Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Nov. 08, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | GelTech Solutions, Inc. | |
Entity Central Index Key | 0001403676 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 112,946,401 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2019 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Incorporation State Country Code | DE | |
Entity File Number | 0-52993 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
ASSETS | ||
Cash | $ 38,626 | $ 69,809 |
Accounts receivable trade, net | 176,931 | 112,816 |
Inventories | 583,668 | 661,178 |
Prepaid expenses and other current assets | 167,692 | 207,297 |
Total current assets | 966,917 | 1,051,100 |
Furniture, fixtures and equipment, net | 102,945 | 122,199 |
Operating lease right of use assets | 10,482 | 29,349 |
Inventory not expected to be realized within one year | 1,486,584 | 1,298,236 |
Deposits | 18,336 | 18,336 |
Total assets | 2,585,264 | 2,519,220 |
LIABILITIES AND STOCKHOLDERS' DEFICIT | ||
Accounts payable | 214,668 | 176,257 |
Accrued expenses | 424,059 | 276,465 |
Customer deposit | 721 | 721 |
Operating lease liability - current portion | 10,482 | |
Insurance premium finance contract | 57,048 | 63,249 |
Total current liabilities | 706,978 | 516,692 |
Operating lease liability | 30,071 | |
Note payable - related party | 1,070,000 | |
Convertible notes - related party, net of discounts | 987,123 | 979,448 |
Convertible line of credit - related party, net of discounts | 3,224,185 | 3,122,367 |
Total liabilities | 5,988,286 | 4,648,578 |
Commitments and contingencies (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; 112,946,401 and 103,651,791 shares issued and outstanding as of September 30, 2019 and December 31, 2018, respectively. | 112,946 | 103,652 |
Additional paid in capital | 55,595,055 | 53,900,638 |
Accumulated deficit | (59,111,023) | (56,133,648) |
Total stockholders' deficit | (3,403,022) | (2,129,358) |
Total liabilities and stockholders' deficit | $ 2,585,264 | $ 2,519,220 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2019 | Dec. 31, 2018 |
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 | 112,946,401 | 103,651,791 |
Common stock, shares outstanding | 112,946,401 | 103,651,791 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Statement [Abstract] | ||||
Sales | $ 491,927 | $ 607,596 | $ 981,701 | $ 1,268,032 |
Cost of goods sold | 274,249 | 209,090 | 519,559 | 414,687 |
Gross profit | 217,678 | 398,506 | 462,142 | 853,345 |
Operating expenses: | ||||
Selling, general and administrative expenses | 1,038,558 | 1,042,127 | 3,048,154 | 3,183,426 |
Research and development | 24,113 | 8,587 | 106,594 | 42,148 |
Total operating expenses | 1,062,671 | 1,050,714 | 3,154,748 | 3,225,574 |
Loss from operations | (844,993) | (652,208) | (2,692,606) | (2,372,229) |
Other income (expense) | ||||
Interest income | 6 | 4 | 15 | 7 |
Loss on conversion of debt | (129,936) | (129,936) | ||
Interest expense | (101,002) | (103,953) | (284,784) | (461,276) |
Total other income (expense) | (100,996) | (233,885) | (284,769) | (591,205) |
Net loss | $ (945,989) | $ (886,093) | $ (2,977,375) | $ (2,963,434) |
Net loss per common share - basic and diluted | $ (0.01) | $ (0.01) | $ (0.03) | $ (0.03) |
Weighted average shares outstanding - basic and diluted | 112,942,858 | 96,687,944 | 109,922,727 | 86,819,775 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT (Unaudited) - USD ($) | Common Stock [Member] | Additional Paid In Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2017 | $ 74,915 | $ 47,285,967 | $ (52,119,691) | $ (4,758,809) |
Balance, shares at Dec. 31, 2017 | 74,914,703 | |||
Common stock and warrants issued for cash | $ 10,723 | 2,169,277 | 2,180,000 | |
Common stock and warrants issued for cash, shares | 10,722,776 | |||
Common stock issued for cash | $ 485 | 95,515 | 96,000 | |
Common stock issued for cash, shares | 484,919 | |||
Common stock issued for services | $ 37 | 7,001 | 7,038 | |
Common stock issued for services, shares | 36,944 | |||
Options issued for services | 15,572 | 15,572 | ||
Common stock issued to convert notes | $ 9,379 | 2,490,621 | 2,500,000 | |
Common stock issued to convert notes, shares | 9,379,473 | |||
Common stock issued for interest | $ 3,249 | 716,382 | 719,631 | |
Common stock issued for interest, shares | 3,249,348 | |||
Common stock issued for option exercise | $ 20 | 3,576 | 3,596 | |
Common stock issued for option exercise, shares | 20,000 | |||
Options and warrants vested | 138,362 | 138,362 | ||
Net loss | (2,963,434) | (2,963,434) | ||
Balance at Sep. 30, 2018 | $ 98,808 | 52,922,272 | (55,083,125) | (2,062,045) |
Balance, shares at Sep. 30, 2018 | 98,808,163 | |||
Balance at Jun. 30, 2018 | $ 87,295 | 49,720,584 | (54,197,032) | (4,389,153) |
Balance, shares at Jun. 30, 2018 | 87,294,690 | |||
Common stock and warrants issued for cash | $ 2,052 | 652,948 | 655,000 | |
Common stock and warrants issued for cash, shares | 2,052,243 | |||
Common stock issued for cash | $ 48 | 11,952 | 12,000 | |
Common stock issued for cash, shares | 47,525 | |||
Common stock issued for services | $ 14 | 3,224 | 3,238 | |
Common stock issued for services, shares | 14,232 | |||
Common stock issued to convert notes | $ 9,379 | 2,490,621 | 2,500,000 | |
Common stock issued to convert notes, shares | 9,379,473 | |||
Common stock issued for option exercise | $ 20 | 3,576 | 3,596 | |
Common stock issued for option exercise, shares | 20,000 | |||
Options and warrants vested | 39,368 | 39,368 | ||
Net loss | (886,093) | (886,093) | ||
