Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Nov. 12, 2018 | |
Document And Entity Information | ||
Entity Registrant Name | GelTech Solutions, Inc. | |
Entity Central Index Key | 1,403,676 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 99,645,375 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,018 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
ASSETS | ||
Cash | $ 18,076 | $ 43,888 |
Accounts receivable trade, net | 356,729 | 77,700 |
Inventories | 561,107 | 1,434,411 |
Prepaid expenses and other current assets | 103,317 | 133,361 |
Total current assets | 1,039,229 | 1,689,360 |
Furniture, fixtures and equipment, net | 137,156 | 185,433 |
Operating right of use asset, net | 35,638 | |
Inventory not expected to be realized within one year | 1,316,418 | 479,486 |
Deposits | 18,336 | 16,086 |
Total assets | 2,546,777 | 2,370,365 |
LIABILITIES AND STOCKHOLDERS' DEFICIT | ||
Accounts payable | 236,384 | 133,303 |
Accrued expenses | 221,076 | 634,791 |
Customer deposit | 721 | |
Operating lease liability - current portion | 27,320 | |
Insurance premium finance contract | 49,543 | 63,364 |
Total current liabilities | 535,044 | 831,458 |
Operating lease liability | 8,861 | |
Convertible notes - related party, net of discounts | 976,862 | 969,186 |
Convertible line of credit - related party, net of discounts | 3,088,055 | 5,328,530 |
Total liabilities | 4,608,822 | 7,129,174 |
Commitments (Note 6) | ||
Stockholders' deficit | ||
Preferred stock: $0.001 par value; 5,000,000 shares authorized; no shares issued and outstanding | ||
Common stock: $0.001 par value; 200,000,000 shares authorized; 98,808,163 and 74,914,703 shares issued and outstanding as of September 30, 2018 and December 31, 2017, respectively. | 98,808 | 74,915 |
Additional paid in capital | 52,922,272 | 47,285,967 |
Accumulated deficit | (55,083,125) | (52,119,691) |
Total stockholders' deficit | (2,062,045) | (4,758,809) |
Total liabilities and stockholders' deficit | $ 2,546,777 | $ 2,370,365 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2018 | Dec. 31, 2017 |
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 | 200,000,000 | 200,000,000 |
Common stock, shares issued | 98,808,163 | 74,914,703 |
Common stock, shares outstanding | 98,808,163 | 74,914,703 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Statement [Abstract] | ||||
Sales | $ 607,596 | $ 383,595 | $ 1,268,032 | $ 954,100 |
Cost of goods sold | 209,090 | 112,386 | 414,687 | 297,027 |
Gross profit | 398,506 | 271,209 | 853,345 | 657,073 |
Operating expenses: | ||||
Selling, general and administrative expenses | 1,042,127 | 1,028,948 | 3,183,426 | 3,046,871 |
Research and development | 8,587 | 15,135 | 42,148 | 37,965 |
Total operating expenses | 1,050,714 | 1,044,083 | 3,225,574 | 3,084,836 |
Loss from operations | (652,208) | (772,874) | (2,372,229) | (2,427,763) |
Other income (expense) | ||||
Interest income | 4 | 1 | 7 | 9 |
Loss on conversion of debt | (129,936) | (129,936) | ||
Interest expense | (103,953) | (213,091) | (461,276) | (636,839) |
Total other income (expense) | (233,885) | (213,090) | (591,205) | (636,830) |
Net loss | $ (886,093) | $ (985,964) | $ (2,963,434) | $ (3,064,593) |
Net loss per common share - basic and diluted | $ (0.01) | $ (0.02) | $ (0.03) | $ (0.05) |
Weighted average shares outstanding - basic and diluted | 96,687,944 | 63,397,615 | 86,819,775 | 58,816,056 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Reconciliation of net loss to net cash used in operating activities: | ||
Net loss | $ (2,963,434) | $ (3,064,593) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Bad debt expense | 10,653 | 11,116 |
Depreciation | 63,344 | 68,229 |
Amortization of right of use assets | 14,675 | |
Amortization of debt discounts | 137,265 | 148,306 |
Loss on conversion of debt | 129,936 | |
Options issued for services | 30,703 | |
Common stock issued for services | 7,038 | |
Stock option compensation expense | 138,362 | 254,246 |
Changes in assets and liabilities: | ||
Accounts receivable | (289,682) | (181,543) |
Inventories | 36,372 | (210,762) |
Prepaid expenses and other current assets | 105,972 | 49,952 |
Accounts payable | 83,081 | 114,038 |
Deferred revenue | 1,583 | |
Lease liability | (14,132) | |
Customer deposits | 721 | |
Other assets | (2,250) | |
Settlement accrual | (26,789) | |
Accrued expenses | 325,915 | 461,270 |
Net cash used in operating activities | (2,216,164) | (2,344,244) |
Cash flows from Investing Activities | ||
Purchases of equipment | (15,067) | (17,209) |
Net cash used in investing activities | (15,067) | (17,209) |
Cash flows from Financing Activities | ||
Proceeds from sale of stock under stock purchase agreement | 210,555 | |
Proceeds from sale of stock and warrants | 2,180,000 | 1,921,000 |
Proceeds from issuance of stock | 96,000 | |
Proceeds from option exercise | 3,596 | |
Proceeds from advances on convertible line of credit with related parties | 200,000 | |
Payments on insurance finance contract | (74,177) | (63,877) |
Net cash provided by financing activities | 2,205,419 | 2,267,678 |
Net (decrease) in cash | (25,812) | (93,775) |
Cash - beginning | 43,888 | 151,184 |
Cash - ending | 18,076 | 57,409 |
Supplemental Disclosure of Cash Flow Information: | ||
Cash paid for interest | 2,207 | 2,315 |
Cash paid for income taxes | ||
Supplementary Disclosure of Non-cash Investing and Financing Activities: | ||
Beneficial conversion feature of convertible notes | 9,662 | |
Loan discount from warrants | 9,662 | |
Options issued for legal services, recorded as prepaid expense | 15,572 | 30,703 |
Recording right of use asset and related lease liability | 50,313 | |
Stock issued for accrued interest | 719,630 | 506,874 |
Stock issued to convert debt | 2,500,000 | 1,997,483 |
Prepaid insurance and related premium finance contracts | $ 60,356 | $ 53,666 |
Organization and Basis of Prese
Organization and Basis of Presentation | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Basis of Presentation | NOTE 1 Organization and Basis of Presentation Organization 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 System, a mobile spray unit that can be used to protect communication tower electronics during hot work. Our unaudited condensed 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. The corporate office is located in Jupiter, Florida and we also have an office in Niwot, Colorado to support our Wildland operations. Basis of Presentation The accompanying unaudited 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 FireIce Gel, Inc., Weather Tech Innovations, Inc. and GelTech International, Inc. These unaudited consolidated interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (SEC) for interim financial information. Accordingly, they do not include all of the information and footnotes required by "GAAP" for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. The information included in these unaudited consolidated interim financial statements should be read in conjunction with Managements Discussion and Analysis of Financial Conditions and Results of Operations contained in this report and the audited consolidated financial statements and accompanying notes included in the Companys Report on Form 10-K for the year ended December 31, 2017 filed on March 26, 2018. 