Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Apr. 07, 2016 | Jun. 30, 2015 | |
Document and Entity Information | |||
Entity Registrant Name | FRESH MEDICAL LABORATORIES, INC. | ||
Entity Trading Symbol | fres | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Amendment Flag | false | ||
Entity Central Index Key | 1,541,884 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Common Stock, Shares Outstanding | 21,903,567 | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | No | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY | ||
Entity Public Float | $ 9,870,368 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Current Assets | ||
Cash | $ 451,526 | $ 4,044 |
Accounts receivable, net of allowance for doubtful accounts of $194,467 and $100,000, respectively | 0 | 154,799 |
Inventory | 35,174 | 210,474 |
Prepaid expenses | 30,520 | 38,640 |
Total Current Assets | 517,220 | 407,957 |
Inventory, noncurrent | 206,722 | 0 |
Property and equipment, net of accumulated depreciation | 106,541 | 65,775 |
Intangible assets, net of accumulated amortization | 175,300 | 0 |
Total Assets | 1,005,783 | 473,732 |
Current Liabilities | ||
Accounts payable | 97,849 | 105,316 |
Accrued liabilities | 138,683 | 406,336 |
Related-party notes payable., | 25,000 | 929,536 |
Note payable | 189,389 | 0 |
Convertible notes payable | 0 | 90,000 |
Total Current Liabilities | 450,921 | 1,531,188 |
Long-Term Liabilities | ||
Related-party note payable. | 0 | 356,931 |
Convertible notes payable., | 1,206,931 | 0 |
Convertible debentures | 2,000,000 | 0 |
Total Long-Term Liabilities | 3,206,931 | 356,931 |
Total Liabilities | $ 3,657,852 | $ 1,888,119 |
Commitments and contingencies | ||
Stockholders' Equity (Deficit): | ||
Preferred stock, $0.001 par value; 10,000,000 shares authorized; none issued and outstanding | $ 0 | $ 0 |
Common stock, $0.001 par value; 40,000,000 shares authorized; 21,525,126 shares and 19,730,052 shares issued and outstanding, respectively | 21,525 | 19,730 |
Additional paid-in capital | 10,636,583 | 9,075,590 |
Accumulated deficit | (13,310,177) | (10,509,707) |
Total Stockholders' Equity (Deficit) | (2,652,069) | (1,414,387) |
Total Liabilities and Stockholders' Equity (Deficit) | $ 1,005,783 | $ 473,732 |
Consolidated Balance Sheets Par
Consolidated Balance Sheets Parentheticals - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Parentheticals | ||
Allowance for doubtul accounts of Accounts receivable | $ 194,467 | $ 100,000 |
Preferred Stock, Par value | $ 0.001 | $ 0.001 |
Preferred Stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred Stock, shares issued | 0 | 0 |
Preferred Stock, shares outstanding | 0 | 0 |
Common Stock, par value | $ 0.001 | $ 0.001 |
Common Stock, shares authorized | 40,000,000 | 40,000,000 |
Common Stock, shares issued | 21,525,126 | 19,730,052 |
Common Stock, shares outstanding | 21,525,126 | 19,730,052 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Revenue: | ||
Sales | $ 10,450 | $ 332,005 |
Licensee revenue | 9,000 | 0 |
Total revenue | 19,450 | 332,005 |
Cost of revenue | 15,563 | 48,824 |
Gross margin | 3,887 | 283,181 |
Operating expenses: | ||
Research and development expense | 1,250,723 | 610,199 |
Selling, general and administrative expense | 1,257,557 | 1,390,033 |
Total operating expenses | 2,508,280 | 2,000,232 |
Loss from operations | (2,504,393) | (1,717,051) |
Other income (expense): | ||
Interest expense | (271,984) | (168,826) |
Loss on extinguishment of debt, net | 0 | (15,746) |
Foreign currency exchange gain (loss), net | (24,093) | (27,566) |
Gain on revaluation of derivative liability | 0 | 5,717 |
Total other income (expense) | (296,077) | (206,421) |
Net loss | $ (2,800,470) | $ (1,923,472) |
Basic and diluted loss per share | $ (0.14) | $ (0.11) |
Weighted-average common shares outstanding, basic and diluted | 20,344,262 | 17,784,227 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity (Deficit) - USD ($) | Common Stock Shares | Common Stock Amount | Additional Paid-in Capital | Accumulated Deficit | Total Stockholders' Equity (Deficit) |
Balance at Dec. 31, 2013 | 15,980,028 | 15,980 | 6,793,934 | (8,586,235) | (1,776,321) |
Stock-based compensation | 924,140 | 924 | 727,257 | 728,181 | |
Common stock issued for conversion of notes and accrued interest | 704,295 | 705 | 391,284 | 391,989 | |
Common stock issued for cash at $0.50 per share | 2,102,000 | 2,102 | 1,048,898 | 1,051,000 | |
Common stock issued for exercise of warrants at $0.001 per share | 53,439 | 53 | 53 | ||
Common stock issued in satisfaction of account payable at $0.50 per share | 20,000 | 20 | 9,980 | 10,000 | |
Issuance of warrants under consulting agreement | $ 109,900 | $ 109,900 | |||
Contribution of common stock by an executive officer | (53,850) | (54) | 54 | ||
Recharacterization of additional paid in capital as derivative liability | $ (373,979) | (373,979) | |||
Recharacterization of derivative liability as additional paid in capital | $ 368,262 | 368,262 | |||
Net loss | $ (1,923,472) | $ (1,923,472) | |||
Balance. at Dec. 31, 2014 | 19,730,052 | 19,730 | 9,075,590 | (10,509,707) | (1,414,387) |
Stock-based compensation | 255,915 | 255,915 | |||
Common stock issued for cash at $0.50 per share | 294,000 | 294 | 146,706 | 147,000 | |
Common stock issued for cash at $0.75 per share | 1,235,278 | 1,235 | 925,225 | 926,460 | |
Common stock issued pursuant to bill of sale and patent assignment agreements, valued at $0.75 per share | 150,000 | 150 | 112,350 | 112,500 | |
Common stock issued for conversion of note and accrued interest at $0.65 per share | 95,283 | 95 | 61,839 | 61,934 | |
Issuance of warrants under consulting agreement | $ 43,594 | $ 43,594 | |||
Common stock issued for services, valued at $0.75 per share | 20,513 | 21 | 15,364 | 15,385 | |
Net loss | $ (2,800,470) | $ (2,800,470) | |||
Balance at Dec. 31, 2015 | 21,525,126 | 21,525 | 10,636,583 | (13,310,177) | (2,652,069) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Cash flows from operating activities: | ||
Net loss | $ (2,800,470) | $ (1,923,472) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 10,923 | 3,676 |
Loss on extinguishment of debt | 0 | 15,746 |
Stock-based compensation | 343,488 | 809,487 |
Provision for doubtful accounts | 102,282 | 100,000 |
Impairment loss | 50,000 | 0 |
Gain on revaluation of derivative liability | 0 | (5,717) |
Change in assets and liabilities: | ||
Accounts receivable | 52,517 | (254,799) |
Inventory | (31,422) | (198,864) |
Prepaid expenses | (20,474) | (10,046) |
Accounts payable | (7,467) | 31,353 |
Accrued liabilities | (255,719) | 91,695 |
Net cash used in operating activities | (2,556,342) | (1,340,941) |
Cash flows from investing activities: | ||
Payments for property and equipment, and intangible assets | (164,489) | (63,150) |
Net cash used in investing activities | (164,489) | (63,150) |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock | 1,073,460 | 1,051,000 |
Proceeds from exercise of warrants to purchase common stock | 0 | 53 |
Proceeds from issuance of convertible debentures | 2,000,000 | 0 |
Proceeds from issuance of convertible notes payable | 1,206,931 | 250,000 |
Proceeds from issuance of related-party notes payable | 50,000 | 20,000 |
Repayment of principal on notes payable | (1,097,078) | 0 |
Repayment of principal on convertible notes payable | (40,000) | 0 |
Repayment of related-party note payable | (25,000) | 0 |
Net cash provided by financing activities | 3,168,313 | 1,321,053 |
Net increase (decrease) in cash | 447,482 | (83,038) |
Cash at beginning of year | 4,044 | 87,082 |
Cash at end of year | 451,526 | 4,044 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 524,544 | 101,590 |
Cash paid for income taxes | 0 | 0 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Notes payable and accrued interest converted to common stock | 61,934 | 391,989 |
Common stock issued to acquire property and equipment, and intangible assets | 112,500 | 0 |
Common stock issued in satisfaction of account payable | $ 0 | $ 10,000 |
Organization and Summary of Sig
Organization and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2015 | |
Organization and Summary of Significant Accounting Policies | |
Organization and Summary of Significant Accounting Policies | Note 1 – Organization and Summary of Significant Accounting Policies Organization Principles of Consolidation Going Concern The ability of the Company to continue as a going concern is dependent on the Company successfully developing products that can be sold profitably, and in the near term successfully generating cash through financing and operating activities. Management’s plans include issuing equity or debt securities to fund capital requirements and ongoing operations. Additionally, the Company has commenced selling the EPN Scan during the year ended December 31, 2014. However, there can be no assurance the Company will be successful in these efforts. Use of Estimates Fair Value of Financial Instruments Research and Development Cash and Cash Equivalents Inventory Property and Equipment Intangible Assets Revenue Recognition – Trade Receivables and Credit Policies – Derivative Financial Instruments – Beneficial Conversion Features – Employee Stock-based Compensation Non-Employee Stock-based Compensation Income Taxes Basic and Diluted Loss Per Share – The Company computes basic loss per share by dividing net loss by the weighted-average number of common shares outstanding during the period. The Company computes diluted loss per share by dividing net loss by the sum of the weighted-average number of common shares outstanding and the weighted-average dilutive common share equivalents outstanding. The computation of diluted loss per share does not assume exercise or conversion of securities that would have an anti-dilutive effect. As of December 31, 2015, there were warrants to purchase 1,423,211 shares of common stock outstanding, 253,670 non-vested shares of common stock, $2,000,000 of 8% convertible debentures, and $1,206,931 of 8% convertible