Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Apr. 13, 2017 | Jun. 30, 2016 | |
Document and Entity Information | |||
Entity Registrant Name | PROLUNG INC | ||
Entity Trading Symbol | fres | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Amendment Flag | false | ||
Entity Central Index Key | 1,541,884 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Common Stock, Shares Outstanding | 21,525,126 | ||
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 | 2,016 | ||
Document Fiscal Period Focus | FY | ||
Entity Public Float | $ 0 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Current Assets | ||
Cash | $ 28,922 | $ 451,526 |
Accounts receivable, net of allowance for doubtful accounts of $0 and $194,467, respectively | 0 | 0 |
Inventory | 0 | 35,174 |
Prepaid expenses | 8,831 | 30,520 |
Total Current Assets | 37,753 | 517,220 |
Inventory, noncurrent | 291,559 | 206,722 |
Property and equipment, net of accumulated depreciation | 82,917 | 106,541 |
Intangible assets, net of accumulated amortization | 165,738 | 175,300 |
Total Assets | 577,967 | 1,005,783 |
Current Liabilities | ||
Accounts payable | 358,477 | 97,849 |
Accrued liabilities | 264,698 | 138,683 |
Related-party notes payable | 105,000 | 25,000 |
Current portion of long-term debt | 32,000 | 189,389 |
Total Current Liabilities | 760,175 | 450,921 |
Long-Term Liabilities | ||
Long-term debt, net of current portion | 2,653,370 | 3,206,931 |
Total Long-Term Liabilities | 2,653,370 | 3,206,931 |
Total Liabilities | 3,413,545 | 3,657,852 |
Stockholders' 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; 24,006,515 shares and 21,525,126 shares issued and outstanding, respectively | 24,007 | 21,525 |
Additional paid-in capital | 13,226,048 | 10,636,583 |
Accumulated deficit | (16,085,633) | (13,310,177) |
Total Stockholders' Deficit | (2,835,578) | (2,652,069) |
Total Liabilities and Stockholder' Deficit | $ 577,967 | $ 1,005,783 |
Consolidated Balance Sheets Par
Consolidated Balance Sheets Parentheticals - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Parentheticals | ||
Allowance for doubtul accounts of Accounts receivable | $ 0 | $ 194,467 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, Shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, Issued | 0 | 0 |
Preferred stock, Outstanding | $ 0 | $ 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, Shares authorized | 40,000,000 | 40,000,000 |
Common stock, Issued | 24,006,515 | 21,525,126 |
Common stock, Outstanding | $ 24,006,515 | $ 21,525,126 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Revenues: | ||
Revenue | $ 8,800 | $ 19,450 |
Total revenue. | 8,800 | 19,450 |
Cost of revenue | 10,193 | 15,563 |
Gross margin | (1,393) | 3,887 |
Operating expenses: | ||
Research and development expense | 1,219,189 | 1,250,723 |
Selling, general and administrative expense | 1,288,960 | 1,257,557 |
Total operating expenses | 2,508,149 | 2,508,280 |
Loss from operations | (2,509,542) | (2,504,393) |
Other expense: | ||
Interest expense | (265,914) | (271,984) |
Foreign currency exchange loss, net | 0 | (24,093) |
Total other expense | (265,914) | (296,077) |
Net loss | $ (2,775,456) | $ (2,800,470) |
Basic and diluted loss per share | $ (0.12) | $ (0.14) |
Weighted-average common shares outstanding, basic and diluted | 22,739,569 | 20,344,262 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Deficit - USD ($) | Common Stock Shares | Common Stock Amount | Additional Paid-in Capital | Accumulated Deficit | Total Stockholders' Deficit |
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 | 294,000 | 294 | 146,706 | 147,000 | |
Common stock issued for cash | 1,235,278 | 1,235 | 925,225 | 926,460 | |
Common stock issued pursuant to bill of sale and patent assignment agreements | 150,000 | 150 | 112,350 | 112,500 | |
Common stock issued for conversion of note and accrued interest | 95,283 | 95 | 61,839 | 61,934 | |
Issuance of warrants under consulting agreement | $ 43,594 | $ 43,594 | |||
Common stock issued for services | 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) |
Stock-based compensation | $ 262,474 | $ 262,474 | |||
Common stock issued for cash and warrants, net of offering costs | 1,106,952 | 1,107 | 1,497,624 | 1,498,731 | |
Common stock issued upon conversion of debt and accrued interest | 1,251,504 | 1,252 | 812,225 | 813,477 | |
Common stock issued to placement agent | 103,166 | 103 | (103) | ||
Common stock issued for service | 19,767 | 20 | 17,245 | 17,265 | |
Net loss | $ (2,775,456) | $ (2,775,456) | |||
Balance at Dec. 31, 2016 | 24,006,515 | 24,007 | 13,226,048 | (16,085,633) | (2,835,578) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities: | ||
Net loss | $ (2,775,456) | $ (2,800,470) |
Adjustments to reconcile net loss to net cash flows from operating activities: | ||
Depreciation and amortization | 33,186 | 10,923 |
Stock-based compensation | 279,739 | 343,488 |
Obsolete inventory | 10,193 | 0 |
Impairment loss | 0 | 50,000 |
Provision for doubtful accounts | 0 | 102,282 |
Change in assets and liabilities: | ||
Accounts receivable | 0 | 52,517 |
Inventory | (59,856) | (31,422) |
Prepaid expenses | 21,689 | (20,474) |
Accounts payable | 260,628 | (7,467) |
Accrued liabilities | 196,542 | (255,719) |
Net cash flows from operating activities | (2,033,335) | (2,556,342) |
Cash flows from investing activities: | ||
Payments for property and equipment | 0 | (164,489) |
Net cash flows from investing activities | 0 | (164,489) |
Cash flows from financing activities: | ||
Issuance of common stock and warrants for cash, net of offering costs | 1,498,731 | 1,073,460 |
Proceeds from issuance of convertible debentures | 0 | 2,000,000 |
Proceeds from issuance of convertible notes payable | 0 | 1,206,931 |
Payments on convertible notes payable | 0 | (40,000) |
Payments on notes payable | 0 | (1,097,078) |
Proceeds from notes payable | 32,000 | 0 |
Proceeds from related party debt | 210,000 | 50,000 |
Payments on related party debt | (130,000) | (25,000) |
Net cash flows from financing activities | 1,610,731 | 3,168,313 |
Net increase (decrease) in cash | (422,604) | 447,482 |
Cash at beginning of period | 451,526 | 4,044 |
Cash at end of period | 28,922 | 451,526 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 76,170 | 524,544 |
Cash paid for income taxes | 0 | 0 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Conversion of convertible debt and interest | 813,477 | 61,934 |
Stock issued to placement agent | 103 | 0 |
Common stock issued to acquire property and equipment, and intangible assets | $ 0 | $ 112,500 |
Organization and Summary of Sig
Organization and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
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 Basis of Presentation The Company has the ability to maintain current levels of spending or reduce expenditures significantly if funding is not available. Additionally, should FDA approval be obtained, the Company could execute on an aggressive marketing plan that would require significant additional funding; however, this plan would not begin until funding is in place. As discussed in Note 13, subsequent to December 31, 2016, the Company sold 2,556,634 units from its on-going Private Placement Memorandum for approximately $3.4 million. Additionally, the Company converted outstanding debt of approximately $1.3 million to equity, and paid debt and accrued interest of approximately $0.5 million. Therefore, approximately $1.8 million of liabilities on the December 31, 2016 balance sheet were converted to equity or repaid subsequent to December 31, 2016. The Companys financial statements for the prior year ended December 31, 2015 disclosed substantial doubt about the Companys ability to continue as a going concern. Based on managements plans and the significant capital raised during subsequent to the year ended December 31, 2016, that substantial doubt has been alleviated. Use of Estimates Fair Value of Financial Instruments Research and Development Cash and Cash Equivalents Inventory Inventory is valued at the lower of cost or market value, with cost determined based on the first-in-first-out method. The estimated cost of inventory not expected to be converted to cash within one year is reflected as Inventory, noncurrent in the consolidated balance sheets although all inventory is ready and available for sale at any moment. During 2016 and 2015, the Company critically reviewed all inventory for impairment. Property and Equipment Property and Equipment is stated at cost and depreciated using the straight-line method over useful lives of 3 to 5 years. Intangible Assets As further discussed in Note 9 to these consolidated financial statements, intangible assets consist of rights to certain patent applications acquired in December 2015 under a Patent Assignment Agreement. These intangible assets will be amortized over an estimated useful life of eighteen years, with periodic evaluation for impairment. Revenue Recognition The Company commenced