Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2015 | Nov. 09, 2015 | |
Document And Entity Information | ||
Entity Registrant Name | CARDAX, INC. | |
Entity Central Index Key | 1,544,238 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2015 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 69,623,715 | |
Trading Symbol | CDXI | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,015 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
CURRENT ASSETS | ||
Cash | $ 413,145 | $ 35,696 |
Inventory | 958,575 | 958,575 |
Deposits and other assets | 87,727 | 92,829 |
Prepaid expenses | 7,473 | 19,862 |
Total current assets | 1,466,920 | 1,106,962 |
PROPERTY AND EQUIPMENT, net | 15,603 | 20,611 |
INTANGIBLE ASSETS, net | 427,005 | 419,518 |
TOTAL ASSETS | 1,909,528 | 1,547,091 |
CURRENT LIABILITIES | ||
Accrued payroll and payroll related expenses | 3,469,219 | 3,555,961 |
Accounts payable | 635,365 | 651,991 |
Fees payable to directors | 418,546 | 418,546 |
Employee settlement | $ 50,000 | 50,000 |
Other current liabilities | 85,004 | |
Total current liabilities | $ 4,573,130 | $ 4,761,502 |
COMMITMENTS AND CONTINGENCIES | ||
Total liabilities | $ 4,573,130 | $ 4,761,502 |
STOCKHOLDERS' DEFICIT | ||
Common stock - $0.001 par value; 400,000,000 shares authorized, 69,011,494 and 63,885,930 shares issued and outstanding as of September 30, 2015, and December 31, 2014, respectively | 69,012 | 63,886 |
Additional paid-in-capital | $ 49,603,549 | 46,908,249 |
Deferred compensation | (294,264) | |
Accumulated deficit | $ (52,336,163) | (49,892,282) |
Total stockholders' deficit | (2,663,602) | (3,214,411) |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ 1,909,528 | $ 1,547,091 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common Stock, shares authorized | 400,000,000 | 400,000,000 |
Common Stock, shares issued | 69,011,494 | 63,885,930 |
Common Stock, shares outstanding | 69,011,494 | 63,885,930 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Income Statement [Abstract] | ||||
REVENUES | ||||
OPERATING EXPENSES: | ||||
Stock based compensation | $ 256,959 | $ 786,747 | $ 1,534,468 | $ 10,783,948 |
Selling, general, and administrative expenses | 266,018 | 724,454 | 681,059 | 3,327,010 |
Research and development | 216,228 | 357,519 | 352,328 | 921,106 |
Depreciation and amortization | 4,373 | 9,435 | 19,373 | 28,196 |
Total operating expenses | 743,578 | 1,878,155 | 2,587,228 | 15,060,260 |
Loss from operations | (743,578) | $ (1,878,155) | (2,587,228) | (15,060,260) |
OTHER INCOME (EXPENSES): | ||||
Interest expense | $ (477) | $ (1,619) | (117,042) | |
Other expenses | $ (3,069) | (14,585) | ||
Interest income | $ 594 | $ 830 | $ 1,762 | $ 3,068 |
Other income | 48,204 | |||
Gain on sale of assets | 95,000 | $ 2,426 | ||
Total other income (expenses) | $ 117 | $ (2,239) | 143,347 | (126,133) |
Loss before provision for income taxes | $ (743,461) | $ (1,880,394) | $ (2,443,881) | $ (15,186,393) |
PROVISION FOR INCOME TAXES | ||||
NET LOSS | $ (743,461) | $ (1,880,394) | $ (2,443,881) | $ (15,186,393) |
NET LOSS PER SHARE | ||||
Basic | $ (0.01) | $ (0.03) | $ (0.04) | $ (0.26) |
Diluted | $ (0.01) | $ (0.03) | $ (0.04) | $ (0.26) |
SHARES USED IN CALCULATION OF NET INCOME PER SHARE | ||||
Basic | 67,955,379 | 63,610,949 | 66,000,101 | 59,019,453 |
Diluted | 67,955,379 | 63,610,949 | 66,000,101 | 59,019,453 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Cash flows from operating activities: | ||
Net loss | $ (2,443,881) | $ (15,186,393) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 19,373 | 28,196 |
Stock based compensation | $ 564,399 | 10,783,948 |
Amortization of debt discount | 4,592 | |
Gain on sale of assets | $ (95,000) | (2,426) |
Changes in assets and liabilities: | ||
Deposits and other assets | 5,102 | 1,989 |
Prepaid expenses | 12,389 | (50,194) |
Inventory | 28,099 | |
Accrued payroll and payroll related expenses | 883,323 | (198,989) |
Accounts payable | (16,626) | (153,510) |
Accrued interest | $ 222 | (101,553) |
Fees payable to directors | (50,000) | |
Patent license payable | (10,000) | |
Other current liabilities | (12,613) | |
Net cash used in operating activities | $ (1,070,699) | (4,918,854) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (1,634) | |
Proceeds from sale of property and equipment | $ 10,000 | 2,426 |
Expenditures on patents | (21,852) | (20,419) |
Net cash used in investing activities | (11,852) | (19,627) |
Cash flows from financing activities: | ||
Proceeds from the issuance of common stock | 1,430,000 | 3,923,798 |
Proceeds from the issuances of notes payable | $ 30,000 | 2,076,000 |
Repayment of principal on notes payable | (550,408) | |
Net cash provided by financing activities | $ 1,460,000 | 5,449,390 |
NET INCREASE IN CASH | 377,449 | 510,909 |
Cash at the beginning of the year | 35,696 | 222,410 |
Cash at the end of the period | 413,145 | 733,319 |
NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Conversion of notes payable and accrued interest into common stock | 30,222 | $ 11,125,167 |
Conversion of accrued payroll and payroll related expenses into stock options | $ 970,069 | |
SUPPLEMENTAL DISCLOSURES: | ||
Cash paid for interest | $ 188,382 | |
Cash paid for income taxes |
Company Background
Company Background | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Company Background | NOTE 1 COMPANY BACKGROUND Cardax Pharmaceuticals, Inc. (Holdings) was incorporated in the State of Delaware on March 23, 2006. In May of 2006, Hawaii Biotech, Inc., contributed its anti-inflammatory, small molecule line of business into Holdings. Holdings issued (i) 9,447,100 shares of common stock of Holdings, (ii) 14,440,920 shares of Series A preferred stock of Holdings, (iii) 11,113,544 shares of Series B preferred stock of Holdings and (iv) 13,859,324 shares of Series C preferred stock of Holdings to Hawaii Biotech, Inc., in exchange for the assets and liabilities contributed to Holdings. The above shares were then distributed by Hawaii Biotech, Inc. to its shareholders. An additional 704,225 shares of Series C preferred stock were issued as part of the initial capitalization of Holdings. On January 30, 2007, all outstanding shares of Series A, B, and C preferred stock were converted into shares of Series A preferred stock. Holdings was formed for the purpose of developing a platform of proprietary, exceptionally safe, small molecule compounds for large unmet medical needs where oxidative stress and inflammation play important causative roles. Holdings platform has application in arthritis, metabolic syndrome, liver disease, and cardiovascular disease, as well as macular degeneration and prostate disease. Holdings current primary focus is on the development of astaxanthin technologies. Astaxanthin is a naturally occurring marine compound that has robust anti-oxidant and anti-inflammatory activity. In May of 2013, Holdings formed a 100% owned subsidiary company called Cardax Pharma, Inc. (Pharma). Pharma was formed to maintain Holdings operations going forward, leaving Holdings as an investment holding company. On November 29, 2013, Holdings entered into a definitive merger agreement (Merger Agreement) with Koffee Korner Inc., a Delaware corporation (Koffee Korner) (OTCQB:KOFF), and its wholly owned subsidiary (Koffee Sub), pursuant to which, among other matters and subject to the conditions set forth in such Merger Agreement, Koffee Sub would merge with and into Pharma. In connection with such merger agreement and related agreements, upon the consummation of such merger, Pharma would become a wholly owned subsidiary of Koffee Korner and Koffee Korner would issue shares of its common stock to Holdings. At the effective time of such merger, Holdings would own a majority of the shares of the then issued and outstanding shares of common stock of Koffee Korner. On February 7, 2014, Holdings completed its merger with Koffee Korner, which was renamed to Cardax, Inc. (the Company) (OTCQB:CDXI). Concurrent with the merger: (i) the Company received aggregate gross cash proceeds of $3,923,100 in exchange for the issuance and sale of an aggregate 6,276,960 of shares of the Companys common stock, together with five year warrants to purchase an aggregate of 6,276,960 shares of the Companys common stock at $0.625 per share, (ii) the notes issued on January 3, 2014, in the outstanding principal amount of $2,076,000 and all accrued interest thereon, automatically converted into 3,353,437 shares of the Companys common stock upon the reverse merger at $0.625 per share, together with five year warrants to purchase 3,321,600 