.75 $ — Exercisable at December 31, 2015 20,000 $ 1.182 2.75 $ — Weighted average fair value of options granted during the year ended December 31, 2015 N/A Balance at December 31, 2015 20,000 $ 1.18 2.75 Granted — $ — — Exercised — $ — — Forfeited — $ — — Expired — $ — — Outstanding at December 31, 2016 20,000 $ 1.189 1.75 $ — Exercisable at December 31, 2016 20,000 $ 1.18 1.75 $ — Weighted average fair value of options granted during the year ended December 31, 2016 N/A During the year ended December 31, 2015, options to purchase 250,000 shares of common stock at an exercise price of $1.22 per share expired. During the years ended December 31, 2016 and 2015 and the year ended June 30, 2015, no options were granted to non-employees or non-directors. Warrants Issued for Settlement Number of Warrants Weighted Average Exercise Price Remaining Contractual Life Balance at December 31, 2014 350,000 $ 0.63 2.7 Granted — $ — — Exercised — $ — — Forfeited — $ — — Expired — $ — — Outstanding at December 31, 2015 350,000 $ 0.63 1.7 Exercisable at December 31, 2015 350,000 $ 0.63 1.7 Weighted average fair value of warrants granted during the year ended December 31, 2015 N/A Balance at December 31, 2015 350,000 $ 0.63 1.7 Granted 250,000 $ 0.37 5.0 Exercised — $ — — Forfeited — $ — — Expired — $ — — Outstanding at December 31, 2016 600,000 $ 0.52 2.3 Exercisable at December 31, 2016 600,000 $ 0.52 2.3 Weighted average fair value of warrants granted during the year ended December 31, 2016 $ 0.28 In July 2016, the Company issued five year warrants to purchase 250,000 shares of common stock at an exercise price of $0.37 per share as part of a settlement. The warrants were valued using the Black-Scholes option pricing model using a volatility of 104.54% based upon the historical price of the company’s stock, a term of five years, the term of the warrants and a risk free rate of 1.01%, resulting in a fair value of $70,631 which was included in loss on settlement for the year ended December 31, 2016. Warrants issued for cash or services A summary of warrants issued for cash or services and changes during the years ended December 31, 2016 and 2015 is as follows: Number of Warrants Weighted Average Exercise Price Remaining Contractual Life Balance at December 31, 2014 5,746,370 $ 1.71 2.63 Granted 4,832,134 $ 1.72 2.76 Exercised — $ — — Forfeited — $ — — Expired (236,200 ) $ 1.60 — Outstanding at December 31, 2015 10,342,304 $ 1.73 1.68 Exercisable at December 31, 2015 10,342,304 $ 1.73 1.68 Weighted average fair value of warrants granted during the year ended December 31, 2015 $ 0.37 Balance at December 31, 2015 10,342,304 $ 1.73 1.68 Granted 4,791,260 $ 1.93 2.5 Exercised — $ — — Forfeited — $ — — Expired — $ — — Outstanding at December 31, 2016 15,133,564 $ 1.77 1.27 Exercisable at December 31, 2016 15,066,898 $ 1.78 1.24 Weighted average fair value of warrants granted during the year ended December 31, 2016 $ 0.26 During the year ended December 31, 2015, the Company issued two year warrants to purchase 3,636,047 shares of common stock at an exercise price at $2.00 per share in connection with advances from its president and principal shareholder pursuant to a secured convertible line of credit agreement. During the year ended December 31, 2015, the Company issued two year warrants to purchase 326,087 shares of common stock at an exercise price of $2.00 per share in connection with a private placements with its president and principal shareholder. In January 2015, the Company granted 5 year warrants to purchase 100,000 shares of the Company’s common stock in exchange for legal services. The warrants vest immediately and are exercisable at $0.27 per share. The Company valued the warrants at $17,611 using the Black-Scholes option pricing model using a volatility of 81.85%, based upon the historical price of the Company’s common stock, an estimated term of 5 years, the term of the warrants, and a discount rate of 1.39%. The warrants vested immediately and therefore the fair value was recognized in legal expense during year ended June 30, 2015. During the year ended December 31, 2015, the Company issued warrants to purchase 690,000 shares of common stock to six consultants. Of the warrants granted, a portion vest immediately, with the remainder ratably over a one year period. The warrants have exercise prices from $0.34 to $0.76 per share and have exercise periods from 5 to 10 years. The Company valued the warrants at $324,833 using the Black-Scholes option pricing model using a volatility of from 81.85% to 99.31%, based upon the historical price of the Company’s common stock, an estimated term of from 5 to ten years, the term of the warrants, and a discount rate of from 1.51% to 2.28%. The value of these warrants will be recognized as consulting expense over the vesting period. In connection with executing the Stock Purchase Agreement with Lincoln Park, in August 2015, the Company extended the expiration date of warrants to purchase 200,000 shares of common stock at an exercise price of $1.25 per share from September 1, 2015 to August 11, 2020. The difference in the value of the warrants resulting from the change in the term, $86,448, was recorded as a reduction of the proceeds of the offering. During the year ended December 31, 2016, the Company issued two year warrants to purchase 795,850 shares of common stock at an exercise price of $2.00 per share in connection with private placements with three accredited investors including warrants to purchase 214,286 shares of common stock to a director and his wife. During the year ended December 31, 2016, the Company issued two year warrants to purchase 3,795,409 shares of common stock at an exercise price at $2.00 per share in connection with advances from its president and principal shareholder pursuant to a secured convertible line of credit agreement. In January 2016, the Company issued five year warrants to purchase 150,000 shares of common stock at an exercise price of $0.39 per share in exchange for legal services. The warrants were valued with the Black-Scholes option pricing model using a volatility of 103.14% based upon the historical price of the company’s stock, a term of five years, the term of the warrants and a risk free rate of 1.49%. The calculated fair value, $44,477 was recorded as legal expense for the year ended December 31, 2016. In December 2016, the Company issued five year warrants to purchase 50,000 shares of common stock at an exercise price of $0.22 per share to four consultants. The warrants vest 25% immediately, with the remainder vesting annually over a three year period, subject to continued employment. The warrants were valued with the Black-Scholes option pricing model using a volatility of 99.29% based upon the historical price of the company’s stock, a term of five years, the term of the warrants and a risk free rate of 1.90%. The calculated fair value, $8,200 will be recorded as expense over the vesting period. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 8. INCOME TAXES Due to the net losses incurred, there was no income tax provision for the years ended December 31, 2016 and 2015. Deferred tax assets and liabilities as of December 31, 2016 and 2015 were as follows: December 31, 2016 2015 Deferred Tax Assets: Net operating loss carryforward $ 14,625,674 $ 13,055,795 Allowance for bad debt 60,567 65,281 Stock-based compensation 2,223,337 2,167,730 Depreciation 19,373 10,702 Gross deferred tax asset 16,928,951 15,299,508 Less: deferred tax asset valuation allowance (16,928,951 ) (15,299,508 ) Total net deferred tax asset — — Less: Deferred tax liability - depreciation — — Net deferred taxes $ — $ — The Company had available at December 31, 2016, net operating loss carryforwards for federal and state tax purposes of approximately $38,867,000 that could be applied against taxable income in subsequent years through December 31, 2036. The amount of net operating loss carryforward that can offset future taxable income may be limited in accordance with IRC Section 382 following certain ownership changes. Based on the weight of available evidence, both positive and negative, a valuation allowance to fully provide for the net deferred tax assets has been recorded since it is more likely than not that the deferred tax assets will not be realized. The valuation allowance was increased by $1,629,443 and $2,562,677during the years ended December 31, 2016 and 2015, respectively. Reconciliation of the differences between income tax benefit computed at the federal and state statutory tax rates and the provision for income tax benefit for the years ended December 31, 2016 and 2015 was as follows: For the Years Ended December 31, 2016 2015 Amount % Amount % Tax at U.S. statutory rate $ (1,588,495 ) -34.00 % $ (2,048,153 ) -34.00 % State taxes, net of federal benefit (168,053 ) -3.60 % (218,670 ) -3.63 % Other 127,105 2.72 % (295,854 ) -4.91 % Change in valuation allowance 1,629,443 34.88 % 2,562,677 42.54 % $ — 0.00 % $ — 0.00 % |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | 9. RELATED PARTY TRANSACTIONS In addition to the acting Chief Executive Officer (CEO) and the Chief Technology Officer (CTO) the following related parties are employed at GelTech: · The CEO ’ – · The CEO ’ The Company has employment arrangements with its executive officers which are described in Note 10. The Company has entered into a series of credit facilities with its president and principal stockholder as more fully described in Note 6. During the years ended December 31, 2016 and 2015, the Company issued common stock and warrants to its president and principal shareholder in exchange for cash as more fully described in Note 7. On January 23, 2015, the Company approved an amendment to the Employment Agreement of Mr. Peter Cordani, the Company's Founder, acting Chief Executive Officer and Chief Technology Officer. In addition to his salary, Mr. Cordani received 5% of the first $2 million of revenue generated by the Company in 2016 and 2015. