Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2016 | May. 15, 2016 | |
Principal Net of Discount | ||
Entity Registrant Name | WOUND MANAGEMENT TECHNOLOGIES, INC. | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2016 | |
Amendment Flag | false | |
Entity Central Index Key | 714,256 | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 108,377,331 | |
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 | Q1 |
Statement - CONSOLIDATED BALANC
Statement - CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
CURRENT ASSETS: | ||
Cash | $ 283,322 | $ 182,337 |
Accounts Receivable, net of allowance for bad debt of $16,880 and $20,388 | 416,471 | 251,546 |
Royalty receivable | 50,250 | 201,000 |
Inventory, net of allowance for obsolescence for $2,254 and $150,135 | 541,527 | 409,778 |
Prepaid and Other Assets | 15,194 | 114,009 |
Total Current Assets | 1,306,764 | 1,158,670 |
LONG-TERM ASSETS: | ||
Property Plant and Equipment, net of accumulated depreciation of $33,873 and $31,477 | 40,069 | 41,762 |
Intangible Assets, net of accumulated depreciation of $331,701 and $318,944 | 178,608 | 191,366 |
Total Long-Term Assets | 218,677 | 233,128 |
TOTAL ASSETS | 1,525,442 | 1,391,798 |
CURRENT LIABILITIES: | ||
Accounts Payable | 196,735 | 222,351 |
Accounts Payable - Related Parties | 32,203 | 21,099 |
Accrued royalties and dividends | 93,750 | 323,062 |
Current Lease Obligation | 4,504 | 4,504 |
Accrued Interest | 316,907 | 273,068 |
Derivative Liabilities | 276 | 310 |
Notes Payable | 443,800 | 444,700 |
Convertible notes payable | 110,000 | 170,000 |
Total Current Liabilities | 1,198,175 | 1,459,094 |
LONG-TERM LIABILITIES | ||
Convertible Notes Payable - Related Parties | 1,200,000 | 1,200,000 |
Capital lease obligation | 2,779 | 3,973 |
Total Long-Term Liabilities | 1,202,779 | 1,203,973 |
TOTAL LIABILITIES | 2,400,954 | 2,663,067 |
STOCKHOLDERS' DEFICIT | ||
Common Stock: $.001 par value; 250,000,000 shares authorized; 108,377,331 issued and 108,373,242 outstanding as of March 31, 2016 and 107,274,559 issued and 107,270,470 outstanding as of December 31, 2015 | 108,373 | 107,274 |
Additional Paid-in Capital | 44,886,864 | 44,615,321 |
Treasury Stock | (12,039) | (12,039) |
Accumulated Deficit | (46,693,730) | (46,784,005) |
Total Stockholders' Deficit | (875,512) | (1,271,269) |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ 1,525,442 | $ 1,391,798 |
Series A Preferred Stock [Member] | ||
STOCKHOLDERS' DEFICIT | ||
Preferred Stock value | ||
Series B Preferred Stock [Member] | ||
STOCKHOLDERS' DEFICIT | ||
Preferred Stock value | ||
Series C Preferred Stock [Member] | ||
STOCKHOLDERS' DEFICIT | ||
Preferred Stock value | $ 835,020 | $ 802,180 |
Series D Preferred Stock [Member] | ||
STOCKHOLDERS' DEFICIT | ||
Preferred Stock value | ||
Series E Preferred Stock [Member] | ||
STOCKHOLDERS' DEFICIT | ||
Preferred Stock value |
Statement - CONSOLIDATED BALAN3
Statement - CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Accounts receivable, net of allowance for bad debt | $ 16,880 | $ 20,388 |
Inventory, net of allowance for obsolescence | 2,254 | 150,135 |
Property plant and equipment accumulated amortization | 33,873 | 31,477 |
Intangible asset accumulated amortization | $ 331,701 | $ 318,944 |
Common Stock, par value | $ 0.001 | $ 0.001 |
Common Stock, shares authorized | 250,000,000 | 250,000,000 |
Common Stock, shares issued | 108,377,331 | 107,274,559 |
Common Stock, shares outstanding | 108,373,242 | 107,270,470 |
Series A Preferred Stock [Member] | ||
Preferred Stock, par value | $ 10 | $ 10 |
Preferred Stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred Stock, shares issued | 0 | 0 |
Preferred Stock, shares outstanding | 0 | 0 |
Series B Preferred Stock [Member] | ||
Preferred Stock, par value | $ 10 | $ 10 |
Preferred Stock, shares authorized | 7,500 | 7,500 |
Preferred Stock, shares issued | 0 | 0 |
Preferred Stock, shares outstanding | 0 | 0 |
Series C Preferred Stock [Member] | ||
Preferred Stock, par value | $ 10 | $ 10 |
Preferred Stock, shares authorized | 100,000 | 100,000 |
Preferred Stock, shares issued | 81,360 | 80,218 |
Preferred Stock, shares outstanding | 81,360 | 80,218 |
Series D Preferred Stock [Member] | ||
Preferred Stock, par value | $ 10 | $ 10 |
Preferred Stock, shares authorized | 25,000 | 25,000 |
Preferred Stock, shares issued | 0 | 0 |
Preferred Stock, shares outstanding | 0 | 0 |
Series E Preferred Stock [Member] | ||
Preferred Stock, par value | $ 10 | $ 10 |
Preferred Stock, shares authorized | 5,000 | 5,000 |
Preferred Stock, shares issued | 0 | 0 |
Preferred Stock, shares outstanding | 0 | 0 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Revenues [Abstract] | ||
REVENUES | $ 1,095,223 | $ 1,013,987 |
COST OF GOODS SOLD | 190,643 | 217,086 |
GROSS PROFIT | 904,580 | 796,901 |
GENERAL AND ADMINISTRATIVE EXPENSES: | ||
General and Administrative Expenses | 746,401 | 878,043 |