shares of common stock at $0.625 per share, (iii) the notes issued in 2013, in the outstanding principal amount of $8,489,036 and all accrued interest thereon, automatically converted into 14,446,777 shares of the Companys common stock upon the reverse merger at $0.625 per share, together with five year warrants to purchase 14,446,777 shares of common stock at $0.625 per share, (iv) stock options to purchase 15,290,486 shares of Holdings common stock at $0.07 per share were cancelled and substituted with stock options to purchase 6,889,555 shares of the Companys common stock at $0.155 per share, (v) additional stock options to purchase 20,867,266 shares of the Companys common stock at $0.625 per share were issued, and (vi) the notes issued in 2008 and 2009, in the outstanding principal amounts of $55,000 and $500,000, respectively, and all accrued interest thereon, were repaid in full. The assets and liabilities of Koffee Korner were distributed in accordance with the terms of a spin-off agreement on the closing date. The share exchange transaction was treated as a reverse acquisition, with Holdings and Pharma as the acquirers and Koffee Korner and Koffee Sub as the acquired parties. Unless the context suggests otherwise, when the Company refers to business and financial information for periods prior to the consummation of the reverse acquisition, the Company is referring to the business and financial information of Holdings and Pharma. Under U.S. GAAP guidance ASC 805-40, Business Combinations Reverse Acquisitions On August 28, 2014, the Company entered into an Agreement and Plan of Merger (the Holdings Merger Agreement) with its principal stockholder, Holdings, pursuant to which Holdings merged with and into the Company (the Holdings Merger). On September 18, 2015, the Company filed a Form S-4 with the SEC in contemplation of the Holdings Merger. There will not be any cash consideration exchanged in the Holdings Merger. Upon the closing of the Holdings Merger, the stockholders of Holdings will receive an aggregate number of shares and warrants to purchase shares of the Companys common stock equal to the aggregate number of shares of the Companys common stock that are held by Holdings on the date of the closing of the Holdings Merger. The Companys restricted shares of common stock held by Holdings will be cancelled upon the closing of the Holdings Merger. Accordingly, there will not be not any change to the Companys fully diluted capitalization due to the Holdings Merger. As of September 30, 2015, the Holdings Merger had not been completed. Going concern matters The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the accompanying condensed consolidated financial statements, the Company incurred a net loss of $743,461 and $2,443,881 for the three and nine-months ended September 30, 2015, respectively, and a net loss of $1,880,394 and $15,186,393 for the three and nine-months ended September 30, 2014, respectively. The Company has incurred losses since inception resulting in an accumulated deficit of $52,336,163 as of September 30, 2015, and has had negative cash flows from operating activities since inception. The Company anticipates further losses in the development of its business. As a result of these and other factors, the Companys independent registered public accounting firm has determined there is substantial doubt about the Companys ability to continue as a going concern. In addition to the $1,460,000 raised during the first nine-months of 2015, the Company plans to raise additional capital to carry out its business plan. The Companys ability to raise additional capital through future equity and debt securities issuances is unknown. Obtaining additional financing, the successful development of the Companys contemplated plan of operations, and its transition, ultimately, to profitable operations are necessary for the Company to continue operations. The ability to successfully resolve these factors raises substantial doubt about the Companys ability to continue as a going concern. The condensed consolidated financial statements of the Company do not include any adjustments that may result from the outcome of these uncertainties. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) for interim financial information and the rules and regulations of the Securities and Exchange Commission (the SEC) for interim financial information. In the opinion of the Companys management, the accompanying condensed consolidated financial statements reflect all adjustments, consisting of normal, recurring adjustments, considered necessary for a fair presentation of the results for the interim periods ended September 30, 2015 and 2014. Although management believes that the disclosures in these unaudited condensed consolidated financial statements are adequate to make the information presented not misleading, certain information and footnote disclosures normally included in financial statements that have been prepared in accordance U.S. GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC. The results for the three-month periods ended September 30, 2015 are not necessarily indicative of the results to be expected for the year ending December 31, 2015. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and footnotes thereto included in the current report on Form 10-K filed on March 13, 2015. The accompanying condensed consolidated financial statements include the accounts of Cardax, Inc., and its wholly owned subsidiary, Cardax Pharma, Inc., and its predecessor, Cardax Pharmaceuticals, Inc. All significant intercompany balances and transactions have been eliminated in consolidation. Reclassifications The Company has made certain reclassifications to conform its prior periods data to the current presentation. These reclassifications had no effect on the reported results of operations or cash flows. Recent accounting pronouncements In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial StatementsGoing Concern. |
Inventory
Inventory | 9 Months Ended |
Sep. 30, 2015 | |
Inventory Disclosure [Abstract] | |
Inventory | NOTE 3 INVENTORY Inventory consists of the following as of: September 30, 2015 December 31, 2014 (Unaudited) Processed materials $ 958,575 $ 958,575 Total inventories $ 958,575 $ 958,575 At September 30, 2015, and December 31, 2014, inventory in the amount of $924,452 is stored at one of the Companys suppliers, which is located in Germany, with the balance of the inventory maintained in the United States. During the year ended December 31, 2014, the Company utilized $28,099 in Astaxanthin as part of commercial product research and development. The Company has determined that no inventory reserves are necessary as of September 30, 2015, and December 31, 2014. |
Property and Equipment, Net
Property and Equipment, Net | 9 Months Ended |
Sep. 30, 2015 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | NOTE 4 PROPERTY AND EQUIPMENT, net Property and equipment, net, consists of the following as of: September 30, 2015 December 31, 2014 (Unaudited) Information technology equipment $ 31,892 $ 31,892 Furniture and office equipment 10,161 10,161 42,053 42,053 Less accumulated depreciation (26,450 ) (21,442 ) Total property and equipment, net $ 15,603 $ 20,611 Depreciation expense was $1,670 and $5,008, for the three and nine-months ended September 30, 2015, respectively. Depreciation expense was $1,783 and $5,241, for the three and nine-months ended September 30, 2014, respectively. During the year ended December 31, 2014, the Company wrote off $992,797 of fully depreciated property and equipment. There was no effect on the statement of operations for the year ended December 31, 2014. On December 16, 2014, the Company entered into an agreement to sell laboratory equipment with a net book value of $0 for $95,000. One payment of $85,000 was received on December 26, 2014 with the balance being received on January 7, 2015. Final sale took place upon delivery of the equipment in February 2015. |
Intangible Assets, Net
Intangible Assets, Net | 9 Months Ended |