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 10. COMMITMENTS AND CONTINGENCIES The Company leases office and warehouse space located in Jupiter, Florida. Rent expense for the years ended December 31, 2016 and 2015 was $118,392 and $116,004, respectively. On November 14, 2012, the Compensation Committee approved new employment agreements for the Company’s then Chief Executive Officer, then President, Chief Technology Officer and Chief Financial Officer. The employment agreements each provide for base salaries of $150,000 and 800,000 stock settled stock appreciation rights (“SARS”) of which (i) 200,000 vested immediately, (ii) 200,000 vest upon the Company generating $3,000,000 in revenue in any 12-month period, (iii) another 200,000 vest upon the Company generating $5,000,000 in revenue in any 12-month period and (iv) another 200,000 vest upon the Company generating $6,000,000 in revenue in any 12-month period. The SARs are exercisable at $0.45 per share over a 10-year period. The Company’s then Chief Executive Officer, then President and Chief Technology Officer agreed to cancel the 250,000 stock options granted to each of them in their prior employment agreements. These executives’ base salary will increase to: (i) $170,000 upon the Company generating $3,000,000 in revenue in any 12-month period, (ii) $190,000 upon the Company generating $5,000,000 in any 12-month period and (iii) $200,000 upon the Company generating $6,000,000 in any 12-month period. On September 30, 2016, the employment agreement for the Company’s Chief Financial Officer expired. In January 2015, GelTech approved an amendment to the Employment Agreement of our Chief Technology Officer. In addition to his base salary, he will receive 5% of the first $2 million of revenue generated by GelTech. The amendment was effective as of January 1, 2015. Additionally, in May 2015, GelTech approved an amendment to the Chief Technology Officer’s Employment Agreement to extend the term of the Agreement an additional four years (now expiring October 1, 2020). The Company was sued by a former employee on June 23, 2008, alleging breach of a consulting agreement and an employment agreement entered into in May and June 2007, respectively. In addition, the plaintiff sought to recover certain of his personal property, which was used or stored in the Company’s offices and alleges the Company invaded his privacy by looking at his personal computer (which was used in the Company’s business) in the Company’s offices. On October 14, 2015, the Court issued an order on Defendant GelTech’s Motion for Attorney’s Fees and Costs granting GelTech attorney fees and costs in excess of the amount of its litigation accrual for the case. As such, the Company reversed the litigation accrual resulting in other income of $56,956 which was included in the Company’s statement of operations for the nine months ended December 31, 2015. In November 2015, the Court issued a Final Judgement against the plaintiff in the amount of $510,499. The plaintiff filed appeals which were pending. In July 2016, the Company entered into a settlement agreement with the plaintiff whereby the Company agreed to pay the plaintiff $250,000 and issue the plaintiff five year warrants to purchase 250,000 shares of common stock at an exercise price of $0.37 per share, in exchange for the dismissal of all claims against the Company. The warrants were valued using the Black-Scholes option pricing model using a volatility of 104.54% based upon the historical price of the company’s stock, a term of five years, the term of the warrants and a risk free rate of 1.01%, resulting in a fair value of $70,631. As such, the Company recorded a loss on settlement of $320,631 for the year ended December 31, 2016. In June 2016, the Company entered into a settlement agreement with its employment practices insurance company related to the Company’s suit against the insurance company for failure to cover post trial legal costs related to the suit described above in this Note 5. Under the settlement agreement, the insurance company agreed to pay the Company $300,000, which payment was received in July 2016. As such the Company recorded a gain on settlement of $300,000 for the year ended December 31, 2016. In June 2013, GelTech filed a lawsuit against its director and former Executive Chairman, for inducing GelTech to enter into an Employment Agreement based on representations that he would facilitate a $25 million financing on behalf of GelTech. In November 2013, the former Executive Chairman countersued GelTech for breach of the Employment Agreement. Effective August 12, 2015, GelTech entered into a settlement agreement and release of claims (the “Settlement Agreement”) related to the lawsuit and countersuit. Under the employment agreement, the executive chairman was entitled to $800,000 of salary, up to 800,000 restricted stock units and $28,800 in auto allowance. Under the Settlement Agreement, the Company issued the former executive chairman 200,000 shares of restricted common stock and made two cash payments totaling $315,000. As a result of the Settlement Agreement, the Company recognized a loss on settlement in the amount of $412,867 during the year ended December 31, 2015. |
CONCENTRATIONS
CONCENTRATIONS | 12 Months Ended |
Dec. 31, 2016 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATIONS | 11. CONCENTRATIONS The Company maintains its cash in bank and financial institution deposits that at times may exceed federally insured limits. The Company has not experienced any losses in such accounts through December 31, 2016. As of December 31, 2016 the Company had no cash equivalent balances that were not insured. At December 31, 2016, two customers accounted for 49.4% and 19.0% of accounts receivable. For the year ended December 31, 2016, five customers accounted for 19.8%, 15.6%, 12.0%, 10.4% and 10.1% of sales. During the year ended December 31, 2016, sales primarily resulted from four sources, sales of FireIce®, Soil 2 2 2 2 Two vendors accounted for 49.0% and 14.2% of the Company’s approximately $631,000 in purchases of raw material and packaging during the year ended December 31, 2016. Approximately 14.5% of revenue was generated from customers outside the United States during the year ended December 31, 2016. During the year ended December 31, 2016, our chairman and principal shareholder provided 100% of our debt financing. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2016 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 12. SUBSEQUENT EVENTS Since January 1, 2017, the Company has issued two year warrants to purchase 396,925 shares of common stock at an exercise price of $2.00 per share in exchange for advances in the amount of $200,000 from the CompanyÂ’s chairman and principal shareholder in connection with the secured convertible line of credit agreement. The conversion rates of these advances were between $0.23 and $0.28 per share. Since January 1, 2017, the Company has issued 403,870 shares of common stock to Lincoln Park in exchange for $98,785 in connection with the Stock Purchase Agreement. Since January 1, 2017, the Company has issued 2,081,637 shares of common stock and two year warrants to purchase 1,040,818 shares of common stock at $2.00 per share in exchange for $500,000 in connection with private placements with three accredited investors, including the issuance of 384,616 shares and 192,308 warrants to its chairman and principal shareholder in exchange for $100,000. On February 7, 2017, the Company entered into a settlement and release agreement with a former employee related to claim filed by the employee under the Americans with Disabilities Act. In connection with the agreement, the Company agreed to pay the employee $125,100, plus payroll taxes of $1,449 and expenses of $340 in full settlement of the claim. In connection with the agreement, the Company was reimbursed $100,100 by its employment practices insurer resulting in net settlement expense of $26,789 which was included in accrued settlements as of December 31, 2016 and in loss on settlements for the year then ended. On February 10, 2017, the Company granted five year warrants to purchase 150,000 shares of the CompanyÂ’s common stock in exchange for legal services. The warrants vest immediately and are exercisable at $0.275 per share. The Company valued the warrants at $30,703 using the Black-Scholes option pricing model using a volatility of 99.06%, based upon the historical price of the CompanyÂ’s common stock, an estimated term of 5 years, the term of the warrants, and a discount rate of 1.88%. The fair value will be recognized in legal expense during the three months ending March 31, 2017. |
NATURE OF OPERATIONS, BASIS O19
NATURE OF OPERATIONS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its three wholly-owned subsidiaries: FireIce Gel, Inc., GelTech International, Inc. and Weather Tech Innovations, Inc. There has been no activity in the subsidiaries during the years ended December 31, 2016 and 2015. All intercompany balances and transactions have been eliminated in consolidation. |
Cash and Cash Equivalents | Cash and Cash Equivalents For the purposes of the statements of cash flows, the Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. The CompanyÂ’s cash equivalents consist of a brokerage money market account. |
Accounts Receivable | Accounts Receivable Accounts receivable are customer obligations due under normal trade terms. Senior management reviews accounts receivable on a monthly basis to determine if any receivables will potentially be uncollectible. The Company includes any accounts receivable balances that are determined to be uncollectible, along with a general reserve, in its overall allowance for doubtful accounts. After all attempts to collect a receivable have failed, the receivable is written off against the allowance. |
Inventories | Inventories Inventories are stated at the lower of cost or market, with cost determined using a first-in, first-out method. |
Property and Equipment and Depreciation | Property and Equipment and Depreciation Property and equipment is recorded at cost. Depreciation is computed using the straight-line method based on the estimated useful lives of the related assets of 3 to 7 years. Leasehold improvements are amortized over the lesser of the lease term or the useful life of the improvements. Expenditures for maintenance and repairs are expensed as incurred. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company accounts for long-lived assets in accordance with the provisions of ASC 360-10. This statement requires that long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. |