Balance at Sep. 30, 2018 | $ 98,808 | 52,922,272 | (55,083,125) | (2,062,045) |
Balance, shares at Sep. 30, 2018 | 98,808,163 | |||
Balance at Dec. 31, 2018 | $ 103,652 | 53,900,638 | (56,133,648) | $ (2,129,358) |
Balance, shares at Dec. 31, 2018 | 103,651,791 | 103,651,791 | ||
Common stock and warrants issued for cash | $ 9,255 | 1,565,745 | $ 1,575,000 | |
Common stock and warrants issued for cash, shares | 9,255,164 | |||
Common stock issued for services and commissions | $ 39 | 6,796 | 6,835 | |
Common stock issued for services and commissions, shares | 39,446 | |||
Options issued for services | 17,614 | 17,614 | ||
Options and warrants vested | 104,262 | 104,262 | ||
Net loss | (2,977,375) | (2,977,375) | ||
Balance at Sep. 30, 2019 | $ 112,946 | 55,595,055 | (59,111,023) | $ (3,403,022) |
Balance, shares at Sep. 30, 2019 | 112,946,401 | 112,946,401 | ||
Balance at Jun. 30, 2019 | $ 112,938 | 55,577,157 | (58,165,034) | $ (2,474,939) |
Balance, shares at Jun. 30, 2019 | 112,937,952 | 112,937,952 | ||
Common stock issued for services and commissions | $ 8 | 1,410 | $ 1,418 | |
Common stock issued for services and commissions, shares | 8,449 | |||
Options and warrants vested | 16,488 | 16,488 | ||
Net loss | (945,989) | (945,989) | ||
Balance at Sep. 30, 2019 | $ 112,946 | $ 55,595,055 | $ (59,111,023) | $ (3,403,022) |
Balance, shares at Sep. 30, 2019 | 112,946,401 | 112,946,401 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Reconciliation of net loss to net cash used in operating activities: | ||
Net loss | $ (2,977,375) | $ (2,963,434) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Bad debt expense | 1,572 | 10,653 |
Depreciation | 59,348 | 63,344 |
Amortization of right of use assets | 14,675 | |
Amortization of debt discounts | 109,493 | 137,265 |
Loss on conversion of debt | 129,936 | |
Stock issued for services and commissions | 6,835 | 7,038 |
Options issued for services | 17,614 | 15,572 |
Stock option compensation expense | 104,262 | 138,362 |
Changes in assets and liabilities: | ||
Accounts receivable | (65,687) | (289,682) |
Inventories | (110,838) | 36,372 |
Prepaid expenses and other current assets | 105,300 | 90,400 |
Other assets | (2,250) | |
Accounts payable | 38,411 | 83,081 |
Accrued expenses | 147,594 | 325,915 |
Operating lease liability | (722) | (14,132) |
Customer deposits | 721 | |
Net cash used in operating activities | (2,564,193) | (2,216,164) |
Cash flows from Investing Activities | ||
Purchases of equipment | (40,094) | (15,067) |
Net cash used in investing activities | (40,094) | (15,067) |
Cash flows from Financing Activities | ||
Proceeds from sale of stock and warrants | 1,575,000 | 2,180,000 |
Proceeds from note payable - related party | 1,070,000 | |
Proceeds from sale of stock | 96,000 | |
Proceeds from option exercise | 3,596 | |
Payments on insurance finance contract | (71,896) | (74,177) |
Net cash provided by financing activities | 2,573,104 | 2,205,419 |
Net decrease in cash and cash equivalents | (31,183) | (25,812) |
Cash and cash equivalents - beginning | 69,809 | 43,888 |
Cash and cash equivalents - ending | 38,626 | 18,076 |
Supplemental Disclosure of Cash Flow Information: | ||
Cash paid for interest | 2,580 | 2,207 |
Cash paid for income taxes | ||
Supplementary Disclosure of Non-cash Investing and Financing Activities: | ||
Operating lease right of use assets and lease obligation | 50,313 | |
Stock issued for accrued interest | 719,631 | |
Stock issued to convert debt | 2,500,000 | |
Stock options granted for prepaid services | 17,614 | 15,572 |
Prepaid insurance and related premium finance contracts | $ 65,695 | $ 60,356 |
Organization and Basis of Prese
Organization and Basis of Presentation | 9 Months Ended |
Sep. 30, 2019 | |
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) the FireIce® family of products including FireIce® Pro and FireIce® 561, water enhancing powders 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; FireIce® XT and FireIce® ST, wet mixed suppressants for extinguishers and fire suppression systems and our new addition, FireIce® Polar Eco-Foam, an environmentally friendly Class A foam (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 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 (See Note 2). 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 and Principles of Consolidation 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, 2018 filed on March 28, 2019. Inventories Inventories as of September 30, 2019 consisted of raw materials and finished goods in the amounts of $972,372 and $1,097,880, respectively. As of September 30, 2019, the Company estimated that raw materials and finished goods in the amount $1,486,584 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, 2019, the Company had approximately $82,847 of consignment inventory held by customers consisting primarily of FireIce 561, FireIce Pro, FireIce HVOF, HDU Wands and Equipment. 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, 2019 include the allowance for doubtful accounts, depreciation and amortization, valuation and classification of inventories, valuation of options granted for services, valuation of common stock granted for services or debt conversion and the valuation of deferred tax assets. 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. The Company used the modified prospective method upon adoption of the ASU. Our adoption of this ASU resulted in no cumulative effect adjustment. 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 order. 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. 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, 2019. 