Sep. 30, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets, Net | NOTE 5 INTANGIBLE ASSETS, net Intangible assets, net, consists of the following as of: September 30, 2015 December 31, 2014 (Unaudited) Patents $ 393,370 $ 393,370 Less accumulated amortization (214,637 ) (200,272 ) 178,733 193,098 Patents pending 248,272 226,420 Total intangible assets, net $ 427,005 $ 419,518 Patents are amortized straight-line over a period of fifteen years. Amortization expense was $2,703 and $14,365, for the three and nine-months ended September 30, 2015, respectively. Amortization expense was $7,652 and $22,955, for the three and nine-months ended September 30, 2014, respectively. The Company has capitalized costs for several patents that are still pending. In those instances, the Company has not recorded any amortization. The Company will commence amortization when these patents are approved. The Company owns 20 issued patents, including 13 in the United States and 7 others in China, India, Japan, and Hong Kong. These patents will expire during the years of 2023 to 2028, subject to any patent term extensions of the individual patent. The Company has 1 patent application pending in the United States and 5 foreign patent applications pending in Europe, Canada, and Brazil. |
Note Payable
Note Payable | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
Note Payable | NOTE 6 NOTE PAYABLE On January 28, 2015, the Company received a short-term loan of $30,000. The loan accrued interest at the rate of 3% per annum. Principal and interest were due on April 28, 2015. Interest accrued and expensed on this short-term loan was $69 and $222 for the three and nine-months ended September 30, 2015, respectively. This note and accrued interest were converted on April 28, 2015 into securities of the Company at $0.30 per unit. Each unit consisted of one share of restricted common stock (100,739 shares), two Class D warrants, each to purchase one share of restricted common stock at $0.10 per share, which expire March 31, 2020, and one Class E warrant to purchase three-fourths of one share of restricted common stock at $0.1667 per share, which expires March 31, 2020. Most favored nation rights are available to the purchaser of such units as described in the Subscription Agreement. |
Stock Issuance
Stock Issuance | 9 Months Ended |
Sep. 30, 2015 | |
Equity [Abstract] | |
Stock Issuance | NOTE 7 STOCK ISSUANCE During the nine-months ended September 30, 2015, the Company sold securities in a self-directed offering in the aggregate amount of $1,460,222 at $0.30 per unit, which included the conversion of the $30,000 note payable and $222 in accrued interest. Each unit consisted of one share of restricted common stock (4,867,394 shares), two Class D warrants, each to purchase one share of restricted common stock at $0.10 per share, which expire March 31, 2020, and one Class E warrant to purchase three-fourths of one share of restricted common stock at $0.1667 per share, which expires March 31, 2020. Warrants issued to date in this offering totaled 13,385,342. Most favored nation rights are available to the purchasers of such units as described in the Subscription Agreement. |
Stock Option Plans
Stock Option Plans | 9 Months Ended |
Sep. 30, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Option Plans | NOTE 8 STOCK OPTION PLANS On May 15, 2006, the Company adopted the 2006 Stock Incentive Plan. Under this plan, the Company may issue shares of restricted stock, incentive stock options, or non-statutory stock options to employees, directors, and consultants. The aggregate number of shares which may be issued under this plan was 16,521,704, which was increased by 1,456,786 to 17,978,490 as part of the Series B Offering in 2007. This plan was terminated on February 7, 2014. On February 7, 2014, the Company adopted the 2014 Equity Compensation Plan. Under this plan, the Company may issue options to purchase shares of common stock to employees, directors, advisors, and consultants. The aggregate number of shares that may be issued under this plan is 30,420,148. On April 16, 2015, the majority stockholder of the Company approved an increase in the Companys 2014 Equity Compensation Plan by 15 million shares. Under the terms of the 2014 Equity Compensation Plan and the 2006 Stock Incentive Plan (collectively, the Plans), incentive stock options may be granted to employees at a price per share not less than 100% of the fair market value at date of grant. If the incentive stock option is granted to a 10% stockholder, then the purchase or exercise price per share shall not be less than 110% of the fair market value per share of common stock on the grant date. Non-statutory stock options and restricted stock may be granted to employees, directors, advisors, and consultants at a price per share, not less than 100% of the fair market value at date of grant. Options granted are exercisable, unless specified differently in the grant documents, over a default term of ten years from the date of grant and generally vest over a period of four years. A summary of stock option activity is as follows: Options Weighted average exercise price Weighted average remaining contractual term in years Aggregate intrinsic value Outstanding January 1, 2014 15,290,486 $ 0.07 3.89 $ 305,810 Exercisable January 1, 2014 15,290,486 $ 0.07 3.89 $ 305,810 Canceled (15,290,486 ) Granted 27,756,821- Exercised (4,506 ) Forfeited - Outstanding December 31, 2014 27,752,315 $ 0.51 8.02 $ 1,963,523 Exercisable December 31, 2014 26,156,553 $ 0.50 7.95 $ 1,962,239 Canceled - Granted 5,365,729 Exercised - - Forfeited - Outstanding September 30, 2015 33,118,044 $ 0.47 6.87 $ 3,418,084 Exercisable September 30, 2015 33,118,044 $ 0.47 6.87 $ 3,418,084 The aggregate intrinsic value in the table above is before applicable income taxes and represents the excess amount over the exercise price option recipients would have received if all options had been exercised on September 30, 2015, based on a valuation of the Companys stock for that day. A summary of the Companys non-vested options for the nine-months ended September 30, 2015 and year ended December 31, 2014, are presented below: Non-vested at January 1, 2014 - Granted 27,756,821 Vested (26,156,553 ) Exercised (4,506 ) Forfeited - Non-vested at December 31, 2014 1,595,762 Granted 5,365,729 Vested (6,961,491 ) Exercised - Forfeited - Non-vested at September 30, 2015 - Under ASC No. 718, the Company estimates the fair value of stock options granted on each grant date using the Black-Scholes option valuation model and recognizes an expense ratably over the requisite service period. The range of fair value assumptions related to options outstanding as of September 30, 2015 and December 31, 2014, were as follows: September 30, 2015 December 31, 2014 (Unaudited) Dividend yield 0.0% 0.0% Risk-free rate 0.12% - 1.47% 0.12% - 1.47% Expected volatility 112% - 170% 112% - 170% Expected term 1.1 - 5.5 years 1.1 - 5.5 years The expected volatility was calculated based on the historical volatilities of publicly traded peer companies, determined by the Company. The risk free interest rate used was based on the U.S. Treasury constant maturity rate in effect at the time of grant for the expected term of the stock options to be valued. The expected dividend yield was zero, as the Company does not anticipate paying a dividend within the relevant time frame. Due to a lack of historical information needed to estimate the Companys expected term, it was estimated using the simplified method allowed under ASC No. 718. In calculating the number of options issued in the three-months ended September 30, 2015, the Company used assumptions comparable to December 31, 2014, with a 20-day weighted average stock price. As part of the requirements of ASC No. 718, the Company is required to estimate potential forfeitures of stock grants and adjust stock based compensation expense accordingly. The estimate of forfeitures will be adjusted over the requisite service period to the extent that actual forfeitures differ, or are expected to differ, from such estimates. Changes in estimated forfeitures will be recognized in the period of change and will also impact the amount of stock based compensation expenses to be recognized in future periods. The Company recognized $206,959 and $1,169,537 in stock based compensation expense related to options during the three and nine-months ended September 30, 2015, respectively. Of these amounts, $206,959 and $970,069 were related to 5,365,729 options issued to employees, directors, and consultants in lieu of salaries, wages, and fees accrued for services during the three and nine-months ended September 30, 2015, respectively. The Company recognized $601,107 and $5,318,948, in stock based compensation expense during the three and nine-months ended September 30, 2014, respectively. |
Warrants
Warrants | 9 Months Ended |
Sep. 30, 2015 | |
Warrants | |