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 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 for the nine months ended September 30, 2018 include the allowance for doubtful accounts, depreciation and amortization, valuation and classification of inventories, valuation of options and warrants granted for services, valuation of common stock granted for services or debt conversion and the valuation of deferred tax assets. Inventories Inventories as of September 30, 2018 consisted of raw materials and finished goods in the amounts of $853,083 and $1,024,442, respectively. As of September 30, 2018, the Company estimated that inventory including raw materials in the amount $,1,316,418 would most likely not be consumed in the next twelve months and therefore reclassified that amount to long term inventory in the unaudited consolidated balance sheet. As of September 30, 2018, the Company had approximately $41,342 of consignment inventory consisting of FireIce 561, FireIce Pro, FireIce HVOF and HDU Wand Kits held by five customers. Internal-Use Software The Company capitalizes the cost of development of internal use software in accordance with ASC 350-40 Intangibles Goodwill and Other Internal- Use Software. During the nine months ended September 30, 2018, the Company capitalized $10,000 paid for the development of its new website. Revenue Recognition On January 1, 2018, we adopted ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes the revenue recognition requirements in Accounting Standards Codification (ASC) Topic 605, Revenue Recognition. This ASU is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This ASU also requires additional disclosure about the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer purchase orders, including significant judgments. Our payment terms are net 30 days for domestic sales with payments for most international sales being due upon delivery of products to the customers freight forwarder. We do not incur incremental costs obtaining purchase orders from our customers, however, if we did, because all of our contracts are less than a year in duration, any contract costs incurred would be expensed rather than capitalized. Our adoption of this ASU, resulted in no change to our results of operations or our balance sheet. Leases In connection with entering into a new lease agreement for our Wildland operations in Colorado, the Company elected to early adopt the provisions of ASU 2016-02, Leases Net Earnings (Loss) per Share The Company computes net earnings (loss) per share in accordance with ASC 260-10, Earnings per Share Stock-Based Compensation The Company accounts for employee stock-based compensation in accordance with ASC 718-10, Share-Based Payment The Company accounts for non-employee stock-based compensation in accordance with ASC 505-50-25, Equity Based Payments to Non-Employees, 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 Companys 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. The Company estimates volatility based upon the historical stock price of the Company and estimates the expected term for employee stock options using the simplified method for employees and directors and the contractual term for non-employees. The risk-free rate is determined based upon the prevailing rate of United States Treasury securities with similar maturities. The fair values of stock options and warrants granted during the period from January 1, 2018 to September 30, 2018 were estimated using the following assumptions: Risk free interest rate 2.49% - 2.84% Expected term (in years) 5.0 10.0 Dividend yield Volatility of common stock 64.92% - 65.97% Estimated annual forfeitures New Accounting Pronouncements In June 2018, the FASB issued Accounting Standards Update 2018-07, Compensation - Stock Compensation No other Accounting Standards Updates (ASUs) which were not effective until after September 30, 2018 are expected to have a significant effect on the Company's consolidated financial position or results of operations. |
Going Concern
Going Concern | 9 Months Ended |
Sep. 30, 2018 | |
Going Concern [Abstract] | |
Going Concern | NOTE 2 Going Concern These unaudited condensed consolidated financial statements have been prepared on a going concern basis, which assumes the Company will continue to realize it assets and discharge its liabilities in the normal course of business. As of September 30, 2018, the Company had an accumulated deficit and stockholders deficit of $55,083,125 and $2,062,045, respectively, and incurred losses from operations and net losses of $2,372,229 and $2,963,434, respectively, for the nine months ended September 30, 2018 and used cash in operations of $2,216,164 during the nine months ended September 30, 2018. In addition, the Company has not yet generated revenue sufficient to support ongoing operations. Management believes these factors raise substantial doubt regarding the Companys ability to continue as a going concern for a period of twelve months from the issuance date of this report. These unaudited condensed 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 nine months ended September 30, 2018, the Company received $2,276,000 from private placements with five accredited investors, including $885,000 from its chairman and principal shareholder and $1,130,000 in connection with a Stock Purchase Agreement with an accredited investor. Management believes that additional funding from its chairman 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. |
Convertible Note Agreements - R
Convertible Note Agreements - Related Party | 9 Months Ended |
Sep. 30, 2018 | |
Convertible Note Agreements - Related Party | |
Convertible Note Agreements - Related Party | NOTE 3 Convertible Note Agreements Related Party The Company currently has two debt facilities outstanding, both of them held by its chairman and principal shareholder. One 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 fiveyear 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. 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. For the nine months ended September 30, 2018, the Company recorded interest expense of $7,676 related to the amortization of the note discounts related to the warrants. As of September 30, 2018, the balance of the unamortized discount related to the warrants was $23,138. In April 2018, the Company issued 612,457 shares of common stock in payment of accrued interest outstanding on the note as of March 31, 2018 in the amount of $128,616. As of September 30, 2018, the principal balance on this note is $1,000,000 and accrued interest amounted to $31,918. In connection with the February 2015 debt modifications described above, the Company entered into a Secured Revolving Convertible Line of Credit Agreement for up to $4 million with its chairman and principal shareholder. On April 8, 2016, the Company and its chairman 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 chairman 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 chairman and principal shareholder, receive advances under the secured convertible line of credit. Each advance bore 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 Companys common stock on the day prior to the date the parties agree to the advance. In addition, the Company