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 Leases In connection with entering into a new lease agreement for our Wildland operations in Colorado in February 2018, 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 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. Given the absence of adequate historical data, the Company uses the Simplified Method to estimate the term of options granted to employees and directors. Effective January 1, 2019, the Company adopted ASU 2018-07 Compensation Stock Compensation (Topic718), Improvements to Nonemployee Share-Based Payment Accounting which modified the accounting for non-employee stock-based compensation. This standard requires the measurement and recognition of compensation expense for all share-based payment awards made to non-employees based on estimated fair values using the same method as for employees. The adoption resulted in no cumulative effect on the Companys retained earnings on the adoption date. 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, 2019 to September 30, 2019 were estimated using the following assumptions: Risk free interest rate 1.81% - 2.59% Expected term (in years) 2.5 - 5.5 Dividend yield Volatility of common stock 72.89% - 79.98% Estimated annual forfeitures New Accounting Pronouncements No Accounting Standards Updates (ASUs) which were not effective until after September 30, 2019 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, 2019 | |
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, 2019, the Company had an accumulated deficit and stockholders deficit of $59,111,023 and $3,403,022, respectively, and incurred losses from operations and net losses of $2,692,606 and $2,977,375, respectively, for the nine months ended September 30, 2019 and used cash in operations of $2,564,193 during the nine months ended September 30, 2019. 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 filing 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, 2019, the Company received $1,575,000 from private placements with two accredited investors, including $675,000 from its chairman and principal shareholder and $900,000 from a director, an accredited investor who is also a significant shareholder. In addition, the Company received $1,070,000 from its chairman and principal shareholder in exchange for a secured promissory note. Management believes that additional funding from its chairman and principal shareholder, our other significant 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. |
Secured Convertible Note Agreem
Secured Convertible Note Agreements - Related Party | 9 Months Ended |
Sep. 30, 2019 | |
Convertible Note Agreements - Related Party | |
Secured Convertible Note Agreements - Related Party | NOTE 3 Secured Convertible Note Agreements Related Party The Company currently has three debt facilities outstanding, all 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, 2019, the Company recorded interest expense of $7,675 related to the amortization of the note discounts related to the warrants. Interest expense for the nine months ended September 30, 2019 amounted to $37,534. As of September 30, 2019, the balance of the unamortized discount related to the warrants was $12,877. As of September 30, 2019, the principal balance on this note is $1,000,000 and accrued interest amounted to $82,055. In connection with the February 2015 debt modifications described above, the Company entered into a Secured Revolving Convertible Line of Credit Agreement (the Notes) 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 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 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 the Notes. The Notes were converted at prices ranging from $0.21 to $0.35 per share. 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 Notes. In addition to the conversion, the Companys chairman, CEO 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, 2019, the Company has recognized interest expense of $101,818 related to the amortization of loan discounts. As of September 30, 2019, 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 $85,407 and $85,408, respectively. Accrued interest on the advances amounted to $ 330,973 as of September 30, 2019. On June 18, 2019, the Company received $500,000 from its Chairman and principal shareholder in exchange for a $500,000 secured promissory note bearing interest of LIBOR plus 2%, not to exceed 7%, payable quarterly with principal due September 30, 2022. In addition, during the three months ended September 30, 2019, the Company received an additional $570,000 in exchange for note amendments with the same terms. For the nine months ended September 30, 2019, the Company recognized interest expense of $8,009 related to this note. As of September 30, 2019, the principal balance of the notes was $1,070,000 and the accrued interest was $8,009. A summary of notes payable and related discounts as of September 30, 2019 is as follows: Principal Unamortized Discount Debt, Net of Discount Related parties Secured Convertible notes payable $ 1,000,000 $ (12,877 ) $ 987,123 Secured Convertible Line of Credit 3,395,000 (170,815 ) 3,224,185 Secured promissory notes payable 1,070,000 1,070,000 Less current portion Secured convertible notes payable and line of credit, net of current portion $ 5,465,000 $ (183,692 ) $ 5,281,308 |
Stockholders' Deficit
Stockholders' Deficit | 9 Months Ended |
Sep. 30, 2019 | |