Warrants | NOTE 9 WARRANTS The following is a summary of the Companys warrant activity: Warrants Weighted average exercise price Weighted average remaining contractual term in years Aggregate intrinsic value Outstanding January 1, 2014 3,395,833 $ 0.45 5.28 $ - Exercisable January 1, 2014 3,395,833 $ 0.45 5.28 $ - Canceled (3,395,833 ) Granted 28,435,782 Exercised - Forfeited - Outstanding December 31, 2014 28,435,782 $ 0.64 4.07 $ - Exercisable December 31, 2014 28,435,782 $ 0.64 4.07 $ - Canceled - Granted 13,435,342 Exercised - Forfeited - Outstanding September 30, 2015 41,871,124 $ 0.47 3.70 $ 4,988,991 Exercisable September 30, 2015 41,871,124 $ 0.47 3.70 $ 4,988,991 Under ASC No. 718, the Company estimates the fair value of warrants granted on each grant date using the Black-Scholes option valuation model. The fair value of warrants issued with debt is recorded as a debt discount and amortized over the life of the debt. The range of fair value assumptions related to warrants outstanding as of September 30, 2015 and December 31, 2014, were as follows: September 30, 2015 December 31, 2014 (Unaudited) Dividend yield 0.0% 0.0% Risk-free rate 0.12% - 0.86% 0.12% - 0.66% Expected volatility 102% - 159% 112% - 159% Expected term 1.0 - 2.5 years 1.0 - 2.5 years The expected volatility was calculated based on the historical volatilities of publicly traded peer companies, determined by the Company. The risk free interest rate used was based on the U.S. Treasury constant maturity rate in effect at the time of grant for the expected term of the warrants to be valued. The expected dividend yield was zero, as the Company does not anticipate paying a dividend within the relevant time frame. The expected warrant term is the life of the warrant. The Company recognized $0 and $4,000 in stock based compensation expense related to warrants for the three and nine-months ended September 30, 2015, respectively. The Company recognized $0 and $5,229,589, in stock based compensation expense related to warrants during the three and nine-months ended September 30, 2014, respectively. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 10 RELATED PARTY TRANSACTIONS Executive chairman agreement As part of an executive chairman agreement, a director provided services to the Company. The Company incurred $37,500 and $139,615 in fees to this director for the three and nine-months ended September 30, 2015, of which $130,385 was paid in stock options. The Company incurred $64,615 and $184,615, in consulting fees to this director for the three and nine-months ended September 30, 2014, respectively. This agreement was amended on April 1, 2015. Under the terms of this amendment, this director receives $37,500 in equity instruments issued quarterly in arrears as compensation. Amounts payable to this director under previous agreements was $293,546 as of September 30, 2015 and December 31, 2014. Director stock grants On September 16, 2014, the Company granted its independent directors an aggregate of 642,200 shares of restricted common stock in the Company. The total fair value of this stock on the date of grant was $597,246. These shares were subject to a risk of forfeiture and vested quarterly in arrears commencing on June 1, 2014 and were fully vested at the end of one full year. On July 14, 2014, the Company granted its independent directors an aggregate of 134,553 shares of restricted common stock in the Company. The total fair value of this stock on the date of grant was $108,988. These shares were subject to a risk of forfeiture and vested quarterly in arrears commencing on June 1, 2014 and were fully vested at the end of one full year. On June 30, 2015, the Company granted its independent directors an aggregate of 111,112 shares of restricted common stock in the Company. The total fair value of this stock on the date of grant was $16,667. These shares were fully vested upon issuance. On September 30, 2015, the Company granted its independent directors an aggregate of 147,058 shares of restricted common stock in the Company. The total fair value of this stock on the date of grant was $50,000. These shares were fully vested upon issuance. The Company recognizes the expense related to these grants ratably over the requisite service period. Total stock compensation expense recognized as a result of these grants was $50,000 and $360,931 for the three and nine-months ended September 30, 2015, respectively. Total stock compensation expense recognized as a result of these grants was $185,640 and $235,411 for the three and nine-months ended September 30, 2014. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 11 INCOME TAXES The Company accounts for income taxes using the asset and liability method. Under this method, deferred income tax assets and liabilities are determined based upon the difference between the financial statement carrying amounts and the tax basis of assets and liabilities and are measured using the enacted tax rate expected to apply to taxable income in the years in which the differences are expected to be reversed. The effective tax rate for the periods ended September 30, 2015 and 2014, differs from the statutory rate of 34% as a result of the state taxes (net of Federal benefit) and permanent differences. The Companys valuation allowance was primarily related to the operating losses. The valuation allowance is determined in accordance with the provisions of ASC No. 740, Income Taxes The Company is subject to taxation in the United States and two state jurisdictions. The preparation of tax returns requires management to interpret the applicable tax laws and regulations in effect in such jurisdictions, which could affect the amount of tax paid by the Company. Management, in consultation with its tax advisors, files its tax returns based on interpretations that are believed to be reasonable under the circumstances. The income tax returns, however, are subject to routine reviews by the various taxing authorities. As part of these reviews, a taxing authority may disagree with respect to the tax positions taken by management (uncertain tax positions) and therefore may require the Company to pay additional taxes. Management evaluates the requirement for additional tax accruals, including interest and penalties, which the Company could incur as a result of the ultimate resolution of its uncertain tax positions. Management reviews and updates the accrual for uncertain tax positions as more definitive information becomes available from taxing authorities, completion of tax audits, expiration of statute of limitations, or upon occurrence of other events. As of September 30, 2015 and December 31, 2014, there was no liability for income tax associated with unrecognized tax benefits. The Company recognizes accrued interest related to unrecognized tax benefits as well as any related penalties in interest income or expense in its condensed consolidated statements of operations, which is consistent with the recognition of these items in prior reporting periods. The federal and state income tax returns of the Company are subject to examination by the IRS and state taxing authorities, generally for three years after they were filed. |
Basic and Diluted Net Income (L
Basic and Diluted Net Income (Loss) Per Share | 9 Months Ended |
Sep. 30, 2015 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Net Income (Loss) Per Share | NOTE 12 BASIC AND DILUTED NET INCOME (LOSS) PER SHARE The following tables set forth the computation of the Companys basic and diluted net income (loss) per share for the three-months ended: Three-months ended September 30, 2015 Net Loss (Numerator) Shares (Denominator) Per share amount Basic loss per share $ (743,461 ) 67,955,379 $ (0.01 ) Effect of dilutive securitiesCommon stock options and warrants - - - Diluted loss per share $ (743,461 ) 67,955,379 $ (0.01 ) Three-months ended September 30, 2014 Net Loss (Numerator) Shares (Denominator) Per share amount Basic loss per share $ (1,880,394 ) 63,610,949 $ (0.03 ) Effect of dilutive securitiesCommon stock options and warrants - - - Diluted loss per share $ (1,880,394 ) 63,610,949 $ (0.03 ) The following table sets forth the computation of the Companys basic and diluted net income (loss) per share for the nine-months ended: Nine-months ended September 30, 2015 Net Loss (Numerator) Shares (Denominator) Per share amount Basic loss per share $ (2,443,881 ) 66,000,101 $ (0.04 ) Effect of dilutive securitiesCommon stock options and warrants - - - Diluted loss per share $ (2,443,881 ) 66,000,101 $ (0.04 ) Nine-months ended September 30, 2014 Net Loss (Numerator) Shares (Denominator) Per share amount Basic loss per share $ (15,186,393 ) 59,019,453 $ (0.26 ) Effect of dilutive securitiesCommon stock options and warrants - - - Diluted loss per share $ (15,186,393 ) 59,019,453 $ (0.26 ) The following outstanding shares of common stock equivalents were excluded from the computation of diluted net loss per share for the years presented because including them would have been antidilutive for the years ended: September 30, 2015 September 30, 2014 Common stock options 33,118,044 23,762,946 Common stock warrants 41,871,124 28,405,782 Total common stock equivalents 74,989,168 52,168,728 |