will issue the Companys chairman 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. In July 2018, the Company issued 9,379,473 shares of common stock to its chairman and principal shareholder upon the conversion of $2.5 million of Secured Convertible Notes (Notes). The Notes were converted at prices ranging from $0.21 to $0.35 per share. In connection with the conversion, the Company recorded a loss on conversion of $129,936 representing the remaining balance of unamortized discounts on the notes converted. No gain or loss was recorded relating to the fair value of the shares exchanged because the debt was converted based upon the contractual terms of the Secured Notes. In addition to the conversion, the Companys chairman, president and principal shareholder agreed to reduce the annual interest rate on the remaining Notes and a $1 million Secured Convertible Promissory Note from 7.5% to 5.0%. The remaining Notes are convertible at prices ranging from $0.35 to $0.82 per share. Because the change in interest rates did not significantly affect the present value of the remaining debt it has been treated as a debt modification. During the nine months ended September 30, 2018, the Company has recognized interest expense of $137,265 related to the amortization of loan discounts. As of September 30, 2018, the principal balance of the advances was $3,395,000 and the balance of the unamortized discounts related to the warrants and the beneficial conversion feature was $153,473 and $153,473, respectively. In April 2018, the Company issued 2,370,690 shares of common stock in payment of accrued interest outstanding as of March 31, 2018 in the amount of $497,845. Accrued interest on the advances amounted to $160,758 as of September 30, 2018. As of March 31, 2018, there remained accrued interest of $93,170 due related to a prior secured convertible note in the amount of $1,997,483 which was converted in September 2017. In April 2018, the Company issued 266,201 shares of common stock in payment of the remaining accrued interest. A summary of notes payable and related discounts as of September 30, 2018 is as follows: Principal Unamortized Discount Debt, Net of Discount Related parties Secured Convertible notes payable $ 1,000,000 $ (23,138 ) $ 976,862 Secured Convertible Line of Credit 3,395,000 (306,945 ) 3,088,055 Less current portion Secured convertible notes payable and line of credit, net of current portion $ 4,395,000 $ (330,083 ) $ 4,064,917 |
Stockholders' Deficit
Stockholders' Deficit | 9 Months Ended |
Sep. 30, 2018 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Deficit | NOTE 4 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 limitation 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 In June 2018, the Companys shareholders approved increasing the authorized number of shares of $0.001 par value common stock from 150 million to 200 million shares. In July 2018, the Company filed a Certificate of Amendment to the Companys Certificate of Incorporation increasing the Companys common stock to 200 million shares. On August 12, 2015, GelTech signed a $10 million Purchase Agreement with Lincoln Park. The Company also 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 had the right to sell, and Lincoln Park was obligated to purchase, up to $10 million in shares of the Companys common stock, subject to certain limitations, from time to time, over the 30-month period commencing on October 16, 2015. During the nine months ended September 30, 2018, the Company did not sell shares to Lincoln Park and the agreement expired in May 2018. During the nine months ended September 30, 2018, the Company issued 10,722,776 shares of common stock and two-year warrants to purchase 5,361,384 shares of common stock for $2.00 per share to three accredited investors in exchange for $2,180,000, including the issuance of 4,191,808 shares of common stock and 2,096,904 warrants to the Companys chairman and principal shareholder in exchange for $885,000. During the nine months ended September 30, 2018, the Company issued 484,919 shares of common stock to three accredited investors in exchange for $96,000. During the nine months ended September 30, 2018, the Company issued 31,022 shares of common stock to consultants in exchange for consulting services rendered valued at $5,600, based upon the market price of our common shares on the grant date. In April 2018, the Company issued 266,201 shares of common stock, with a fair market value of $55,902 to our chairman and principle shareholder to convert accrued interest in the amount of $93,170, converted at $0.35 per share in connection with a secured convertible note agreement that was converted in September 2017. Because the shares were with a related party, the gain on conversion of $37,268 was recorded to paid in capital. In April 2018, the Company issued 2,983,147 shares of common stock, with a fair market value of $626,461, to its chairman and principle shareholder in conversion of accrued interest of $626,461 as of March 31, 2018 on a $1 million secured convertible note and its $6 million secured convertible line of credit. In July 2018, the Company issued 20,000 shares in connection with the exercise of options by an employee in exchange for $3,596. In June 2018, the Company issued 5,922 shares of restricted common stock to its National Sales Director as payment for commission in the amount of $1,438 in accordance with his employment agreement, Stock-Based Compensation Stock-based compensation expense recognized under ASC 718-10 for the period January 1, 2018 to September 30, 2018, was $137,129 for stock options granted to employees and directors. This expense is included in selling, general and administrative expenses in the unaudited 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 September 30, 2018, the total compensation cost for stock options not yet recognized was approximately $83,569. This cost will be recognized over the remaining vesting term of the options of approximately two years. Stock-based awards granted to non-employees, in the form of warrants to purchase the Companys common stock, are valued 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 three months ended September 30, 2018 was $1,233. During the nine months ended September 30, 2018 the Company granted ten-year options to purchase 150,000 shares of common stock at an exercise price of $0.14 per share to our national Sales Director. The options were valued with the Black-Scholes option pricing model using a volatility of 65.97% based upon the historical price of the companys stock, a term of five years, using the simplified method, and a risk-free rate of 2.49%. The calculated fair value, $11,918 was included in expense during the nine months ended September 30, 2018. During the nine months ended September 30, 2018 the Company granted ten-year options to purchase 150,000 shares of common stock at an exercise price of $0.14 per share in exchange for legal services. The options were valued with the Black-Scholes option pricing model using a volatility of 65.97% based upon the historical price of the companys stock, a term of ten years, the term of the warrants and a risk-free rate of 2.70%. The calculated fair value, $15,572 was recorded as prepaid expense and will