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 The Company has authorized 200,000,000 shares of $0.001 par value common stock. During the nine months ended September 30, 2019, the Company issued 9,255,164 shares of common stock and two-year warrants to purchase 4,627,582 shares of common stock with an exercise price of $2.00 per share to two accredited investors in exchange for $1,575,000 including the issuance of 3,911,766 shares of common stock and 1,955,883 warrants to the Companys chairman and principal shareholder in exchange for $675,000. During the three months ended March 31, 2019, the Company issued 4,762 shares of common stock to consultants in exchange for consulting services rendered valued at $900, based upon the $0.189 quoted price per share of our common shares at the grant date. During the nine months ended September 30, 2019, the Company issued 27,410 shares of common stock in payment of commissions in the amount of $4,735, based upon the fair market value of the common shares. During the three months ended June 30, 2019, the Company issued 3,637 shares of common stock in connection with the exercise of options by a consultant with an exercise price of $0.165 per share. During the three months ended September 30, 2019, the Company issued 3,637 shares of common stock in connection with the exercise of options by a consultant with an exercise price of $0.165 per share. Stock-Based Compensation Stock-based compensation expense recognized under ASC 718-10 for the period January 1, 2019 to September 30, 2019, was $103,446 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, 2019, the total compensation cost for stock options not yet recognized was approximately $49,184. This cost will be recognized over the remaining vesting term of the options of approximately one year. Stock-based awards granted to non-employees, in the form of options to purchase the Companys common stock, are valued at the grant date at fair value in accordance ASU 2018-07 Compensation Stock Compensation (Topic718), Improvements to Nonemployee Share-Based Payment Accounting which modified the accounting for non-employee stock-based compensation in accordance with ASC 505-50-25, Equity Based Payments to Non-Employees, During the three months ended March 31, 2019, the Company granted five-year options to purchase 150,000 shares of common stock at an exercise price of $0.18 per share to our Vice President of Industrial Services. The options were valued on the grant date with the Black-Scholes option pricing model using a volatility of 79.98% based upon the historical price of the companys stock, a term of 2.5 years, using the simplified method, and a risk-free rate of 2.59%. The calculated fair value, $13,223 was included in the $86,958 expense noted above for the nine months ended September 30, 2019. During the three months ended March 31, 2019, the Company granted five-year options to purchase 150,000 shares of common stock at an exercise price of $0.18 per share in exchange for legal services. The options were valued on the grant date with the Black-Scholes option pricing model using a volatility of 79.98% based upon the historical price of the Companys stock, a term of five years, the term of the options and a risk-free rate of 2.59%. The calculated fair value, $17,614 was recorded as prepaid expense and will be amortized over twelve months. For the nine months ended September 30, 2019, $7,341 was amortized to expense. In June 2019, the Company granted five-year options to purchase 5,000 shares of common stock at an exercise price of $0.16 per share to a new employee. The options were immediately vested and were valued on the grant date with the Black-Scholes option pricing model using a volatility of 74.85% based upon the historical price of the companys stock, a term of 2.5 years, using the simplified method and a risk-free rate of 1.88%. The calculated fair value, $367 was included in the $86,958 expense noted above for the nine months ended September 30, 2019. In accordance with the 2017 Equity Incentive Plan, on July 1, 2019 the non-employee directors were granted ten-year options to purchase 560,000 shares of common stock to non-employee directors at an exercise price of $0.166 per share. The options vest on June 30, 2020, subject to continued service as a director. The options were valued with the Black-Scholes option pricing model using an expected volatility of 72.89% 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 1.81%. The calculated fair value, $58,246, will be recorded as expense over the one-year vesting period. Warrants to Purchase Common Stock Warrants Issued as Settlements During the nine months ended September 30, 2019, there were no warrants granted for settlements. Warrants Issued for Cash or Services During the nine months ended September 30, 2019, the Company issued two-year warrants to purchase 4,627,582 shares of common stock with an exercise price of $2.00 per share to two accredited investors, including the issuance of 1,955,883 warrants to the Companys chairman and principal shareholder in connection with the private placements described above. During the nine months ended September 30, 2019, two-year warrants to purchase 4,704,329 shares of common stock at $2.00 per share, held by four accredited investors, expired, of which 1,688,879 were held by our chairman and principal shareholder. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 5 Related Party Transactions During the nine months ended September 30, 2019, the Company issued stock and warrants, and entered into secured note agreements with its chairman and principal shareholder in exchange for cash as more fully described in Note 3 and Note 4. In August 2017, |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2019 | |