Concentration
Concentration | 9 Months Ended |
Sep. 30, 2015 | |
Risks and Uncertainties [Abstract] | |
Concentration | NOTE 13 CONCENTRATION The Company purchased all of its inventory from one vendor in Germany. Although, there were no purchases from this vendor during the three and nine-months ended September 30, 2015 and 2014, outstanding payables to this vendor were $86,255 as of September 30, 2015, and December 31, 2014. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2015 | |
Leases [Abstract] | |
Leases | NOTE 14 LEASES Hawaii Research Center The Company entered into a lease for laboratory and office space on May 9, 2006. This lease amended on September 7, 2011, and October 30, 2012. This lease expired on October 31, 2014, after which the terms converted to month-to-month. The Company vacated the space in February 2015. Total rent expense under this agreement as amended was $0 and $12,112, for the three and nine-months ended September 30, 2015, respectively. Total rent expense under this agreement as amended was $14,709 and $47,331, for the three and nine-months ended September 30, 2014, respectively. Manoa Innovation Center The Company entered into an automatically renewable month-to-month lease for office space on August 13, 2010. Under the terms of this lease, the Company must provide a written notice 45 days prior to vacating the premises. Total rent expense under this agreement as amended was $7,931 and $23,759, for the three and nine-months ended September 30 2015, respectively. Total rent expense under this agreement as amended was $7,825 and $23,255, for the three and nine-months ended September 30, 2014, respectively. |
Commitments
Commitments | 9 Months Ended |
Sep. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments | NOTE 15 COMMITMENTS Patent payable As part of the formation of the Company, a patent license was transferred to the Company. The original license began in 2006. Under the terms of the license the Company agreed to pay $10,000 per year through 2015 and royalties of 2% on any revenues resulting from the license. There were no revenues generated by this license during the three and nine-months ended September 30, 2015 and 2014. The remaining obligation of $20,000 as of September 30, 2015 and December 31, 2014, is recorded as a part of accounts payable on the condensed consolidated balance sheets. Employee settlement As of September 30, 2015 and December 31, 2014, the Company owed a former employee a severance settlement payable in the amount of $50,000 for accrued vacation benefits. As part of the severance settlement, a stock option previously granted to the former employee was fully vested and extended. BASF agreement and license In November 2006, the Company entered into a joint development and supply agreement with BASF SE (BASF). Under the agreement, the Company granted BASF an exclusive world-wide license to the Companys rights related to the development and commercialization of Astaxanthin consumer health products; the Company retains all rights related to Astaxanthin pharmaceutical products. The Company is to receive specified royalties based on future net sales of such Astaxanthin consumer health products. No royalties were realized from this agreement during the three and nine-months ended September 30, 2015 and 2014. The license does not prohibit the Company from purchasing Astaxanthin consumer health products from BASF for consumer health applications, similar to any third-party wholesale customer. Capsugel agreement On August 18, 2014, the Company entered into a collaboration agreement with Capsugel US, LLC (Capsugel) for the joint commercial development of Astaxanthin products for the consumer health market that contain nature-identical synthetic Astaxanthin and use Capsugels proprietary formulation technology, which is expected to increase the oral bioavailability of Astaxanthin. The agreement provides for the parties to jointly administer activities under a product development plan that will include identifying at least one mutually acceptable third party marketer who will further develop, market and distribute consumer health, nature-identical synthetic Astaxanthin products developed under the collaboration. Capsugel will share revenues with the Company based on net sales of products that are developed under the collaboration. No revenues were realized from this agreement during the three and nine-months ended September 30, 2015 and 2014. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 16 SUBSEQUENT EVENTS The Company evaluated its September 30, 2015, condensed consolidated financial statements for subsequent events through November 9, 2015, the date the condensed consolidated financial statements were available to be issued and noted the following non-recognized events for disclosure. Stock issuance On October 19, 2015, the Company granted a consultant 100,000 shares of restricted common stock in the Company. The total fair value of this stock on the date of grant was $45,000. These shares vested immediately. On October 26, 2015, the Company issued 25,556 shares of common stock in the Company in connection with the cashless exercise of a stock option for 41,851 shares of common stock at $0.155 per share with 16,295 shares of common stock withheld with an aggregate fair market value equal to the aggregate exercise price. In October and November 2015 (through November 9, 2015), the Company sold securities in a self-directed offering in the aggregate amount of $146,000 at $0.30 per unit. Each unit consisted of 1 share of restricted common stock (486,665 shares), 2 Class D warrants, each to purchase 1 share of restricted common stock at $0.10 per share, which expire March 31, 2020, and 1 Class E warrant to purchase 3/4 of 1 share of restricted common stock at $0.1667 per share, which expires March 31, 2020. Most favored nation rights are available to the purchasers of such units as described in the Subscription Agreement. |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) for interim financial information and the rules and regulations of the Securities and Exchange Commission (the SEC) for interim financial information. In the opinion of the Companys management, the accompanying condensed consolidated financial statements reflect all adjustments, consisting of normal, recurring adjustments, considered necessary for a fair presentation of the results for the interim periods ended September 30, 2015 and 2014. Although management believes that the disclosures in these unaudited condensed consolidated financial statements are adequate to make the information presented not misleading, certain information and footnote disclosures normally included in financial statements that have been prepared in accordance U.S. GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC. The results for the three-month periods ended September 30, 2015 are not necessarily indicative of the results to be expected for the year ending December 31, 2015. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and footnotes thereto included in the current report on Form 10-K filed on March 13, 2015. The accompanying condensed consolidated financial statements include the accounts of Cardax, Inc., and its wholly owned subsidiary, Cardax Pharma, Inc., and its predecessor, Cardax Pharmaceuticals, Inc. All significant intercompany balances and transactions have been eliminated in consolidation. |
Reclassifications | Reclassifications The Company has made certain reclassifications to conform its prior periods data to the current presentation. These reclassifications had no effect on the reported results of operations or cash flows. |
Recent Accounting Pronouncements | Recent accounting pronouncements In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial StatementsGoing Concern. |
Inventory (Tables)
Inventory (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Inventory Disclosure [Abstract] | |