selling the EPN Scan during the year ended December 31, 2014. The Company recognizes revenue from the sale of the EPN Scan when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when (1) it has persuasive evidence of an arrangement, (2) delivery has occurred, (3) the sales price is fixed or determinable, and (4) collectability is reasonably assured. The Company recognizes revenue from licensing arrangements on a straight-line basis over the contractual term of the arrangement or the expected period during which the specified services will be performed, whichever is longer. However, for licensing arrangements where there are no future service obligations, the licensing income is recognized upon receipt of the consideration under the arrangement. Trade Receivables and Credit Policies Accounts receivable are recorded at the invoiced amount, with foreign currencies reflected in U.S. dollars (based on the exchange rate on the date of sale and adjusted to current exchange rates at the end of each reporting period), and do not bear interest. The Company uses an allowance for doubtful accounts to reflect the Companys best estimate of the amount of probable credit losses in accounts receivable. Account balances will be charged off against the allowance when the account receivable is considered uncollectible. The allowance for doubtful accounts is an estimate that is particularly susceptible to change in the near term. During the years ended December 31, 2016 and 2015, the Company recorded a provision for doubtful accounts in the amount of $0 and $102,282, respectively, for accounts receivable that had not been collected and were overdue at that date. At December 31, 2016 and 2015, the allowance for doubtful accounts is $0 and $194,467, respectively. Employee Stock-based Compensation The Company accounts for employee stock-based compensation in accordance with ASC 718, Compensation-Stock Compensation. ASC 718 requires companies to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award and to recognize it as compensation expense over the period the employee is required to provide service in exchange for the award, usually the vesting period. Non-Employee Stock-based Compensation The Company accounts for non-employee stock-based compensation in accordance with the provision of ASC 505, Equity Based Payments to Non-Employees, which requires that such equity instruments are recorded at their fair value on the measurement date. The measurement of stock-based compensation is subject to periodic adjustment as the underlying equity instruments vest. Income Taxes The Company accounts for income taxes under the asset and liability method. Deferred income tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and for operating loss and tax credit carry-forwards. Deferred income tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred income tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date. The Company has established a valuation allowance to reduce deferred income tax assets to their realizable values based on whether it is more likely than not that such deferred income tax assets will be realized. At December 31, 2016 and 2015, the Company has recorded a full valuation allowance against the net deferred tax assets related to temporary differences and operating losses because there is significant uncertainty as to the realizability of the deferred tax assets. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon settlement. 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 and 2015, the following items were excluded from the computation of diluted net loss per common share as their effect is anti-dilutive: For the Years Ended December 31, 2016 2015 Warrants to purchase shares 3,447,386 1,423,211 Restricted common stock grants 872 253,670 Convertible debentures 2,198,850 3,253,279 Convertible notes 1,641,692 1,609,242 Foreign Currency Policy Transactions in foreign currencies are initially recorded at the rates of exchange prevailing on the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are retranslated into the Companys functional currency at the rates prevailing on the balance sheet date. Exchange differences arising on the settlement of monetary items, and on the retranslation of monetary items, are reported as other income (expense) and included in Net loss for the period. The Company recorded a foreign currency exchange loss of $24,093 for the year ended December 31, 2015. Related Parties The Company discloses related party transactions in accordance with ASC 850, Related Party Disclosures. All transactions with related parties are in the normal course of operations and are measured at the exchange amount. Recent Accounting Pronouncements In March 2016, the FASB issued ASU 2016-09, Stock Compensation |
Inventory
Inventory | 12 Months Ended |
Dec. 31, 2016 | |
Inventory. | |
Inventory | Note 2 Inventory Inventory principally consists of the cost of materials purchased and assembled during the years ended December 31, 2016 and 2015. 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: December 31, 2016 2015 Raw materials $ 69,264 $ 76,925 Work in progress 31,185 58,376 Finished goods 191,110 106,595 Total inventory 291,559 241,896 Less carrying value of inventory not deemed to be a current asset 291,559 206,722 Inventory, included in current assets $ - $ 35,174 In an effort to create a unified marketing image, inventory recorded at $10,193, which consisted of older packaging materials was written off during the year ended December 31, 2016 and is reported as cost of revenues in the accompanying statement of operations. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2016 | |
Property and Equipment | |
Property and Equipment | Note 3 Property and Equipment Property and equipment consists of the following at December 31, 2016 and 2015: December 31, Life 2016 2015 Computer equipment 3 years $ 19,787 $ 19,787 Office equipment 3 to 5 years 13,852 13,852 Tooling 5 years 92,228 92,228 125,867 125,867 Less accumulated depreciation (42,950) (19,326) Property and equipment, net $ 82,917 $ 106,541 Depreciation expense for the years ended December 31, 2016 and 2015 was $23,624 and $10,923, respectively. Effective January 2014, the Company entered into a Master Services Agreement (the Agreement) with an entity that provides consulting and professional services to develop an internet-based customer service portal. The entity is owned and managed by a former director of the Company. By December 31, 2015, the Company had paid a total of $50,000 under the Agreement in full satisfaction of amounts owed for services provided under the Agreement. With this payment, the Agreement was terminated. With the termination of the Agreement, management evaluated the status of this project in light of its plan for the future development and completion of the 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 was recorded at December 31, 2015. |
Accrued Liabilities
Accrued Liabilities | 12 Months Ended |
Dec. 31, 2016 | |
Accrued liabilities. | |
Accrued Liabilities | Note 4 Accrued Liabilities Accrued liabilities consisted of the following at December 31, 2016 and 2015: December 31, 2016 2015 Accrued interest $ 234,405 $ 115,627 Accrued royalties 17,873 5,183 Accrued payroll and payroll taxes 12,420 17,873 Total accrued liabilities $ 264,698 $ 138,683 Related party accrued interest was 35,519 and 1,012 at December 31, 2016 and 2015 respectively. |
Long-term Debt
Long-term Debt | 12 Months Ended |
Dec. 31, 2016 | |
Long-term Debt {1} | |
Long-term Debt | Note 5 Short and Long-term Debt Short and Long-term debt is summarized as follows: December 31, 2016 2015 Convertible debentures; unsecured; interest at 8.00% per annum; due May 1, 2018; $742,950 was converted to common stock during the year ended December 31, 2016 $ 1,257,050 $ 2,000,000 Convertible notes payable; unsecured; interest at 8.00% per annum; due November 6, 2020 1,206,931 1,206,931 Note payable secured by all the assets of the Company; interest at 15.00% per annum; due June 30, 2018 189,389 189,389 Unsecured Note payable; interest at 10.00% per annum; due on demand 32,000 - Total long-term debt 2,685,370 3,396,320 Less: current portion 32,000 189,389 Long-term debt, net of current portion $ 2,653,370 $ 3,206,931 During the year ended December 31, 2016, notes totaling $32,000 became due. These notes are now considered due on demand and are recorded as current notes payable. Maturities on long-term debt are as follows: Year ending December 31, 2017 $ 32,000 2018 1,446,439 2019 - 2020 1,206,931 2021 - Note Payable Secured by the Assets of the Company During the year ended December 31, 2015, the Company paid off the remaining principal of a master note to a shareholder of $929,536 and accrued interest of $310,770. Total interest expense related to this note for the year ended December 31, 2015 was $87,028. Other Convertible 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, a note payable in the amount of $50,000 and related accrued interest of $11,934 was converted into 95,283 shares of the Companys common stock, at $0.65 per share. Note Payable to a Relative of an Executive Officer At December 31, 2016 and 2015, 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 $189,389. During the year ended December 31, 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 note is secured by all the assets of the Company, bears interest at 15 percent per annum, and requires the board of directors to retain the current management as long as the note is outstanding. The note was extended on June 30, 2016 and is now due September 30, 2018. The balance of accrued interest at December 31, 2016 and 2015 was $29,498 and $1,012, respectively. As part of the extension of the due date, the Company analyzed the note and determined that the change in due date did not qualify as a debt modification under generally accepted accounting principles and accordingly, classified the note as long-term. As described in Note 13, the remainder of the principal and interest was either converted or repaid subsequent to year end. Convertible Debentures In 2015, the Company issued $2,000,000 in Convertible Debentures. The Convertible Debentures are unsecured and bear interest at the rate of 8% per annum. 