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, 2019 | |
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 order. 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, 2019, the total amount of freight recognized as revenue was $47,017. 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, 2019. 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 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, 2019: Three Months Ended September 30, Nine Months Ended September 30, 2019 2019 FireIce $ 453,186 $ 883,137 Soil ₂ 30,307 62,051 FireIce Shield 8,434 362 Other 36,151 Total $ 491,927 $ 981,701 |
Concentrations
Concentrations | 9 Months Ended |
Sep. 30, 2019 | |
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, 2019. As of September 30, 2019, there were no cash balances held in depository accounts that are not insured. At September 30, 2019, three customers accounted for 33.1%, 32.8% and 11.4% of accounts receivable. For the nine months ended September 30, 2019, two customers accounted for 18.8% and 11.0% of sales. Approximately 37.9% of revenue was generated from customers outside the United States during the nine months ended September 30, 2019. During the nine months ended September 30, 2019, sales primarily resulted from three product categories, FireIce®, Soil ₂ ₂ ₂ ₂ Two vendors accounted for 28.3% and 11.6% of the Companys approximately $567,000 in purchases of raw material, finished goods and packaging during the nine months ended September 30, 2019. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 9 Subsequent Events Since October 1, 2019, the Company has received additional advances in the amount of $310,000 from its chairman and principal shareholder in exchange for amendments to the secured promissory note entered into on June 18, 2019, increasing the amount due under the note to $1,380,000. |
Organization and Basis of Pre_2
Organization and Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
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) the FireIce® family of products including FireIce® Pro and FireIce® 561, water enhancing powders 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; FireIce® XT and FireIce® ST, wet mixed suppressants for extinguishers and fire suppression systems and our new addition, FireIce® Polar Eco-Foam, an environmentally friendly Class A foam (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 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 (See Note 2). 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 and Principles of Consolidation | Basis of Presentation and Principles of Consolidation 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, 2018 filed on March 28, 2019. |
Inventories | Inventories Inventories as of September 30, 2019 consisted of raw materials and finished goods in the amounts of $972,372 and $1,097,880, respectively. As of September 30, 2019, the Company estimated that raw materials and finished goods in the amount $1,486,584 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, 2019, the Company had approximately $82,847 of consignment inventory held by customers consisting primarily of FireIce 561, FireIce Pro, FireIce HVOF, HDU Wands and Equipment. |
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, 2019 include the allowance for doubtful accounts, depreciation and amortization, valuation and classification of inventories, valuation of options granted for services, valuation of common stock granted for services or debt conversion and the valuation of deferred tax assets. |
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. The Company used the modified prospective method upon adoption of the ASU. Our adoption of this ASU resulted in no cumulative effect adjustment. 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 order. 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. 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, 2019. 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 |
Leases | Leases In connection with entering into a new lease agreement for our Wildland operations in Colorado in February 2018, 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 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. Given the absence of adequate historical data, the Company uses the Simplified Method to estimate the term of options granted to employees and directors. Effective January 1, 2019, the Company adopted ASU 2018-07 Compensation Stock Compensation (Topic718), Improvements to Nonemployee Share-Based Payment Accounting which modified the accounting for non-employee stock-based compensation. This standard requires the measurement and recognition of compensation expense for all share-based payment awards made to non-employees based on estimated fair values using the same method as for employees. The adoption resulted in no cumulative effect on the Companys retained earnings on the adoption date. 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, 2019 to September 30, 2019 were estimated using the following assumptions: Risk free interest rate 1.81% - 2.59% Expected term (in years) 2.5 - 5.5 Dividend yield Volatility of common stock 72.89% - 79.98% Estimated annual forfeitures |
New Accounting Pronouncements | New Accounting Pronouncements No Accounting Standards Updates (ASUs) which were not effective until after September 30, 2019 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, 2019 | |