be amortized over twelve months. For the nine months ended September 30, 2018, $10,381 was amortized to expense. During the nine months ended September 30, 2018 the Company granted five-year options to purchase 100,000 shares of common stock at an exercise price of $0.25 per share to our Director of Wildland and Soil2O. The options were valued with the Black-Scholes option pricing model using a volatility of 64.92% based upon the historical price of the companys stock, a term of 5.5 years, using the simplified method, and a risk-free rate of 2.84%. The calculated fair value, $14,694 was included in expense during the nine months ended September 30, 2018. In accordance with the 2017 Equity Incentive Plan, on July 1, 2018 the non-employee directors were granted ten year options to purchase 690,000 shares of common stock to non-employee directors at an exercise price of $0.285 per share. The options vest on June 30, 2019, subject to continued service as a director. The options were valued with the Black-Scholes option pricing model using an expected volatility of 65.76% based upon the historical price of the companys stock, an expected term of 5.5 years using the simplified method, and a risk-free rate of 2.77%. The calculated fair value, $116,482, will be recorded as expense over the vesting period. Warrants to Purchase Common Stock Warrants Issued as Settlements During the nine months ended September 30, 2018, there were no warrants granted for settlements. Warrants Issued for Cash or Services During the nine months ended September 30, 2018, two-year warrants to purchase 2,168,379 shares of common stock at $2.00 per share expired, all of which were held by our chairman and principal shareholder. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 5 Related Party Transactions During the nine months ended September 30, 2018, the Company issued stock and warrants to its chairman and principal shareholder in exchange for cash as more fully described in Notes 3 and 4. In August 2017, |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 6 Commitments and Contingencies In February 2018, the Company entered into a two-year operating lease agreement for an office in Niwot, Colorado to better serve our Wildland fire customers. The lease began on March 1, 2018 and calls for 24 monthly payments of $2,250. In accounting for this operating lease, the Company elected to early adopt ASU 2016-02, Leases. On November 14, 2012, the Compensation Committee approved new employment agreements for the Companys 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 Companys 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 Companys 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 Company paid the Chief Technology Officer $52,797 and $62,056, respectively, in 2017 and 2016 under this provision. The amendment was effective as of January 1, 2015. Additionally, in May 2015, GelTech approved an amendment to the Chief Technology Officers Employment Agreement to extend the term of the Agreement an additional four years (now expiring October 1, 2020). On August 16, 2017, the Company entered into a new three-year Employment Agreement with the Companys chief financial officer. The Employment Agreement provides for a base salary of $150,000 per year and a car allowance of $600 per month. The Companys Compensation Committee will also have the discretion to award a discretionary bonus. In consideration for entering into the Employment Agreement, the Company granted 125,000 fully vested 10-year stock options exercisable at $0.1849 per share. |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | NOTE 7 Revenue Recognition The revenue that we recognize arises from purchase orders we receive from our customers. Our performance obligations under the purchase orders correspond to each shipment of product that we make to our customer under the purchase orders; as a result, each purchase order generally contains more than one performance obligation based on the number of products ordered, the quantity of product to be shipped and the mode of shipment requested by the customer. Control of our products transfers to our customers when the customer is able to direct the use of, and obtain substantially all of the benefits from, our products, which generally occurs at the later of when the customer obtains title to our product or when the customer assumes risk of loss of our product. The transfer of control generally occurs at a point of shipment from either our warehouse or our third-party fulfillment centers. Once this occurs, we have satisfied our performance obligation and we recognize revenue. When we receive a purchase order from a customer, we are obligated to provide the product during a mutually agreed upon time period. Depending on the terms of the purchase order, either we or the customer arranges delivery of the product to the customers intended destination. In situations where we have agreed to arrange delivery of the product to the customers intended destination and control of the product transfers upon loading of our product onto transportation equipment, we have elected to account for any freight income associated with the delivery of these products as freight revenue, since this activity fulfills our obligation to transfer the product to the customer. For the nine months ended September 30, 2018, the total amount of freight recognized as revenue was $31,694. Transaction Price We agree with our customers on the selling price of each transaction. This transaction price is generally based on the product, market conditions, including supply and demand balances and freight. In our contracts with customers, we allocate the entire transaction price to the sale of product to the customer, which is the basis for the determination of the relative standalone selling price allocated to each performance obligation. Returns of our product by our customers are permitted only when the product is not to specification and were not material for the nine months ended September 30, 2018. Any sales tax, value added tax, and other tax we collect concurrently with our revenue-producing activities are excluded from revenue. Our revenues for FireIce, Soil ₂ ₂ During the nine months ended September 30, 2018, the Company received a deposit of $14,970 from a new distributor which was credited toward a purchase of $14,249 in June 2018, leaving a balance of $721. If we continued to apply legacy revenue recognition guidance for the first nine months of 2018, our revenues, gross margin, and net loss would not have changed. See Note 1Revenue Recognition for the impact of our adoption of ASU No. 2014-09. Revenue Disaggregation We track our revenue by product. The following table summarizes our revenue by product for the three and nine months ended September 30, 2018: For the Three For the Nine Months Ended Months Ended FireIce $ 554,354 $ 1,108,720 Soil ₂ 28,608 83,400 FireIce Shield 17,090 65,433 Other 7,544 10,479 Total $ $607,596 $ 1,268,032 |
Concentrations
Concentrations | 9 Months Ended |
Sep. 30, 2018 | |
Risks and Uncertainties [Abstract] | |