Fair Value of Financial Instruments and Fair Value Measurements | Fair Value of Financial Instruments and Fair Value Measurements We measure our financial assets and liabilities in accordance with ASC 820 "Fair Value Measurements and Disclosures". For certain of our financial instruments, including cash equivalents, accounts receivable, accounts payable and accrued expenses, the carrying amounts approximate fair value due to their short maturities. The carrying amount of our convertible and other debt approximates the fair value because the interest rate on those debts do not vary materially from the market rate for similar debt instruments. We adopted accounting guidance for fair value measurements of financial assets and liabilities and adopted the same guidance for non-financial assets and liabilities effective July 1, 2009. The adoption did not have a material impact on our results of operations, financial position or liquidity. The standard defines fair value, provides guidance for measuring fair value and requires certain disclosures. This standard does not require any new fair value measurements, but rather applies to all other accounting pronouncements that require or permit fair value measurements. This guidance does not apply to measurements related to share-based payments. This guidance discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). The guidance utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels: Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: Inputs other than quoted prices that are observable, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. Level 3: Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect those that a market participant would use. The Company had no financial or non-financial assets or liabilities measured at fair value and subject to this accounting standard as of December 31, 2016 or 2015. |
Revenue Recognition | Revenue Recognition Revenue from sales of products is recognized when persuasive evidence of an arrangement exists, products have been shipped to the customer, economic risk of loss has passed to the customer, the price is fixed or determinable, collection is reasonably assured, and any future obligations of the Company are insignificant. Revenue is shown net of returns and allowances. The Company provides certain customers with the right of return for unsold product. Sales to these customers are recorded as the customer sells the product, thus removing the right of return. Products shipped from either our third-party fulfillment companies or our Jupiter, Florida or Irwindale, California locations are shipped FOB shipping point. Normal payment terms are net 30 days depending on the arrangement we have with the customer. As such, revenue is recognized when product has been shipped from either the third-party fulfillment company or from the Jupiter, Florida or Irwindale, California locations. The Company follows the guidance of ASC 605-50-25, “Revenue Recognition, Customer Payments”. Accordingly, any incentives received from vendors are recognized as a reduction of the cost of products. Promotional products or samples given to customers or potential customers are recognized as a cost of goods sold. However, products we utilize to perform demonstrations for potential customers are recorded as a marketing expense in operations. In June 2016, the Company entered into two agreements with a state forestry agency whereby the Company agreed to pay for and build two fixed airport mixing facilities in order to support the state agency’s aerial wildland firefighting operations. In connection with the agreement, the state agency has the use of the equipment in exchange for paying a premium price per bucket for our HVO-F aerial FireIce product and also making an initial minimum purchase of 200 buckets per year. As such, the Company has deferred the premium portion of the bucket price for the minimum purchase amount and will recognize the revenue related to the premium over 12 months. For the year ended December 31, 2016, the Company has recognized $9,333 in revenue and has deferred $6,667 of the minimum purchase amounts. |
Shipping and Handling Costs | Shipping and Handling Costs Amounts invoiced to customers for shipping and handling are included in revenues. Shipping and handling costs related to sales of products are included in cost of sales in the amount of $27,754 and $23,384 for the years ended December 31, 2016 and 2015, respectively. |
Research and Development | Research and Development In accordance with ASC 730-10 expenditures for research and development of the Company's products are expensed when incurred, and are included in operating expenses. The Company recognized research and development costs of $233,939 and $192,499 during the years ended December 31 2016 and 2015, respectively. |
Advertising | Advertising The Company conducts advertising for the promotion of its products and services. In accordance with ASC 720-35, advertising costs are charged to operations when incurred; such amounts aggregated $11,192 and $50,684, respectively, during the years ended December 31, 2016 and 2015. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Management believes that the estimates utilized in preparing its consolidated financial statements are reasonable; however, actual results could differ materially from these estimates. Significant estimates during the years ended December 31, 2016 and 2015 include the allowance for doubtful accounts, depreciation and amortization, valuation of inventories, valuation of the beneficial conversion features associated with convertible notes, valuation of options and warrants granted for services or settlements, valuation of common stock granted for services or for debt conversion, accruals for litigation losses and the valuation of deferred tax assets. |
Net Earnings (Loss) per Share | Net Earnings (Loss) per Share The Company computes net earnings (loss) per share in accordance with ASC 260-10. ASC 260-10 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period. Diluted EPS excludes all dilutive potential common shares if their effect is anti-dilutive. For the years ended December 31, 2016 and 2015, there was no separate computation of dilutive net loss per share since the common stock equivalents outstanding were anti-dilutive due to the net losses. At December 31, 2016, there were options to purchase 11,696,340 shares and warrants to purchase 15,733,564 shares of common stock outstanding which may dilute future earnings per share. In addition, there are 23,427,312 shares reserved for issuance related to convertible note agreements. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for stock-based compensation in accordance with ASC 718-10 “Compensation – Stock Compensation” which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees and directors including employee stock options, restricted stock units, and stock appreciation rights are based on estimated fair values. Stock option compensation expense recognized under ASC 718-10 for the years ended December 31, 2016 and 2015 was $416,586 and $1,030,568, respectively, related to employee, director and advisory board stock options, and is included in selling, general and administrative expenses in the consolidated statements of operations. Stock-based compensation expense recognized during the period is based on the value of the portion of share-based payment awards that is ultimately expected to vest during the period. At December 31, 2016, the total compensation cost for stock options not yet recognized was $198,542. This cost will be recognized over the remaining vesting period of the options. The Company accounts for non-employee stock based awards at fair value in accordance with the measurement and recognition criteria of ASC 505-50 "Equity Based payments to Non-Employees. Stock based compensation to non-employees recognized for the years ended December 31, 2016 and 2015 was $18,101 and $325,718, respectively. 2007 Equity Incentive Plan In January 2007, the Company established the 2007 Equity Incentive Plan under which provided for the issuance of up to 1,500,000 stock options, stock appreciation rights, restricted stock or restricted stock units to our directors, employees and consultants. In September 2008, the Board of Directors approved an amendment to the Company’s 2007 Equity Incentive Plan to increase the number of shares authorized by the plan from 1,500,000 to 3,500,000. In fiscal 2012, Board of Directors increased the number of share authorized under the Plan to 4,500,000. In June 2013, the Board of Directors approved an amendment to increase the number of shares authorized by the plan to 15,000,000. Under the Equity Incentive Plan, all directors who are not employees or own 10% or more of the Company’s outstanding stock at the time of grant shall automatically receive a grant of stock options as follows: Initial Grants A – Chairman of the Board - 50,000 options B – Director - 30,000 options C – Chair of a Committee - 10,000 options D – Member of a Committee - 5,000 options In June 2013, the Board of Directors increased the annual grants to the following amounts: Annual Grants A – Chairman of the Board - 70,000 options B – Director - 100,000 options C – Chair of a Committee - 20,000 options D – Member of a Committee - 10,000 options All initial grants of options to new non-employee directors and committee members vest annually over a three year period on the anniversary date of the grant, subject to continuing service as a director, Committee member, Chairman of the Board or Chairman of a Committee on the applicable vesting date. Options automatically granted annually under the 2007 Equity Incentive Plan vest the following June 30th, subject to continuing service as a director. The exercise price of options or stock appreciation rights granted under the 2007 Equity Incentive Plan shall not be less than the fair market value of the underlying common stock at the time of grant. In the case of incentive stock options, the exercise price may not be less than 110% of the fair market value in the case of 10% shareholders. Options and stock appreciation rights granted under the 2007 Equity Incentive Plan shall expire no later than ten years after the date of grant. The option price may be paid in United States dollars by check or wire transfer or, at the discretion of the Board of Directors or Compensation Committee, by delivery of shares of our common stock having fair market value equal as of the date of exercise to the cash exercise price, or a combination thereof. The identification of individuals entitled to receive awards, the terms of the awards, and the number of shares subject to individual awards, are determined by the Board of Directors or the Compensation Committee, in their sole discretion. The purchase price per share, if applicable, shall be adjusted for any increase or decrease in the number of issued shares resulting from a recapitalization, reorganization, merger, consolidation, exchange of shares, stock dividend, stock split, reverse stock split, or other subdivision or consolidation of shares. The Board of Directors or the Compensation Committee may from time to time alter, amend, suspend, or discontinue the Equity Incentive Plan with respect to any shares as to which awards of stock rights have not been granted. However no rights granted with respect to any awards under this Equity Incentive Plan before the amendment or alteration shall be impaired by any such amendment, except with the written consent of the grantee. Under the terms of the Equity Incentive Plan, the Board of Directors or the Compensation Committee may also grant awards which will be subject to vesting under certain conditions. The vesting may be time-based or based upon meeting performance standards, or both. In April 2010, the Company amended the 2007 Equity Incentive Plan to increase the number of stock options granted annually to directors from 20,000 to 50,000. In June 2013, the Company amended the 2007 Equity Incentive Plan to increase the number of stock options granted annually to directors to 100,000. All of our Stock Option Agreements provide for “clawback” provisions, which enable our Board of Directors to cancel stock awards and recover past profits if the person is dismissed for cause or commits certain acts which harm us. Determining Fair Value under ASC 718-10 The Company estimates the fair value of stock options granted using the Black-Scholes option-pricing formula. This fair value is then amortized on a straight-line basis over the requisite service periods of the awards, which is generally the vesting period. The Company’s determination of fair value using an option-pricing model is affected by the stock price as well as assumptions regarding the number of highly subjective variables. |