notes payable that were excluded from the computation of diluted net loss per common share as they were anti-dilutive. As of December 31, 2014, there were warrants to purchase 1,423,211 shares of common stock outstanding, 765,500 non-vested shares of common stock and $90,000 of convertible notes payable that were excluded from the computation of diluted net loss per common share as they were anti-dilutive. Concentrations Company’s revenues are concentrated in 2015 2014 Customer A (Germany) $ - $ 239,645 Customer B (Switzerland) - 81,760 Customer C (China) 19,450 10,600 Total revenue $ 19,450 $ 332,005 Foreign currency policy Related parties – A party is considered to be related to the Company if the party directly or indirectly or through one or more intermediaries, controls, is controlled by, or is under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. A party which can significantly influence the management or operating policies of the transacting parties or if it has an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests is also a related party. Recent Accounting Pronouncements Leases In January 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-01, Financial Instruments – Overall, In November 2015, the FASB issued Accounting Standards Update No. 2015-17, Balance Sheet Classification of Deferred Taxes In July 2015, the FASB issued Accounting Standards Update 2015-11, Simplifying the Measurement of Inventory, In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs, In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements - Going Concern: Disclosure of Uncertainties About an Entity's Ability to Continue as a Going Concern, In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers |
Inventory
Inventory | 12 Months Ended |
Dec. 31, 2015 | |
Inventory. | |
Inventory | Note 2 – Inventory Inventory principally consists of the cost of materials purchased and assembled during the years ended December 31, 2015 and 2014 for the assembly of the EPN Scan which has received regulatory approval for sale in Europe. The Company has recorded these costs as inventory because regulatory approval has been received and management has determined that a future benefit is probable. The cost of inventory also includes the costs of direct labor for the assembly and certain indirect costs incurred in connection with purchasing of parts and the assembly of products. Inventory consists of the following at December 31, 2015 and 2014: 2015 2014 Raw materials $ 76,925 $ 93,699 Work in progress 58,376 12,002 Finished goods 106,595 104,773 Total inventory 241,896 210,474 Less carrying value of inventory not deemed to be a current asset 206,722 - Inventory, included in current assets $ 35,174 $ 210,474 At the end of each reporting period, management has estimated that portion of inventory not expected to be converted to cash within one year and reflected that amount as “Inventory, noncurrent” in the accompanying consolidated balance sheets. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2015 | |
Property and Equipment | |
Property and Equipment | Note 3 – Property and Equipment Property and equipment consists of the following at December 31, 2015 and 2014: Life 2015 2014 Computer equipment 3 years $ 19,787 $ 7,228 Office equipment 3 to 5 years 13,852 3,800 Tooling 5 years 92,228 36,350 Website development 5 years - 26,800 125,867 74,178 Less accumulated depreciation (19,326) (8,403) Property and equipment, net $ 106,541 $ 65,775 In January 2014, the Company ordered tooling having a total cost of $72,700, of which a deposit of $36,350 was paid during the three months ended March 31, 2014. The tooling is for the purpose of manufacturing the case for the EPN Scan. In July 2015, the Company settled the outstanding balance with a payment of $20,878. Depreciation of the tooling commenced in July 2015 on the date that the tooling was placed into service, over an expected useful life of five years. Effective January 11, 2014, the Company entered into a Master Services Agreement (the “Agreement”) with an entity that provides consulting and professional services. The entity is owned and managed by a director of the Company. The costs incurred for the development of the Internet-based customer service portal pursuant to the second work order were accounted for pursuant to generally accepted accounting principles governing the accounting for Website Development Costs and for Internal-Use Software. Those standards require that costs incurred during the preliminary project stage be expensed as incurred, costs incurred to develop internal-use computer software during the application development stage be capitalized, and costs incurred for training and during the post-implementation operation stage be expensed as incurred. Since the $50,000 of costs incurred related to the application development stage, the costs were preliminarily capitalized as property and equipment. With the termination of the Agreement, management has evaluated the current status of this project in light of its plan for the future development and completion of the Internet-based customer service portal project and concluded that the $50,000 of costs paid and recorded will not have a significant future benefit. Accordingly, an impairment loss of $50,000 has been recorded at December 31, 2015. Depreciation expense for the years ended December 31, 2015 and 2014 was $10,923 and $3,676, respectively. |
Accrued Liabilities
Accrued Liabilities | 12 Months Ended |
Dec. 31, 2015 | |
Accrued liabilities. | |
Accrued Liabilities | Note 4 – Accrued Liabilities Accrued liabilities consisted of the following at December 31, 2015 and 2014: 2015 2014 Accrued interest $ 115,627 $ 380,122 Accrued payroll and payroll taxes 5,183 8,864 Accrued royalties 17,873 17,350 Total accrued liabilities $ 138,683 $ 406,336 |
Long-term Debt
Long-term Debt | 12 Months Ended |
Dec. 31, 2015 | |
Long-term Debt {1} | |
Long-term Debt | Note 5 – Long-term Debt Long-term debt is summarized as follows as of December 31, 2015 and 2014: 2015 2014 Convertible debentures; unsecured; interest at 8.00% per annum; due May 1, 2018 $ 2,000,000 $ - Convertible notes payable; unsecured; interest at 8.00% per annum; due November 6, 2020 1,206,931 - Note payable to a shareholder and former director; unsecured; interest at 11.10% per annum; paid in 2015 - 929,536 Note payable to a relative of an executive officer; secured by all the assets of the Company; interest at 15.00% per annum; due June 30, 2016 189,389 356,931 Other convertible notes; unsecured; interest at 8.00% per annum; paid or converted in 2015 - 90,000 Related-party note payable 25,000 - Total long-term debt 3,421,320 1,376,467 Less: current portion 214,389 1,019,536 Long-term debt, net of current portion $ 3,206,931 $ 356,931 Convertible Debentures In February 2015, the Company commenced an offering of Convertible Debentures in an aggregate amount of up to $2,000,000. As of April 30, 2015, the Company had received subscriptions with respect to $2,000,000 in Convertible Debentures. The Convertible Debentures were issued in April 2015, are unsecured, and bear interest at the rate of 8% per annum commencing on the issuance date. Principal and accrued interest are due on the maturity date, which is May 1, 2018. The holder of the Convertible Debenture is entitled, at its option, to convert all or any portion of the outstanding principal of the Convertible Debenture into shares of the Company’s common stock at a conversion price of $0.65 per share. Interest accruing from the date of issuance to the conversion date shall be paid on the maturity date. The Company evaluated the Convertible Debentures for consideration of any beneficial conversion features as required under generally accepted accounting principles. The Company determined the beneficial conversion feature to be $0. As further described in Note 13 to these consolidated financial statements, the Company entered into a Placement Agent Agreement, effective December 28, 2015, that provides for compensation to a Placement Agent in connection with an offering of common stock. Additionally, the Placement Agent Agreement provides for potential compensation to the Placement Agent in connection with the future conversion of the Convertible Debentures into shares of common stock of the Company. Upon the conversion of the Convertible Debentures, the Company shall issue the Placement Agent warrants to acquire shares of the Company’s common stock at an exercise price of $0.65 per share. On a quarterly basis, the Placement Agent will be issued a warrant to purchase one share of common stock for each $0.81 of the principal amount of the Convertible Debentures converted into common stock during the quarter, with the maximum number of shares issuable under the Placement Agreement limited to 2,463,460 shares of the Company’s common stock. The term of the warrants shall be for a period of 36 months from the date of issuance. Convertible Notes Payable On November 6, 2015, the Company issued two convertible promissory notes (the “Convertible Notes”) in the aggregate principal amount of $1,206,931 to two investment entities controlled by a single family. In the same transaction, the investment entities purchased an aggregate of 66,666 shares of common stock for a purchase price of $50,000, or $0.75 per share. The Convertible Notes are unsecured and accrue interest at the rate of 8% per annum, with interest payable on the last day of each calendar quarter. The principal amount under the Convertible Notes is due on the five-year anniversary of the issue date. The Convertible Notes are convertible at any time prior to maturity at the option of the holders at a conversion rate of $0.75 per share. If the Company’s common stock commences trading and closes at a price of $3.50 per share for five consecutive trading days, the principal amount under the Convertible Notes automatically converts into common stock at the rate of $0.75 per share. Proceeds from the Convertible Notes were to be used for the purpose of