Depreciation / Amortization | 15,154 | 14,889 |
Bad debt expense | 4,159 | 0 |
INCOME (LOSS) FROM CONTINUING OPERATIONS: | 138,866 | (96,031) |
OTHER INCOME (EXPENSES): | ||
Change in fair value of Derivative Liability | 34 | 309 |
Other income | 0 | 9 |
Interest Expense | (48,625) | (37,683) |
NET INCOME (LOSS) | 90,275 | (133,396) |
Series C preferred stock dividends | (73,269) | (63,478) |
NET INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS | $ 17,006 | $ (196,874) |
Basic and diluted income (loss) per share of common stock | $ 0 | $ 0 |
Weighted average number of common shares outstanding, basic | 107,974,738 | 106,695,782 |
Weighted average number of common shares outstanding, diluted | 108,600,904 | 106,695,782 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 90,275 | $ (133,396) |
Adjustments to reconcile net income (loss) to net cash used in operating activities | ||
Depreciation and amortization | 15,153 | 14,889 |
Bad debt expense | 4,159 | 0 |
Inventory obsolescence | 0 | 132 |
Common stock issued for services | 5,482 | 32,779 |
(Gain) loss on change in fair value of derivative liabilities | (34) | (309) |
Changes in assets and liabilities: | ||
(Increase) decrease in accounts receivable | (169,084) | (36,162) |
(Increase) decrease in royalities receivable | 150,750 | 0 |
(Increase) decrease in inventory | (131,750) | 57,212 |
(Increase) decrease in prepaids and other assets | 98,815 | (8,082) |
Increase (decrease) in accrued royalties and dividends | (229,312) | (230,536) |
Increase (decrease) in accounts payable | (25,616) | 84,679 |
Increase (decrease) in accounts payable, related parties | 11,104 | 0 |
Increase (decrease) in accrued interest payable | 43,839 | 37,683 |
Net cash flows used in operating activities | (136,219) | (179,064) |
Cash flows from investing activities: | ||
Purchase of property and equipment | (702) | (708) |
Net cash flows used in investing activities | (702) | (708) |
Cash flows from financing activities: | ||
Payments on capital lease obligation | (1,194) | (1,125) |
Payments on debt | (60,900) | (900) |
Cash proceeds from sale of series C preferred stock | 300,000 | 0 |
Net cash flows provided by (used in) financing activities | 237,906 | (2,025) |
Net increase (decrease) in cash | 100,985 | (181,797) |
Cash and cash equivalents, beginning of period | 182,337 | 523,441 |
Cash and cash equivalents, end of period | 283,322 | 341,644 |
Cash paid during the period for: | ||
Interest | 2,420 | 0 |
Income Taxes | 0 | 0 |
Supplemental non-cash investing and financing activities: | ||
Common stock issued for Series C dividends | 99 | 1,036 |
Common stock issued for conversion of Series C Preferred Stock | 10,000 | 3,570 |
Issuance of vested stock | $ 0 | $ 333 |
1. SUMMARY OF SIGNIFICANT ACCOU
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Basis of Presentation The terms WMT, we, the Company, and us as used in this report refer to Wound Management Technologies, Inc. The accompanying unaudited consolidated balance sheet as of March 31, 2016 and unaudited consolidated statements of operations for the three months ended March 31, 2016 and 2015 have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. In the opinion of management of WMT, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three month period ended March 31, 2016, are not necessarily indicative of the results that may be expected for the year ending December 31, 2016, or any other period. These financial statements and notes should be read in conjunction with the financial statements for each of the two years ended December 31, 2015, and December 31, 2014, included in the Companys Annual Report on Form 10-K. The accompanying consolidated balance sheet as of December 31, 2015, has been derived from the audited financial statements filed in our Form 10-K and is included for comparison purposes in the accompanying balance sheet. Certain prior year amounts have been reclassified to conform to current year presentation. Principles of Consolidation The accompanying consolidated financial statements include the accounts of WMT and its wholly-owned subsidiaries: Wound Care Innovations, LLC a Nevada limited liability company (WCI); Resorbable Orthopedic Products, LLC, a Texas limited liability company (Resorbable); and Innovate OR, Inc. InnovateOR formerly referred to as BioPharma Management Technologies, Inc., a Texas corporation (BioPharma). All intercompany accounts and transactions have been eliminated. Fair Value Measurements As defined in Accounting Standards Codification (ASC) Topic No. 820, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. ASC 820 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurement). This fair value measurement framework applies at both initial and subsequent measurement. The three levels of the fair value hierarchy defined by ASC Topic No. 820 are as follows: Level 1 Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives, marketable