Income Taxes | Income Taxes The Company accounts for income taxes pursuant to the provisions of ASC 740-10, "Accounting for Income Taxes," which requires, among other things, an asset and liability approach to calculating deferred income taxes. The asset and liability approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. A valuation allowance is provided to offset any net deferred tax assets for which management believes it is more likely than not that the net deferred asset will not be realized. The Company follows the provisions of the ASC 740 -10 related to, Accounting for Uncertain Income Tax Positions. Effective July 1, 2007, the Company adopted ASC 740-10-25 Definition of Settlement, |
Legal Costs and Contingencies | Legal Costs and Contingencies In the normal course of business, the Company incurs costs to hire and retain external legal counsel to advise it on regulatory, litigation and other matters. The Company expenses these costs as the related services are received. If a loss is considered probable and the amount can be reasonably estimated, the Company recognizes an expense for the estimated loss. If the Company has the potential to recover a portion of the estimated loss from a third party, the Company makes a separate assessment of recoverability and reduces the estimated loss, if recovery is also deemed probable. |
New Accounting Pronouncements | New Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued an update ("ASU 2014-09") establishing Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers Deferral of the Effective Date Principal versus Agent Considerations (Reporting Revenue Gross versus Net), , Identifying Performance Obligations and Licensing, Narrow-Scope Improvements and Practical Expedients, In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory In February 2016, the FASB issued (“ASU 2016-02”) Leases No other Accounting Standards Updates (ASUs) which were not effective until after December 31, 2016 are expected to have a significant effect on the Company's consolidated financial position or results of operations. |
ACCOUNTS RECEIVABLE (Tables)
ACCOUNTS RECEIVABLE (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accounts Receivable, Net [Abstract] | |
Schedule of Accounts Receivable | As of 2016 2015 Accounts receivable $ 108,659 $ 178,608 Allowance for doubtful accounts — (21,875 ) $ 108,659 $ 156,733 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories consisted of the following at December 31, 2016 and 2015: As of 2016 2015 Finished goods $ 741,588 $ 967,800 Raw materials 920,841 460,357 $ 1,662,429 $ 1,428,157 |
FURNITURE, FIXTURES AND EQUIP22
FURNITURE, FIXTURES AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Furniture, fixtures and Estimated December 31, Useful Life 2016 2015 Wildland equipment 3 - 5 years $ 155,659 $ 11,274 Wildland vehicles 5 - 7 years 204,117 158,185 Equipment 3 - 5 years 125,530 123,086 Storage facilities 3 years 38,986 29,266 Other vehicles 5 years 63,545 63,545 Furniture and fixtures 5 years 20,420 20,420 608,256 405,776 Accumulated depreciation (354,962 ) (271,517 ) $ 253,294 $ 134,259 |
SECURED CONVERTIBLE NOTE AGRE23
SECURED CONVERTIBLE NOTE AGREEMENTS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Notes Payable and Related Discounts | A summary of notes payable and related discounts as of December 31, 2016 is as follows: Principal Unamortized Discount Debt, Net of Discount Related parties Secured Convertible notes payable $ 2,997,483 $ (41,076 ) $ 2,956,407 Secured Convertible Line of Credit 5,695,000 (735,326 ) 4,959,674 Less current portion — — — Secured convertible notes payable and line of credit, net of current portion $ 8,692,483 $ (776,402 ) $ 7,916,081 A summary of notes payable and related discounts as of December 31, 2015 is as follows: Principal Unamortized Discount Debt, Net of Discount Related parties Secured Convertible notes payable $ 2,997,483 $ (51,365 ) $ 2,946,118 Secured Convertible Line of Credit 3,265,000 (518,664 ) 2,746,336 Less current portion — — — Secured convertible notes payable and line of credit, net of current portion $ 6,262,483 $ (570,029 ) $ 5,692,454 |
STOCKHOLDERS' DEFICIT (Tables)
STOCKHOLDERS' DEFICIT (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of Fair Value Assumptions for Stock Options | For the Years Ended 2016 2015 Risk free interest rate 0.58% – 1.90% 0.54% – 2.28% Expected term in years 2.0 – 10.0 2.0 – 10.0 Dividend yield — — Volatility of common stock 99.01% – 105.08% 79.66% – 99.31% Estimated annual forfeitures — — |
Employee Options and Stock Appreciation Rights [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of Options Activity | Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life Aggregate Intrinsic Value Balance at December 31, 2014 7,784,507 $ 0.85 5.44 Granted 367,500 $ 0.41 5.0 Exercised — $ — — Forfeited — $ — — Expired — $ — — Outstanding at December 31, 2015 8,152,007 $ 0.85 5.36 $ 6,000 Exercisable at December 31, 2015 5,006,675 $ 0.94 4.65 $ 1,500 Weighted average fair value of options granted during the year ended December 31, 2015 $ 0.26 Balance at December 31, 2015 8,152,007 $ 0.85 5.36 Granted 301,000 $ 0.22 5.00 Exercised — $ — — Forfeited — $ — — Expired (257,500 ) $ 1.88 — Outstanding at December 31, 2016 8,195,507 $ 0.82 4.71 $ — Exercisable at December 31, 2016 5,107,679 $ 0.92 4.12 $ — Weighted average fair value of options granted during the year ended December 31, 2016 $ 0.15 |
Director [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of Options Activity | Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life Aggregate Intrinsic Value Balance at December 31, 2014 2,145,833 $ 1.03 7.65 Granted 620,000 $ 0.79 10.00 Exercised — $ — — Forfeited — $ — — Expired — $ — — Outstanding at December 31, 2015 2,765,833 $ 0.98 7.28 $ 900 Exercisable at December 31, 2015 1,377,501 $ 1.15 6.6 $ 900 Weighted average fair value of options granted during the year ended December 31, 2015 $ 0.76 Balance at December 31, 2015 2,765,833 $ 0.98 7.28 Granted 715,000 $ 0.37 10.00 Exercised — $ — — Forfeited — $ — — Expired — $ — — Outstanding at December 31, 2016 3,480,833 $ 0.86 6.93 $ — Exercisable at December 31, 2016 2,812,500 $ 0.98 6.31 $ — Weighted average fair value of options granted during the year ended December 31, 2016 $ 0.29 |
Non-Employee, Non-Director Options [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of Options Activity | A summary of options issued to non-employees, non-directors under the 2007 Plan and changes during the year ended December 31, 2016 and 2015 is as follows: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life Aggregate Intrinsic Value Balance at December 31, 2014 270,00 $ 1.21 1.2 Granted — $ — — Exercised — $ — — Forfeited — $ — — Expired (250,000 ) $ — — Outstanding at December 31. 2015 20,000 $ 1.18 2.75 $ — Exercisable at December 31, 2015 20,000 $ 1.182 2.75 $ — Weighted average fair value of options granted during the year ended December 31, 2015 N/A Balance at December 31, 2015 20,000 $ 1.18 2.75 Granted — $ — — Exercised — $ — — Forfeited — $ — — Expired — $ — — Outstanding at December 31, 2016 20,000 $ 1.189 1.75 $ — Exercisable at December 31, 2016 20,000 $ 1.18 1.75 $ — Weighted average fair value of options granted during the year ended December 31, 2016 N/A |
Warrants Issued for Settlement [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of Warrant Activity | Number of Warrants Weighted Average Exercise Price Remaining Contractual Life Balance at December 31, 2014 350,000 $ 0.63 2.7 Granted — $ — — Exercised — $ — — Forfeited — $ — — Expired — $ — — Outstanding at December 31, 2015 350,000 $ 0.63 1.7 Exercisable at December 31, 2015 350,000 $ 0.63 1.7 Weighted average fair value of warrants granted during the year ended December 31, 2015 N/A Balance at December 31, 2015 350,000 $ 0.63 1.7 Granted 250,000 $ 0.37 5.0 Exercised — $ — — Forfeited — $ — — Expired — $ — — Outstanding at December 31, 2016 600,000 $ 0.52 2.3 Exercisable at December 31, 2016 600,000 $ 0.52 2.3 Weighted average fair value of warrants granted during the year ended December 31, 2016 $ 0.28 |
Warrant [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of Warrant Activity | A summary of warrants issued for cash or services and changes during the years ended December 31, 2016 and 2015 is as follows: Number of Warrants Weighted Average Exercise Price Remaining Contractual Life Balance at December 31, 2014 5,746,370 $ 1.71 2.63 Granted 4,832,134 $ 1.72 2.76 Exercised — $ — — Forfeited — $ — — Expired (236,200 ) $ 1.60 — Outstanding at December 31, 2015 10,342,304 $ 1.73 1.68 Exercisable at December 31, 2015 10,342,304 $ 1.73 1.68 Weighted average fair value of warrants granted during the year ended December 31, 2015 $ 0.37 Balance at December 31, 2015 10,342,304 $ 1.73 1.68 Granted 4,791,260 $ 1.93 2.5 Exercised — $ — — Forfeited — $ — — Expired — $ — — Outstanding at December 31, 2016 15,133,564 $ 1.77 1.27 Exercisable at December 31, 2016 15,066,898 $ 1.78 1.24 Weighted average fair value of warrants granted during the year ended December 31, 2016 $ 0.26 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of Deferred Income Tax Assets and Liabilities | Due to the net losses incurred, there was no income tax provision for the years ended December 31, 2016 and 2015. Deferred tax assets and liabilities as of December 31, 2016 and 2015 were as follows: December 31, 2016 2015 Deferred Tax Assets: Net operating loss carryforward $ 14,625,674 $ 13,055,795 Allowance for bad debt 60,567 65,281 Stock-based compensation 2,223,337 2,167,730 Depreciation 19,373 10,702 Gross deferred tax asset 16,928,951 15,299,508 Less: deferred tax asset valuation allowance (16,928,951 ) (15,299,508 ) Total net deferred tax asset — — Less: Deferred tax liability - depreciation — — Net deferred taxes $ — $ — |