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 Companys 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 that there was no beneficial conversion feature. As further described in Note 6 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 Companys 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 warrants issuable under the Placement Agreement limited to 2,463,460 shares of the Companys common stock. The term of the warrants shall be for a period of 36 months from the date of issuance. As of December 31, 2016, $742,950 of principal and accrued interest of $70,525 were converted into 1,251,504 shares of common stock. As described in Note 13, the remainder of the principal and interest was either converted or repaid subsequent to year end. 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 Companys 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 that there was no beneficial conversion feature. Other Notes Payable On August 16, 2016, the Company issued an unsecured bridge note to an individual for $32,000 with an interest rate of 8%. This note was originally due on September 30, 2016, and is now due on demand. As of December 31, 2016, there is a balance of $1,461 in accrued interest related to this note. As described in Note 13, this principal and interest was repaid subsequent to year end. Related-Party Notes Payable During the year ended December 31, 2016 the Company issued notes to related parties for $210,000. Also during the year ended December 31, 2016, $105,000 of those notes were paid back along with interest and fees of $3,089. 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 Companys 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. In December 2015, the Company repaid $25,000, and as described in Note 13, the remainder of the principal and interest was repaid subsequent to year end. |
Preferred Stock
Preferred Stock | 12 Months Ended |
Dec. 31, 2016 | |
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, 2016 and 2015, 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, 2016 | |
Common Stock | |
Common Stock | Note 7 Common Stock Common Stock Issued for Cash The Company signed a Private Placement Memorandum dated December 28, 2015 to offer a maximum of 3,500,000 shares of its common stock at a price of $1.50 per share. On July 7, 2016, the board of directors authorized changing the offering to be units of one share of common stock and one warrant, sold for a price of $1.50 per unit. This change was applied retroactively to all purchasers under the Private Placement Memorandum. The units are being offered on a best efforts basis. During the year ended December 31, 2016, 1,106,952 units were subscribed, conditions for the minimum offering were met, and the Company received net proceeds of $1,498,731 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 Companys common stock sold in the offering. Pursuant to these provisions, with the release of shares described in the previous paragraph, the Company incurred commission fees to the Placement Agent of $166,043 and has issued the Placement Agent 103,166 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 was paid $1,000 for services in connection with the offering. Legal fees of $6,949 were also paid in connection with the offering. 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 number of Convertible Debentures authorized by the Companys board of directors. These investors opted to purchase shares of common stock in the Company at $0.75 per share in accordance with the provisions of the convertible debentures. Common Stock Issued for Conversion of Debt During the year ended December 31, 2016, certain convertible debenture holders exercised their right and converted $742,950 of principal and $70,527 of accrued interest into common stock. The Company issued 1,251,504 shares of common stock at $0.65 per share in accordance with the provisions of the convertible debentures. During the year ended December 31, 2015, a convertible note payable in the amount of $50,000 and related accrued interest of $11,934 was converted into 95,283 shares of the Companys common stock, at $0.65 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 Companys 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 for Services Periodically, the Company issues restricted common stock grants to directors, officers and consultants as compensation for future services. During the year ended December 31, 2016, the Company recognized $126,400 in stock compensation expense related to the amortization of this deferred compensation. During the year ended December 31, 2015 the Company issued 20,513 shares to employees, directors, and consultants as compensation for current services. The Company recognized stock-based compensation of $15,385 ($0.75 per share) for the year ended December 31, 2015. In addition, during the year ended December 31, 2016, the Company issued 19,767 shares of common stock with a total value of $17,265 to two consultants for services rendered. The Company recognized stock-based compensation related to the shares issued to directors, officers and consultants for the year ended December 31, 2015 of $255,915. A summary of the status of the Companys restricted common stock grants as of December 31, 2016 and changes during the year then ended, is presented below: Weighted Restricted Average Common Common Stock Stock Grants Price Balance at December 31, 2014 765,500 $ 0.50 Awarded - - Vested (511,830) 0.50 Balance at December 31, 2015 253,670 0.50 Awarded - - Vested (252,798) 0.50 Balance at December 31, 2016 872 $ 0.50 As of December 31, 2016, there was $436 of total unrecognized compensation cost related to the restricted common stock grants and the stock-based compensation arrangements awarded to directors, officers, and consultants. That cost is expected to be recognized over a weighted-average period of 0.02 years. Total stock-based compensation expense from all sources for the year ended December 31, 2016 and 2015, including stock-based compensation for the warrants and related amortization discussed below in Note 8, has been included in the consolidated statements of operations as follows: For the Years Ended December 31, 2016 2015 Research and development expense $ 166,626 $ 165,342 Selling, general and administrative expense 113,114 178,146 Total share-based compensation $ 279,739 $ 343,488 |
Common Stock Warrants
Common Stock Warrants | 12 Months Ended |
Dec. 31, 2016 | |