Concentrations | NOTE 8 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 September 30, 2018. As of September 30, 2018, there were no cash balances held in depository accounts that are not insured. At September 30, 2018, three customers accounted for 30.1%, 16.4% and 10.9% of accounts receivable. For the nine months ended September 30, 2018, two customers accounted for 10.2% and 13.8% of sales. Approximately 18.0% of revenues were generated from customers outside the United States during the nine months ended September 30, 2018. During the nine months ended September 30, 2018, sales primarily resulted from three products, FireIce®, Soil ₂ ₂ ₂ ₂ Three vendors accounted for 21.1%, 19.3%, and 10.9% of the Companys approximately $313,000 in purchases of raw material, finished goods and packaging during the nine months ended September 30, 2018. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 9 Subsequent Events Since October 1, 2018, the Company has issued 837,212 shares of common stock and two-year warrants to purchase 418,606 shares of common stock at an exercise price of $2.00 per share to the Investor in exchange for $180,000. On October 26, 2018, the Companys Board of Directors appointed Mr. Michael Reger, the Companys president and principal shareholder, as the Companys Chief Executive Officer, replacing Mr. Peter Cordani who will remain as the Companys Chief Technology Officer. |
Organization and Basis of Pre_2
Organization and Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization 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 System, a mobile spray unit that can be used to protect communication tower electronics during hot work. Our unaudited condensed 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. The corporate office is located in Jupiter, Florida and we also have an office in Niwot, Colorado to support our Wildland operations. |
Basis of Presentation | Basis of Presentation The accompanying unaudited 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 FireIce Gel, Inc., Weather Tech Innovations, Inc. and GelTech International, Inc. These unaudited consolidated interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (SEC) for interim financial information. Accordingly, they do not include all of the information and footnotes required by "GAAP" for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. The information included in these unaudited consolidated interim financial statements should be read in conjunction with Managements Discussion and Analysis of Financial Conditions and Results of Operations contained in this report and the audited consolidated financial statements and accompanying notes included in the Companys Report on Form 10-K for the year ended December 31, 2017 filed on March 26, 2018. |
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 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 for the nine months ended September 30, 2018 include the allowance for doubtful accounts, depreciation and amortization, valuation and classification of inventories, valuation of options and warrants granted for services, valuation of common stock granted for services or debt conversion and the valuation of deferred tax assets. |
Inventories | Inventories Inventories as of September 30, 2018 consisted of raw materials and finished goods in the amounts of $853,083 and $1,024,442, respectively. As of September 30, 2018, the Company estimated that inventory including raw materials in the amount $,1,316,418 would most likely not be consumed in the next twelve months and therefore reclassified that amount to long term inventory in the unaudited consolidated balance sheet. As of September 30, 2018, the Company had approximately $41,342 of consignment inventory consisting of FireIce 561, FireIce Pro, FireIce HVOF and HDU Wand Kits held by five customers. |
Internal-Use Software | Internal-Use Software The Company capitalizes the cost of development of internal use software in accordance with ASC 350-40 Intangibles Goodwill and Other Internal- Use Software. During the nine months ended September 30, 2018, the Company capitalized $10,000 paid for the development of its new website. |
Revenue Recognition | Revenue Recognition On January 1, 2018, we adopted ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes the revenue recognition requirements in Accounting Standards Codification (ASC) Topic 605, Revenue Recognition. This ASU is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This ASU also requires additional disclosure about the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer purchase orders, including significant judgments. Our payment terms are net 30 days for domestic sales with payments for most international sales being due upon delivery of products to the customers freight forwarder. We do not incur incremental costs obtaining purchase orders from our customers, however, if we did, because all of our contracts are less than a year in duration, any contract costs incurred would be expensed rather than capitalized. Our adoption of this ASU, resulted in no change to our results of operations or our balance sheet. |
Leases | Leases In connection with entering into a new lease agreement for our Wildland operations in Colorado, the Company elected to early adopt the provisions of ASU 2016-02, Leases |
Net Earnings (Loss) per Share | Net Earnings (Loss) per Share The Company computes net earnings (loss) per share in accordance with ASC 260-10, Earnings per Share |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for employee stock-based compensation in accordance with ASC 718-10, Share-Based Payment The Company accounts for non-employee stock-based compensation in accordance with ASC 505-50-25, Equity Based Payments to Non-Employees, 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 Companys 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. The Company estimates volatility based upon the historical stock price of the Company and estimates the expected term for employee stock options using the simplified method for employees and directors and the contractual term for non-employees. The risk-free rate is determined based upon the prevailing rate of United States Treasury securities with similar maturities. The fair values of stock options and warrants granted during the period from January 1, 2018 to September 30, 2018 were estimated using the following assumptions: Risk free interest rate 2.49% - 2.84% Expected term (in years) 5.0 10.0 Dividend yield Volatility of common stock 64.92% - 65.97% Estimated annual forfeitures |
New Accounting Pronouncements | New Accounting Pronouncements In June 2018, the FASB issued Accounting Standards Update 2018-07, Compensation - Stock Compensation No other Accounting Standards Updates (ASUs) which were not effective until after September 30, 2018 are expected to have a significant effect on the Company's consolidated financial position or results of operations. |
Organization and Basis of Pre_3
Organization and Basis of Presentation (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Fair Value Assumptions for Stock Options | The fair values of stock options and warrants granted during the period from January 1, 2018 to September 30, 2018 were estimated using the following assumptions: Risk free interest rate 2.49% - 2.84% Expected term (in years) 5.0 10.0 Dividend yield Volatility of common stock 64.92% - 65.97% Estimated annual forfeitures |
Convertible Note Agreements -_2