Schedule of Reconciliation of Provision (Benefit) for Income Taxes | Reconciliation of the differences between income tax benefit computed at the federal and state statutory tax rates and the provision for income tax benefit for the years ended December 31, 2016 and 2015 was as follows: For the Years Ended December 31, 2016 2015 Amount % Amount % Tax at U.S. statutory rate $ (1,588,495 ) -34.00 % $ (2,048,153 ) -34.00 % State taxes, net of federal benefit (168,053 ) -3.60 % (218,670 ) -3.63 % Other 127,105 2.72 % (295,854 ) -4.91 % Change in valuation allowance 1,629,443 34.88 % 2,562,677 42.54 % $ — 0.00 % $ — 0.00 % |
NATURE OF OPERATIONS, BASIS O26
NATURE OF OPERATIONS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Revenue recognized | $ 9,333 | |
Deferred revenue | 6,667 | |
Shipping and handling costs related to sales of products | 27,754 | $ 23,384 |
Research and development | 233,939 | 192,499 |
Advertising costs | $ 11,192 | $ 50,684 |
Minimum [Member] | ||
Estimated useful life of property and equipment | 3 years | |
Years subject to audit | 2,013 | |
Maximum [Member] | ||
Estimated useful life of property and equipment | 7 years | |
Years subject to audit | 2,015 | |
Employee Options and Stock Appreciation Rights [Member] | ||
Shares considered antidilutive | 11,696,340 | |
Warrant [Member] | ||
Shares considered antidilutive | 15,733,564 | |
Stock Options For Convertible Notes Reserved [Member] | ||
Shares considered antidilutive | 23,427,312 |
NATURE OF OPERATIONS, BASIS O27
NATURE OF OPERATIONS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Stock-Based Compensation) (Details) - USD ($) | Jul. 02, 2016 | Mar. 31, 2010 | Oct. 24, 2016 | Jul. 31, 2015 | Jun. 30, 2015 | Jun. 30, 2013 | Apr. 30, 2010 | Dec. 31, 2016 | Dec. 31, 2015 | Jul. 31, 2016 | Jun. 30, 2012 | Sep. 30, 2008 | Jan. 31, 2007 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Share-based compensation expense | $ 434,687 | $ 1,356,286 | |||||||||||
Unrecognized compensation expense | $ 198,542 | ||||||||||||
Shares authorized | 15,000,000 | 4,500,000 | 3,500,000 | 1,500,000 | |||||||||
Minimum percentage of fair market price for an exercise price, exceeding benchmark ownership percentage | 110.00% | ||||||||||||
Percentage of ownership of outstanding stock, benchmark | 10.00% | ||||||||||||
Employee Options and Stock Appreciation Rights [Member] | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Share-based compensation expense | $ 416,586 | $ 1,030,568 | |||||||||||
Options granted | 301,000 | 367,500 | |||||||||||
Non Employee [Member] | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Share-based compensation expense | $ 18,101 | $ 325,718 | |||||||||||
Director [Member] | Employee Options and Stock Appreciation Rights [Member] | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Unrecognized compensation expense | $ 198,236 | ||||||||||||
Options granted | 680,000 | 5,000 | 580,000 | 30,000 | |||||||||
Vesting period | 3 years | 1 year | 3 years | ||||||||||
Term | 10 years | 10 years | 10 years | 10 years | |||||||||
Initial Grant [Member] | Chairman of the Board [Member] | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Options granted | 50,000 | ||||||||||||
Initial Grant [Member] | Director [Member] | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Options granted | 30,000 | ||||||||||||
Initial Grant [Member] | Chair of a Committee [Member] | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Options granted | 10,000 | ||||||||||||
Initial Grant [Member] | Member of a Committee [Member] | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Options granted | 5,000 | ||||||||||||
Annual Grant [Member] | Chairman of the Board [Member] | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Options granted | 70,000 | ||||||||||||
Annual Grant [Member] | Director [Member] | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Options granted | 20,000 | 100,000 | 50,000 | ||||||||||
Annual Grant [Member] | Chair of a Committee [Member] | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Options granted | 20,000 | ||||||||||||
Annual Grant [Member] | Member of a Committee [Member] | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Options granted | 10,000 |
GOING CONCERN (Details)
GOING CONCERN (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Aug. 31, 2015 | Dec. 31, 2014 | |
Net loss | $ 4,672,043 | $ 6,023,980 | ||
Net cash used in operating activities | 3,344,593 | 3,777,610 | ||
Accumulated deficit | 47,957,926 | 43,285,883 | ||
Stockholders' deficit | 6,363,616 | 4,482,416 | $ 1,313,367 | |
Proceeds from issuance of common stock | 214,250 | |||
President and Principal Shareholder [Member] | ||||
Advances from convertible line of credit | 2,430,000 | |||
Lincoln Park Capital Fund, LLC. [Member] | ||||
Common stock issued | $ 10,000,000 | |||
Proceeds from issuance of common stock | $ 715,075 | $ 199,120 |
ACCOUNTS RECEIVABLE (Details)
ACCOUNTS RECEIVABLE (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Accounts Receivable, Net [Abstract] | ||
Accounts receivable | $ 108,659 | $ 178,608 |
Allowance for doubtful accounts | (21,875) | |
Accounts receivable, net | 108,659 | 156,733 |
Bad debt expense | $ (21,875) | $ 23,900 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2016 | |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 967,800 | $ 741,588 |
Raw materials | 460,357 | 920,841 |
Total inventory | 1,428,157 | 1,662,429 |
Consignment inventory | $ 3,100 | |
Inventory written off for obsolescence | $ 67,439 |
FURNITURE, FIXTURES AND EQUIP31
FURNITURE, FIXTURES AND EQUIPMENT (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment [Line Items] | ||
Furniture, fixtures, and equipment | $ 608,256 | $ 405,776 |
Accumulated depreciation | (354,962) | (271,517) |
Total furniture, fixtures, and equipment, net | 253,294 | 134,259 |
Depreciation expense | $ 83,445 | 59,660 |
Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life | 3 years | |
Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life | 7 years | |
Wildland Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Furniture, fixtures, and equipment | $ 155,659 | 11,274 |
Wildland Equipment [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life | 3 years | |
Wildland Equipment [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life | 5 years | |
Wildland Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Furniture, fixtures, and equipment | $ 204,117 | 158,185 |
Wildland Vehicles [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life | 3 years | |
Wildland Vehicles [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life | 7 years | |
Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Furniture, fixtures, and equipment | $ 125,530 | 123,086 |
Equipment [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life | 3 years | |
Equipment [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life | 5 years | |
Storage Facilities [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Furniture, fixtures, and equipment | $ 38,986 | 29,266 |
Estimated useful life | 3 years | |
Other vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Furniture, fixtures, and equipment | $ 63,545 | 63,545 |
Estimated useful life | 5 years | |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Furniture, fixtures, and equipment | $ 20,420 | $ 20,420 |
Estimated useful life | 5 years |
SECURED CONVERTIBLE NOTE AGRE32
SECURED CONVERTIBLE NOTE AGREEMENTS (Narrative) (Details) - USD ($) | Feb. 12, 2015 | Feb. 12, 2015 | Jul. 11, 2013 | Feb. 01, 2013 | Jul. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Sep. 27, 2016 | Apr. 08, 2016 |
Debt Instrument [Line Items] | |||||||||
Interest expense | $ 718,636 | $ 423,090 | |||||||
Loss on extinguishment of debt | 596,648 | ||||||||
President and Principal Shareholder [Member] | Convertible Note Payable Dated February 2013 [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt issued | $ 1,997,483 | 1,997,483 | |||||||
Debt, interest rate | 7.50% | ||||||||
Maturity date | Dec. 31, 2020 | Dec. 31, 2016 | |||||||
Convertible note, conversion price | $ 0.35 | ||||||||
Accrued interest | 137,088 | ||||||||
Loss on extinguishment of debt | 34,586 | ||||||||
President and Principal Shareholder [Member] | Convertible Note Payable Dated July 2013 [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Proceeds from issuance of debt | $ 1,000,000 | ||||||||
Debt issued | 1,000,000 | ||||||||
Debt, interest rate | 7.50% | ||||||||
Maturity date | Dec. 31, 2020 | Jul. 10, 2018 | |||||||
Convertible note, conversion price | $ 0.35 | $ 0.35 | $ 1 | ||||||
Stock issued upon conversion of convertible note, shares | 208,333 | ||||||||
Stock issued upon conversion of convertible note, accrued interest value | $ 75,000 | ||||||||
Unamortized discount on notes payable | $ 60,390 | $ 60,390 | 41,075 | ||||||
Accrued interest | 35,041 | ||||||||
Interest expense | 10,290 | ||||||||
Number of shares callable by warrants | 500,000 | ||||||||
Term of warrants | 5 years | ||||||||
Exercise price of shares called by warrants | $ 1.30 | ||||||||
Loss on extinguishment of debt | 562,062 | ||||||||
President and Principal Shareholder [Member] | Secured Convertible Line Of Credit Agreement [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt issued | 5,695,000 | ||||||||
Debt, interest rate | 7.50% | 7.50% | |||||||
Maturity date | Dec. 31, 2020 | ||||||||
Accrued interest | 310,122 | ||||||||
Interest expense | $ 143,681 | ||||||||
Maximum borrowing capacity | $ 4,000,000 | $ 4,000,000 | $ 6,000,000 | $ 5,000,000 | |||||
Number of shares callable by warrants | 3,795,498 | ||||||||
Term of warrants | 2 years | ||||||||
Exercise price of shares called by warrants | $ 2 | $ 2 | $ 2 | ||||||
Percentage of warrants issued equals of number of shares issuable upon the conversion | 50.00% | ||||||||
Convertible amount | $ 2,430,000 | ||||||||
Loan discounts related to warrants | 367,663 | 180,172 | |||||||
Loan discounts related to beneficial conversion features of advances | $ 367,663 | $ 180,172 | |||||||
Expected term | 2 years | ||||||||
President and Principal Shareholder [Member] | Secured Convertible Line Of Credit Agreement [Member] | Minimum [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Convertible note, conversion price | $ 0.2108 | ||||||||
Volatility rate (as a percent) | 99.01% | ||||||||
Discount rate | 0.58% | ||||||||