Components of Inventory | Inventory consists of the following as of: September 30, 2015 December 31, 2014 (Unaudited) Processed materials $ 958,575 $ 958,575 Total inventories $ 958,575 $ 958,575 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment, Net | Property and equipment, net, consists of the following as of: September 30, 2015 December 31, 2014 (Unaudited) Information technology equipment $ 31,892 $ 31,892 Furniture and office equipment 10,161 10,161 42,053 42,053 Less accumulated depreciation (26,450 ) (21,442 ) Total property and equipment, net $ 15,603 $ 20,611 |
Intangible Assets, Net (Tables)
Intangible Assets, Net (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets, Net | Intangible assets, net, consists of the following as of: September 30, 2015 December 31, 2014 (Unaudited) Patents $ 393,370 $ 393,370 Less accumulated amortization (214,637 ) (200,272 ) 178,733 193,098 Patents pending 248,272 226,420 Total intangible assets, net $ 427,005 $ 419,518 |
Stock Option Plans (Tables)
Stock Option Plans (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Stock Option Activity | A summary of stock option activity is as follows: Options Weighted average exercise price Weighted average remaining contractual term in years Aggregate intrinsic value Outstanding January 1, 2014 15,290,486 $ 0.07 3.89 $ 305,810 Exercisable January 1, 2014 15,290,486 $ 0.07 3.89 $ 305,810 Canceled (15,290,486 ) Granted 27,756,821- Exercised (4,506 ) Forfeited - Outstanding December 31, 2014 27,752,315 $ 0.51 8.02 $ 1,963,523 Exercisable December 31, 2014 26,156,553 $ 0.50 7.95 $ 1,962,239 Canceled - Granted 5,365,729 Exercised - - Forfeited - Outstanding September 30, 2015 33,118,044 $ 0.47 6.87 $ 3,418,084 Exercisable September 30, 2015 33,118,044 $ 0.47 6.87 $ 3,418,084 |
Schedule of Non-vested Shares Granted Under Stock Option Plan | A summary of the Companys non-vested options for the nine-months ended September 30, 2015 and year ended December 31, 2014, are presented below: Non-vested at January 1, 2014 - Granted 27,756,821 Vested (26,156,553 ) Exercised (4,506 ) Forfeited - Non-vested at December 31, 2014 1,595,762 Granted 5,365,729 Vested (6,961,491 ) Exercised - Forfeited - Non-vested at September 30, 2015 - |
Schedule of Fair Value Assumptions | The range of fair value assumptions related to options outstanding as of September 30, 2015 and December 31, 2014, were as follows: September 30, 2015 December 31, 2014 (Unaudited) Dividend yield 0.0% 0.0% Risk-free rate 0.12% - 1.47% 0.12% - 1.47% Expected volatility 112% - 170% 112% - 170% Expected term 1.1 - 5.5 years 1.1 - 5.5 years |
Warrants (Tables)
Warrants (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Warrants | |
Schedule of Stock Warrants Activity | The following is a summary of the Companys warrant activity: Warrants Weighted average exercise price Weighted average remaining contractual term in years Aggregate intrinsic value Outstanding January 1, 2014 3,395,833 $ 0.45 5.28 $ - Exercisable January 1, 2014 3,395,833 $ 0.45 5.28 $ - Canceled (3,395,833 ) Granted 28,435,782 Exercised - Forfeited - Outstanding December 31, 2014 28,435,782 $ 0.64 4.07 $ - Exercisable December 31, 2014 28,435,782 $ 0.64 4.07 $ - Canceled - Granted 13,435,342 Exercised - Forfeited - Outstanding September 30, 2015 41,871,124 $ 0.47 3.70 $ 4,988,991 Exercisable September 30, 2015 41,871,124 $ 0.47 3.70 $ 4,988,991 |
Schedule of Fair Value Assumptions Related to Warrants Outstanding | The range of fair value assumptions related to warrants outstanding as of September 30, 2015 and December 31, 2014, were as follows: September 30, 2015 December 31, 2014 (Unaudited) Dividend yield 0.0% 0.0% Risk-free rate 0.12% - 0.86% 0.12% - 0.66% Expected volatility 102% - 159% 112% - 159% Expected term 1.0 - 2.5 years 1.0 - 2.5 years |
Basic and Diluted Net Income 28
Basic and Diluted Net Income (Loss) Per Share (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Net Income (Loss) | The following tables set forth the computation of the Companys basic and diluted net income (loss) per share for the three-months ended: Three-months ended September 30, 2015 Net Loss (Numerator) Shares (Denominator) Per share amount Basic loss per share $ (743,461 ) 67,955,379 $ (0.01 ) Effect of dilutive securitiesCommon stock options and warrants - - - Diluted loss per share $ (743,461 ) 67,955,379 $ (0.01 ) Three-months ended September 30, 2014 Net Loss (Numerator) Shares (Denominator) Per share amount Basic loss per share $ (1,880,394 ) 63,610,949 $ (0.03 ) Effect of dilutive securitiesCommon stock options and warrants - - - Diluted loss per share $ (1,880,394 ) 63,610,949 $ (0.03 ) The following table sets forth the computation of the Companys basic and diluted net income (loss) per share for the nine-months ended: Nine-months ended September 30, 2015 Net Loss (Numerator) Shares (Denominator) Per share amount Basic loss per share $ (2,443,881 ) 66,000,101 $ (0.04 ) Effect of dilutive securitiesCommon stock options and warrants - - - Diluted loss per share $ (2,443,881 ) 66,000,101 $ (0.04 ) Nine-months ended September 30, 2014 Net Loss (Numerator) Shares (Denominator) Per share amount Basic loss per share $ (15,186,393 ) 59,019,453 $ (0.26 ) Effect of dilutive securitiesCommon stock options and warrants - - - Diluted loss per share $ (15,186,393 ) 59,019,453 $ (0.26 ) |
Schedule of Computation of Diluted Net Income (Loss) Per Share | The following outstanding shares of common stock equivalents were excluded from the computation of diluted net loss per share for the years presented because including them would have been antidilutive for the years ended: September 30, 2015 September 30, 2014 Common stock options 33,118,044 23,762,946 Common stock warrants 41,871,124 28,405,782 Total common stock equivalents 74,989,168 52,168,728 |
Company Background (Details Nar
Company Background (Details Narrative) - USD ($) | Feb. 07, 2014 | Jan. 03, 2014 | May. 31, 2006 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | May. 31, 2013 | Dec. 31, 2009 | Dec. 31, 2008 |
Issuance of common stock, shares | 9,447,100 | |||||||||||
Ownership interest | 100.00% | |||||||||||
Proceeds from sale of common stock | $ 3,923,100 | |||||||||||
Number of common stock shares sold | 6,276,960 | |||||||||||
Warrants term | 5 years | 5 years | 5 years | |||||||||
Warrants to purchase of common stock shares | 6,276,960 | 3,321,600 | ||||||||||
Warrant exercise price per share | $ 0.625 | $ 0.625 | $ 0.625 | |||||||||
Outstanding principal amount of notes payable | $ 2,076,000 | $ 8,489,036 | ||||||||||
Shares of Common Stock issued upon conversion of notes payable | 3,353,437 | 14,446,777 | ||||||||||
Warrants issued upon conversion of notes payable (issued Jan. 03, 2014) | 3,321,600 | 14,446,777 | ||||||||||
Stock options cancelled | 15,290,486 | |||||||||||
Exercise price of cancelled option | $ 0.07 | |||||||||||
Stock options issued in substitution of cancelled options | 6,889,555 | |||||||||||
Stock options issued in substitution of cancelled options, price per share | $ 0.155 | |||||||||||
Additional stock options issued purchase number of common stock | 20,867,266 | |||||||||||
Additional stock options issued purchase number of common stock, price per share | $ 0.625 | |||||||||||
Outstanding principal notes repaid in full | $ 500,000 | $ 55,000 | ||||||||||
Net losses | $ 743,461 | $ 1,880,394 | $ 2,443,881 | $ 15,186,393 | ||||||||
Accumulated deficit | 52,336,163 | 52,336,163 | $ 49,892,282 | |||||||||
Additional capital through future equity and debt securities issuances | $ 1,460,000 | $ 1,460,000 | ||||||||||
Preferred Series C [Member] | ||||||||||||
Issuance of preferred stock | 13,859,324 | |||||||||||
Series A Preferred Stock [Member] | ||||||||||||
Issuance of preferred stock | 14,440,920 | |||||||||||
Series B Preferred Stock [Member] | ||||||||||||
Issuance of preferred stock | 11,113,544 | |||||||||||
Preferred Series C [Member] | ||||||||||||
Issuance of preferred stock issued additional | 704,225 |
Inventory (Details Narrative)
Inventory (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Inventory | $ 958,575 | $ 958,575 | $ 958,575 | ||
Research and development | 216,228 | $ 357,519 | 352,328 | $ 921,106 | |
Commercial Product Research and Development [Member] | |||||
Research and development | 28,099 | ||||
Germany [Member] | |||||
Inventory | 924,452 | 924,452 | 924,452 | ||
Inventory reserves | $ 0 | $ 0 | $ 0 |
Inventory - Components of Inven
Inventory - Components of Inventory (Details) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Inventory Disclosure [Abstract] | ||
Processed materials | $ 958,575 | $ 958,575 |
Total inventories | $ 958,575 | $ 958,575 |
Property and Equipment, Net (De
Property and Equipment, Net (Details Narrative) - USD ($) | Dec. 16, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 |
