| Significant Accounting Policies | 3. SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation The consolidated
financial statements include accounts of TMP, its wholly owned subsidiary, CCPI, and its 50% owned subsidiary, AMINO (collectively
referred to as the Company). All significant intercompany accounts and transactions have been eliminated in consolidation.
In addition, TMP, CCPI and AMINO share the common operating facility, certain employees and various costs. Such expenses are principally
paid by TMP. Due to the nature of the parent and subsidiary relationship, the individual financial position and operating results
of TMP, CCPI and AMINO may be different from those that would have been obtained if they were autonomous. Accounting Estimates The preparation
of financial statements, in conformity with accounting principles generally accepted in the United States of America, requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting
period. The Companys critical accounting policies that involve significant judgment and estimates include revenue recognition,
share based compensation, recoverability of accounts receivable, intangibles, valuation of derivatives, and valuation of deferred
income taxes. Actual results could differ from those estimates Cash Equivalents The Company considers
all highly liquid investments with a remaining maturity of three months or less when purchased to be cash equivalents. The recorded
carrying amounts of the Companys cash and cash equivalents approximate their fair value. As of December 31, 2015 and 2014,
the Company had no cash equivalents. Considerations of Credit Risk Financial instruments
that potentially subject the Company to concentrations of credit risk consist principally of trade accounts receivable. Revenue Recognition TMP markets and
sells medical foods through employed sales representatives, independent distributors, and pharmacies. Product sales are invoiced
upon shipment at Average Wholesale Price ( AWP Physician Direct Sales
Model Distributor Direct Sales
Model Physician Managed Model Hybrid Model As a courtesy to our physician
clients, our general practice has been to extend the rapid pay discount from our Physician Managed and Hybrid models beyond the
initial term of the invoice until the invoice is paid and not to apply a late payment fee to the outstanding balance. Due to substantial uncertainties
as to the timing and collectability of revenues derived from our Physician Managed and Hybrid models, which can take in excess
of five years to collect, we have determined that these revenues do not meet the criteria for recognition, in accordance with The
Financial Accounting Standards Board ( FASB ASC Revenue Recognition ASC 605 The Company had
entered into an agreement with Cambridge Medical Funding Group, LLC ( CMFG WC Transfers of Financial Assets CMFG #1 WC Receivable
Purchase Assignment Model CMFG #1 During the years
ended December 31, 2015 and 2014, the Company issued billings to Physician Managed and Hybrid model customers aggregating $3.2
million and $3.8 million, respectively, which were not recognized as revenues or accounts receivable in the accompanying consolidated
financial statements at the time of such billings. Direct costs associated with the above billings are expensed as incurred. Direct
costs associated with all billings, aggregating $466,214 and $569,570, respectively, were expensed in the accompanying consolidated
financial statements at the time of such billings. In accordance with the Companys revenue recognition policy, the Company
recognized revenues from customers under these models aggregating $2,788,401 and $3,179,673 during the years ended December 31,
2015 and 2014, based on cash collections during the respective periods. As of December 31, 2015, we had approximately $7.9 million
in unrecorded accounts receivable that potentially will be recorded as revenue in the future as our CCPI subsidiary secures claims
payments on behalf of our PMM and Hybrid Customers. All unpaid invoices underlying claims assigned to CMFG pursuant to CMFG #1
are excluded from unrecorded accounts receivable. CCPI receives no
revenue in the Physician Direct or Distributor Direct models because it does not provide collection and billing services to these
customers. In the Physician Managed and Hybrid models CCPI has a billing and claims processing service agreement with the physician.
The billing and claims processing agreement includes a service fee that is based upon a percentage of collections on all claims.
Because fees are only earned by CCPI upon collection on the claim, and the fee is not determinable until the amount of the collection
is known, CCPI recognizes revenue at the time claims are paid. Under CMFG #1 the Company recognized revenue related to CCPIs
services upon receipt of the advance payment from CMFG. No returns of products
are allowed except for products damaged in shipment, which historically have been insignificant. The rapid pay discounts
to the AWP amount offered to the physician or distributor vary based upon the expected payment term from the physician or distributor.