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, 2019 to September 30, 2019 were estimated using the following assumptions: Risk free interest rate 1.81% - 2.59% Expected term (in years) 2.5 - 5.5 Dividend yield Volatility of common stock 72.89% - 79.98% Estimated annual forfeitures |
Secured Convertible Note Agre_2
Secured Convertible Note Agreements - Related Party (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Convertible Note Agreements - Related Party | |
Schedule of Secured Convertible Note Agreements | A summary of notes payable and related discounts as of September 30, 2019 is as follows: Principal Unamortized Discount Debt, Net of Discount Related parties Secured Convertible notes payable $ 1,000,000 $ (12,877 ) $ 987,123 Secured Convertible Line of Credit 3,395,000 (170,815 ) 3,224,185 Secured promissory notes payable 1,070,000 1,070,000 Less current portion Secured convertible notes payable and line of credit, net of current portion $ 5,465,000 $ (183,692 ) $ 5,281,308 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
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, 2019: Three Months Ended September 30, Nine Months Ended September 30, 2019 2019 FireIce $ 453,186 $ 883,137 Soil ₂ 30,307 62,051 FireIce Shield 8,434 362 Other 36,151 Total $ 491,927 $ 981,701 |
Organization and Basis of Pre_4
Organization and Basis of Presentation (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Raw materials | $ 972,372 | |
Finished goods | 1,097,880 | |
Consignment inventory | 82,847 | |
Long term inventory | $ 1,486,584 | $ 1,298,236 |
Employee Options and Stock Appreciation Rights [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Shares considered antidilutive | 15,136,059 | |
Warrants [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Shares considered antidilutive | 15,816,066 | |
Stock Options For Convertible Notes Reserved [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [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, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk free interest rate, minimum | 1.81% |
Risk free interest rate, maximum | 2.59% |
Dividend yield | |
Volatility of common stock, minimum | 72.89% |
Volatility of common stock, maximum | 79.98% |
Estimated annual forfeitures | |
Minimum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected term (in years) | 2 years 6 months |
Maximum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected term (in years) | 5 years 6 months |
Going Concern (Details)
Going Concern (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Jun. 30, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | Dec. 31, 2017 | |
Accumulated deficit | $ 59,111,023 | $ 59,111,023 | $ 56,133,648 | |||||
Stockholders' deficit | 3,403,022 | $ 2,062,045 | 3,403,022 | $ 2,062,045 | $ 2,474,939 | $ 2,129,358 | $ 4,389,153 | $ 4,758,809 |
Loss from operations | 844,993 | 652,208 | 2,692,606 | 2,372,229 | ||||
Net loss | $ 945,989 | $ 886,093 | 2,977,375 | 2,963,434 | ||||
Net cash used in operating activities | 2,564,193 | $ 2,216,164 | ||||||
Two Accredited Investors [Member] | ||||||||
Advances from convertible line of credit | 1,575,000 | |||||||
Chairman and Principal Shareholder [Member] | ||||||||
Advances from convertible line of credit | 675,000 | |||||||
Proceeds from secured promissory note | 1,070,000 | |||||||
Accredited Investor [Member] | ||||||||
Proceeds from sale of stock under stock purchase agreement | $ 900,000 |
Secured Convertible Note Agre_3
Secured Convertible Note Agreements - Related Party (Details) - USD ($) | Feb. 12, 2015 | Jul. 11, 2013 | Jun. 18, 2019 | Jul. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2019 | Sep. 27, 2016 | Apr. 08, 2016 |
Chairman and principal shareholder [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt issued | $ 1,070,000 | $ 1,070,000 | ||||||
Maturity date | Sep. 30, 2022 | |||||||
Accrued interest | 8,009 | 8,009 | ||||||
Proceeds from secured promissory note | $ 500,000 | 570,000 | ||||||
LIBOR interest rate | LIBOR plus 2%, not to exceed 7%, payable | |||||||
Iinterest expense | 8,009 | |||||||
Remaining Convertible Note Payable [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Convertible amount | $ 1,000,000 | |||||||
Minimum [Member] | Remaining Convertible Note Payable [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt, interest rate | 5.00% | |||||||
Convertible note, conversion price | $ 0.35 | |||||||
Maximum [Member] | Remaining Convertible Note Payable [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt, interest rate | 7.50% | |||||||
Convertible note, conversion price | $ 0.82 | |||||||
President [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Iinterest expense | 37,534 | |||||||
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 Principal Shareholder [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Shares issued upon conversion of convertible note | 9,379,473 | |||||||
Proceeds from secured promissory note | 1,070,000 | |||||||
Convertible amount | $ 2,500,000 | |||||||
Chairman and Principal Shareholder [Member] | Minimum [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Convertible note, conversion price | $ 0.21 | |||||||
Chairman and Principal 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 | 82,055 | 82,055 | ||||||
Note discount | 60,390 | |||||||
Iinterest expense | 7,675 | |||||||
Unamortized discount | 12,877 | 12,877 | ||||||
Exercise price of shares called by warrants | $ 1.30 | |||||||
Two advances totaling $200,000 [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt issued | 3,395,000 | 3,395,000 | ||||||
Accrued interest | 330,973 | 330,973 | ||||||
Iinterest expense | 101,818 | |||||||
Unamortized discount | 85,407 | 85,407 | ||||||