Depreciation expense | $ 1,670 | $ 1,783 | $ 5,008 | $ 5,241 | ||
Written off of property and equipment | $ 992,797 | |||||
Gain on sale of assets | $ 95,000 | 2,426 | ||||
Payment to receive upon sell agreement | $ 1,634 | |||||
Laboratory Equipment [Member] | ||||||
Net book value of assets | $ 0 | |||||
Gain on sale of assets | 95,000 | |||||
Payment to receive upon sell agreement | $ 85,000 |
Property and Equipment, Net - S
Property and Equipment, Net - Schedule of Property and Equipment, Net (Details) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Property and equipment, gross | $ 42,053 | $ 42,053 |
Less accumulated depreciation | (26,450) | (21,442) |
Total property and equipment, net | 15,603 | 20,611 |
Information Technology Equipment [Member] | ||
Property and equipment, gross | 31,892 | 31,892 |
Furniture and Office Equipment [Member] | ||
Property and equipment, gross | $ 10,161 | $ 10,161 |
Intangible Assets, Net (Details
Intangible Assets, Net (Details Narrative) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($)Units | Sep. 30, 2014USD ($) | |
Patent, amortization period | 15 years | |||
Amortization expense | $ | $ 2,703 | $ 7,652 | $ 14,365 | $ 22,955 |
Patents, Units | 20 | |||
Patents expiration date | patents will expire during the years of 2023 to 2028. | |||
United States [Member] | ||||
Patents, Units | 13 | |||
Number of patent application pending | 1 | |||
China, India, Japan And Hong Kong [Member] | ||||
Patents, Units | 7 | |||
Europe, Canada, and Brazil [Member] | ||||
Number of patent application pending | 5 |
Intangible Assets, Net - Schedu
Intangible Assets, Net - Schedule of Intangible Assets, Net (Details) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Patents | $ 393,370 | $ 393,370 |
Less accumulated amortization | (214,637) | (200,272) |
Patents, Total | 178,733 | 193,098 |
Patents pending | 248,272 | 226,420 |
Total intangible assets, net | $ 427,005 | $ 419,518 |
Note Payable (Details Narrative
Note Payable (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2015 | Apr. 28, 2015 | Jan. 28, 2015 | |
Short term loan | $ 30,000 | |||
Loan interest rate percentage | 3.00% | 3.00% | ||
Debt maturity date | Apr. 28, 2015 | |||
Interest expense on notes payable | $ 69 | $ 222 | ||
Conversion of securities, price per unit | $ 0.30 | |||
Two Class D Warrant [Member] | ||||
Restricted common stock units description | Each unit consisted of one share of restricted common stock (100,739 shares), two Class D warrants, each to purchase one share of restricted common stock at $0.10 per share, which expire March 31, 2020, and one Class E warrant to purchase three-fourths of one share of restricted common stock at $0.1667 per share, which expires March 31, 2020. | |||
Number of restricted common stock units | 100,739 | |||
Warrants to purchase restricted common stock, price per share | $ 0.10 | |||
Warrant expiration date | Mar. 31, 2020 | |||
One Class E Warrant [Member] | ||||
Warrants to purchase restricted common stock, price per share | $ 0.1667 | |||
Warrant expiration date | Mar. 31, 2020 |
Stock Issuance (Details Narrati
Stock Issuance (Details Narrative) | 9 Months Ended |
Sep. 30, 2015USD ($)$ / sharesshares | |
Sales of securities, number of units | $ 1,460,222 |
Sales of securities, price per unit | $ / shares | $ 0.30 |
Conversion of notes payable | $ 30,000 |
Accrued interest on debt | $ 222 |
Warrants rights | shares | 13,385,342 |
Two Class D Warrant [Member] | |
Restricted common stock units description | Each unit consisted of one share of restricted common stock (100,739 shares), two Class D warrants, each to purchase one share of restricted common stock at $0.10 per share, which expire March 31, 2020, and one Class E warrant to purchase three-fourths of one share of restricted common stock at $0.1667 per share, which expires March 31, 2020. |
Number of restricted common stock units | shares | 100,739 |
Warrants to purchase restricted common stock, price per share | $ / shares | $ 0.10 |
Warrant expiration date | Mar. 31, 2020 |
One Class E Warrant [Member] | |
Warrants to purchase restricted common stock, price per share | $ / shares | $ 0.1667 |
Warrant expiration date | Mar. 31, 2020 |
Stock Option Plans (Details Nar
Stock Option Plans (Details Narrative) - USD ($) | Feb. 07, 2014 | May. 15, 2006 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 |
Recognized stock based compensation expense related to options | $ 206,959 | $ 601,107 | $ 1,169,537 | $ 5,318,948 | |||
Options, issued during period | 5,365,729 | 27,756,821 | |||||
Employees [Member] | |||||||
Recognized stock based compensation expense related to options | 206,959 | $ 970,069 | |||||
Director [Member] | |||||||
Recognized stock based compensation expense related to options | 206,959 | 970,069 | |||||
Consultants [Member] | |||||||
Recognized stock based compensation expense related to options | $ 206,959 | $ 970,069 | |||||
2006 Stock Incentive Plan [Member] | |||||||
Aggregate number of shares issuable under this plan | 16,521,704 | ||||||
Percentage granted to employees at a price per share | 100.00% | ||||||
Percentage of stock option granted to stockholders | 10.00% | ||||||
Percentage exercise price per share | 110.00% | ||||||
Percentage restricted stock to related parties price per share | 100.00% | ||||||
2006 Stock Incentive Plan [Member] | Minimum [Member] | |||||||
Aggregate number of shares issuable under this plan | 1,456,786 | ||||||
2006 Stock Incentive Plan [Member] | Maximum [Member] | |||||||
Aggregate number of shares issuable under this plan | 17,978,490 | ||||||
2014 Equity Compensation Plan [Member] | |||||||
Aggregate number of shares issuable under this plan | 30,420,148 |
Stock Option Plans - Schedule o
Stock Option Plans - Schedule of Stock Option Activity (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2015 | Dec. 31, 2014 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Options Outstanding, Beginning balance | 27,752,315 | 15,290,486 |
Options Exercisable, Beginning balance | 26,156,553 | 15,290,486 |
Options, Canceled | (15,290,486) | |
Options, Granted | 5,365,729 | 27,756,821 |
Options, Exercised | (4,506) | |
Options, Forfeited | ||
Options Outstanding, Ending balance | 33,118,044 | 27,752,315 |
Options Exercisable, Ending balance | 33,118,044 | 26,156,553 |
Weighted Average Exercise Price, Outstanding, Beginning balance | $ 0.51 | $ 0.07 |
Weighted Average Exercise Price, Exercisable, Beginning balance | $ 0.50 | $ 0.07 |
Weighted Average Exercise Price, Canceled | ||
Weighted Average Exercise Price, Granted | ||
Weighted Average Exercise Price, Exercised | ||
Weighted Average Exercise Price, Forfeited | ||
Weighted Average Exercise Price, Outstanding, Ending balance | $ 0.47 | $ 0.51 |
Weighted Average Exercise Price, Exercisable, Ending balance | $ 0.47 | $ 0.50 |
Weighted Average Remaining Contractual Terms (Years), Outstanding Beginning | 8 years 7 days | 3 years 10 months 21 days |
Weighted Average Remaining Contractual Terms (Years), Outstanding Ending | 6 years 10 months 13 days | 8 years 7 days |
Weighted Average Remaining Contractual Terms (Years), Exercisable, Beginning | 7 years 11 months 12 days | 3 years 10 months 21 days |
Weighted Average Remaining Contractual Terms (Years), Exercisable, Ending | 6 years 10 months 13 days | 7 years 11 months 12 days |
Aggregate Intrinsic Value, Outstanding Beginning balance | $ 1,963,523 | $ 305,810 |
Aggregate Intrinsic Value, Outstanding Ending balance | 3,418,084 | 1,963,523 |
Aggregate Intrinsic Value, Exercisable Beginning balance | 1,962,239 | 305,810 |
Aggregate Intrinsic Value, Exercisable Ending balance | $ 3,418,084 | $ 1,962,239 |
Stock Option Plans - Schedule40
Stock Option Plans - Schedule of Non-vested Shares Granted Under Stock Option Plan (Details) - shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2015 | Dec. 31, 2014 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Non-vested, Options Outstanding, Beginning balance | 1,595,762 | |
Non-vested, Options Granted | 5,365,729 | 27,756,821 |
Non-vested, Options Vested | (6,961,491) | (26,156,553) |
Non-vested, Options Exercised | (4,506) | |
Non-vested, Options Forfeited | ||
Non-vested, Options Outstanding, Ending balance | 1,595,762 |
Stock Option Plans - Schedule41
Stock Option Plans - Schedule of Fair Value Assumptions (Details) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2015 | Dec. 31, 2014 | |
Dividend yield | 0.00% | 0.00% |
Minimum [Member] | ||
Risk-free rate | 0.12% | 0.12% |
Expected volatility | 112.00% | 112.00% |
Expected term | 1 year 1 month 6 days | 1 year 1 month 6 days |