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 warrants issued for consulting services is recognized as consulting expense at the date the warrants become exercisable. The Company values warrants 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 consolidated financial statements. The fair value of warrants was estimated using the Black-Scholes option pricing model with volatility based on peer group companies. The fair value of the warrants that vested during the year ended December 31, 2016 was $0.76 per share. The fair value of the warrants that vested during the year ended December 31, 2015 was $0.402 per share. Management used the following inputs to value the warrants for the year ended December 31, 2016: For the Years Ended December 31, 2016 2015 Expected life 4.5 years 5.2 years Exercise price $0.50 $0.50 Expected volatility 124% 71% Expected dividends None None Risk-free interest rate 1.33% 1.70% The Company recognized $136,074 of share-based compensation and additional paid in capital during the year ended December 31, 2016 and $43,594 of share-based compensation and additional paid-in capital in addition to $28,594 in amortization related to the vesting of warrants for the year ended December 31, 2015. Pursuant to the Private Placement Memorandum discussed in Note 7, the Company issued, to the investors, one warrant to purchase a share of common stock at a price of $1.50 for each share purchased. The Company issued 1,106,952 warrants under these terms. The fair value of warrants was estimated using the Black-Scholes option pricing model with the following weighted-average assumptions: risk-free interest rate of 1.02%, expected volatility 141%, expected life 2.12 years, expected dividend yield of zero. The proceeds of the private placement were allocated to the stock and warrants based on their relative fair values with $688,644 being allocated to the warrants. In addition, as noted in Note 7 above, the Private Placement Memorandum requires the Company to issue, to the Placement Agent, a warrant to purchase one share of common stock at a price of $0.65 for each $0.81 of the principal amount of the outstanding 8% Convertible Debentures that is converted into Common Stock of the Company. During the year ended December 31, 2016, certain convertible debenture holders exercised their right and converted $742,950 of principal which resulted in 917,223 warrants issued to the Placement Agent. A summary of warrant activity for the years ended December 31, 2016 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, 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 Issued 2,024,175 1.26 Exercised - - Expired - - Outstanding at September 30, 2016 3,447,386 $ 0.88 4.2 years $ 546,333 The intrinsic value at December 31, 2016 is calculated at $0.85 per share less the exercise price, based on managements latest estimate of the fair value of the shares of common stock, which is the latest price the Company issued shares of common stock for cash. |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2016 | |
Intangible Assets | |
Intangible Assets | Note 9 Intangible Assets In December 2015, the Company purchased patents for a probe as well as enhanced surface and tips for obtaining bioelectrical signals for $175,300 comprised of $62,800 in cash and 150,000 shares of common stock. These patents will be amortized at a rate of $797 per month, or $9,562 per year, over the 220-month remaining life of the patents. During the years ended December 31, 2016 and 2015 the Company recognized amortization expense of $9,562 and $0, respectively. |
Commitment and Contingencies
Commitment and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitment and Contingencies: | |
Commitments and Contingencies Disclosure | Note 10 Commitments and Contingencies 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 agreed to complete certain marketing milestones related to relationship development with key government and regulatory officials in the European Union and the introduction and marketing of the Companys products to potential medical, clinical and hospital customers of the member states of the European Union. This Consulting Representation Agreement was terminated during the year ended December 31, 2016 due to failure of the consultants to perform. During the year ended December 31, 2016, the Company has issued 10,000 shares of common stock in accordance with this agreement. Lease Agreement The Company leases office space under an agreement that expires in 2017, with an option to renew with a 3% annual rent escalation. Monthly rental payments as of December 31, 2016 are $3,940 per month. Lease expense charged to operations for the years ended December 31, 2016 and 2015 was $49,469 and $48,649, respectively. License Agreement The Company has a license agreement with a party related through a shareholder and former member of the board of directors. Under the agreement, the Company has the right to the exclusive use of certain patents pending and related technology (the technology) in its medical devices and other products for an indefinite term. In return, the Company agreed to incur a minimum of $4,750,000 in development costs by the year 2014 to develop and market its products worldwide based on a graduated schedule and to make royalty payments based on a percentage of the aggregate worldwide net sales (as defined in the agreement) of its medical device and other products that utilize the technology. The minimum expenditure of $4,750,000 was achieved. At December 31, 2016 and 2015, accrued royalties under this license agreement total $17,873, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Taxes | |
Income Taxes | Note 11 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 (liabilities) were as follows at December 31, 2016 and 2015: 2016 2015 Net operating losses $ 4,841,700 $ 3,776,478 Research and development credit carryforward 129,500 75,004 Related-party accruals 2,300 - Allowance for doubtful accounts - 75,842 Stock based compensation - 57,253 Depreciation and amortization 15,500 (4,477) Change in valuation allowance (4,989,000) (3,980,100) Net Deferred Tax Asset $ - $ - As of December 31, 2016, the Company had no unrecognized tax benefits that, if recognized, would affect the Companys effective income tax rate over the next 12 months. 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, 2016 and 2015 is set forth below: 2016 2015 Net loss $ (1,082,400) $ (952,160) Non-deductible expenses 110,300 (8,824) Valuation allowance 972,100 960,984 Benefit from Income Taxes $ - $ - As of December 31, 2016, the Company has a net operating loss carry-forward for U.S. federal income tax purposes of approximately $12.2 million. This carry-forward is available to offset future taxable income, if any, and will expire, if not used, from 2017 through 2036. 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 Companys 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, 2012. The Company is no longer subject to Utah state tax examinations for tax years before and including December 31, 2010. During the years ended December 31, 2016 and 2015, the Company did not incur interest and penalties. |
Other Related Party Transaction
Other Related Party Transactions | 12 Months Ended |
Dec. 31, 2016 | |
Other Related Party Transactions | |
Other Related Party Transactions | Note 12 Other Related Party Transactions During the year ended December 31, 2016, the Company has consulting agreements in place with two of the members of its board of directors. These directors provide marketing and medical advisory services. One of the agreements was terminated during the year ended December 31, 2016. The remaining consulting agreement may be terminated by either the Company or by the consultant at any time and for any reason. During the year ended December 31, 2016, these directors were paid a total of $161,000 under these agreements. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2016 | |
Subsequent Events | |
Subsequent Events | Note 13 Subsequent Events The Company evaluated all subsequent events that occurred after the balance sheet date through April 17, 2017, the date its financial statements were available to be issued, and concluded there were additional events and transactions occurring during this period that required recognition or disclosure in the financial statements. Subsequent to December 31, 2016, the Company sold 2,256,634 shares under the Private Placement Memorandum discussed in Note 7 for cash received of $3,384,952. Subsequent to December 31, 2016, the remaining balance of the note payable to a relative of an executive officer was converted or repaid as follows: 1) the Company issued 66,667 shares of common stock as well as 66,667 warrants to purchase stock at a price of $1.50 for conversion of debt principal of $100,000, and 2) the Company repaid the remaining principal of $89,389 and accrued interest payable of $39,071. Any and all security interest held by the noteholder was released to the Company. Subsequent to December 31, 2016, the remaining balance of convertible debentures was converted or repaid as follows: 1) the Company issued 1,752,274 shares of common stock for conversion of debenture principal of $991,550 and accrued interest payable of $147,428, and 2) the Company repaid the remaining principal of $265,500 and accrued interest payable of $41,607. Subsequent to December 31, 2016, the Company repaid the other note payable of $32,000. Subsequent to December 31, 2016, the remaining balance of the related-party notes payable were converted or repaid as follows: 1) the Company issued 40,000 shares of common stock as well as 40,000 warrants to purchase stock at a price of $1.50 for conversion of debt principal of $60,000, and 2) the Company repaid the remaining principal, interest and fees of $52,300. |
Organization and Summary of S20
Organization and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Organization and Summary of Significant Accounting Policies (Policies) | |