President and Principal Shareholder [Member] | Secured Convertible Line Of Credit Agreement [Member] | Maximum [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Convertible note, conversion price | $ 0.55 | ||||||||
Volatility rate (as a percent) | 105.41% | ||||||||
Discount rate | 1.22% |
SECURED CONVERTIBLE NOTE AGRE33
SECURED CONVERTIBLE NOTE AGREEMENTS (Schedule of Debt) (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Related parties | ||
Convertible notes payable, related, principal | $ 2,997,483 | $ 2,997,483 |
Convertible notes payable, related, unamortized discount | (41,076) | (51,365) |
Convertible notes payable, related, net | 2,956,407 | 2,946,118 |
Convertible line of credit, related, principal | 5,695,000 | 3,265,000 |
Convertible line of credit, related, unamortized discount | (735,326) | (518,664) |
Convertible line of credit, related, net | 4,959,674 | 2,746,336 |
Less current portion, related, principal | ||
Less current portion, related, unamortized portion | ||
Less current portion, related, net | ||
Convertible and nonconvertible note payable, net of current portion, principal | 8,692,483 | 6,262,483 |
Convertible and nonconvertible note payable, net of current portion, unamortized discount | (776,402) | (570,029) |
Convertible and nonconvertible note payable, net of current portion, net | $ 7,916,081 | $ 5,692,454 |
STOCKHOLDERS' DEFICIT (Narrativ
STOCKHOLDERS' DEFICIT (Narrative) (Preferred Stock) (Details) - $ / shares | Dec. 31, 2016 | Dec. 31, 2015 |
Stockholders' Equity Note [Abstract] | ||
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, par value per share | $ 0.001 | $ 0.001 |
STOCKHOLDERS' DEFICIT (Narrat35
STOCKHOLDERS' DEFICIT (Narrative) (Common Stock) (Details) | 1 Months Ended | 12 Months Ended | ||||||||
Jul. 31, 2016USD ($)shares | Apr. 30, 2016USD ($)shares | Feb. 28, 2016USD ($)$ / sharesshares | Aug. 31, 2015USD ($)$ / sharesshares | Jul. 31, 2015USD ($)shares | Jun. 30, 2015USD ($)shares | Feb. 28, 2015USD ($)$ / sharesshares | Dec. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2015USD ($)$ / sharesshares | Aug. 12, 2015USD ($) | |
Class of Stock [Line Items] | ||||||||||
Common stock issued for cash in connection with stock purchase agreement | $ 715,075 | $ 199,120 | ||||||||
Proceeds from issuance of common stock | 214,250 | |||||||||
Proceeds from the sale of stock and warrants through private placements | 500,000 | 150,000 | ||||||||
Gain (loss) on conversion of interest | (72,765) | 12,841 | ||||||||
Common stock issued for services | $ 13,067 | |||||||||
Common stock issued to purchase vehicle | 16,000 | |||||||||
Common Stock [Member] | Private Placement [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Proceeds from issuance of common stock | $ 214,250 | |||||||||
Common stock issued for cash, shares | shares | 545,865 | |||||||||
Number of accredited investors | 3 | |||||||||
Investor Relation Services [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Common stock issued for services, shares | shares | 18,114 | 12,235 | ||||||||
Common stock issued for services | $ 8,000 | $ 6,000 | ||||||||
Investor Relation Services [Member] | Minimum [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Equity issuance, price per share | $ / shares | $ 0.36 | $ 0.35 | ||||||||
Investor Relation Services [Member] | Maximum [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Equity issuance, price per share | $ / shares | $ 0.52 | $ 0.60 | ||||||||
Consultant [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Common stock issued for services, shares | shares | 12,126 | 12,307 | ||||||||
Common stock issued for services | $ 5,067 | $ 5,627 | ||||||||
Former Executive Chairman and Director [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Common stock issued for settlement, shares | shares | 200,000 | |||||||||
Equity issuance, price per share | $ / shares | $ 0.68 | |||||||||
President and Principal Shareholder [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Common stock issued to purchase vehicle, shares | shares | 21,918 | |||||||||
Common stock issued to purchase vehicle | $ 16,000 | |||||||||
President and Principal Shareholder [Member] | Private Placement [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Common stock and warrants issued for cash, shares | shares | 652,174 | |||||||||
Term of warrants | 2 years | |||||||||
Number of shares callable by warrants | shares | 326,087 | |||||||||
Exercise price of shares called by warrants | $ / shares | $ 2 | |||||||||
Proceeds from the sale of stock and warrants through private placements | $ 150,000 | |||||||||
President and Principal Shareholder [Member] | Convertible Debt [Member] | Common Stock [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Common stock issued for interest, shares | shares | 208,333 | 296,371 | 428,032 | 101,352 | 428,032 | |||||
Common stock issued for interest, value | $ 75,000 | $ 148,365 | $ 149,811 | $ 75,000 | $ 149,811 | |||||
Accrued interest | 75,000 | 75,000 | ||||||||
Conversion price | $ / shares | $ 0.35 | $ 0.35 | ||||||||
Fair market value, price per share | $ / shares | $ 0.52 | $ 0.32 | ||||||||
Convertible notes payable | $ 1,000,000 | $ 1,000,000 | ||||||||
Fair market value, conversion of shares | $ 222,577 | $ 136,970 | ||||||||
Gain (loss) on conversion of interest | $ 72,765 | $ 12,841 | ||||||||
Accredited Investor [Member] | Director and his wife [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Common stock and warrants issued for cash, shares | shares | 428,572 | |||||||||
Term of warrants | 2 years | |||||||||
Number of shares callable by warrants | shares | 214,286 | |||||||||
Proceeds from the sale of stock and warrants through private placements | $ 150,000 | |||||||||
Accredited Investor [Member] | Private Placement [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Number of accredited investors | 3 | |||||||||
Common stock and warrants issued for cash, shares | shares | 1,591,700 | |||||||||
Term of warrants | 2 years | |||||||||
Number of shares callable by warrants | shares | 795,850 | |||||||||
Exercise price of shares called by warrants | $ / shares | $ 2 | |||||||||
Proceeds from the sale of stock and warrants through private placements | $ 500,000 | |||||||||
Lincoln Park Capital Fund, LLC. [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Commitment to purchase shares | $ 10,000,000 | |||||||||
Proceeds from issuance of common stock | $ 715,075 | $ 199,120 | ||||||||
Shares of stock issued as a commitment fee | shares | 28,008 | 7,797 | ||||||||
Common stock issued for cash, shares | shares | 2,078,008 | 457,797 | ||||||||
Lincoln Park Capital Fund, LLC. [Member] | Common Stock [Member] | Common Stock Purchase Agreement [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Commitment to purchase shares | $ 10,000,000 | |||||||||
Common stock issued for cash in connection with stock purchase agreement | $ 189,213 | |||||||||
Shares of stock issued as a commitment fee | shares | 291,097 |
STOCKHOLDERS' DEFICIT (Schedule
STOCKHOLDERS' DEFICIT (Schedule of Assumptions) (Details) - Employee Options and Stock Appreciation Rights [Member] | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate, minimum | 0.58% | 0.54% |
Risk-free interest rate, maximum | 1.90% | 2.28% |
Dividend yield | ||
Expected volatility, minimum | 99.01% | 79.66% |
Expected volatility, maximum | 105.08% | 99.31% |
Estimated annual forfeitures | ||
Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term | 2 years | 2 years |
Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term | 10 years | 10 years |
STOCKHOLDERS' DEFICIT (Schedu37
STOCKHOLDERS' DEFICIT (Schedule of Stock Options Activity) (Details) | 12 Months Ended | ||
Dec. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2015USD ($)$ / sharesshares | Dec. 31, 2014$ / sharesshares | |
Number of Options | |||
Expired | shares | (250,000) | ||
Weighted Average Exercise Price | |||
Expired | $ 1.22 | ||
Employee Options and Stock Appreciation Rights [Member] | |||
Number of Options | |||
Balance | shares | 8,152,007 | 7,784,507 | |
Granted | shares | 301,000 | 367,500 | |
Exercised | shares | |||
Forfeited | shares | |||
Expired | shares | (257,500) | ||
Outstanding | shares | 8,195,507 | 8,152,007 | 7,784,507 |
Exercisable | shares | 5,107,679 | 5,006,675 | |
Weighted Average Exercise Price | |||
Balance | $ 0.85 | $ 0.85 | |
Granted | 0.22 | 0.41 | |
Exercised | |||
Forfeited | |||
Expired | 1.88 | ||
Outstanding | 0.82 | 0.85 | $ 0.85 |
Exercisable | 0.92 | 0.94 | |
Weighted average fair value of options granted | $ 0.15 | $ 0.26 | |
Weighted Average Remaining Contractual Life | |||
Granted | 5 years | 5 years | |
Outstanding | 4 years 8 months 16 days | 5 years 4 months 10 days | |
Exercisable | 4 years 1 month 13 days | 4 years 7 months 24 days | |
Aggregate Intrinsic Value | |||
Outstanding | $ | $ 6,000 | ||
Exercisable | $ | $ 1,500 | ||
Director Options [Member] | |||
Number of Options | |||
Balance | shares | 2,765,833 | 2,145,833 | |
Granted | shares | 715,000 | 620,000 | |
Exercised | shares | |||
Forfeited | shares | |||
Expired | shares | |||
Outstanding | shares | 3,480,833 | 2,765,833 | 2,145,833 |
Exercisable | shares | 2,812,500 | 1,377,501 | |
Weighted Average Exercise Price | |||
Balance | $ 0.98 | $ 1.03 | |
Granted | 0.37 | 0.79 | |
Exercised | |||
Forfeited | |||
Expired | |||
Outstanding | 0.86 | 0.98 | $ 1.03 |
Exercisable | 0.98 | 1.15 | |
Weighted average fair value of options granted | $ 0.29 | $ 0.76 | |
Weighted Average Remaining Contractual Life | |||
Granted | 10 years | 10 years | |
Outstanding | 6 years 11 months 5 days | 7 years 3 months 11 days | |
Exercisable | 6 years 3 months 22 days | 6 years 7 months 6 days | |
Aggregate Intrinsic Value | |||
Outstanding | $ | $ 900 | ||
Exercisable | $ | $ 900 | ||
Non-Employee, Non-Director Options [Member] | |||
Number of Options | |||
Balance | shares | 20,000 | 270,000 | |
Granted | shares | |||
Exercised | shares | |||
Forfeited | shares | |||
Expired | shares | (250,000) | ||
Outstanding | shares | 20,000 | 20,000 | 270,000 |
Exercisable | shares | 20,000 | 20,000 | |
Weighted Average Exercise Price | |||
Balance | $ 1.18 | $ 1.21 | |
Granted | |||
Exercised | |||
Forfeited | |||
Expired | |||
Outstanding | 1.189 | 1.18 | $ 1.21 |
Exercisable | 1.18 | 1.182 | |
Weighted average fair value of options granted | |||
Weighted Average Remaining Contractual Life | |||
Outstanding | 1 year 9 months | 2 years 9 months | 1 year 2 months 12 days |
Exercisable | 1 year 9 months | 2 years 9 months | |
Aggregate Intrinsic Value | |||
Outstanding | $ | |||
Exercisable | $ |
STOCKHOLDERS' DEFICIT (Narrat38