retirement of long-term debt. The Company evaluated the Convertible Notes for consideration of any beneficial conversion features as required under generally accepted accounting principles. The Company determined the beneficial conversion feature to be $0. Note Payable to a Shareholder and Former Director As of December 31, 2014, the Company was obligated under the terms of a master note to a shareholder and former member of its board of directors in the principal amount of $929,536 plus accrued interest of $223,742. The note and accrued interest of $249,348 were due on April 30, 2015. The note bore interest at 11.10% and was unsecured. On May 1, 2015, the Company and the noteholder entered into an Amended and Restated Master Loan Agreement and Promissory Note (the “Revised Note”) in the principal amount of $900,000, which terminated and replaced the previous note. On April 30, 2015, in anticipation of entering into the Revised Note, the Company paid all accrued interest in the amount of $249,348 and principal of $29,536. Interest under the Revised Note also accrued at the rate of 11.10% per annum and was payable monthly in arrears. The Company was obligated to make a $250,000 principal payment on January 1, 2016, and the balance of the Revised Note was scheduled to mature on April 30, 2017. The Revised Note and all unpaid accrued interest were paid off in November 2015. The Revised Note was unsecured and included standard creditor remedies in the event of default. The Company evaluated the modification of the term of the note under generally accepted accounting principles for troubled debt restructurings by debtors and for debt modifications and extinguishments. The Company determined the modification was not within the scope of a troubled debt restructuring. The Company also determined that the modification was not substantial, and as such, the transaction should not be accounted for as an extinguishment, and no gain or loss should be recognized. In total, the Company paid accrued interest of $310,770 and $51,590 during the years ended December 31, 2015 and 2014, respectively. Interest expense for the years ended December 31, 2015 and 2014 was $87,028 and $103,179, respectively. In periods prior to January 1, 2015, this note was presented as a related-party arrangement in the Company’s consolidated financial statements. However, management has concluded that this note no longer meets the definition of a related party transaction under generally accepted accounting principles. Note Payable to a Relative of an Executive Officer At December 31, 2014, the Company was obligated under the terms of a master note to an individual related to an executive officer of the Company in the amount of $356,931. The note is secured by all the assets of the Company, bears interest at 15% per annum, and requires the board of directors to retain the current management as long as the note is outstanding. The note was originally due on December 31, 2012, however, in March 2014, the Company paid the note holder $50,000 of accrued interest and entered into an amendment of the master note to extend the due date of the note and accrued interest to June 30, 2016. In December 2015, the Company paid $356,931 to the note holder, which paid all accrued interest in the amount of $189,389 as of the date of the payment and the remainder of the payment was applied to reduce the principal of the note by $167,542, leaving a balance of $189,389. The balance of accrued interest at December 31, 2015 and 2014 was $1,012 and $137,610, respectively. Interest expense for the years ended December 31, 2015 and 2014 was $52,791 and $53,540, respectively. In periods prior to January 1, 2015, this note was presented as a related-party arrangement in the Company’s consolidated financial statements. However, management has concluded that this note no longer meets the definition of a related party transaction under generally accepted accounting principles. Other Convertible Notes During 2012 and 2013, the Company issued notes payable totaling $684,000. These notes bore interest at 8% and were unsecured. The notes and accrued interest were due, if not previously converted, from June through August 2015. The terms of the notes payable were that the notes were originally convertible into common stock at the greater of $0.80 per share or 85% of the closing price for the previous ten trading days prior to the conversion. If the Company’s stock was not publicly traded, then the price would be the average of the three prior private stock purchases of the Company’s common stock for cash. During the years ended December 31, 2012 and 2013 notes payable totaling $504,000 and related accrued interest of $24,615 were converted into 787,570 shares of the Company’s common stock, representing a weighted average of approximately $0.67 per share, which resulted in a remaining balance payable on convertible notes of $180,000 at December 31, 2013. During the year ended December 31, 2014, notes payable totaling $90,000 and related accrued interest of $16,243 were converted into 164,295 shares of the Company’s common stock, at a weighted average of approximately $0.65 per share. The Company recognized a loss on extinguishment of debt of $15,746 as a result of the modification of the conversion price of one of the promissory notes. During the year ended December 31, 2015, one note payable in the amount of $40,000 and related accrued interest of $9,837 were paid off for cash. During the year ended December 31, 2015, the other remaining note payable in the amount of $50,000 and related accrued interest of $11,934 was converted into 95,283 shares of the Company’s common stock, at $0.65 per share. Other Notes Payable During the six months ended December 31, 2014, the Company received advances from five unrelated parties in the aggregate amount of $250,000. The terms of the advances were not initially established such as the interest rate, the security, or the conversion terms. During the three months ended December 31, 2014, these advances were converted into 500,000 shares of common stock, or $0.50 per share. There was no interest paid on the advances during the periods that the advances were outstanding. During the three months ended September 30, 2014, the Company received advances from two members of its board of directors in the aggregate amount of $20,000. The terms of the advances were not initially established such as the interest rate, the security, or the conversion terms. During the three months ended December 31, 2014, these advances were converted into 40,000 shares of common stock, or $0.50 per share. There was no interest paid on the advances during the periods that the advances were outstanding. On December 18, 2015, the Company entered into a Patent Assignment Agreement for the acquisition of certain patent application rights. Prior to the execution of the Patent Assignment Agreement, a member of the Company’s board of directors advanced $50,000 on behalf of the Company to the seller under the Patent Assignment Agreement. The advance did not bear interest, was unsecured, and did not offer conversion terms at any time. Later in December, the Company repaid $25,000 of the advance and the remaining $25,000 was repaid in January 2016. |
Preferred Stock
Preferred Stock | 12 Months Ended |
Dec. 31, 2015 | |
Preferred Stock | |
Preferred Stock | Note 6 – Preferred Stock The stockholders of the Company have authorized 10,000,000 shares of preferred stock, par value $0.001 per share. The preferred stock may be issued in one or more series. The board of directors has the right to fix the number of shares of each series (within the total number of authorized shares of the preferred stock available for designation as a part of such series), and designate, in whole or part, the preferences, limitations and relative rights of each series of preferred stock. As of December 31, 2015 and 2014, the board of directors has not designated any series of preferred stock and there are no shares of preferred stock issued or outstanding. |
Common Stock
Common Stock | 12 Months Ended |
Dec. 31, 2015 | |
Common Stock | |
Common Stock | Note 7 – Common Stock On December 3, 2014, the Company held an annual and special meeting of stockholders. At the meeting, the stockholders approved an amendment to increase the number of shares of common stock authorized under the Company’s Second Amended and Restated Certificate of Incorporation to forty million shares. The Second Amended and Restated Certificate of Incorporation was filed with the State of Delaware on December 8, 2014. Common Stock Issued for Cash During the year ended December 31, 2014, the Company issued 2,102,000 shares of common stock for cash. Proceeds from the issuances totaled $1,051,000, or $0.50 per share. During the three months ended March 31, 2015, the Company issued 294,000 shares of common stock for cash. Proceeds from these issuances total $147,000, or $0.50 per share. During the nine months ended December 31, 2015, the Company issued 1,235,278 shares of common stock for cash. Proceeds from these issuances total $926,460, or $0.75 per share. Certain of these issuances were the result of the Company receiving proceeds in excess of the amount of Convertible Debentures authorized by the Company’s board of directors. These investors opted to purchase shares of common stock in the Company at $0.75 per share. Common Stock Issued Pursuant to Bill of Sale and Patent Assignment Agreements On December 18, 2015, the Company entered into a Bill of Sale Agreement and a Patent Assignment Agreement with an individual. Pursuant to the two agreements, the Company acquired a) inventory with an estimated value of $2,200; b) molds with an estimated value of $35,000; and c) certain patent application rights with an estimated value of $175,300. Total consideration given for these assets was cash in the amount of $100,000 and 150,000 shares of the Company’s common stock, valued at $0.75 per share, or $112,500. The value assigned to the common