Organization | Organization ProLung, Inc. (the Company) is a Delaware corporation that was incorporated on November 22, 2004 and is doing business as ProLungdx. The Companys headquarters are located in Salt Lake City, Utah. The Companys business is the development and deployment of medical devices and procedures specializing in the immediate, non-invasive evaluation of indeterminate lung masses suspicious for cancer as seen in computerized tomography (CT) and radiography. The Companys principal activities have consisted of research and development, developing markets for its products, securing strategic alliances and obtaining financing. The Company has developed and tested, and is commercializing its non-invasive lung cancer risk stratification test, the Electro Pulmonary Nodule Scan (EPN Scan). In April 2013, the Company entered into an agreement to license this technology to a distributor for the China market. In May 2013, the Company received the CE mark in Europe permitting the marketing of the EPN Scan in the European Union and certain other countries. During the year ended December 31, 2014, the Company commenced selling the EPN Scan to customers in the European Union. In the United States, the Company has submitted its application for marketing approval to the United States Food and Drug Administration but has since withdrawn such application with the intent of re-submitting it once certain tests are complete. |
Principles of Consolidation | Principles of Consolidation During the year ended December 31, 2012, the Company formed a wholly-owned subsidiary, Hilltop Acquisition Corporation, Inc., which has had no activity since its inception and is included in the accompanying financial statements from the date of its formation. |
Basis of Presentation | Basis of Presentation The Company has the ability to maintain current levels of spending or reduce expenditures significantly if funding is not available. Additionally, should FDA approval be obtained, the Company could execute on an aggressive marketing plan that would require significant additional funding; however, this plan would not begin until funding is in place. As discussed in Note 13, subsequent to December 31, 2016, the Company sold 2,556,634 units from its on-going Private Placement Memorandum for approximately $3.4 million. Additionally, the Company converted outstanding debt of approximately $1.3 million to equity, and paid debt and accrued interest of approximately $0.5 million. Therefore, approximately $1.8 million of liabilities on the December 31, 2016 balance sheet were converted to equity or repaid subsequent to December 31, 2016. The Companys financial statements for the prior year ended December 31, 2015 disclosed substantial doubt about the Companys ability to continue as a going concern. Based on managements plans and the significant capital raised during subsequent to the year ended December 31, 2016, that substantial doubt has been alleviated. |
Use of Estimates | Use of 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 certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Certain notes payable bear interest rates that are not market interest rates given the risks associated with a company in the early stage of its development. The conversion terms and risks associated with a company in the early stage of its development may also cause the interest rate borne by the convertible debt to not approximate a market interest rate for similar instruments. However, for notes payable which are classified among current liabilities due to their relatively short terms remaining to the notes maturity dates as of December 31, 2016, the carrying value of those notes payable approximates their fair value. For the notes payable and convertible debentures classified as long-term liabilities, the estimated fair value is approximately equal to the carrying value based on the interest rates and other terms of debt. |
Research and Development | Research and Development The Company expenses research and development costs as incurred. Research and development costs primarily consist of clinical study costs, consulting fees, compensation of employees related to activities to obtain regulatory approval for the Companys devices, and materials and supplies. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all unrestricted highly liquid investments purchased with a maturity of three months or less to be cash equivalents. The Company had no cash equivalents as of December 31, 2016 or 2015. |
Inventory | Inventory Inventory is valued at the lower of cost or market value, with cost determined based on the first-in-first-out method. The estimated cost of inventory not expected to be converted to cash within one year is reflected as Inventory, noncurrent in the consolidated balance sheets. During 2016 and 2015, the Company critically reviewed all slow moving inventory to determine if defective or obsolete. If not defective or obsolete, we presented these items as non-current inventory, although all inventory is ready and available for sale at any moment. |
Property and Equipment | Property and Equipment Property and Equipment is stated at cost and depreciated using the straight-line method over useful lives of 3 to 5 years. |
Intangible Assets | Intangible Assets As further discussed in Note 8 to these consolidated financial statements, intangible assets consist of rights to certain patent applications acquired in December 2015 under a Patent Assignment Agreement. These intangible assets will be amortized over an estimated useful life of eighteen years, with periodic evaluation for impairment. |
Revenue Recognition | Revenue Recognition The Company commenced selling the EPN Scan during the year ended December 31, 2014. The Company recognizes revenue from the sale of the EPN Scan when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when (1) it has persuasive evidence of an arrangement, (2) delivery has occurred, (3) the sales price is fixed or determinable, and (4) collectability is reasonably assured. The Company recognizes revenue from licensing arrangements on a straight-line basis over the contractual term of the arrangement or the expected period during which the specified services will be performed, whichever is longer. However, for licensing arrangements where there are no future service obligations, the licensing income is recognized upon receipt of the consideration under the arrangement. |
Trade Receivables and Credit Policies | Trade Receivables and Credit Policies Accounts receivable are recorded at the invoiced amount, with foreign currencies reflected in U.S. dollars (based on the exchange rate on the date of sale and adjusted to current exchange rates at the end of each reporting period), and do not bear interest. The Company uses an allowance for doubtful accounts to reflect the Companys best estimate of the amount of probable credit losses in accounts receivable. Account balances will be charged off against the allowance when the account receivable is considered uncollectible. The allowance for doubtful accounts is an estimate that is particularly susceptible to change in the near term. During the years ended December 31, 2016 and 2015, the Company recorded a provision for doubtful accounts in the amount of $0 and $102,282, respectively, for accounts receivable that had not been collected and were overdue at that date. At December 31, 2016 and 2015, the allowance for doubtful accounts is $0 and $194,467, respectively. |
Employee Stock-based Compensation | Employee Stock-based Compensation The Company accounts for employee stock-based compensation in accordance with ASC 718, Compensation-Stock Compensation. ASC 718 requires companies to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award and to recognize it as compensation expense over the period the employee is required to provide service in exchange for the award, usually the vesting period |
Non-Employee Stock-based Compensation | Non-Employee Stock-based Compensation The Company accounts for non-employee stock-based compensation in accordance with the provision of ASC 505, Equity Based Payments to Non-Employees, which requires that such equity instruments are recorded at their fair value on the measurement date. The measurement of stock-based compensation is subject to periodic adjustment as the underlying equity instruments vest. |
Income Taxes | Income Taxes The Company accounts for income taxes under the asset and liability method. Deferred income tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and for operating loss and tax credit carry-forwards. Deferred income tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred income tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date. The Company has established a valuation allowance to reduce deferred income tax assets to their realizable values based on whether it is more likely than not that such deferred income tax assets will be realized. At December 31, 2016 and 2015, the Company has recorded a full valuation allowance against the net deferred tax assets related to temporary differences and operating losses because there is significant uncertainty as to the realizability of the deferred tax assets. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon settlement. |