STOCKHOLDERS' DEFICIT (Narrative) (Options) (Details) - USD ($) | Jul. 02, 2016 | Dec. 31, 2016 | Nov. 30, 2016 | Oct. 24, 2016 | Apr. 30, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jul. 31, 2015 | Jun. 30, 2015 | May 30, 2015 | Jan. 23, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Jul. 31, 2016 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Unrecognized compensation expense | $ 198,542 | $ 198,542 | ||||||||||||
Options expired, number | 250,000 | |||||||||||||
Options expired, exercise price | $ 1.22 | |||||||||||||
Employee Options and Stock Appreciation Rights [Member] | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Options granted, number | 301,000 | 367,500 | ||||||||||||
Options granted, exercise price | $ 0.22 | $ 0.41 | ||||||||||||
Options expired, number | 257,500 | |||||||||||||
Options expired, exercise price | $ 1.88 | |||||||||||||
Employee Options and Stock Appreciation Rights [Member] | Employees [Member] | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Options granted, term | 5 years | 5 years | 5 years | |||||||||||
Options granted, number | 251,000 | 300,000 | 62,500 | |||||||||||
Options granted, exercise price | $ 0.22 | $ 0.34 | $ 0.70 | |||||||||||
Vesting period | 3 years | 3 years | ||||||||||||
Fair value of options | $ 38,092 | $ 70,258 | $ 24,590 | |||||||||||
Volatility | 99.29% | 99.26% | 97.15% | |||||||||||
Expected term | 4 years | 4 years | 2 years 6 months | |||||||||||
Discount rate | 1.67% | 1.53% | 0.82% | |||||||||||
Employee Options and Stock Appreciation Rights [Member] | Employees [Member] | Vesting Immediately [Member] | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Percentage of shares immediately vested | 25.00% | 25.00% | ||||||||||||
Employee Options and Stock Appreciation Rights [Member] | Employees [Member] | Vesting Over Three Years [Member] | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Percentage of shares immediately vested | 25.00% | 25.00% | ||||||||||||
Employee Options and Stock Appreciation Rights [Member] | New Employee [Member] | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Options granted, term | 5 years | 5 years | 5 years | |||||||||||
Options granted, number | 25,000 | 25,000 | 5,000 | |||||||||||
Options granted, exercise price | $ 0.23 | $ 0.26 | $ 0.64 | |||||||||||
Vesting period | 1 year | 1 year | 1 year | |||||||||||
Fair value of options | $ 3,556 | $ 4,119 | $ 1,913 | |||||||||||
Volatility | 99.28% | 102.80% | 95.65% | |||||||||||
Expected term | 3 years | 3 years | 3 years | |||||||||||
Discount rate | 1.44% | 1.27% | 0.88% | |||||||||||
Employee Options and Stock Appreciation Rights [Member] | Chief Executive Officer [Member] | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Options granted, term | 5 years | |||||||||||||
Options granted, number | 750,000 | |||||||||||||
Options granted, exercise price | $ 1.22 | |||||||||||||
Fair value of options | $ 271,118 | |||||||||||||
Volatility | 98.68% | |||||||||||||
Expected term | 2 years 6 months | |||||||||||||
Discount rate | 1.10% | |||||||||||||
Employee Options and Stock Appreciation Rights [Member] | Audit Committee Chairman [Member] | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Options granted, term | 10 years | |||||||||||||
Options granted, number | 10,000 | |||||||||||||
Options granted, exercise price | $ 0.27 | |||||||||||||
Vesting period | 3 years | |||||||||||||
Fair value of options | $ 1,974 | |||||||||||||
Volatility | 84.16% | |||||||||||||
Expected term | 6 years 6 months | |||||||||||||
Discount rate | 1.61% | |||||||||||||
Employee Options and Stock Appreciation Rights [Member] | Director [Member] | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Options granted, term | 10 years | 10 years | 10 years | 10 years | ||||||||||
Options granted, number | 680,000 | 5,000 | 580,000 | 30,000 | ||||||||||
Options granted, exercise price | $ 0.37 | $ 0.27 | $ 0.80 | $ 0.76 | ||||||||||
Vesting period | 3 years | 1 year | 3 years | |||||||||||
Fair value of options | $ 1,117 | $ 353,553 | $ 18,283 | |||||||||||
Volatility | 104.37% | 105.08% | 98.15% | 97.97% | ||||||||||
Expected term | 5 years 6 months | 6 years 6 months | 5 years 6 months | 6 years 6 months | ||||||||||
Discount rate | 1.49% | 1.42% | 1.74% | 2.03% | ||||||||||
Unrecognized compensation expense, period for recognition | 1 year | |||||||||||||
Unrecognized compensation expense | $ 198,236 | |||||||||||||
Employee Options and Stock Appreciation Rights [Member] | New Director [Member] | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Options granted, term | 10 years | |||||||||||||
Options granted, number | 30,000 | |||||||||||||
Options granted, exercise price | $ 0.39 | |||||||||||||
Vesting period | 3 years | |||||||||||||
Volatility | 103.79% | |||||||||||||
Expected term | 6 years 6 months | |||||||||||||
Risk-free interest rate | 1.52% | |||||||||||||
Unrecognized compensation expense | $ 9,631 |
STOCKHOLDERS' DEFICIT (Schedu39
STOCKHOLDERS' DEFICIT (Schedule of Warrant Activity) (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Warrants Issued for Settlement [Member] | ||
Number of Warrants | ||
Balance | 350,000 | 350,000 |
Granted | 250,000 | |
Exercised | ||
Forfeited | ||
Expired | ||
Outstanding | 600,000 | 350,000 |
Exercisable | 600,000 | 350,000 |
Weighted Average Exercise Price | ||
Balance | $ 0.63 | $ 0.63 |
Granted | 0.37 | |
Exercised | ||
Forfeited | ||
Expired | ||
Outstanding | 0.52 | 0.63 |
Exercisable | 0.52 | 0.63 |
Weighted average fair value of warrants granted | $ 0.28 | |
Remaining Contractual Life | ||
Granted | 5 years | |
Outstanding | 2 years 3 months 18 days | 1 year 8 months 12 days |
Exercisable | 2 years 3 months 18 days | 1 year 8 months 12 days |
Warrant [Member] | ||
Number of Warrants | ||
Balance | 10,342,304 | 5,746,370 |
Granted | 4,791,260 | 4,832,134 |
Exercised | ||
Forfeited | ||
Expired | (236,200) | |
Outstanding | 15,133,564 | 10,342,304 |
Exercisable | 15,066,898 | 10,342,304 |
Weighted Average Exercise Price | ||
Balance | $ 1.73 | $ 1.71 |
Granted | 1.93 | 1.72 |
Exercised | ||
Forfeited | ||
Expired | 1.60 | |
Outstanding | 1.77 | 1.73 |
Exercisable | 1.78 | 1.73 |
Weighted average fair value of warrants granted | $ 0.26 | $ 0.37 |
Remaining Contractual Life | ||
Granted | 2 years 6 months | 2 years 9 months 4 days |
Outstanding | 1 year 3 months 7 days | 1 year 8 months 5 days |
Exercisable | 1 year 2 months 27 days | 1 year 8 months 5 days |
STOCKHOLDERS' DEFICIT (Narrat40
STOCKHOLDERS' DEFICIT (Narrative) (Warrant) (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |||||
Dec. 31, 2016 | Jul. 31, 2016 | Jan. 31, 2016 | Aug. 31, 2015 | Jan. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | |
President and Principal Shareholder [Member] | Private Placement [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of shares callable by warrants | 326,087 | ||||||
Exercise price of shares called by warrants | $ 2 | ||||||
Warrant [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Term | 5 years | 5 years | 5 years | ||||
Number of shares callable by warrants | 250,000 | 150,000 | 100,000 | ||||
Exercise price of shares called by warrants | $ 0.37 | $ 0.39 | $ 0.27 | ||||
Fair value | $ 70,631 | $ 44,477 | $ 17,611 | ||||
Volatility rate | 104.54% | 103.14% | 81.85% | ||||
Risk free interest rate | 1.01% | 1.49% | 1.39% | ||||
Expected term | 5 years | 5 years | 5 years | ||||
Warrant [Member] | Private Placement [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Term | 2 years | ||||||
Number of shares callable by warrants | 795,850 | 795,850 | |||||
Exercise price of shares called by warrants | $ 2 | $ 2 | |||||
Warrant [Member] | President and Principal Shareholder [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Term | 2 years | ||||||
Number of shares callable by warrants | 3,636,047 | ||||||
Exercise price of shares called by warrants | $ 2 | ||||||
Warrant [Member] | President and Principal Shareholder [Member] | Private Placement [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Term | 2 years | 2 years | |||||
Number of shares callable by warrants | 3,795,409 | 3,795,409 | 326,087 | ||||
Exercise price of shares called by warrants | $ 2 | $ 2 | $ 2 | ||||
Warrant [Member] | Consultant [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Term | 5 years | ||||||
Number of shares callable by warrants | 50,000 | 50,000 | 690,000 | ||||
Exercise price of shares called by warrants | $ 0.22 | $ 0.22 | |||||
Fair value | $ 8,200 | $ 324,833 | |||||
Volatility rate | 99.29% | ||||||
Risk free interest rate | 1.90% | ||||||
Expected term | 5 years | ||||||
Vesting period | 3 years | ||||||
Warrant [Member] | Consultant [Member] | Vesting Immediately [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Percentage of shares immediately vested | 25.00% | ||||||
Warrant [Member] | Consultant [Member] | Vesting Over Three Years [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Percentage of shares immediately vested | 25.00% | ||||||
Warrant [Member] | Consultant [Member] | Minimum [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Term | 5 years | ||||||
Exercise price of shares called by warrants | $ 0.34 | ||||||
Volatility rate | 81.85% | ||||||
Expected term | 5 years | ||||||
Discount rate | 1.51% | ||||||
Warrant [Member] | Consultant [Member] | Maximum [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Term | 10 years | ||||||
Exercise price of shares called by warrants | $ 0.76 | ||||||
Volatility rate | 99.31% | ||||||
Expected term | 10 years | ||||||
Discount rate | 2.28% | ||||||
Warrant [Member] | Director And Wife [Member] | Private Placement [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of shares callable by warrants | 214,286 | 214,286 | |||||
Five Year Warrants [Member] | Lincoln Park Capital Fund, LLC. [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Difference in value of warrants recorded as a reduction of the proceeds of the offering | $ 86,448 | ||||||
Number of shares callable by warrants | 200,000 | ||||||
Exercise price of shares called by warrants | $ 1.25 |
INCOME TAXES (Narrative) (Detai
INCOME TAXES (Narrative) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforwards | $ 38,867,000 | |
Increase in valuation allowance | $ 1,629,443 | $ 2,562,677 |
Maximum [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carry-forward expiration date | Dec. 31, 2036 |
INCOME TAXES (Schedule of Defer
INCOME TAXES (Schedule of Deferred Tax Assets and Liabilities) (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforward | $ 14,625,674 | $ 13,055,795 |
Allowance for bad debt | 60,567 | 65,281 |
Stock-based compensation | 2,223,337 | 2,167,730 |
Depreciation | 19,373 | 10,702 |
Gross deferred tax asset | 16,928,951 | 15,299,508 |
Less: deferred tax asset valuation allowance | (16,928,951) | (15,299,508) |
Total net deferred tax asset | ||