Maximum [Member] | ||
Risk-free rate | 1.47% | 1.47% |
Expected volatility | 170.00% | 170.00% |
Expected term | 5 years 6 months | 5 years 6 months |
Warrants (Details Narrative)
Warrants (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Stock based compensation expense | $ 564,399 | $ 10,783,948 | ||
Warrant [Member] | ||||
Stock based compensation expense | $ 0 | $ 0 | $ 4,000 | $ 5,229,589 |
Warrants - Schedule of Stock Wa
Warrants - Schedule of Stock Warrants Activity (Details) - Warrant [Member] - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2015 | Dec. 31, 2014 | |
Warrants, Outstanding, Beginning balance | 28,435,782 | 3,395,833 |
Warrants, Exercisable, Beginning balance | 28,435,782 | 3,395,833 |
Warrants, Canceled | (3,395,833) | |
Warrants, Granted | 13,435,342 | 28,435,782 |
Warrants, Exercised | ||
Warrants, Forfeited | ||
Warrants, Outstanding, Ending balance | 41,871,124 | 28,435,782 |
Warrants, Exercisable, Ending balance | 41,871,124 | 28,435,782 |
Weighted Average Exercise Price, Outstanding, Beginning | $ 0.64 | $ 0.45 |
Weighted Average Exercise Price, Exercisable, Beginning | $ 0.64 | $ 0.45 |
Weighted Average Exercise Price, Canceled | ||
Weighted Average Exercise Price, Granted | ||
Weighted Average Exercise Price, Exercised | ||
Weighted Average Exercise Price, Forfeited | ||
Weighted Average Exercise Price, Outstanding, Ending | $ 0.47 | $ 0.64 |
Weighted Average Exercise Price, Exercisable, Ending | $ 0.47 | $ 0.64 |
Weighted Average Remaining Contractual Terms (Years), Beginning Outstanding | 4 years 26 days | 5 years 3 months 11 days |
Weighted Average Remaining Contractual Terms (Years), Beginning Exercisable | 4 years 26 days | 5 years 3 months 11 days |
Weighted Average Remaining Contractual Terms (Years), Beginning Outstanding | 3 years 8 months 12 days | 4 years 26 days |
Weighted Average Remaining Contractual Terms (Years), Beginning Exercisable | 3 years 8 months 12 days | 4 years 26 days |
Aggregate Intrinsic Value, Outstanding, Beginning | ||
Aggregate Intrinsic Value, Exercisable, Beginning | ||
Aggregate Intrinsic Value, Outstanding, Ending | $ 4,988,991 | |
Aggregate Intrinsic Value, Exercisable, Ending | $ 4,988,991 |
Warrants - Schedule of Fair Val
Warrants - Schedule of Fair Value Assumptions Related to Warrants Outstanding (Details) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2015 | Dec. 31, 2014 | |
Dividend yield | 0.00% | 0.00% |
Minimum [Member] | ||
Risk-free rate | 0.12% | 0.12% |
Expected volatility | 112.00% | 112.00% |
Expected term | 1 year 1 month 6 days | 1 year 1 month 6 days |
Maximum [Member] | ||
Risk-free rate | 1.47% | 1.47% |
Expected volatility | 170.00% | 170.00% |
Expected term | 5 years 6 months | 5 years 6 months |
Warrant [Member] | ||
Dividend yield | 0.00% | 0.00% |
Warrant [Member] | Minimum [Member] | ||
Risk-free rate | 0.12% | 0.12% |
Expected volatility | 102.00% | 112.00% |
Expected term | 1 year | 1 year |
Warrant [Member] | Maximum [Member] | ||
Risk-free rate | 0.86% | 0.66% |
Expected volatility | 159.00% | 159.00% |
Expected term | 2 years 6 months | 2 years 6 months |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | Sep. 30, 2015 | Jun. 30, 2015 | Apr. 02, 2015 | Sep. 16, 2014 | Jun. 14, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 |
Equity instruments issued arrears of compensation | $ 37,500 | |||||||||
Amounts payable to directors | $ 293,546 | $ 293,546 | $ 293,546 | $ 293,546 | ||||||
Options, issued during period | 5,365,729 | 27,756,821 | ||||||||
Stock based compensation expense | $ 564,399 | $ 10,783,948 | ||||||||
Director [Member] | ||||||||||
Options, issued during period | 147,058 | 111,112 | 642,200 | 134,553 | ||||||
Fair value of stock option | $ 50,000 | $ 16,667 | $ 597,246 | $ 108,988 | ||||||
Stock based compensation expense | 50,000 | $ 185,640 | 360,931 | 235,411 | ||||||
Executive Chairman Agreement [Member] | Director [Member] | ||||||||||
Consulting fees to director | $ 37,500 | $ 64,615 | 139,615 | $ 184,615 | ||||||
Paid in stock option | $ 130,385 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
Effective tax statutory rate | 34.00% | 34.00% | |
Unrecognized tax benefits |
Basic and diluted Net Income 47
Basic and diluted Net Income (Loss) Per Share - Schedule of Basic and Diluted Net Income (Loss) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Earnings Per Share [Abstract] | ||||
Net loss (numerator) basic loss per share, basic | $ (743,461) | $ (1,880,394) | $ (2,443,881) | $ (15,186,393) |
Net loss (numerator) effect of dilutive securities-common stock options and warrants | ||||
Net loss (numerator) diluted loss per share, diluted | $ (743,461) | $ (1,880,394) | $ (2,443,881) | $ (15,186,393) |
Shares (denominator) basic loss per shares , basic | 67,955,379 | 63,610,949 | 66,000,101 | 59,019,453 |
Shares (denominator) effect of dilutive securities-common stock options and warrants | ||||
Shares (denominator) diluted loss per shares, diluted | 67,955,379 | 63,610,949 | 66,000,101 | 59,019,453 |
Per share amount basic loss per share, basic | $ (0.01) | $ (0.03) | $ (0.04) | $ (0.26) |
Per share amount effect of dilutive securities-common stock options and warrants | ||||
Per share amount diluted loss per share, diluted | $ (0.01) | $ (0.03) | $ (0.04) | $ (0.26) |
Basic and Diluted Net Income 48
Basic and Diluted Net Income (Loss) Per Share - Schedule of Computation of Diluted Net Income Loss Per Share (Details) - shares | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Total common stock equivalents | 74,989,168 | 52,168,728 |
Common Stock Warrants [Member] | ||
Total common stock equivalents | 41,871,124 | 28,405,782 |
Common Stock Options [Member] | ||
Total common stock equivalents | 33,118,044 | 23,762,946 |
Concentration (Details Narrativ
Concentration (Details Narrative) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Vendor [Member] | ||
Outstanding payables | $ 86,255 | $ 86,255 |
Leases (Details Narrative)
Leases (Details Narrative) - Lease Settlement Agreement [Member] - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Hawaii Research Center [Member] | ||||||
Lease expiration date | Oct. 31, 2014 | |||||
Operating lease rent expense | $ 0 | $ 14,709 | $ 12,112 | $ 47,331 | ||
Manoa Innovation Center [Member] | ||||||
Operating lease rent expense | $ 7,931 | $ 7,825 | $ 23,759 | $ 23,255 |
Commitments (Details Narrative)
Commitments (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Payment for license cost | $ 10,000 | ||||
Percentage of royalties revenue | 2.00% | ||||
License revenue | |||||
License payable | $ 20,000 | $ 20,000 | $ 20,000 | ||
Employee settlement | $ 50,000 | $ 50,000 | $ 50,000 | ||
Revenues | |||||
BASF Agreement And License [Member] | |||||
Royalty revenue | |||||
Capsugel Agreement [Member] | |||||
Royalty revenue | |||||
Revenues |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Oct. 26, 2015 | Oct. 19, 2015 | Nov. 09, 2015 | Sep. 30, 2015 |
Sale of securities in self-directed offering | $ 1,460,222 | |||
Sale of securities, price per unit | $ 0.30 | |||
One Class E Warrant [Member] | ||||
Warrants to purchase restricted common stock, price per share | $ 0.1667 | |||
Warrant expiration date | Mar. 31, 2020 | |||
Subsequent Event [Member] | ||||
Common stock | 25,556 | |||
Sale of securities in self-directed offering | $ 146,000 | |||
Sale of securities, price per unit | $ 0.30 | |||
Issuance of restricted common stock, each unit consisted of one share | 486,665 | |||
Subsequent Event [Member] | Two Class D Warrants [Member] | ||||
Restricted common stock units description | Each unit consisted of 1 share of restricted common stock ([486,665] shares), 2 Class D warrants, each to purchase 1 share of restricted common stock at $0.10 per share, which expire March 31, 2020, and 1 Class E warrant to purchase 3/4 of 1 share of restricted common stock at $0.1667 per share, which expires March 31, 2020. | |||
Warrants to purchase restricted common stock, price per share | $ 0.10 | |||
Warrant expiration date | Mar. 31, 2020 | |||
Subsequent Event [Member] | One Class E Warrant [Member] | ||||
Warrants to purchase restricted common stock, price per share | $ 0.1667 | |||
Warrant expiration date | Mar. 31, 2020 | |||
Subsequent Event [Member] | Restricted Stock [Member] | ||||
Common stock | 100,000 | |||
Total fair value of stock | $ 45,000 | |||
Subsequent Event [Member] | Stock Option [Member] | ||||
Common stock | 41,851 | |||
Sale of securities, price per unit | $ 0.1555 | |||
Subsequent Event [Member] | Withheld [Member] | ||||
Common stock | 16,295 |