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, 2016 and 2015, the following items were excluded from the computation of diluted net loss per common share as their effect is anti-dilutive: For the Years Ended December 31, 2016 2015 Warrants to purchase shares 3,447,386 1,423,211 Restricted common stock grants 872 253,670 Convertible debentures 2,198,850 3,253,279 Convertible notes 1,641,692 1,609,242 |
Foreign currency policy | Foreign Currency Policy Transactions in foreign currencies are initially recorded at the rates of exchange prevailing on the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are retranslated into the Companys functional currency at the rates prevailing on the balance sheet date. Exchange differences arising on the settlement of monetary items, and on the retranslation of monetary items, are reported as Other income (expense) and included in Net loss for the period. The Company recorded a foreign currency exchange loss of $24,093 for the year ended December 31, 2015. |
Related parties | Related Parties The Company discloses related party transactions in accordance with ASC 850, Related Party Disclosures. All transactions with related parties are in the normal course of operations and are measured at the exchange amount. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (the FASB) issued Accounting Standards Update (ASU) No. 2016-02, Leases (ASU 2016-02). ASU 2016-02 requires companies to generally recognize on the balance sheet operating and financing lease liabilities and corresponding right-of-use assets. ASU 2016-02 will be effective for the Companys fiscal year beginning January 1, 2019 on a modified retrospective basis and earlier adoption is permitted. Management is currently evaluating the impact of the pending adoption of ASU 2016-02 on the Companys consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, Stock Compensation |
Basic and Diluted Loss Per Shar
Basic and Diluted Loss Per Share (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Basic and Diluted Loss Per Share {1} | |
Schedule of Warrants to purchase shares of common stock | As of December 31, 2016 and 2015, the following items were excluded from the computation of diluted net loss per common share as their effect is anti-dilutive: For the Years Ended December 31, 2016 2015 Warrants to purchase shares 3,447,386 1,423,211 Restricted common stock grants 872 253,670 Convertible debentures 2,198,850 3,253,279 Convertible notes 1,641,692 1,609,242 |
Inventory (Tables)
Inventory (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Inventory (Tables) | |
Inventory (Tables) | Inventory consists of the following: December 31, 2016 2015 Raw materials $ 69,264 $ 76,925 Work in progress 31,185 58,376 Finished goods 191,110 106,595 Total inventory 291,559 241,896 Less carrying value of inventory not deemed to be a current asset 291,559 206,722 Inventory, included in current assets $ - $ 35,174 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property and Equipment (Tables) | |
Property and Equipment (Tables) | Property and equipment consists of the following at December 31, 2016 and 2015: December 31, Life 2016 2015 Computer equipment 3 years $ 19,787 $ 19,787 Office equipment 3 to 5 years 13,852 13,852 Tooling 5 years 92,228 92,228 125,867 125,867 Less accumulated depreciation (42,950) (19,326) Property and equipment, net $ 82,917 $ 106,541 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accrued Liabilities (Tables) | |
Accrued Liabilities | Accrued liabilities consisted of the following at December 31, 2016 and 2015: December 31, 2016 2015 Accrued interest $ 234,405 $ 115,627 Accrued royalties 17,873 5,183 Accrued payroll and payroll taxes 12,420 17,873 Total accrued liabilities $ 264,698 $ 138,683 |
Schedule of Long - term Debt (T
Schedule of Long - term Debt (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Schedule of Long - term Debt (Tables): | |
Schedule of Maturities of Long-term Debt | Maturities on long-term debt are as follows: Year ending December 31, 2017 $ 32,000 2018 1,446,439 2019 - 2020 1,206,931 2021 - |
Schedule of Long-term Debt | Short and Long-term debt is summarized as follows: December 31, 2016 2015 Convertible debentures; unsecured; interest at 8.00% per annum; due May 1, 2018; $742,950 was converted to common stock during the year ended December 31, 2016 $ 1,257,050 $ 2,000,000 Convertible notes payable; unsecured; interest at 8.00% per annum; due November 6, 2020 1,206,931 1,206,931 Note payable secured by all the assets of the Company; interest at 15.00% per annum; due June 30, 2018 189,389 189,389 Unsecured Note payable; interest at 10.00% per annum; due on demand 32,000 - Total long-term debt 2,685,370 3,396,320 Less: current portion 32,000 189,389 Long-term debt, net of current portion $ 2,653,370 $ 3,206,931 |
Common Stock (Tables)
Common Stock (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Common Stock (Tables) | |
Company's Nonvested Shares | A summary of the status of the Companys restricted common stock grants as of December 31, 2016 and changes during the year then ended, is presented below: Weighted Restricted Average Common Common Stock Stock Grants Price Balance at December 31, 2014 765,500 $ 0.50 Awarded - - Vested (511,830) 0.50 Balance at December 31, 2015 253,670 0.50 Awarded - - Vested (252,798) 0.50 Balance at December 31, 2016 872 $ 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, 2016 and 2015, including stock-based compensation for the warrants and related amortization discussed below in Note 8, has been included in the consolidated statements of operations as follows: For the Years Ended December 31, 2016 2015 Research and development expense $ 166,626 $ 165,342 Selling, general and administrative expense 113,114 178,146 Total share-based compensation $ 279,739 $ 343,488 |
Warrants (Tables)
Warrants (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Warrants (Tables) | |
Summary of fair value of the warrants | The fair value of the warrants that vested during the year ended December 31, 2015 was $0.402 per share. Management used the following inputs to value the warrants for the year ended December 31, 2016: For the Years Ended December 31, 2016 2015 Expected life 4.5 years 5.2 years Exercise price $0.50 $0.50 Expected volatility 124% 71% Expected dividends None None Risk-free interest rate 1.33% 1.70% |
Summary of Warrants Outstanding | A summary of warrant activity for the years ended December 31, 2016 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, 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 Issued 2,104,421 1.26 Exercised - - Expired - - Outstanding at September 30, 2016 3,527,632 $ 0.88 4.2 years $ 546,333 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Taxes (Tables): | |
Schedule of Components of Income Tax Expense (Benefit) | The significant components of net deferred tax assets (liabilities) were as follows at December 31, 2016 and 2015: 2016 2015 Net operating losses $ 4,841,700 $ 3,776,478 Research and development credit carryforward 129,500 75,004 Related-party accruals 2,300 - Allowance for doubtful accounts - 75,842 Stock based compensation - 57,253 Depreciation and amortization 15,500 (4,477) Change in valuation allowance (4,989,000) (3,980,100) Net Deferred Tax Asset $ - $ - |
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, 2016 and 2015 is set forth below: 2016 2015 Net loss $ (1,082,400) $ (952,160) Non-deductible expenses 110,300 (8,824) Valuation allowance 972,100 960,984 Benefit from Income Taxes $ - $ - |
Basis of Presentation (Details)
Basis of Presentation (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Basis of Presentation Details | ||
Cash used in operating activities | $ 2,000,000 | $ 2,600,000 |
Company incurred net losses | $ 2,800,000 | $ 2,800,000 |
Trade Receivables and Credit Po
Trade Receivables and Credit Policies (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Trade Receivables and Credit Policies (Details) | ||
Company recorded a provision for doubtful accounts | $ 0 | $ 102,282 |
Allowance for doubtful accounts | $ 0 | $ 194,467 |
Basic and Diluted Loss Per Sh31
Basic and Diluted Loss Per Share (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Basic and Diluted Loss Per Share Details | ||
Warrants to purchase shares | 3,447,386 | 1,423,211 |
Restricted common stock grants | 872 | 253,670 |
Convertible debentures | $ 2,198,850 | $ 3,253,279 |
Convertible notes | $ 1,641,692 | $ 1,609,242 |
Foreign currency policy (Detail
Foreign currency policy (Details) | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Foreign currency policy Details | |
Company recorded a foreign currency exchange loss | $ 24,093 |
Inventory consists of the follo
Inventory consists of the following (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Inventory consists of the following | ||
Raw materials | $ 69,264 | $ 76,925 |
Work in progress | 31,185 | 58,376 |
Finished goods | 191,110 | 106,595 |