Convertible Note Agreements - Related Party (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Convertible Note Agreements - Related Party | |
Schedule of Convertible Note Agreements | A summary of notes payable and related discounts as of September 30, 2018 is as follows: Principal Unamortized Discount Debt, Net of Discount Related parties Secured Convertible notes payable $ 1,000,000 $ (23,138 ) $ 976,862 Secured Convertible Line of Credit 3,395,000 (306,945 ) 3,088,055 Less current portion Secured convertible notes payable and line of credit, net of current portion $ 4,395,000 $ (330,083 ) $ 4,064,917 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Revenue Disaggregation | We track our revenue by product. The following table summarizes our revenue by product for the three and nine months ended September 30, 2018: For the Three For the Nine Months Ended Months Ended FireIce $ 554,354 $ 1,108,720 Soil ₂ 28,608 83,400 FireIce Shield 17,090 65,433 Other 7,544 10,479 Total $ $607,596 $ 1,268,032 |
Organization and Basis of Pre_4
Organization and Basis of Presentation (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Raw materials | $ 853,083 | |
Finished goods | 1,024,442 | |
Consignment inventory | 41,342 | |
Long term inventory | 1,316,418 | $ 479,486 |
Capitalized development of new website | 10,000 | |
Operating lease right of use asset | 35,638 | |
Accounting Standards Update 2016-02 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Operating lease right of use asset | 50,313 | |
Operating lease liability | $ 50,313 | |
Employee Options and Stock Appreciation Rights [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares considered antidilutive | 13,984,333 | |
Warrants [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares considered antidilutive | 15,640,539 | |
Stock Options For Convertible Notes Reserved [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares considered antidilutive | 9,134,594 |
Organization and Basis of Pre_5
Organization and Basis of Presentation (Fair Value Assumptions) (Details) | 9 Months Ended |
Sep. 30, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk-free interest rate, minimum | 2.49% |
Risk-free interest rate, maximum | 2.84% |
Dividend yield | |
Volatility of common stock, minimum | 64.92% |
Volatility of common stock, maximum | 65.97% |
Estimated annual forfeitures | |
Minimum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected term (in years) | 5 years |
Maximum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected term (in years) | 10 years |
Going Concern (Details)
Going Concern (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Related Party Transaction [Line Items] | |||||
Accumulated deficit | $ 55,083,125 | $ 55,083,125 | $ 52,119,691 | ||
Stockholders' deficit | 2,062,045 | 2,062,045 | $ 4,758,809 | ||
Loss from operations | 652,208 | $ 772,874 | 2,372,229 | $ 2,427,763 | |
Net loss | $ 886,093 | $ 985,964 | 2,963,434 | 3,064,593 | |
Net cash used in operating activities | 2,216,164 | 2,344,244 | |||
Proceeds from sale of stock under stock purchase agreement | $ 210,555 | ||||
Five Accredited Investors [Member] | |||||
Related Party Transaction [Line Items] | |||||
Advances from convertible line of credit | 2,276,000 | ||||
Chairman and Principle Shareholder [Member] | |||||
Related Party Transaction [Line Items] | |||||
Advances from convertible line of credit | 885,000 | ||||
Accredited Investor [Member] | |||||
Related Party Transaction [Line Items] | |||||
Proceeds from sale of stock under stock purchase agreement | $ 1,130,000 |
Convertible Note Agreements -_3
Convertible Note Agreements - Related Party (Details) - USD ($) | Feb. 12, 2015 | Jul. 11, 2013 | Jul. 31, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Apr. 30, 2018 | Sep. 27, 2016 | Apr. 08, 2016 |
Debt Instrument [Line Items] | ||||||||||
Loss on extinguishment of debt | $ 129,936 | $ 129,936 | ||||||||
Accrued interest | $ 626,461 | |||||||||
Minimum [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Expected term, simplified method | 5 years | |||||||||
Maximum [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Expected term, simplified method | 10 years | |||||||||
Convertible Note Payable [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Accrued interest | $ 128,616 | |||||||||
Common stock in payment of accrued interest outstanding | 612,457 | |||||||||
Secured Convertible Note [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Accrued interest | 93,170 | $ 93,170 | ||||||||
Convertible amount | 1,997,483 | |||||||||
Convertible Note Payable One [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Accrued interest | $ 497,845 | |||||||||
Common stock in payment of accrued interest outstanding | 2,370,690 | |||||||||
Remaining Convertible Note Payable [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Convertible amount | $ 1,000,000 | |||||||||
Common stock in payment of accrued interest outstanding | 266,201 | |||||||||
Remaining Convertible Note Payable [Member] | Minimum [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt, interest rate | 5.00% | |||||||||
Convertible note, conversion price | $ 0.35 | |||||||||
Remaining Convertible Note Payable [Member] | Maximum [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt, interest rate | 7.50% | |||||||||
Convertible note, conversion price | $ 0.82 | |||||||||
Secured Convertible Line of Credit Agreement [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Convertible amount | 6,000,000 | |||||||||
President [Member] | Secured Convertible Line of Credit Agreement [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Maximum borrowing capacity | $ 4,000,000 | $ 6,000,000 | $ 5,000,000 | |||||||
Debt, interest rate | 7.50% | 7.50% | 7.50% | |||||||
Maturity date | Dec. 31, 2020 | |||||||||
Term | 2 years | |||||||||
Exercise price of shares called by warrants | $ 2 | |||||||||
Percentage of warrants issued equals of number of shares issuable upon the conversion | 50.00% | |||||||||
Chairman and Principle Shareholder [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Loss on extinguishment of debt | $ 129,936 | |||||||||
Shares issued upon conversion of convertible note | 9,379,473 | |||||||||
Convertible amount | $ 2,500,000 | |||||||||
Chairman and Principle Shareholder [Member] | Minimum [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Convertible note, conversion price | $ 0.21 | |||||||||
Chairman and Principle Shareholder [Member] | Maximum [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Convertible note, conversion price | $ 0.35 | |||||||||
Convertible Note Payable Dated July 2013 [Member] | President [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt issued | $ 1,000,000 | 1,000,000 | 1,000,000 | |||||||
Debt, interest rate | 7.50% | |||||||||
Convertible note, conversion price | $ 0.35 | $ 1 | ||||||||
Maturity date | Dec. 31, 2020 | Jul. 10, 2018 | ||||||||
Term | 5 years | |||||||||
Number of shares callable by warrants | 500,000 | |||||||||
Accrued interest | 31,918 | 31,918 | ||||||||
Note discount | 60,390 | |||||||||
Recognized interest expense | 7,676 | |||||||||
Unamortized discount | 23,138 | 23,138 | ||||||||
Exercise price of shares called by warrants | $ 1.30 | |||||||||