stock was based on the price per share that common stock was most-recently issued to third parties for cash Common Stock Issued Pursuant to the Exercise of Stock Warrants On February 25, 2014, the Company issued 53,439 shares of common stock to a stockholder and former director of the Company pursuant to his exercise of warrants to purchase common stock at $0.001 per share. Proceeds from the exercise were $53. Common Stock Issued in Satisfaction of Account Payable On May 25, 2014, the Company issued 20,000 shares of common stock to a vendor of the Company in satisfaction of its account payable to the vendor of $10,000, or $0.50 per share. Contribution of Common Stock to the Company In November 2014, an executive officer of the Company returned 53,850 shares to the Company for cancelation, which has been accounted for as a contribution of capital to the Company for no consideration. Common Stock Issued for Services During the years ended December 31, 2015 and 2014, the Company issued 20,513 shares and 804,140 shares, respectively, to employees, directors, and consultants as compensation for current services. The Company recognized stock-based compensation of $15,385 ($0.75 per share) and $402,070 ($0.50 per share) for the years ended December 31, 2015 and 2014, respectively. The Company also issues non-vested common stock to various employees, directors, and consultants as compensation for future services. The Company values the non-vested shares of common stock based on the fair value of the stock on the date of issuance and records compensation over the requisite service period which is usually the vesting period. The non-vested shares are included in the total outstanding shares recorded in the financial statements. On August 1, 2013, the Company issued 1,839,286 non-vested shares of common stock to directors, officers, and consultants for their future services. These shares were valued at $919,643, or $0.50 per share, based on the price that common stock was issued to third parties for cash. On January 8, 2014, the Company issued 120,000 non-vested shares of common stock to a newly-appointed director for his future services. These shares were valued at $60,000, or $0.50 per share, based on the price that common stock was issued to third parties most recently for cash. The Company recognized stock-based compensation related to the vesting of shares issued to directors, officers, and consultants for the years ended December 31, 2015 and 2014 of $255,915 and $326,111, respectively. A summary of the status of the Company’s non-vested shares as of December 31, 2014 and 2015 and changes during the years then ended, is presented below: Non-vested Shares of Weighted Common Average Stock Fair Value Balance at December 31, 2013 1,297,722 $ 0.50 Awarded 924,140 0.50 Vested (1,456,362) 0.50 Balance at December 31, 2014 765,500 0.50 Awarded - - Vested (511,830) 0.50 Balance at December 31, 2015 253,670 $ 0.50 As of December 31, 2015 and 2014, there was $126,835 and $382,750, respectively, of total unrecognized compensation cost related to the non-vested stock-based compensation arrangements awarded to directors, officers, and consultants. That cost is expected to be recognized over a weighted-average period of 0.7 years from December 31, 2015. Total stock-based compensation expense from all sources for the year ended December 31, 2015 and 2014 (including stock-based compensation of $72,188 and $81,306, respectively, for the warrant discussed below in Note 9) has been included in the consolidated statements of operations as follows: 2015 2014 Research and development expense $ 165,342 $ 239,291 Selling, general and administrative expense 178,146 570,196 Total share-based compensation $ 343,488 $ 809,487 |
Common Stock Warrants
Common Stock Warrants | 12 Months Ended |
Dec. 31, 2015 | |
Common Stock Warrants | |
Common Stock Warrants | Note 8 – Common Stock Warrants The Company has issued warrants to purchase its common stock for payment of consulting services, in connection with the extension of a note payable, as incentives to investors, and for cash. The fair value of each warrant issuance is estimated on the date of issuance using the Black-Scholes option pricing model. The fair value of warrants issued for consulting services is recognized as consulting expense at the date the warrants become exercisable. The Black-Scholes option pricing model incorporates ranges of assumptions for each input. Expected volatilities are based on the historical volatility of an appropriate industry sector index, comparable companies in the index, and other factors. The Company estimates expected life of each warrant based on the midpoint between the date the warrant vests and the contractual term of the warrant (the Simplified Method). The Company uses the Simplified Method because it does not have more detailed information about exercise behavior that would allow a more reliable method of predicting the expected life of each warrant. The risk-free interest rate represents the U.S. Treasury Department’s constant maturities rate for the expected life of the related warrant. And the dividend yield represents anticipated cash dividends to be paid over the expected life of the warrant. Effective July 1, 2014, the Company entered into a Consulting Services Agreement (the “Consulting Agreement”) with Leavitt Partners, LLC (“Leavitt Partners”) pursuant to which Leavitt Partners agreed to provide strategic consulting services to the Company. The Consulting Agreement provided that the Company would appoint the chief executive officer of Leavitt Partners to the Company’s board of directors. The Consulting Agreement has a term of four years, but may be terminated by either party as of the first, second, or third anniversary date of the Consulting Agreement, without cause and in the sole discretion of either party. As consideration for the services, in two transactions during the six months ended December 31, 2014, the Company issued warrants to Leavitt Partners to purchase 900,000 shares of common stock of the Company. The Consulting Agreement provided that the warrants would stop vesting upon termination of the Consulting Agreement. The warrants have an exercise price of $0.50 per share and expire 10 years after issuance. During the three months ended September 30, 2014, the Company issued a warrant, as amended, to purchase 225,000, with all of the shares under the amended warrant exercisable as of September 1, 2014, and with the rights to exercise the warrant expiring on September 1, 2024. During the three months ended December 31, 2014, the Company issued a second warrant to Leavitt Partners to purchase 675,000 shares of common stock of the Company. This second warrant has an exercise price of $0.50 per share, vests with respect to 15,000 shares per month commencing October 1, 2014, and expires 10 years after issuance. The fair value of these two warrants was estimated using the Black-Scholes option pricing model. The fair value of the warrant shares that vested during the six months ended December 31, 2014 was $0.285 per share. The weighted-average assumptions used for the warrant shares that vested during the six months ended December 31, 2014 were risk-free interest rate of 1.75%, expected volatility of 66%, expected life of 5.2 years, and expected dividend yield of zero. The fair value of the warrant shares that vested during the year ended December 31, 2015 was $0.402 per share. The weighted-average assumptions used for the warrant shares that vested during the year ended December 31, 2015 were risk-free interest rate of 1.70%, expected volatility of 71%, expected life of 5.2 years, and expected dividend yield of zero. The Company recognized the prepayment of stock-based compensation through the first anniversary date of the Consulting Agreement by recognizing $109,900 as prepaid compensation expense and additional paid-in capital related to the issuance of the warrants to Leavitt Partners. The Company also recognized $43,594 as share-based compensation and additional paid-in capital related to the vesting of warrant shares for the six months ended December 31, 2015. Based on the vesting pattern of the warrants, the Company amortized $81,306 of stock-based compensation during the six months ended December 31, 2014 and amortized an additional $72,188 during the year ended December 31, 2015. With the issuance of the second warrant to Leavitt Partners, the total number of shares of common stock outstanding plus the number of shares of common stock subject to outstanding warrants exceeded the number of shares of common stock authorized under the Company’s Certificate of Incorporation. In this situation, generally accepted accounting principles require that the fair value of all of the outstanding warrants be accounted for as a derivative liability and reclassified from additional paid in capital. The fair value of each outstanding warrant was estimated on the date of the second warrant using the Black-Scholes option pricing model using the assumptions described above. The aggregate fair value of all warrants was estimated to be $373,979 on the date of the second warrant and was recharacterized as a derivative liability. As further described in Note 8, on December 3, 2014, the Company held an annual and special meeting of stockholders and the stockholders approved an amendment to increase the number of shares of common stock authorized under the Company’s Second Amended and Restated Certificate of Incorporation to forty million shares. Accordingly, on December 3, 2014, the total number of shares of common stock outstanding plus the number of shares of common stock subject to outstanding warrants no longer exceeded the number of shares of common stock authorized under the Company’s Certificate of Incorporation. At that date, derivative liability accounting for the outstanding warrants was no longer required under generally accepted accounting principles. Accordingly, on December 3, 2014, the fair value of each outstanding warrant was again estimated using the Black-Scholes option pricing model using the assumptions described above and the aggregate fair value of all warrants was estimated to be $368,262. The Company recognized a gain on revaluation of derivative liability of $5,717 at that date and the fair value of the derivative liability was recharacterized back to additional paid in capital. A summary of warrant activity for the years ended December 31, 2014 and 2015 is presented below: Weighted Aggregate Weighted Average Intrinsic Shares Average Remaining Value of Under Exercise Contractual Vested Warrants Price Life Warrants Outstanding at December 31, 2013 576,650 $ 0.55 6.7 years $ 44,306 Issued 900,000 0.50 Exercised (53,439) 0.001 Expired - - Outstanding at December 31, 2014 1,423,211 0.54 8.3 years 17,640 Issued - - Exercised - - Expired - - Outstanding at December 31, 2015 1,423,211 $ 0.54 7.3 years $ 213,364 The year-end intrinsic value at December 31, 2015 is calculated at $0.75 per share, based on the last price for which the Company issued shares of common stock for cash. |