Total inventory | 291,559 | 241,896 |
Less carrying value of inventory not deemed to be a current asset | $ 291,559 | 206,722 |
Inventory, included in current assets | $ 35,174 |
Inventory written off (Details)
Inventory written off (Details) | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Inventory written off Details | |
Inventory recorded was written off during the year | $ 10,193 |
Property and equipment consists
Property and equipment consists of the following (Details) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) |
Property and equipment consists of the following | ||
Computer equipment | 19,787 | 19,787 |
Office equipment | $ 13,852 | $ 13,852 |
Tooling | 92,228 | 92,228 |
Property and Equipment Gross | 125,867 | 125,867 |
Less accumulated depreciation | (42,950) | (19,326) |
Property and equipment, net | $ 82,917 | $ 106,541 |
Property and equipment Life (de
Property and equipment Life (details) | Dec. 31, 2016 |
Property and equipment Life details | |
Computer equipment | 3 |
Office equipment Maximum | 5 |
Office equipment Minimum | 3 |
Tooling | 5 |
The total cost for the services
The total cost for the services and expenses (Details) | Dec. 31, 2016USD ($) |
The total cost for the services and expenses | |
The total amount paid for the services provided under the Agreement | $ 50,000 |
Completion of the project and concluded that costs paid | 50,000 |
Impairment loss has been recorded | $ 50,000 |
Depreciation expense (Details)
Depreciation expense (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Depreciation expense | ||
Depreciation expense for the years ended | $ 23,624 | $ 10,923 |
Accrued liabilities consisted o
Accrued liabilities consisted of the following (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Accrued liabilities consisted of the following | ||
Accrued interest | $ 234,405 | $ 115,627 |
Accrued royalties | 17,873 | 5,183 |
Accrued payroll and payroll taxes | 12,420 | 17,873 |
Total accrued liabilities | $ 264,698 | $ 138,683 |
Summary of Short and Long-term
Summary of Short and Long-term debt (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Summary of short and Long-term debt | ||
Convertible debentures; unsecured; interest at 8.00% per annum; due May 1, 2018; $742,950 was converted to common stock during the year ended December 31, 2016 | $ 1,257,050 | $ 2,000,000 |
Convertible notes payable; unsecured; interest at 8.00% per annum; due November 6, 2020 | 1,206,931 | 1,206,931 |
Note payable secured by all the assets of the Company; interest at 15.00% per annum; due June 30, 2018 | 189,389 | 189,389 |
Unsecured Note payable; interest at 10.00% per annum; due on demand | 32,000 | |
Total long-term debt | 2,685,370 | 3,396,320 |
Less: current portion | 32,000 | 189,389 |
Long-term debt, net of current portion | $ 2,653,370 | $ 3,206,931 |
Short and Long-Term Debt Parent
Short and Long-Term Debt Parentheticals (Details) | Dec. 31, 2016 |
Short and Long-Term Debt Parentheticals | |
Convertible debentures interest per annum | 8.00% |
Convertible notes interest per annum | 8.00% |
Note payable secured by all the assets interest at per annum | 15.00% |
Unsecured Note payable interest per annum | 10.00% |
Maturities on long-term debt (D
Maturities on long-term debt (Details) | Dec. 31, 2016USD ($) |
Maturities on long-term debt are as follows | |
Year ending December 31, 2017 | $ 32,000 |
Year ending December 31, 2018 | 1,446,439 |
Year ending December 31, 2019 | 0 |
Year ending December 31, 2020 | 1,206,931 |
Year ending December 31, 2021 | $ 0 |
Note Payable Secured by the Ass
Note Payable Secured by the Assets of the Company (Details) | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Note Payable Secured by the Assets of the Company | |
Company paid off the remaining principal of a master note to a shareholder | $ 929,536 |
Company paid off accrued interest | 310,770 |
Total interest expense | $ 87,028 |
Other Convertible Notes (Detail
Other Convertible Notes (Details) | 12 Months Ended |
Dec. 31, 2015USD ($)$ / sharesshares | |
Other Convertible Notes | |
One note payable paid in cash | $ 40,000 |
Related accrued interest paid in cash | 9,837 |
Note payable in the amount | 50,000 |
Related accrued interest | $ 11,934 |
Related accrued interest was converted into shares of the Company's common stock | shares | 95,283 |
Related accrued interest was converted into shares of the Company's common stock per share | $ / shares | $ 0.65 |
Note Payable to a Relative of a
Note Payable to a Relative of an Executive Officer (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Note Payable to a Relative of an Executive Officer | ||
Note payable to an individual related to an executive officer | $ 189,389 | $ 189,389 |
Note bears interest per annum (percent) | 15.00% | 15.00% |
Company paid to the note holder | $ 356,931 | |
Accrued interest paid | 189,389 | |
Payment applied to paid principal of the note | 167,542 | |
Amount of Balance of accrued interest | $ 29,498 | $ 1,012 |
Amount of Balance principal payable | $ 189,389 |
Convertible Debentures (Details
Convertible Debentures (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Convertible Debentures issues | ||
Company issued Convertible Debentures | $ 2,000,000 | |
Convertible Debentures are unsecured and bear interest at the rate per annum | 8.00% | |
Convertible Debentures are convertible at a price per share | $ 0.65 | |
The Company determined the beneficial conversion feature | $ 0 | |
Placement Agent warrants to acquire shares of the Company's common stock at an exercise price per share. | $ 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 | $ 0.81 | |
The maximum number of shares issuable under the Placement Agreement limited to shares of the Company's common stock | 2,463,460 | |
The term of the warrants shall be for a period of months from the date of issuance | 36 | |
Principal amount of convertible debentures converted in to stock | $ 742,950 | |
Interest amount of convertible debentures converted in to stock | 70,525 | |
Total number of shares issued upon conversion of debentures | $ 1,251,504 |
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 | $ | $ 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 | $ 3.5 |
Convertible Notes converts into common stock at the rate of per share | $ 0.75 |
Other Notes Payable (Details)
Other Notes Payable (Details) - USD ($) | Dec. 31, 2016 | Aug. 16, 2016 |
Other Notes Payable {1} | ||
Company issued an unsecured bridge note to an individual | $ 32,000 | |
Bridge note bear interest rate per annum | 8.00% | |
Accrued interest related to this Bridge note | $ 1,461 |
Related-Party Notes Payable (De
Related-Party Notes Payable (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Related-Party Notes Payable | ||
The Company's board of directors advanced an amount | $ 50,000 | |
Company repaid part of the advance amount | $ 25,000 | |
Company issued notes to related parties for an amount | $ 210,000 | |
Notes of related parties repaid during the year | 105,000 | |
Interest and fees of related party notes repaid during the year | $ 3,089 |
Preferred Stock Transactions (D
Preferred Stock Transactions (Details) | Dec. 31, 2016$ / 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 |
Mar. 31, 2015 | Dec. 31, 2015 | |
Common Stock Issued for Cash Details | ||
Company issued shares of common stock for cash | 294,000 | 1,235,278 |
Proceeds from the issuances totaled | $ 147,000 | $ 926,460 |
Proceeds from the issuances totaled per share | $ 0.50 | $ 0.75 |
Private Placement Memorandum (D
Private Placement Memorandum (Details) | Dec. 31, 2016USD ($)shares | Dec. 28, 2015shares |
Private Placement Memorandum | ||
Company offered a maximum number of shares under this agreement | shares | 3,500,000 | |
One warrant issued to purchase stock at a price | 1.50 | |
Units were offered at a purchase price per unit | 1.50 | |
Number of units subscribed, conditions for the minimum offering were met | shares | 1,106,952 | |
Company received net proceeds from the offering. | $ 1,498,731 | |
Company incurred commission fees to the Placement Agent | $ 166,043 | |
Company issued shares to the Placement Agent | shares | 103,166 | |
Placement Agent will also receive an expense allowance to reimburse it for direct out-of-pocket costs | $ 10,000 | |
Payment made to Escrow Agent for services in connection with the offering | 1,000 | |
Legal fees paid in connection with the offering. | $ 6,949 |
Common Stock Issued for Convers
Common Stock Issued for Conversion of Debt (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Common Stock Issued for Conversion of Debt | ||
Convertible note payable in the amount converted in to stock | $ 742,950 | $ 50,000 |
Related accrued interest of Convertible note payable in the amount converted in to stock | $ 70,527 | $ 11,934 |
Shares of the Company's common stock issued on conversion of note | 1,251,504 | 95,283 |
Per share value of the stock issued on conversion of note | $ 0.65 | $ 0.65 |