Unamortized beneficial conversion feature | $ 85,408 | $ 85,408 |
Secured Convertible Note Agre_4
Secured Convertible Note Agreements - Related Party (Schedule of Debt) (Details) | Sep. 30, 2019USD ($) |
Related parties | |
Convertible notes payable, related, principal | $ 1,000,000 |
Convertible notes payable, related, unamortized discount | (12,877) |
Convertible notes payable, related, net | 987,123 |
Convertible line of credit, related, principal | 3,395,000 |
Convertible line of credit, related, unamortized discount | (170,815) |
Convertible line of credit, related, net | 3,224,185 |
Convertible promissory note payable, related, principal | 1,070,000 |
Convertible promissory note payable, related, unamortized discount | |
Convertible promissory note payable, related, net | 1,070,000 |
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 | 5,465,000 |
Convertible and nonconvertible note payable, net of current portion, unamortized discount | (183,692) |
Convertible and nonconvertible note payable, net of current portion, net | $ 5,281,308 |
Stockholders' Deficit (Preferre
Stockholders' Deficit (Preferred Stock) (Details) - $ / shares | Sep. 30, 2019 | Dec. 31, 2018 |
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 ($) | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
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 | $ 0.001 | ||||
Common stock issued for services | $ 3,238 | $ 7,038 | |||||
Debt conversion shares issued for secured convertible note | $ 2,500,000 | $ 2,500,000 | |||||
Common Stock [Member] | |||||||
Class of Stock [Line Items] | |||||||
Common stock issued in private placement, shares | 47,525 | 484,919 | |||||
Stock options exercised | 20,000 | 20,000 | |||||
Common stock issued for services | $ 14 | $ 37 | |||||
Common stock and warrants issued for cash, shares | 2,052,243 | 9,255,164 | 10,722,776 | ||||
Debt conversion shares issued for secured convertible note | $ 9,379 | $ 9,379 | |||||
Debt conversion shares issued for secured convertible note, shares | 9,379,473 | 9,379,473 | |||||
Consultant [Member] | |||||||
Class of Stock [Line Items] | |||||||
Stock options exercised | 3,637 | 3,637 | |||||
Issuance price per share | $ 0.165 | $ 0.165 | $ 0.165 | ||||
Consultant [Member] | |||||||
Class of Stock [Line Items] | |||||||
Common stock issued for investor relation services, shares | |||||||
Common stock issued for services | |||||||
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 | $ 1,575,000 | ||||||
Number of shares callable by warrants | 4,627,582 | 4,627,582 | |||||
Exercise price of shares called by warrants | $ 2 | $ 2 | |||||
Common stock and warrants issued for cash, shares | 9,255,164 | ||||||
Term of warrants | 2 years | ||||||
Chairman and principal investor [Member] | |||||||
Class of Stock [Line Items] | |||||||
Common stock issued in private placement, shares | 27,410 | ||||||
Fair value | $ 4,735 | ||||||
Proceeds from the sale of stock and warrants through private placements | $ 675,000 | ||||||
Number of shares callable by warrants | 1,955,883 | 1,955,883 | |||||
Common stock and warrants issued for cash, shares | 3,911,766 | ||||||
Chairman and principal investor [Member] | Common Stock [Member] | |||||||
Class of Stock [Line Items] | |||||||
Debt conversion shares issued for secured convertible note | $ 900 | ||||||
Debt conversion shares issued for secured convertible note, shares | 4,762 | ||||||
Share price at grant date | $ 0.189 |
Stockholders' Deficit (Narrativ
Stockholders' Deficit (Narrative) (Options) (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 9 Months Ended | |
Jul. 31, 2019 | Mar. 31, 2019 | Jun. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation expense | $ 104,262 | $ 138,362 | |||
Share-based compensation expense not yet recognized | 49,184 | ||||
Five 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 | $ 0.18 | ||||
Fair value | $ 17,614 | ||||
Options granted, vesting period | 5 years | ||||
Volatility | 79.98% | ||||
Expected term | 5 years | ||||
Risk free rate | 2.59% | ||||
Share-based compensation expense | 7,341 | ||||
Non Employees [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation expense | 816 | ||||
Non Employees [Member] | 2017 Equity Incentive Plan [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Options granted | 560,000 | ||||
Options granted, exercise price | $ 0.166 | ||||
Fair value | $ 58,246 | ||||
Options granted, vesting period | 10 years | ||||
Volatility | 72.89% | ||||
Expected term | 5 years 6 months | ||||
Risk free rate | 1.81% | ||||
New Employee [Member] | Five Year Options [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Options granted | 5,000 | ||||
Options granted, exercise price | $ 0.16 | ||||
Fair value | 367 | ||||
Options granted, vesting period | 5 years | ||||
Volatility | 74.85% | ||||
Expected term | 2 years 6 months | ||||
Risk free rate | 1.88% | ||||
Share-based compensation expense | $ 86,958 | ||||
Accredited Investor [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares callable by warrants | 4,627,582 | ||||
Exercise price of shares called by warrants | $ 2 | ||||
Chairman and principal investor [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Fair value | $ 4,735 | ||||
Number of shares callable by warrants | 1,955,883 | ||||
Employees and Directors [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation expense | $ 103,446 | ||||
Share-based compensation expense period for recognition | 1 year | ||||
Vice President of Industrial Services [Member] | Five Year Options [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Options granted | 150,000 | ||||