Other Related Party Transaction
Other Related Party Transactions | 12 Months Ended |
Dec. 31, 2015 | |
Other Related Party Transactions | |
Other Related Party Transactions | Note 9 – Other Related Party Transactions During the year ended December 31, 2015, the Company has entered into consulting agreements with two of the members of its board of directors. The directors provide marketing and medical advisory services. The consulting agreements may be terminated by either the Company or by the consultant at any time and for any reason. During the year ended December 31, 2015, the directors were paid a total of $226,000. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2015 | |
Income Taxes | |
Income Taxes | Note 10 Income Taxes The Company provides for income taxes using an asset and liability based approach. Deferred income tax assets and liabilities are recorded to reflect the future tax consequences of temporary differences between the financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The significant components of net deferred tax assets and liabilities were as follows at December 31, 2015 and 2014: 2015 2014 Operating loss carry forwards $ 3,630,341 $ 2,741,690 Research credit carryforwards 51,698 37,677 Allowance for doubtful accounts 72,536 37,300 Stock based compensation 57,253 30,327 Other (4,477) (628) Valuation allowance (3,807,351) (2,846,366) Net Deferred Tax Assets $ - $ - As of December 31, 2015, the Company had no unrecognized tax benefits that, if recognized, would affect the CompanyÂ’s effective income tax rate over the next 12 months. 2015 2014 Benefit at federal statutory rate (34%) $ (952,160) $ (653,980) State income tax benefit, net of federal tax (83,785) (38,975) Stock-based compensation 87,011 247,582 Loss on extinguishment of debt - 5,354 Research credits (14,021) (25,819) Other differences 1,971 738 Change in valuation allowance 960,984 465,100 Benefit from Income Taxes $ - $ - As of December 31, 2015, the Company has a net operating loss carry-forward for U.S. federal income tax purposes of approximately $9.7 million. This carry-forward is available to offset future taxable income, if any, and will expire, if not used, from 2023 through 2035. The utilization of the net operating loss carry-forward is dependent upon the tax laws in effect at the time the net operating loss carry-forward can be utilized and may be limited by changes in ownership control of the Company. The CompanyÂ’s U.S. federal and Utah income tax returns, constituting the returns of the major taxing jurisdictions, are subject to examination by the taxing authorities for all open years as prescribed by applicable statute. No income tax waivers have been executed that would extend the period subject to examination beyond the period prescribed by statute. The Company is no longer subject to U.S. federal tax examinations for tax years before and including December 31, 2011. The Company is no longer subject to Utah state tax examinations for tax years before and including December 31, 2009. During the years ended December 31, 2015 and 2014, the Company did not recognize interest and penalties. |
Commitment and Contingencies
Commitment and Contingencies | 12 Months Ended |
Dec. 31, 2015 | |
Commitment and Contingencies: | |
Commitments and Contingencies Disclosure | Note 11 Commitments and Contingencies Lease Agreement Minimum lease commitments at December 31, 2015 for the remaining term of the lease are as follows: Year ending December 31, 2016 $ 46,736 2017 27,578 Thereafter - Total $ 74,314 Lease expense charged to operations for the years ended December 31, 2015 and 2014 was $48,649 and $38,672, respectively. License Agreement |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2015 | |
Subsequent Events | |
Subsequent Events | Note 12 – Subsequent Events Private Placement of Common Stock of the Company Pursuant to a Private Placement Memorandum dated December 28, 2015, the Company is offering a minimum of 333,333 shares, or a maximum of 3,500,000 shares of its common stock at a purchase price of $1.50 per share, for a minimum offering amount of $500,000 and a maximum offering amount of $5,250,000. The shares are being offered to a limited number of prospective investors who qualify as “accredited investors”. The shares are being offered on a “best efforts, all-or-none” basis for the first 333,333 shares subscribed for and on a “best efforts” basis thereafter. The offering proceeds are being deposited into an escrow account until a minimum of 333,333 shares are sold for cash, at which time the proceeds may be released to the Company. As of March 25, 2016, 344,037 shares were subscribed, conditions for the minimum offering were met, and the Company received net proceeds of $463,284 from the offering. Concurrently with the Private Placement Memorandum, the Company entered into a Placement Agent Agreement, effective December 28, 2015, that provides for compensation to a Placement Agent in connection with the offering of common stock. Pursuant to the Placement Agent Agreement, the Company will pay the Placement Agent a cash commission of ten percent of the issuance price of the common stock sold in the offering, and one share of common stock of the Company for each ten shares of the Company’s common stock sold in the offering. Pursuant to these provisions, with the release of shares described in the previous paragraph, the Company incurred a commission liability to the Placement Agent of $51,606 and is obligated to issue the Placement Agent 34,404 shares of common stock. The Placement Agent will also receive an expense allowance of up to $10,000 to reimburse it for direct out-of-pocket costs related to the offering and the Escrow Agent will receive $1,000 for services in connection with the offering. Consulting Representation Agreement On January 1, 2016, the Company entered into a Consulting Representation Agreement with two consultants located in the European Union. Pursuant to the Consulting Representation Agreement, the consultants have agreed to the completion of certain marketing milestones related to relationship development with key government and regulatory officials in the European Union and the introduction and marketing of the Company’s products to potential medical, clinical and hospital customers of the member states of the European Union. Under the Consulting Representation Agreement, the Company is obligated to pay the consultants $70,000 per calendar quarter for the expenses. The initial payment of $70,000 was paid to the consultants on January 4, 2016 for the expenses for the first quarter of 2016. The Consulting Representation Agreement is subject to termination by either the Company or by the consultants upon 15 days written notice. Additionally, as an inducement to launch the European market as market representatives without other commission receivable, the Consulting Representation Agreement provides that for a period of one year, the consultants may receive up to the value of the compensation margin (actual net revenue less all actual expense, including marketing expense) in shares of the Company’s common stock valued at $1.50 per share and paid at the earliest of termination of the Consulting Representation Agreement or December 31, 2016. |
Organization and Summary of S19
Organization and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Organization and Summary of Significant Accounting Policies (Policies) | |
Organization | Organization |
Principles of Consolidation | Principles of Consolidation |
Going Concern | Going Concern The ability of the Company to continue as a going concern is dependent on the Company successfully developing products that can be sold profitably, and in the near term successfully generating cash through financing and operating activities. ManagementÂ’s plans include issuing equity or debt securities to fund capital requirements and ongoing operations. Additionally, the Company has commenced selling the EPN Scan during the year ended December 31, 2014. However, there can be no assurance the Company will be successful in these efforts. |
Use of Estimates | Use of Estimates |
Fair Value of Financial Instruments | Fair Value of Financial Instruments |
Research and Development | Research and Development |
Cash and Cash Equivalents | Cash and Cash Equivalents |
Inventory | Inventory |
Property and Equipment | Property and Equipment |
Intangible Assets | Intangible Assets |
Revenue Recognition | Revenue Recognition – |
Trade Receivables and Credit Policies | Trade Receivables and Credit Policies – |
Derivative Financial Instruments | Derivative Financial Instruments – |
Beneficial Conversion Features | Beneficial Conversion Features – |
Employee Stock-based Compensation | Employee Stock-based Compensation |
Non-Employee Stock-based Compensation | Non-Employee Stock-based Compensation |
Income Taxes | Income Taxes |