The discounts are derived from the Companys experience of the collection rates from internal sources and updated for facts
and circumstances and known trends and conditions in the industry, as appropriate. As described in the various models, we recognize
provisions for rapid pay discounts in the same period in which the related revenue is recorded. We believe that our current provisions
appropriately reflect our exposure for rapid pay discounts. These rapid pay discounts have typically ranged from 40% to 88% of
AWP. Allowance for Doubtful Accounts Trade accounts receivable
are stated at the amount management expects to collect from outstanding balances. Currently, accounts receivable are comprised
of amounts due from our CMFG #1, distributor customers and other miscellaneous receivables. The carrying amounts of accounts receivable
are reduced by an allowance for doubtful accounts that reflects managements best estimate of the amounts that will not be
collected. The Company individually reviews all accounts receivable balances and based upon an assessment of current creditworthiness,
estimates the portion, if any, of the balance that will not be collected. An allowance is recorded for those accounts that are
determined to likely be uncollectible through a charge to earnings and a credit to a valuation allowance. Balances that remain
outstanding after we have used reasonable collection efforts will be written off. Based on an assessment as of December 31, 2015
and 2014, of the collectability of invoices, accounts receivable are presented net of an allowance for doubtful accounts of $72,634
and $55,773, respectively. Inventory Valuation Inventory is valued
at the lower of cost (first in, first out) or market and consists primarily of finished goods of medical food products sold by
the Company. Property and Equipment Property and equipment
are stated at cost. Depreciation is calculated using the straight-line method over the estimated useful lives of the related assets.
Computer equipment is depreciated over three to five years. Furniture and fixtures are depreciated over five to seven years. Leasehold
improvements are amortized over the shorter of fifteen years or term of the applicable property lease. Maintenance and repairs
are expensed as incurred; major renewals and betterments that extend the useful lives of property and equipment are capitalized.
When property and equipment is sold or retired, the related cost and accumulated depreciation are removed from the accounts and
any gain or loss is recognized. Impairment of Long-Lived Assets The long-lived assets
held and used by the Company are reviewed for impairment no less frequently than annually or whenever events or changes in circumstances
indicate that the carrying amount of an asset may not be recoverable. In the event that facts and circumstances indicate that the
cost of any long-lived assets may be impaired, an evaluation of recoverability is performed. No impairment indicators existed at
December 31, 2015 and 2014, so no long-lived asset impairment was recorded. Intangible Assets Intangible assets
with finite lives, including patents and internally developed software (primarily the Companys PDRx Software), are stated
at cost and are amortized over their useful lives. Patents are amortized on a straight line basis over their statutory lives, usually
fifteen to twenty years. Internally developed software is amortized over three to five years. Intangible assets with indefinite
lives are tested annually for impairment, during the fiscal fourth quarter and between annual periods, and more often when events
indicate that an impairment may exist. If impairment indicators exist, the intangible assets are written down to fair value as
required. The Company has one intangible asset with an indefinite life which is a domain name for medical foods. Taking into account
the cyclical and non-recurring events that affected operations, the Company determined during its impairment analysis of intangible
assets with finite and indefinite lives that no impairment indicators existed at December 31, 2015, or December 31, 2014, so no
intangible asset impairment was recorded for the years ended December 31, 2015 and 2014. Fair Value of Financial Instruments The Companys
financial instruments are accounts receivable, accounts payable, notes payable, and warrant derivative liability. The recorded
values of accounts receivable and accounts payable approximate their fair values based on their short term nature. Notes payable
and notes payable related parties are recorded at their issue value or if warrants are attached at their issue value less
the proportionate value of the warrant, which approximates their fair value. Warrants issued with ratcheting provisions are classified
as derivative liabilities and are revalued using the Black-Scholes model each quarter based on changes in the market value of our
common stock and unobservable level 3 inputs. The table below
sets forth a summary of changes in the fair value of our financial instruments valued on a recurring basis using Level 3 inputs
for the year ended December 31, 2015:
January 1, 2015 Recorded New Derivative Liabilities Change in estimated fair value recognized in results of operations December 31, 2015
Derivative liabilities $ 18,075 $ 119,229 $ (136,146 ) $ 1,158
The Company defines
fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal
or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement
date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable
inputs. The fair value hierarchy is based on three levels of inputs that may be used to measure fair value, of which the first
two are considered observable and the last is considered unobservable: Level 1: Quoted prices in active markets
for identical assets or liabilities. Level 2: Inputs other than Level 1 that
are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets
that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the
full term of the assets or liabilities. Level 3 assumptions: Unobservable inputs