Convertible Note Payable Dated February 2013 [Member] | President [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Maturity date | Dec. 31, 2020 | |||||||||
Two advances totaling $200,000 [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt issued | 3,395,000 | 3,395,000 | ||||||||
Accrued interest | 160,758 | 160,758 | ||||||||
Recognized interest expense | 137,265 | |||||||||
Unamortized discount | 153,473 | 153,473 | ||||||||
Unamortized beneficial conversion feature | $ 153,473 | $ 153,473 |
Convertible Note Agreements -_4
Convertible Note Agreements - Related Party (Schedule of Debt) (Details) | Sep. 30, 2018USD ($) |
Related parties | |
Convertible notes payable, related, principal | $ 1,000,000 |
Convertible notes payable, related, unamortized discount | (23,138) |
Convertible notes payable, related, net | 976,862 |
Convertible line of credit, related, principal | 3,395,000 |
Convertible line of credit, related, unamortized discount | (306,945) |
Convertible line of credit, related, net | 3,088,055 |
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 | 4,395,000 |
Convertible and nonconvertible note payable, net of current portion, unamortized discount | (330,083) |
Convertible and nonconvertible note payable, net of current portion, net | $ 4,064,917 |
Stockholders' Deficit (Preferre
Stockholders' Deficit (Preferred Stock) (Details) - $ / shares | Sep. 30, 2018 | Dec. 31, 2017 |
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 (Common S
Stockholders' Deficit (Common Stock) (Details) - USD ($) | 1 Months Ended | 9 Months Ended | |||||
Jul. 31, 2018 | Jun. 30, 2018 | Apr. 30, 2018 | Sep. 30, 2018 | Dec. 31, 2017 | Oct. 31, 2015 | Aug. 12, 2015 | |
Class of Stock [Line Items] | |||||||
Common stock, shares authorized | 200,000,000 | 200,000,000 | 200,000,000 | ||||
Common stock, par value per share | $ 0.001 | $ 0.001 | |||||
Common stock issued in private placement, shares | 2,983,147 | ||||||
Fair value | $ 626,461 | ||||||
Accrued interest | $ 626,461 | ||||||
Chairman and Principle Shareholder [Member] | |||||||
Class of Stock [Line Items] | |||||||
Common stock issued in private placement, shares | 266,201 | ||||||
Fair value | $ 55,902 | ||||||
Convertible amount | $ 37,268 | ||||||
Exercise price of shares called by warrants | $ 0.35 | ||||||
Accrued interest | $ 93,170 | ||||||
Employee [Member] | |||||||
Class of Stock [Line Items] | |||||||
Common stock issued in private placement | $ 3,596 | ||||||
Common stock issued in private placement, shares | 20,000 | ||||||
Director and His Wife [Member] | Restricted Stock [Member] | |||||||
Class of Stock [Line Items] | |||||||
Common stock issued in private placement | $ 1,438 | ||||||
Common stock issued in private placement, shares | 5,922 | ||||||
Consultant [Member] | |||||||
Class of Stock [Line Items] | |||||||
Common stock issued for investor relation services, shares | |||||||
Common stock issued for services | |||||||
Secured Convertible Note Agreement [Member] | |||||||
Class of Stock [Line Items] | |||||||
Convertible amount | 1,000,000 | ||||||
Secured Convertible Line of Credit Agreement [Member] | |||||||
Class of Stock [Line Items] | |||||||
Convertible amount | 6,000,000 | ||||||
Lincoln Park Capital Fund, LLC. [Member] | |||||||
Class of Stock [Line Items] | |||||||
Commitment to purchase shares | $ 10,000,000 | $ 10,000,000 | |||||
Lincoln Park Capital Fund, LLC. [Member] | Common Stock [Member] | Common Stock Purchase Agreement [Member] | |||||||
Class of Stock [Line Items] | |||||||
Common stock issued for cash in connection with stock purchase agreement | |||||||
Common stock issued for cash in connection with stock purchase agreement, shares | |||||||
Accredited Investor [Member] | |||||||
Class of Stock [Line Items] | |||||||
Proceeds from the sale of stock and warrants through private placements | $ 2,180,000 | ||||||
Number of shares callable by warrants | 5,361,384 | ||||||
Exercise price of shares called by warrants | $ 2 | ||||||
Common stock and warrants issued for cash, shares | 10,722,776 | ||||||
Term of warrants | 2 years | ||||||
Private Placement [Member] | Accredited Investor [Member] | |||||||
Class of Stock [Line Items] | |||||||
Common stock issued in private placement | $ 96,000 | ||||||
Common stock issued in private placement, shares | 484,919 | ||||||
Proceeds from the sale of stock and warrants through private placements | $ 885,000 | ||||||
Number of shares callable by warrants | 2,096,904 | ||||||
Common stock and warrants issued for cash, shares | 4,191,808 | ||||||
Term of warrants | 2 years | ||||||
Chairman and principal investor [Member] | Common Stock [Member] | |||||||
Class of Stock [Line Items] | |||||||
Debt conversion shares issued for secured convertible note | $ 31,022 | ||||||
Debt conversion shares issued for secured convertible note, shares | 5,600 |
Stockholders' Deficit (Narrativ
Stockholders' Deficit (Narrative) (Options) (Details) - USD ($) | 1 Months Ended | 9 Months Ended | ||
Jul. 31, 2018 | Apr. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Fair value | $ 626,461 | |||
Share-based compensation expense | $ 138,362 | $ 254,246 | ||
Share-based compensation expense not yet recognized | $ 83,569 | |||
Ten Year Options [Member] | Legal Services [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Options granted | 150,000 | |||
Options granted, exercise price | $ 0.14 | |||
Fair value | $ 15,572 | |||
Options granted, vesting period | 10 years | |||
Volatility | 65.97% | |||
Expected term | 10 years | |||
Risk free rate | 2.70% | |||
Share-based compensation expense | $ 10,381 | |||
Warrants [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Options granted | 2,168,379 | |||
Options granted, exercise price | $ 2 | |||
Share-based compensation expense period for recognition | 2 years | |||
Non Employees [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 1,233 | |||
Non Employees [Member] | 2017 Equity Incentive Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Options granted | 690,000 | |||
Options granted, exercise price | $ 0.285 | |||
Fair value | $ 116,482 | |||
Options granted, vesting period | 10 years | |||
Volatility | 65.76% | |||
Expected term | 5 years 6 months | |||
Risk free rate | 2.77% | |||
Employees and Directors [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 137,129 | |||
Share-based compensation expense period for recognition | 2 years | |||
Sales Director [Member] | Ten Year Options [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Options granted | 150,000 | |||
Options granted, exercise price | $ 0.14 | |||
Fair value | $ 11,918 | |||
Options granted, vesting period | 10 years | |||
Volatility | 65.97% | |||
Expected term | 5 years | |||
Risk free rate | 2.49% | |||
Share-based compensation expense | $ 11,918 | |||
Sales Director [Member] | Five Year Options [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Options granted | 100,000 | |||
Options granted, exercise price | $ 0.25 | |||
Fair value | $ 14,694 | |||
Options granted, vesting period | 5 years | |||
Volatility | 64.92% | |||
Expected term | 5 years 6 months | |||
Risk free rate | 2.84% | |||
Share-based compensation expense | $ 14,694 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 1 Months Ended | |
Apr. 30, 2018 | Aug. 31, 2017 | |
Related Party Transaction [Line Items] | ||