Options granted, exercise price | $ 0.18 | ||||
Fair value | $ 13,223 | ||||
Options granted, vesting period | 5 years | ||||
Volatility | 79.98% | ||||
Expected term | 2 years 6 months | ||||
Risk free rate | 2.59% | ||||
Share-based compensation expense | $ 86,958 | ||||
Accredited Investor [Member] | Warrants [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Options granted | 4,704,329 | ||||
Options granted, exercise price | $ 2 | ||||
Share-based compensation expense period for recognition | 2 years | ||||
Chairman and principal shareholder [Member] | Warrants [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Options granted | 1,688,879 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 1 Months Ended | 9 Months Ended |
Aug. 31, 2017 | Sep. 30, 2019 | |
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 | |
Number of shares callable by warrants | 5,343,398 | |
Exercise price of shares called by warrants | $ 2 | |
Proceeds from the sale of stock and warrants through private placements | $ 900,000 | |
Term of warrants | 2 years | |
Stock Purchase Agreement Related Party Investor [Member] | Warrants [Member] | ||
Related Party Transaction [Line Items] | ||
Number of shares callable by warrants | 2,671,699 | |
President and Principal Shareholder [Member] | ||
Related Party Transaction [Line Items] | ||
Amount purchased by related party under Stock Purchase Agreement | $ 1,800,000 |
Commitments and Contingencies (
Commitments and Contingencies (Operating Lease Agreement) (Details) | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Lessee, Lease, Description [Line Items] | |
Operating lease discount rate | 7.50% |
Accounting Standards Update 2016-02 [Member] | |
Lessee, Lease, Description [Line Items] | |
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 |
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 Technology Officer [Member] | ||||||
Other Commitments [Line Items] | ||||||
Percentage to be received of first $2 million of revenue | 5.00% | |||||
Officer compensation | $ 52,797 | $ 62,056 | ||||
Executive Chairman [Member] | ||||||
Other Commitments [Line Items] | ||||||
Annual base salary | $ 150,000 | |||||
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 |
Revenue Recognition (Details)
Revenue Recognition (Details) - USD ($) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 491,927 | $ 981,701 |
Net amount of freight | 47,017 | |
FireIce Products [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 453,186 | 883,137 |
Soil 2 O Traditional Sales[Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 30,307 | 62,051 |
FireIce Shield [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 8,434 | 362 |
Other [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 36,151 |
Concentrations (Details)
Concentrations (Details) | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Concentration Risk [Line Items] | |
Total purchases of raw material, finished goods and packaging made during the period | $ 567,000 |
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 | 33.10% |
Accounts Receivable [Member] | Customer Two Concentration Risk [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 32.80% |
Accounts Receivable [Member] | Customer Three Concentration Risk [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 11.40% |
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 | 37.90% |
Sales Revenue [Member] | Customer One Concentration Risk [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 18.80% |
Sales Revenue [Member] | Customer Two Concentration Risk [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 11.00% |
Sales Revenue [Member] | Fire Ice [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 90.00% |
Sales Revenue [Member] | Soil 2 O [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 6.30% |
Sales Revenue [Member] | FireIce Shield [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 3.70% |
Sales Revenue [Member] | FireIce sales [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 39.90% |
Sales Revenue [Member] | FireIce Products [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 33.20% |
Sales Revenue [Member] | FireIce Polar Eco-Foam [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 8.20% |
Sales Revenue [Member] | FireIce Eductors, EMFIDS and extinguishers [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 18.70% |
Sales Revenue [Member] | Soil 2 O Traditional Sales[Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 50.00% |
Sales Revenue [Member] | Soil 2 O Dust Control Products [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 50.00% |
Sales Revenue [Member] | Canisters and Refills [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 15.60% |
Sales Revenue [Member] | CTP units and products [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 22.90% |
Sales Revenue [Member] | Spray Bottles [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 61.60% |
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 | 28.30% |
Inventory purchases [Member] | Supplier Two Concentration Risk [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 11.60% |
Subsequent Events (Details)
Subsequent Events (Details) - Chairman and principal shareholder [Member] - USD ($) | 1 Months Ended | 3 Months Ended | |
Oct. 31, 2019 | Jun. 18, 2019 | Sep. 30, 2019 | |
Subsequent Event [Line Items] | |||
Proceeds from secured promissory note | $ 500,000 | $ 570,000 | |
Subsequent Event [Member] | |||
Subsequent Event [Line Items] | |||
Proceeds from secured promissory note | $ 310,000 | ||
Increase amount of note | $ 1,380,000 |