Issued Pursuant to Bill of Sale
Issued Pursuant to Bill of Sale and Patent Assignment Agreement (Details) | Dec. 18, 2015USD ($)$ / sharesshares |
Issued Pursuant to Bill of Sale and Patent Assignment Agreement | |
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 | shares | 150,000 |
Total consideration given for these assets in shares of the common stock at per share | $ / shares | $ 0.75 |
Value of the shares of the Company's common stock | $ 112,500 |
Common Stock Issued for Service
Common Stock Issued for Services (Details) | 12 Months Ended | |
Dec. 31, 2016USD ($)shares | Dec. 31, 2015USD ($)$ / sharesshares | |
Common Stock Issued for Services Details | ||
Company issued shares to employees, directors, and consultants as compensation | shares | 20,513 | |
The Company recognized stock-based compensation | $ 15,385 | |
The Company recognized stock-based compensation of per share | $ / shares | $ 0.75 | |
The Company recognized stock-based compensation related to the vesting of shares | $ 255,915 | |
Total stock-based compensation expense | $ 126,400 | |
Company issued shares of common stock to two consultants for services rendered. | shares | 19,767 | |
Company issued shares of common stock with a total value to two consultants for services rendered. | shares | 17,265 | |
Total unrecognized compensation cost related to the restricted common stock grants and the stock-based compensation arrangements | $ 436 | |
Cost is expected to be recognized over a weighted-average period in years | 0.02 |
Total stock-based compensation
Total stock-based compensation expense (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Total stock-based compensation expense Details | ||
Research and development expense. | $ 166,626 | $ 165,342 |
Selling, general and administrative expense. | 113,114 | 178,146 |
Total share-based compensation. | $ 279,739 | $ 343,488 |
Summary of the status of the Co
Summary of the status of the Company's restricted common stock grants (Details) - $ / shares | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Restricted Common Stock Grants | |||
Company's restricted common stock grants | 872 | 253,670 | 765,500 |
Awarded restricted common stock grants | 0 | 0 | |
Vested restricted common stock grants | (252,798) | (511,830) | |
Weighted Average Common Stock Price | |||
Weighted Average Common Stock Price - Grants | $ 0.50 | $ 0.50 | $ 0.50 |
Weighted Average Common Stock Price - Awarded | 0 | 0 | |
Weighted Average Common Stock Price - Vested | $ 0.50 | $ 0.50 |
Fair value of Warrant was estim
Fair value of Warrant was estimated using the Black-Scholes option pricing model (Details) | 12 Months Ended | |
Dec. 31, 2016USD ($)$ / shares | Dec. 31, 2015USD ($)$ / shares | |
The fair value of the Warrant was | ||
Expected life | 4.5 | 5.2 |
Exercise price | $ 0.50 | $ 0.50 |
Expected volatility | 124.00% | 71.00% |
Expected dividends | $ | $ 0 | $ 0 |
Risk-free interest rate | 1.33% | 1.70% |
The fair value of the warrants that vested during the year per share | $ 0.76 | $ 0.402 |
Black-Scholes option pricing mo
Black-Scholes option pricing model Assumptions (Details) | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Fair value of Warrant per share | |
Warrant Risk free interest Rate | 1.02% |
Warrant Expected volatility | 141.00% |
Warrant Expected life in years | 2.12 |
Warrant Expected dividend yield | $ 0 |
Common Stock Warrants (Details)
Common Stock Warrants (Details) | Dec. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2015USD ($) |
Common Stock Warrants Details | ||
Company recognized as share-based compensation | $ 136,074 | $ 136,074 |
Company recognized in additional paid-in capital | 28,594 | 28,594 |
Company recognized in amortization related to the vesting of warrants | $ 43,594 | $ 43,594 |
Company issued, to the investors, one warrant to purchase a share of common stock at a price | 1.5 | |
The Company issued warrants under these terms to investors | shares | 1,106,952 | |
Company issued, to thePlacement Agent, one warrant to purchase a share of common stock at a price | 0.65 | |
Certain convertible debenture holders exercised their right and converted the principal in to warrants | $ 742,950 | |
Warrants issued to the Placement Agent on conversion | shares | 917,223 | |
The intrinsic value per share | $ / shares | $ 0.85 |
Summary of warrant activity dur
Summary of warrant activity during the period (Details) | Dec. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2015USD ($)$ / sharesshares | Dec. 31, 2014USD ($)$ / sharesshares |
Shares Under Warrants | |||
Outstanding | 3,527,632 | 1,423,211 | 1,423,211 |
Issued | 2,104,421 | ||
Exercised | 0 | ||
Expired | 0 | ||
Weighted Average Exercise Price | |||
Weighted Average Exercise Price - Outstanding | $ / shares | $ 0.88 | $ 0.54 | $ 0.54 |
Weighted Average Exercise Price - Issued | $ / shares | $ 1.26 | ||
Weighted Average Remaining Contractual Life (years) | |||
Weighted Average Remaining Contractual Life (years) - Outstanding | 4.2 | 7.3 | 8.3 |
Aggregate Intrinsic Value of Vested Warrants | |||
Aggregate Intrinsic Value of Vested Warrants - Outstanding | $ | $ 546,333 | $ 213,364 | $ 17,640 |
Intangible Assets (Details)
Intangible Assets (Details) | Dec. 31, 2015USD ($) |
Intangible Assets Details | |
Company purchased patents for a probe as well as enhanced surface | $ 175,300 |
Patents will be amortized at a rate per month | 797 |
Patents will be amortized at a rate per year | $ 9,562 |
Intangible Assets amortization
Intangible Assets amortization expense (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Intangible Assets amortization expense Details | ||
Company recognized amortization expense | $ 9,562 | $ 0 |
Consulting Representation Agree
Consulting Representation Agreement (Details) | Dec. 31, 2016shares |
Consulting Representation Agreement Details | |
Company has issued shares of common stock in accordance with this agreement | 10,000 |
Lease Agreement (Details)
Lease Agreement (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Lease Agreemen Details | ||
Lease expense charged to operations | $ 49,469 | $ 48,649 |
Monthly rental payments per month | $ 3,940 | |
Option to renew with a annual rent escalation. | 3.00% |
License Agreement (Details)
License Agreement (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
License Agreement | ||
Company inccur a minimum development costs | $ 4,750,000 | |
Total accrued royalties under license agreement | $ 17,873 | $ 17,873 |
Deferred tax assets and liabili
Deferred tax assets and liabilities (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred tax assets and liabilities | ||
Net operating losses | $ 4,841,700 | $ 3,776,478 |
Research and development credit carryforward | 129,500 | 75,004 |
Related-party accruals | 2,300 | |
Allowance for doubtful accounts | 75,842 | |
Stock based compensation | 57,253 | |
Depreciation and amortization | 15,500 | (4,477) |
Valuation allowance | (4,919,900) | (3,980,100) |
Net deferred tax asset | 0 | |
Company has a net operating loss carry-forward | $ 1,220,000 | $ 0 |
Income tax benefit (Details)
Income tax benefit (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income tax benefit | ||
Net loss | $ (1,082,400) | $ (952,160) |
Non-deductible expenses | 110,300 | (8,824) |
Valuation allowance | $ 972,100 | 960,984 |
Benefit from Income Taxes | $ 0 |
Other Related Party Transacti69
Other Related Party Transactions (Details) | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Other Related Party Transactions Details | |
During the year end directors were paid a total amounted | $ 161,000 |
Subsequent transactions (Detail
Subsequent transactions (Details) | Dec. 31, 2016USD ($)$ / sharesshares |
Subsequent transactions | |
Company sold shares under the Private Placement Memorandum | shares | 2,256,634 |
Company sold shares under the Private Placement Memorandum for cash received | $ 3,384,952 |
Company issued shares of common stock | shares | 66,667 |
Company issued warrants to purchase stock | $ 66,667 |
Company issued warrants to purchase stock at a price | $ / shares | $ 1.5 |
Common stock for conversion of debt principal | $ 100,000 |
Company repaid the remaining principal | 89,389 |
Company repaid accrued interest payable | $ 39,071 |
Company issued shares of common stock for conversion of debenture | shares | 1,752,274 |
Company issued issued shares for conversion of debenture principal | shares | 991,550 |
Company issued issued shares for accrued interest payable | shares | 147,428 |
Company repaid the remaining principal of | $ 265,500 |
Company repaid accrued interest payable of | 41,607 |
Company repaid the other note payable | $ 32,000 |
Company issued shares of common stock | shares | 40,000 |
Company issued warrants to purchase stock | $ 40,000 |
Company issued warrants to purchase stock at a price | $ / shares | $ 1.5 |
Common stock for conversion of debt principal | $ 60,000 |
Company repaid the remaining principal, interest and fees | $ 52,300 |