Basic and Diluted Loss Per Share | Basic and Diluted Loss Per Share – The Company computes basic loss per share by dividing net loss by the weighted-average number of common shares outstanding during the period. The Company computes diluted loss per share by dividing net loss by the sum of the weighted-average number of common shares outstanding and the weighted-average dilutive common share equivalents outstanding. The computation of diluted loss per share does not assume exercise or conversion of securities that would have an anti-dilutive effect. As of December 31, 2015, there were warrants to purchase 1,423,211 shares of common stock outstanding, 253,670 non-vested shares of common stock, $2,000,000 of 8% convertible debentures, and $1,206,931 of 8% convertible notes payable that were excluded from the computation of diluted net loss per common share as they were anti-dilutive. As of December 31, 2014, there were warrants to purchase 1,423,211 shares of common stock outstanding, 765,500 non-vested shares of common stock and $90,000 of convertible notes payable that were excluded from the computation of diluted net loss per common share as they were anti-dilutive. |
Concentrations | Concentrations CompanyÂ’s revenues are concentrated in 2015 2014 Customer A (Germany) $ - $ 239,645 Customer B (Switzerland) - 81,760 Customer C (China) 19,450 10,600 Total revenue $ 19,450 $ 332,005 |
Foreign currency policy | Foreign currency policy |
Related parties | Related parties – A party is considered to be related to the Company if the party directly or indirectly or through one or more intermediaries, controls, is controlled by, or is under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. A party which can significantly influence the management or operating policies of the transacting parties or if it has an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests is also a related party. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Leases In January 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-01, Financial Instruments – Overall, In November 2015, the FASB issued Accounting Standards Update No. 2015-17, Balance Sheet Classification of Deferred Taxes In July 2015, the FASB issued Accounting Standards Update 2015-11, Simplifying the Measurement of Inventory, In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs, In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements - Going Concern: Disclosure of Uncertainties About an Entity's Ability to Continue as a Going Concern, In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers |
Concentrations (Tables)
Concentrations (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Concentrations {1} | |
Concentrations | During the years ended December 31, 2015 and 2014, the CompanyÂ’s revenues were concentrated in three customers, as follows: 2015 2014 Customer A (Germany) $ - $ 239,645 Customer B (Switzerland) - 81,760 Customer C (China) 19,450 10,600 Total revenue $ 19,450 $ 332,005 |
Inventory (Tables)
Inventory (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Inventory (Tables) | |
Inventory (Tables) | Inventory consists of the following at December 31, 2015 and 2014: 2015 2014 Raw materials $ 76,925 $ 93,699 Work in progress 58,376 12,002 Finished goods 106,595 104,773 Total inventory 241,896 210,474 Less carrying value of inventory not deemed to be a current asset 206,722 - Inventory, included in current assets $ 35,174 $ 210,474 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Property and Equipment (Tables) | |
Property and Equipment (Tables) | Property and equipment consists of the following at December 31, 2015 and 2014: Life 2015 2014 Computer equipment 3 years $ 19,787 $ 7,228 Office equipment 3 to 5 years 13,852 3,800 Tooling 5 years 92,228 36,350 Website development 5 years - 26,800 125,867 74,178 Less accumulated depreciation (19,326) (8,403) Property and equipment, net $ 106,541 $ 65,775 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Accrued Liabilities (Tables) | |
Accrued Liabilities | Accrued liabilities consisted of the following at December 31, 2015 and 2014: 2015 2014 Accrued interest $ 115,627 $ 380,122 Accrued payroll and payroll taxes 5,183 8,864 Accrued royalties 17,873 17,350 Total accrued liabilities $ 138,683 $ 406,336 |
Schedule of Long - term Debt (T
Schedule of Long - term Debt (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Schedule of Long - term Debt (Tables): | |
Schedule of Long-term Debt | Long-term debt is summarized as follows as of December 31, 2015 and 2014: 2015 2014 Convertible debentures; unsecured; interest at 8.00% per annum; due May 1, 2018 $ 2,000,000 $ - Convertible notes payable; unsecured; interest at 8.00% per annum; due November 6, 2020 1,206,931 - Note payable to a shareholder and former director; unsecured; interest at 11.10% per annum; paid in 2015 - 929,536 Note payable to a relative of an executive officer; secured by all the assets of the Company; interest at 15.00% per annum; due June 30, 2016 189,389 356,931 Other convertible notes; unsecured; interest at 8.00% per annum; paid or converted in 2015 - 90,000 Related-party note payable 25,000 - Total long-term debt 3,421,320 1,376,467 Less: current portion 214,389 1,019,536 Long-term debt, net of current portion $ 3,206,931 $ 356,931 |
Common Stock (Tables)
Common Stock (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Common Stock (Tables) | |
Company's Nonvested Shares | A summary of the status of the CompanyÂ’s non-vested shares as of December 31, 2014 and 2015 and changes during the years then ended, is presented below: Non-vested Shares of Weighted Common Average Stock Fair Value Balance at December 31, 2013 1,297,722 $ 0.50 Awarded 924,140 0.50 Vested (1,456,362) 0.50 Balance at December 31, 2014 765,500 0.50 Awarded - - Vested (511,830) 0.50 Balance at December 31, 2015 253,670 $ 0.50 |
Schedule of Compensation Cost for Share-based Payment Arrangements, Allocation of Share-based Compensation Costs by Plan | Total stock-based compensation expense from all sources for the year ended December 31, 2015 and 2014 (including stock-based compensation of $72,188 and $81,306, respectively, for the warrant discussed below in Note 9) has been included in the consolidated statements of operations as follows: 2015 2014 Research and development expense $ 165,342 $ 239,291 Selling, general and administrative expense 178,146 570,196 Total share-based compensation $ 343,488 $ 809,487 |
Warrants (Tables)
Warrants (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Warrants (Tables) | |
Summary of Warrants Outstanding | A summary of warrant activity for the years ended December 31, 2014 and 2015 is presented below: Weighted Aggregate Weighted Average Intrinsic Shares Average Remaining Value of Under Exercise Contractual Vested Warrants Price Life Warrants Outstanding at December 31, 2013 576,650 $ 0.55 6.7 years $ 44,306 Issued 900,000 0.50 Exercised (53,439) 0.001 Expired - - Outstanding at December 31, 2014 1,423,211 0.54 8.3 years 17,640 Issued - - Exercised - - Expired - - Outstanding at December 31, 2015 1,423,211 $ 0.54 7.3 years $ 213,364 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Taxes (Tables): | |
Schedule of Components of Income Tax Expense (Benefit) | The significant components of net deferred tax assets and liabilities were as follows at December 31, 2015 and 2014: 2015 2014 Operating loss carry forwards $ 3,630,341 $ 2,741,690 Research credit carryforwards 51,698 37,677 Allowance for doubtful accounts 72,536 37,300 Stock based compensation 57,253 30,327 Other (4,477) (628) Valuation allowance (3,807,351) (2,846,366) Net Deferred Tax Assets $ - $ - |
Schedule of Effective Income Tax Rate Reconciliation | A reconciliation of the expected income tax benefit at the U.S. Federal income tax rate to the income tax benefit actually recognized for the years ended December 31, 2015 and 2014 is set forth below: 2015 2014 Benefit at federal statutory rate (34%) $ (952,160) $ (653,980) State income tax benefit, net of federal tax (83,785) (38,975) Stock-based compensation 87,011 247,582 Loss on extinguishment of debt - 5,354 Research credits (14,021) (25,819) Other differences 1,971 738 Change in valuation allowance 960,984 465,100 Benefit from Income Taxes $ - $ - |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies {1} | |
Minimum lease commitments | Minimum lease commitments at December 31, 2015 for the remaining term of the lease are as follows: Year ending December 31, 2016 $ 46,736 2017 27,578 Thereafter - Total $ 74,314 |
Trade Receivables and Credit Po
Trade Receivables and Credit Policies (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Trade Receivables and Credit Policies (Details) | ||
Company recorded a provision for doubtful accounts | $ 102,282 | $ 100,000 |
Allowance for doubtful accounts | $ 194,467 | $ 100,000 |
Basic and Diluted Loss Per Shar
Basic and Diluted Loss Per Share (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Basic and Diluted Loss Per Share (Details) | ||
Warrants to purchase shares of common stock | 1,423,211 | 1,423,211 |
Non-vested shares of common stock. | 253,670 | 765,500 |
convertible debentures | $ 2,000,000 | |
convertible notes payable | $ 1,206,931 | $ 90,000 |
Concentrations (Details)
Concentrations (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Concentrations Details | ||
Customer A (Germany) | $ 239,645 | |
Customer B (Switzerland) | 81,760 | |
Customer C (China) | $ 19,450 | 10,600 |
Total revenue | $ 19,450 | $ 332,005 |
Foreign currency policy (Detail
Foreign currency policy (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Foreign currency policy Details | ||
Company recorded a foreign currency exchange loss | $ 24,093 | $ 27,566 |
Inventory consists of the follo
Inventory consists of the following (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Inventory consists of the following | ||
Raw materials | $ 76,925 | $ 93,699 |
Work in progress | 58,376 | 12,002 |
Finished goods | 106,595 | 104,773 |
Total inventory | 241,896 | 210,474 |
Less carrying value of inventory not deemed to be a current asset | 206,722 | |