Common stock issued in private placement, shares | 2,983,147 | |
Stock Purchase Agreement Related Party Investor [Member] | ||
Related Party Transaction [Line Items] | ||
Value of shares related party investor is committed to purchase per agreement | $ 1,800,000 | |
Maximum value of shares company will have the right to direct related party investor to purchase during any calendar month | 150,000 | |
Common stock issued in private placement | $ 4,929,209 | |
Common stock issued in private placement, shares | 1,805,000 | |
Percentage of ownership | 10.00% |
Commitments and Contingencies (
Commitments and Contingencies (Operating Lease Agreement) (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | |
Lessee, Lease, Description [Line Items] | ||
Operating lease discount rate | 7.50% | |
Amortization of the operating lease right of use asset | $ 14,675 | |
Operating lease right of use asset | 35,638 | |
Accounting Standards Update 2016-02 [Member] | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease right of use asset | 50,313 | |
Operating lease liability | $ 50,313 | |
Wildland [Member] | ||
Lessee, Lease, Description [Line Items] | ||
Term of contract | 2 years | |
Monthly lease payment | $ 2,250 |
Commitments and Contingencies_2
Commitments and Contingencies (Employment Agreements) (Details) - USD ($) | Aug. 16, 2017 | Nov. 14, 2012 | Jan. 31, 2015 | Nov. 30, 2012 | Dec. 31, 2017 | Dec. 31, 2016 |
Executive Chairman [Member] | ||||||
Other Commitments [Line Items] | ||||||
Annual base salary | $ 150,000 | |||||
Chief Financial Officer [Member] | ||||||
Other Commitments [Line Items] | ||||||
Annual base salary | $ 150,000 | |||||
Monthly auto allowance | $ 600 | |||||
Options granted, exercise price | $ 0.1849 | |||||
Options granted | 125,000 | |||||
Options term | 10 years | |||||
Chief Financial Officer [Member] | Stock Appreciation Rights (SARs) [Member] | ||||||
Other Commitments [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 | |||||
Chief Executive Officer And Chief Financial Officer And President And Chief Technology Officer [Member] | ||||||
Other Commitments [Line Items] | ||||||
Executive's base salary if company generates $3,000,000 in revenues in any 12 month period | $ 170,000 | |||||
Executive's base salary if company generates $5,000,000 in revenues in any 12 month period | 190,000 | |||||
Executive's base salary if company generates $6,000,000 in revenues in any 12 month period | $ 200,000 | |||||
Chief Executive Officer And Chief Financial Officer And President And Chief Technology Officer [Member] | Stock Appreciation Rights (SARs) [Member] | ||||||
Other Commitments [Line Items] | ||||||
Immediately vested shares | 800,000 | |||||
Cancelled options | 250,000 | |||||
Chief Technology Officer [Member] | ||||||
Other Commitments [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 | |||||
Officer compensation | $ 52,797 | $ 62,056 |
Revenue Recognition (Details)
Revenue Recognition (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2018 | Dec. 31, 2017 | |
Disaggregation of Revenue [Line Items] | |||
Revenue | $ 607,596 | $ 1,268,032 | |
Customer deposit | 721 | 721 | |
Net amount of freight | 31,694 | ||
Credit purchase | 14,249 | ||
FireIce Products [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 554,354 | 1,108,720 | |
Soil 2 O Traditional Sales[Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 28,608 | 83,400 | |
FireIce Shield [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 17,090 | 65,433 | |
Other [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 7,544 | 10,479 | |
New Distributor [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Customer deposit | $ 14,970 | $ 14,970 |
Concentrations (Details)
Concentrations (Details) | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Concentration Risk [Line Items] | |
Total purchases of raw material, finished goods and packaging made during the period | $ 313,000 |
FireIce Shield [Member] | |
Concentration Risk [Line Items] | |
Amount of return from distributor | $ 12,928 |
Accounts Receivable [Member] | |
Concentration Risk [Line Items] | |
Number of customers in concentration | 3 |
Accounts Receivable [Member] | Customer One Concentration Risk [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 30.10% |
Accounts Receivable [Member] | Customer Two Concentration Risk [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 16.40% |
Accounts Receivable [Member] | Customer Three Concentration Risk [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 10.90% |
Sales Revenue [Member] | |
Concentration Risk [Line Items] | |
Number of customers in concentration | 2 |
Sales Revenue [Member] | Non-US [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 18.00% |
Sales Revenue [Member] | Customer One Concentration Risk [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 10.20% |
Sales Revenue [Member] | Customer Two Concentration Risk [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 13.80% |
Sales Revenue [Member] | Fire Ice [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 87.40% |
Sales Revenue [Member] | Soil 2 O [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 6.60% |
Sales Revenue [Member] | FireIce Shield [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 5.20% |
Sales Revenue [Member] | FireIce Products [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 75.80% |
Sales Revenue [Member] | FireIce Eductors, EMFIDS and extinguishers [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 23.50% |
Sales Revenue [Member] | Soil 2 O Traditional Sales[Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 20.50% |
Sales Revenue [Member] | Soil 2 O Dust Control Products [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 79.50% |
Sales Revenue [Member] | Canisters and Refills [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 14.50% |
Sales Revenue [Member] | CTP units and products [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 35.60% |
Sales Revenue [Member] | Spray Bottles [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 58.00% |
Inventory purchases [Member] | |
Concentration Risk [Line Items] | |
Number of customers in concentration | 3 |
Inventory purchases [Member] | Supplier One Concentration Risk [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 21.10% |
Inventory purchases [Member] | Supplier Two Concentration Risk [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 19.30% |
Inventory purchases [Member] | Supplier Three Concentration Risk [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 10.90% |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | 1 Months Ended | ||||
Oct. 31, 2018 | Apr. 30, 2018 | Sep. 30, 2018 | Jul. 31, 2018 | Dec. 31, 2017 | |
Subsequent Event [Line Items] | |||||
Common stock, shares authorized | 200,000,000 | 200,000,000 | 200,000,000 | ||
Common stock issued in private placement, shares | 2,983,147 | ||||
Subsequent Event [Member] | Chairman, President and Principal Shareholder [Member] | Warrants [Member] | |||||
Subsequent Event [Line Items] | |||||
Common stock issued in private placement, shares | 837,212 | ||||
Proceeds from the sale of stock | $ 180,000 | ||||
Term | 2 years | ||||
Number of shares callable by warrants | 418,606 | ||||
Exercise price | $ 2 |