that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities including
liabilities resulting from imbedded derivatives associated with certain warrants to purchase common stock. Derivative Financial Instruments Derivative liabilities
are recognized in the consolidated balance sheets at fair value based on the criteria specified in FASB ASC Topic 815-40 Derivatives
and Hedging Contracts in Entitys own Equity ASC 815-40 Derivatives and Hedging
Embedded Derivatives ASC 815-15 Income Taxes The Company determines
its income taxes under the asset and liability method. Under the asset and liability approach, deferred income tax assets and liabilities
are calculated and recorded based upon the future tax consequences of temporary differences by applying enacted statutory tax rates
applicable to future periods for differences between the financial statements carrying amounts and the tax basis of existing assets
and liabilities. Generally, deferred income taxes are classified as current or non-current in accordance with the classification
of the related asset or liability. Those not related to an asset or a liability are classified as current or non-current depending
on the periods in which the temporary differences are expected to reverse. Valuation allowances are provided for significant deferred
income tax assets when it is more likely than not that some or all of the deferred tax assets will not be realized. The Company recognizes
tax liabilities by prescribing a minimum probability threshold that a tax position must meet before a financial statement benefit
is recognized and also provides guidance on de-recognition, measurement, classification, interest and penalties, accounting in
interim periods, disclosure and transition. The minimum threshold is defined as a tax position that is more likely than not to
be sustained upon examination by the applicable taxing authority, including resolution of any related appeals or litigation processes,
based on the technical merits of the position. The tax benefit to be recognized is measured as the largest amount of benefit that
is greater than fifty percent likely of being realized upon ultimate settlement. To the extent that the final tax outcome of these
matters is different than the amount recorded, such differences impact income tax expense in the period in which such determination
is made. Interest and penalties, if any, related to accrued liabilities for potential tax assessments are included in income tax
expense. U.S. GAAP also requires management to evaluate tax positions taken by the Company and recognize a liability if the Company
has taken uncertain tax positions that more likely than not would not be sustained upon examination by applicable taxing authorities.
Management of the Company has evaluated tax positions taken by the Company and has concluded that as of December 31, 2015, there
are no uncertain tax positions taken, or expected to be taken, that would require recognition of a liability that would require
disclosure in the financial statements. Stock-Based Compensation The Company accounts
for stock option awards in accordance with FASB ASC Topic No. 718, Compensation-Stock Compensation The Companys
accounting policy for equity instruments issued to consultants and vendors in exchange for goods and services follows the provisions
of FASB ASC Topic No. 505-50, Equity Based Payments to Non-Employees Loss per Common Share The Company utilizes
FASB ASC Topic No. 260, Earnings per Share Since the effects
of outstanding options, warrants and the conversion of convertible debt are anti-dilutive in all periods presented, shares of common
stock underlying these instruments have been excluded from the computation of loss per common share. The following sets
forth the number of shares of common stock underlying outstanding options, warrants and convertible debt as of December 31, 2015
and 2014:
December 31,
2015 2014
Warrants 4,699,372 4,919,372
Stock options 2,406,741 2,421,041
Convertible debentures 2,166,667
9,272,780 7,340,413 Debt Discounts The Company accounts
for debt discount according to ASC 470-20, Debt with Conversion and Other Options Research and Development Research and development
costs are expensed as incurred. In instances where we enter into clinical trial agreements with third parties for research and
development activities, we may prepay fees for services at the initiation of the contract. We record the prepayment as a prepaid
asset and amortize the asset into research and development expense over the period of time the contracted research and development
services are performed. At this time, no clinical trials are being conducted. Comprehensive Loss Comprehensive loss
for the periods reported was comprised solely of the Company's net loss. The comprehensive loss for the years ended December 31,
2015 and 2014 was $3,067,192 and $3,895,009, respectively. There were no other changes in equity that were excluded from net loss
for all periods presented. Reclassifications Certain prior year
amounts have been reclassified for comparative purposes to conform to the current-year financial statement presentation. These
reclassifications had no effect on previously reported results of operations. Recent Accounting Pronouncements In May 2014, the
FASB issued Accounting Standards Update (ASU) No. 2014-09 Revenue from Contracts with Customers (Topic
606) Revenue
from Contracts with Customers (Topic 606) which In August 2014,
the FASB issued ASU No. 2014-15 Presentation of Financial StatementsGoing Concern (Subtopic 205-40): Disclosure
of Uncertainties about an Entitys Ability to Continue as a Going Concern. In January 2015,
the FASB issued ASU No. 2015-01, Extraordinary and Unusual Items In July 2015, the
FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory In August 2015,
the FASB issued ASU No. 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit
Arrangements Simplifying the Presentation of Debt
Issuance Costs In February 2016,
the FASB issued ASU No. 2016-02, Leases |