Inventory, included in current assets | $ 35,174 | $ 210,474 |
Property and equipment consists
Property and equipment consists of the following (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Property and equipment consists of the following | ||
Computer equipment | $ 19,787 | $ 7,228 |
Office equipment | 13,852 | 3,800 |
Tooling | 92,228 | 36,350 |
Website development | 26,800 | |
Property and Equipment Gross | 125,867 | 74,178 |
Less accumulated depreciation | (19,326) | (8,403) |
Property and equipment, net | $ 106,541 | $ 65,775 |
Property and equipment Life (de
Property and equipment Life (details) | Dec. 31, 2015 |
Property and equipment Life details | |
Computer equipment | 3 |
Office equipment Maximum | 5 |
Office equipment Minimum | 3 |
Tooling | 5 |
Website development | 5 |
The total cost for the services
The total cost for the services and expenses (Details) | Mar. 26, 2014USD ($) |
The total cost for the services and expenses | |
The total cost for the services and expenses under the second work order | $ 147,900 |
Cost paid for the first phase of proto type and development | 26,800 |
Additional payment under the agreement | 23,200 |
Total payments under the agreement | $ 50,000 |
Property and Equipment during t
Property and Equipment during the period (Details) - USD ($) | 3 Months Ended | |
Dec. 31, 2015 | Mar. 31, 2014 | |
Property and Equipment during the period: | ||
Company ordered tooling having a total cost | $ 72,700 | |
Deposit paid | $ 36,350 | |
Settlement of outstanding balance | $ 20,878 | |
Impairment loss recorded during the period | $ 50,000 |
Depreciation expense (Details)
Depreciation expense (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Depreciation expense | ||
Depreciation expense for the years ended | $ 10,923 | $ 3,676 |
Accrued liabilities consisted o
Accrued liabilities consisted of the following (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Accrued liabilities consisted of the following | ||
Accrued interest | $ 115,627 | $ 380,122 |
Accrued payroll and payroll taxes | 5,183 | 8,864 |
Accrued royalties | 17,873 | 17,350 |
Total accrued liabilities | $ 138,683 | $ 406,336 |
Summary of Long-term debt (Deta
Summary of Long-term debt (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Summary of Long-term debt | ||
Convertible debentures; unsecured; interest at 8.00% per annum; due May 1, 2018 | $ 2,000,000 | |
Convertible notes payable; unsecured; interest at 8.00% per annum; due November 6, 2020 | 1,206,931 | |
Note payable to a shareholder and former director; unsecured; interest at 11.10% per annum; paid in 2015 | $ 929,536 | |
Note payable to a relative of an executive officer; secured by all the assets of the Company; interest at 15.00% per annum; due June 30, 2016 | 189,389 | 356,931 |
Other convertible notes; unsecured; interest at 8.00% per annum; paid or converted in 2015 | 90,000 | |
Related-party note payable | 25,000 | |
Total long-term debt | 3,421,320 | 1,376,467 |
Less: current portion | 214,389 | 1,019,536 |
Long-term debt, net of current portion | $ 3,206,931 | $ 356,931 |
Long-Term Debt Parentheticals (
Long-Term Debt Parentheticals (Details) | Dec. 31, 2015 |
Long-Term Debt Parentheticals | |
Convertible debentures interest per annum | 8.00% |
Convertible notes interest per annum | 8.00% |
Note payable to a former director and founding shareholder interest per annum | 11.10% |
Note payable to a relative of an executive officer interest at per annum | 15.00% |
Convertible Debentures (Details
Convertible Debentures (Details) | Dec. 28, 2015$ / sharesshares | Apr. 30, 2015USD ($)$ / shares | Feb. 28, 2015USD ($) |
Convertible Debentures Details | |||
Company commenced an offering of convertible debentures | $ | $ 2,000,000 | ||
Received subscriptions in Debentures | $ | $ 2,000,000 | ||
Debentures bear interest rate per annum | 8.00% | ||
Common stock at a conversion price per share | $ / shares | $ 0.65 | ||
Beneficial conversion feature | $ | $ 0 | ||
Company shall issue the Placement Agent warrants to acquire shares of the Company's common stock at an exercise price per share | $ / shares | $ 0.65 | ||
On a quarterly basis, the Placement Agent will be issued a warrant to purchase one share of common stock for each of the principal amount | $ / shares | $ 0.81 | ||
The maximum number of shares issuable under the Placement Agreement limited to shares of the Company's common stock | shares | 2,463,460 | ||
The term of the warrants shall be for a period of months from the date of issuance | 36 |
Convertible Notes Payable (Deta
Convertible Notes Payable (Details) | Nov. 06, 2015USD ($)$ / sharesshares |
Convertible Notes Payable Details | |
Company issued two convertible promissory notes | $ | $ 1,206,931 |
Investment entities purchased an aggregate shares of common stock | shares | 66,666 |
Common stock for a purchase price | shares | 50,000 |
Common stock for a purchase price Per share | $ 0.75 |
Convertible notes bear interest rate per annum | 8.00% |
Common stock commences trading and closes at a price per share | $ 3.50 |
Convertible Notes converts into common stock at the rate of per share | $ 0.75 |
Note Payable to Former Director
Note Payable to Former Director and Shareholder (Details) - USD ($) | Jan. 01, 2016 | May. 01, 2015 | Apr. 30, 2015 | Dec. 31, 2014 |
Note Payable to Former Director and Shareholder | ||||
Note payable stockholder and to a former director | $ 929,536 | |||
Note bears interest (percent) | 11.10% | 11.10% | ||
Accrued interest | $ 249,348 | $ 223,742 | ||
Accrued interest due paid | 249,348 | |||
Loan Agreement and Promissory Note in principal amount | $ 900,000 | |||
The note principal amount due paid | $ 29,536 | |||
Revised Note accrues Interest rate per annum and is payable monthly | 11.10% | |||
Company is obligated to make principal payment | $ 250,000 |
Note Payable to a Relative of a
Note Payable to a Relative of an Executive Officer (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2014 |
Note Payable to a Relative of an Executive Officer | |||
Note payable to an individual related to an executive officer | $ 189,389 | $ 356,931 | $ 356,931 |
Note bears interest per annum (percent) | 15.00% | 15.00% | 15.00% |
Paid interest with amendment of the master note to extend the due date of the note | $ 50,000 | ||
Company paid to the note holder | $ 356,931 | ||
Accrued interest paid | 189,389 | ||
Payment applied to paid principal of the note | 167,542 | ||
Balance of accrued interest | $ 1,012 | $ 137,610 |
Other Convertible Notes (Detail
Other Convertible Notes (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Other Convertible Notes Details | ||||
Company issued notes payable totaling | $ 684,000 | |||
Notes bore interest | 8.00% | |||
Common stock at the per share of the closing price | $ 0.8 | |||
Common stock at the per share of the closing price (Percent) | 85.00% | |||
Shares received on conversion of common stock | 95,283 | 164,295 | 787,570 | |
Conversion of notes payable | $ 50,000 | $ 90,000 | $ 504,000 | |
Accrued interest converted | $ 11,934 | $ 16,243 | $ 24,615 | |
Company's common stock, representing a weighted average per share | $ 0.65 | $ 0.65 | $ 0.67 | |
Remaining balance payable on convertible notes | $ 180,000 | |||
Company recognized a loss on extinguishment of debt | $ 15,746 | |||
Other remaining note payable | $ 50,000 | |||
Related accrued interest | 11,934 | |||
Accrued interest was converted into shares of the common stock | $ 95,283 | |||
Accrued interest was converted into shares of the common stock at per share | $ 0.65 |
Other Notes Payable (Details)
Other Notes Payable (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |
Dec. 31, 2014 | Sep. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2015 | |
Other Notes Payable {1} | ||||
The Company's board of directors advanced an amount | $ 50,000 | |||
Company repaid part of the advance amount | 25,000 | |||
The remaining advance amount was repaid | $ 25,000 | |||
Company received advances from five unrelated parties | $ 250,000 | |||
Advances were converted into shares of common stock | 500,000 | 40,000 | ||
Advances were converted into shares of common stock at per share | $ 0.5 | $ 0.5 | ||
Company received advances from two members of its board of directors | $ 20,000 |
Interest expense (Details)
Interest expense (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Interest expense Details | ||
Company paid accrued interest | $ 310,770 | $ 51,590 |
Interest expense for the years ended | 87,028 | 103,179 |
Interest expense to a Relative of an Executive Officer | 52,791 | $ 53,540 |
Note payable in the amount | 40,000 | |
Accrued interest were paid off for cash | $ 9,837 |
Preferred Stock Transactions (D
Preferred Stock Transactions (Details) | Dec. 31, 2015$ / sharesshares |
Preferred Stock Transactions: | |
Shares of preferred stock authorized | shares | 10,000,000 |
Shares of preferred stock, par value | $ / shares | $ 0.001 |
Common Stock Issued for Cash (D
Common Stock Issued for Cash (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | |
Common Stock Issued for Cash Details | |||
Company issued shares of common stock for cash | 294,000 | 1,235,278 | 2,102,000 |
Proceeds from the issuances totaled | $ 147,000 | $ 926,460 | $ 1,051,000 |
Proceeds from the issuances totaled per share | $ 0.50 | $ 0.75 | $ 0.50 |
Issued Pursuant to Bill of Sale
Issued Pursuant to Bill of Sale and Patent Assignment Agreement (Details) - USD ($) | Dec. 18, 2015 | Nov. 30, 2014 | May. 25, 2014 | Feb. 25, 2014 |
Issued Pursuant to Bill of Sale and Patent Assignment Agreements Details | ||||
Inventory with an estimated value | $ 2,200 | |||
Molds with an estimated value | 35,000 | |||
Patent application rights with an estimated value | 175,300 | |||
Total consideration given for these assets in cash | $ 100,000 | |||
Total consideration given for these assets in shares of the common stock | 150,000 | |||
Total consideration given for these assets in shares of the common stock at per share | $ 0.75 | |||