Less: Deferred tax liability - depreciation | ||
Net deferred taxes |
INCOME TAXES (Schedule of Recon
INCOME TAXES (Schedule of Reconciliation of Provision (Benefit) for Income Taxes) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Amount | ||
Tax at U.S. statutory rate | $ (1,588,495) | $ (2,048,153) |
State taxes, net of federal benefit | (168,053) | (218,670) |
Other | 127,105 | (295,854) |
Change in valuation allowance | 1,629,443 | 2,562,677 |
Total income tax expense (benefit) | ||
Percentage | ||
Tax at U.S. statutory rate | (34.00%) | (34.00%) |
State taxes, net of federal benefit | (3.60%) | (3.63%) |
Other | 2.72% | (4.91%) |
Change in valuation allowance | 34.88% | 42.54% |
Total effective income tax rate | 0.00% | 0.00% |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) | 1 Months Ended | |
Jan. 31, 2015 | Dec. 31, 2016 | |
Chief Executive Officer Sister In Law [Member] | ||
Related Party Transaction [Line Items] | ||
Weekly salary amount | $ 1,269 | |
Chief Executive Officer And Chief Technology Officer Mother [Member] | ||
Related Party Transaction [Line Items] | ||
Weekly salary amount | $ 600 | |
Chief Executive Officer [Member] | ||
Related Party Transaction [Line Items] | ||
Percentage to be received of first $2 million of revenue | 5.00% | |
First revenue amount on which 5% is to be received | $ 2,000,000 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) | Nov. 14, 2012 | Jul. 31, 2016 | Jun. 30, 2016 | Jan. 31, 2015 | Feb. 28, 2014 | Feb. 28, 2013 | Nov. 30, 2012 | Dec. 31, 2016 | Dec. 31, 2015 |
Loss Contingencies [Line Items] | |||||||||
Gain (loss) on settlement | $ (13,067) | ||||||||
Final judgement against plaintiff issued by court | 510,499 | ||||||||
Chief Executive Officer [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Percentage to be received of first $2 million of revenue | 5.00% | ||||||||
First revenue amount on which 5% is to be received | $ 2,000,000 | ||||||||
Executive Chairman [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Annual base salary | $ 150,000 | ||||||||
Stock Appreciation Rights (SARs) [Member] | Chief Financial Officer [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Immediately vested shares | 200,000 | ||||||||
Vested shares upon generating $3,000,000 in revenue in any 12-month period | 200,000 | ||||||||
Vested shares upon generating $5,000,000 in revenue in any 12-month period | 200,000 | ||||||||
Vested shares upon generating $6,000,000 in revenue in any 12-month period | 200,000 | ||||||||
Employment agreement term | 10 years | ||||||||
Options granted, exercise price | $ 0.45 | ||||||||
Stock Appreciation Rights (SARs) [Member] | Chief Executive Officer And Chief Financial Officer And President And Chief Technology Officer [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Immediately vested shares | 800,000 | ||||||||
Vested shares upon generating $3,000,000 in revenue in any 12-month period | 170,000 | ||||||||
Vested shares upon generating $5,000,000 in revenue in any 12-month period | 190,000 | ||||||||
Vested shares upon generating $6,000,000 in revenue in any 12-month period | 200,000 | ||||||||
Cancelled options | 250,000 | ||||||||
Building [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Rent expense | 118,392 | 116,004 | |||||||
Monthly rent payment | $ 4,000 | $ 3,600 | |||||||
Lease terms | 1 year | ||||||||
Settlement Agreement With Employment Practices Insurance Company [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Gain (loss) on settlement | $ 300,000 | ||||||||
Litigation amount | $ 300,000 | ||||||||
Case Brought By Former Employee [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Gain (loss) on settlement | $ 320,631 | $ 56,956 | |||||||
Litigation amount | $ 250,000 | ||||||||
Number of shares callable by warrants | 250,000 | ||||||||
Exercise price of warrants | $ 0.37 | ||||||||
Volatility | 104.54% | ||||||||
Expected term | 5 years | ||||||||
Risk free rate | 1.01% | ||||||||
Fair value of Warrants | $ 70,631 | ||||||||
Settlement Agreement [Member] | Former Executive Chairman [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Gain (loss) on settlement | 412,867 | ||||||||
Financing to facilitate | 25,000,000 | ||||||||
Annual base salary | $ 800,000 | ||||||||
RSUs that executive is entitled to | 800,000 | ||||||||
Restricted stock | 200,000 | ||||||||
Cash payments | $ 315,000 | ||||||||
Auto allowance | $ 28,800 |
CONCENTRATIONS (Details)
CONCENTRATIONS (Details) | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Concentration Risk [Line Items] | |
Total EMFIDS parts, raw material and packaging purchases made during the period | $ 631,000 |
Accounts Receivable [Member] | |
Concentration Risk [Line Items] | |
Number of customers in concentration | 2 |
Accounts Receivable [Member] | Customer One Concentration Risk [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 49.40% |
Accounts Receivable [Member] | Customer Two Concentration Risk [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 19.00% |
Sales Revenue [Member] | |
Concentration Risk [Line Items] | |
Number of customers in concentration | 5 |
Number of products in concentration | 4 |
Sales Revenue [Member] | Non-US [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 14.50% |
Sales Revenue [Member] | Customer One Concentration Risk [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 19.80% |
Sales Revenue [Member] | Customer Two Concentration Risk [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 15.60% |
Sales Revenue [Member] | Customer Three Concentration Risk [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 12.00% |
Sales Revenue [Member] | Customer Four Concentration Risk [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 10.40% |
Sales Revenue [Member] | Customer Five Concentration Risk [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 10.10% |
Sales Revenue [Member] | FireIce [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 65.70% |
Sales Revenue [Member] | Soil2O [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 16.30% |
Sales Revenue [Member] | FireIce Shield [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 14.50% |
Sales Revenue [Member] | Paid for Research [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 2.90% |
Sales Revenue [Member] | FireIce Products [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 85.20% |
Sales Revenue [Member] | FireIce Eductors, EMFIDS and extinguishers [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 14.80% |
Sales Revenue [Member] | Spray Bottles [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 50.70% |
Sales Revenue [Member] | Canisters and Refills [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 41.20% |
Sales Revenue [Member] | Soil2O Traditional Sales [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 27.40% |
Sales Revenue [Member] | Soil2O Dust Control Products [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 54.40% |
Sales Revenue [Member] | Soil2O Soil Cap [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 11.20% |
Inventory purchases [Member] | |
Concentration Risk [Line Items] | |
Number of customers in concentration | 2 |
Inventory purchases [Member] | Supplier One Concentration Risk [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 49.00% |
Inventory purchases [Member] | Supplier Two Concentration Risk [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 14.20% |
Debt Financing [Member] | President and Principal Shareholder [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 100.00% |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) | Feb. 10, 2017 | Feb. 07, 2017 | Jan. 31, 2017 | Jul. 31, 2016 | Jan. 31, 2016 | Jan. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 |
Subsequent Event [Line Items] | ||||||||
Common stock issued for cash | $ 500,000 | $ 214,250 | ||||||
Warrant [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Number of shares callable by warrants | 250,000 | 150,000 | 100,000 | |||||
Warrant exercise price | $ 0.37 | $ 0.39 | $ 0.27 | |||||
Term | 5 years | 5 years | 5 years | |||||
Fair value | $ 70,631 | $ 44,477 | $ 17,611 | |||||
Volatility rate | 104.54% | 103.14% | 81.85% | |||||
Warrant [Member] | Private Placement [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Number of shares callable by warrants | 795,850 | |||||||
Warrant exercise price | $ 2 | |||||||
Term | 2 years | |||||||
President and Principal Shareholder [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Advances from convertible line of credit | $ 2,430,000 | |||||||
Subsequent Event [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Payment to employee | $ 125,100 | |||||||
Payroll taxes | 1,449 | |||||||
Claim settlement | 340 | |||||||
Reimburse employment practices insurer | 100,100 | |||||||
Settlement expense | $ 26,789 | |||||||
Subsequent Event [Member] | Warrant [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Number of shares callable by warrants | 150,000 | |||||||
Warrant exercise price | $ 0.275 | |||||||
Term | 5 years | |||||||
Fair value | $ 30,703 | |||||||
Volatility rate | 99.06% | |||||||
Discount rate | 1.88% | |||||||
Subsequent Event [Member] | Warrant [Member] | Private Placement [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Number of shares callable by warrants | 1,040,818 | |||||||
Warrant exercise price | $ 2 | |||||||
Term | 2 years | |||||||
Common stock issued for cash | $ 500,000 | |||||||
Common stock issued for cash, shares | 2,081,637 | |||||||
Subsequent Event [Member] | President and Principal Shareholder [Member] | Warrant [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Number of shares callable by warrants | 396,925 | |||||||
Warrant exercise price | $ 2 | |||||||
Advances from convertible line of credit | $ 200,000 | |||||||
Term | 2 years | |||||||
Subsequent Event [Member] | President and Principal Shareholder [Member] | Warrant [Member] | Private Placement [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Number of shares callable by warrants | 192,308 | |||||||
Common stock issued for cash | $ 100,000 | |||||||
Common stock issued for cash, shares | 384,616 | |||||||
Subsequent Event [Member] | President and Principal Shareholder [Member] | Warrant [Member] | Minimum [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Convertible note, conversion price | $ 0.23 | |||||||
Subsequent Event [Member] | President and Principal Shareholder [Member] | Warrant [Member] | Maximum [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Convertible note, conversion price | $ 0.28 | |||||||
Subsequent Event [Member] | Lincoln Park [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Common stock issued for cash | $ 403,870 | |||||||
Common stock issued for cash, shares | 98,785 |