Value of the shares of the Company's common stock | $ 112,500 | |||
Issued Pursuant to the Exercise of Stock Warrants | ||||
Company issued shares of common stock to a stockholder and former director | 53,439 | |||
Warrants to purchase common stock at per share | $ 0.001 | |||
Proceeds from the exercise | $ 53 | |||
Issued in Satisfaction of Account Payable | ||||
Company issued shares of common stock to a vendor of the Company | 20,000 | |||
Accounts payable satisfied with issuance of common stock | 10,000 | |||
Company issued shares of common stock in account payable to the vendor per share | $ 0.50 | |||
Contribution of Common Stock to the Company | ||||
Company returned shares to the Company for cancelation | 53,850 |
Common Stock Issued for Service
Common Stock Issued for Services (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Common Stock Issued for Services Details | ||
Company issued shares to employees, directors, and consultants as compensation | 20,513 | 804,140 |
The Company recognized stock-based compensation | $ 15,385 | $ 402,070 |
The Company recognized stock-based compensation of per share | $ 0.75 | $ 0.5 |
The Company recognized stock-based compensation related to the vesting of shares | $ 255,915 | $ 326,111 |
Total stock-based compensation expense | $ 72,188 | $ 81,306 |
Issues of non-vested common sto
Issues of non-vested common stock (Details) - USD ($) | Jan. 08, 2014 | Aug. 01, 2013 |
Issues of non-vested common stock | ||
Company issued non-vested shares of common stock to directors, officers, and consultants for their future services | 1,839,286 | |
Per share value of non-vested shares of common stock issued to directors, officers, and consultants for their future services | $ 0.50 | |
Value of non-vested shares of common stock issued to directors, officers, and consultants for their future services | $ 919,643 | |
Company issued non-vested shares of common stock stock to a newly-appointed director for his future services | 120,000 | |
Per share value of non-vested shares of common stock issued stock to a newly-appointed director for his future services | $ 0.50 | |
Value of non-vested shares of common stock issued stock to a newly-appointed director for his future services | $ 60,000 |
Summary of the status of non-ve
Summary of the status of non-vested shares (Details) - $ / shares | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Non-vested Shares of Common Stock | |||
Balance of non-vested shares | 253,670 | 765,500 | 1,297,722 |
Awarded | 924,140 | ||
Vested | (511,830) | (1,456,362) | |
Weighted Average Fair Value | |||
Weighted Average Fair Value - Balance of non-vested shares | $ 0.50 | $ 0.50 | $ 0.50 |
Weighted Average Fair Value - Awarded | 0.50 | ||
Weighted Average Fair Value - Vested | $ 0.50 | $ 0.50 |
Total stock-based compensation
Total stock-based compensation expense (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Total stock-based compensation expense Details | ||
Research and development expense | $ 165,342 | $ 239,291 |
Selling, general and administrative expense | 178,146 | 570,196 |
Total share-based compensation | 343,488 | 809,487 |
Total unrecognized compensation | $ 126,835 | $ 382,750 |
Stock Warrants (Details)
Stock Warrants (Details) | 3 Months Ended | 6 Months Ended | 9 Months Ended | |
Dec. 31, 2014USD ($)$ / sharesshares | Sep. 30, 2014shares | Dec. 31, 2014$ / sharesshares | Sep. 30, 2015$ / shares | |
Stock Warrants | ||||
Company issued warrants to Leavitt Partners to purchase shares of common stock | shares | 675,000 | 225,000 | 900,000 | |
Warrants have an exercise price per share | $ / shares | $ 0.5 | $ 0.5 | ||
Warrants expire in years | 10 | |||
Warrants vests with respect to shares per month | shares | 15,000 | |||
Company recognized as a prepaid compensation expense | $ | $ 109,900 | |||
Intrinsic value is calculated at per share | $ / shares | $ 0.75 |
Stock warrants compensation exp
Stock warrants compensation expense (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended |
Sep. 30, 2015 | Dec. 31, 2014 | Sep. 30, 2015 | |
Stock warrants compensation expense: | |||
Amortized of stock-based compensation based on the vesting pattern of the warrants | $ 21,519 | ||
Prepaid expense will be amortized as stock-based compensation | $ 81,306 | $ 50,113 |
Fair value of Warrant was estim
Fair value of Warrant was estimated using the Black-Scholes option pricing model (Details) - $ / shares | 6 Months Ended | 12 Months Ended |
Dec. 31, 2014 | Dec. 31, 2015 | |
The fair value of the Warrant was | ||
Fair value of Warrant per share | $ 0.285 | $ 0.402 |
Warrant Risk free interest Rate | 1.75% | 1.70% |
Expected volatility | 66.00% | 71.00% |
Expected life in years | 5.2 | 5.2 |
Expected dividend yield | 0.00% | 0.00% |
Prepayment and Amortized Stock-
Prepayment and Amortized Stock-Based Compensation (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Dec. 31, 2015 | Dec. 31, 2015 | |
Prepayment and Amortized Stock-Based Compensation | ||
Company recognized as a prepaid compensation expense | $ 109,900 | |
Amortized of stock-based compensation based on the vesting pattern of the warrants | 81,306 | |
Amortized an additional | $ 72,188 | |
Share-based compensation and additional paid-in capital related to the vesting of warrant shares | 43,594 |
Fair Value and Derivative Liabi
Fair Value and Derivative Liability (Details) - USD ($) | Dec. 31, 2015 | Dec. 03, 2014 |
Fair Value and Derivative Liability | ||
Aggregate fair value of all warrants was estimated | $ 373,979 | |
Estimated fair value of all warrants | 368,262 | |
Gain on revaluation of derivative liability | $ 5,717 | |
Intrinsic value is calculated at per share | $ 0.5 |
Summary of warrant activity dur
Summary of warrant activity during the period (Details) | Dec. 31, 2015USD ($)$ / sharesshares | Dec. 31, 2014USD ($)$ / sharesshares | Dec. 31, 2013USD ($)$ / sharesshares |
Shares Under Warrants | |||
Outstanding | 1,423,211 | 1,423,211 | 576,650 |
Issued | 900,000 | ||
Exercised | (53,439) | ||
Expired | 0 | ||
Weighted Average Exercise Price | |||
Weighted Average Exercise Price - Outstanding | $ / shares | $ 0.54 | $ 0.54 | $ 0.55 |
Weighted Average Exercise Price - Issued | $ / shares | 0.50 | ||
Weighted Average Exercise Price - Exercised | $ / shares | $ 0.001 | ||
Weighted Average Remaining Contractual Life (years) | |||
Weighted Average Remaining Contractual Life (years) - Outstanding | 7.3 | 8.3 | 6.7 |
Aggregate Intrinsic Value of Vested Warrants | |||
Aggregate Intrinsic Value of Vested Warrants - Outstanding | $ | $ 213,364 | $ 17,640 | $ 44,306 |
Other Related Party Transacti62
Other Related Party Transactions (Details) | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Other Related Party Transactions Details | |
Consulting agreements may be terminated the directors were paid a total | $ 226,000 |
Deferred tax assets and liabili
Deferred tax assets and liabilities (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Deferred tax assets and liabilities | ||
Operating loss carry forwards | $ 3,630,341 | $ 2,741,690 |
Research credit carryforwards | 51,698 | 37,677 |
Allowance for doubtful accounts | 72,536 | 37,300 |
Stock based compensation | 57,253 | 30,327 |
Other | (4,477) | (628) |
Valuation allowance | (3,807,351) | (2,846,366) |
Net Deferred Tax Assets | 0 | $ 0 |
Company has a net operating loss carry-forward for U.S. federal income tax purposes | $ 9,700,000 |
Income tax benefit (Details)
Income tax benefit (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Income tax benefit | ||
Benefit at federal statutory rate (34%) | $ (952,160) | $ (653,980) |
State income tax benefit, net of federal tax | (83,785) | (38,975) |
Stock-based compensation | 87,011 | 247,582 |
Loss on extinguishment of debt | 5,354 | |
Research credits | (14,021) | (25,819) |
Other differences | 1,971 | 738 |
Change in valuation allowance | 960,984 | 465,100 |
Benefit from Income Taxes | $ 0 | $ 0 |
New lease agreement (Details)
New lease agreement (Details) | Aug. 01, 2014USD ($) |
New lease agreement | |
Monthly rental payments per month | $ 2,888 |
Office space of company after new lease agreement | 4,657 |
Monthly rental payments under the non-cancelable lease for the initial year | $ 3,787 |
Monthly rental payments under the non-cancelable lease in the third year | $ 3,940 |
Percentage of escalation per year during the term | 2.00% |
Percentage of escalation per year during the additional term | 3.00% |
Lease Commitments (Details)
Lease Commitments (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Lease Commitments | ||
Minimum lease commitments of 2016 | $ 46,736 | |
Minimum lease commitments of 2017 | 27,578 | |
Minimum lease commitments Thereafter | 0 | |
Total Minimum lease commitments | 74,314 | |
Lease expense charged to operations | $ 48,649 | $ 38,672 |
License Agreement (Details)
License Agreement (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
License Agreement | ||
Company incur a minimum development costs | $ 4,750,000 | |
Total accrued royalties under license agreement | $ 17,873 | $ 17,350 |
Subsequent transactions (Detail
Subsequent transactions (Details) - USD ($) | Mar. 25, 2016 | Jan. 01, 2016 | Dec. 28, 2015 |
Subsequent transactions | |||
Company is offering a minimum of shares | 333,333 | ||
Company is offering a maximum of shares | 3,500,000 | ||
Stock at a purchase price | $ 1.5 | ||
Common stock minimum offering amount | 500,000 | ||
Common stock maximum offering amount | 5,250,000 | ||
Company sold shares of stock | 344,037 | ||
Company received net proceeds | $ 463,284 | ||
Company incurred a commission liability | $ 51,606 | ||
Shares issuable to Placement Agent | 34,404 | ||
Placement Agent will also receive an expense allowance | $ 10,000 | ||
Agent will receive for services in connection with the offering | $ 1,000 | ||
Company is obligated to pay the consultants | $ 70,000 | ||
The initial payment was paid to the consultants | $ 70,000 | ||
Company's common stock valued at per share | $ 1.50 |