securities and listed equities. Level 2 Pricing inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reported date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Instruments in this category generally include non-exchange-traded derivatives such as commodity swaps, interest rate swaps, options and collars. Level 3 Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in managements best estimate of fair value. At March 31, 2016, the Companys financial instruments consist of the derivative liabilities related to stock purchase warrants. The derivative liability on stock purchase warrants was valued using the Black-Scholes Option Pricing Model, a Level 3 input. The fair value of the conversion features associated with the convertible debt was estimated in accordance with ASC Topic No. 470-20-25-4. The change in fair value of the derivative liabilities is classified in other income (expense) in the statement of operations. Our intangible assets have also been valued using the fair value accounting treatment and a description of the methodology used, including the valuation category, is described in the Companys Annual Report on Form 10-K. Income (Loss) Per Share The Company computes income (loss) per share in accordance with Accounting Standards Codification ASC Topic No. 260, Earnings per Share, which requires the Company to present basic and dilutive income (loss) per share when the effect is dilutive. Basic income (loss) per share is computed by dividing loss available to common stockholders by the weighted average number of common shares available. Diluted income (loss) per share is computed similar to basic income (loss) per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. The dilutive effect of the outstanding warrants for the three months ended March 31, 2016 and 2015 was 626,166 and -0- shares, respectively. The outstanding convertible preferred stock and convertible notes were excluded from the calculation of dilutive income (loss) per share as their effect would have been antidilutive. |
2. GOING CONCERN
2. GOING CONCERN | 3 Months Ended |
Mar. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
GOING CONCERN | The Company has continuously incurred losses from operations, has a working capital deficit, and has a significant accumulated deficit. The appropriateness of using the going concern basis is dependent upon the Company's ability to obtain additional financing or equity capital and, ultimately, to achieve profitable operations. These conditions raise substantial doubt about its ability to continue as a going concern. These unaudited interim consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty. The continuation of the Company as a going concern is dependent upon the success of the Company in obtaining additional funding and the success of its future operations. The ability of the Company to achieve these objectives cannot be determined at this time. |
3. NOTES PAYABLE
3. NOTES PAYABLE | 3 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE | During the three months ended March 31, 2016, the Company paid a total of $900 to Quest Capital as part of the furniture purchase agreement in the original amount of $11,700. During the three months ended March 31, 2016, the Company paid a total of $60,000 to Tonaquint, Inc. as part of the outstanding convertible note in the original amount of $170,000. |
4. STOCKHOLDERS' EQUITY
4. STOCKHOLDERS' EQUITY | 3 Months Ended |
Mar. 31, 2016 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS' EQUITY | Preferred Stock There are currently 5,000,000 shares of Series A Preferred Stock authorized, with no shares of Series A Preferred Stock currently issued or outstanding. Effective June 24, 2010, the Company filed a Certificate of Designations, Number, Voting Power, Preferences and Rights of Series B Convertible Redeemable Preferred Stock (the Certificate) with the Texas Secretary of State, designating 7,500 shares of Series B Preferred Stock, par value $10.00 per share (the Series B On October 11, 2013, the Company filed a Certificate of Designations, Number, Voting Power, Preferences and Rights of Series C Convertible Preferred Stock (the Certificate of Designations), under which it designated 100,000 shares of Series C Preferred Stock, par value $10.00. The Series C Preferred Stock is entitled to accruing dividends (payable, at the Companys options, in either cash or stock) of 5% per annum until October 10, 2016, and 3% per annum until October 10, 2018. The Series C Preferred Stock is senior to the Companys common stock and any other currently issued series of the Companys preferred stock upon liquidation, and is entitled to a liquidation preference per share equal to the original issuance price of such shares of Series C Preferred Stock together with the amount of all accrued but unpaid dividends thereon. Each of the Series C Shares is convertible at the option of the holder into 1,000 shares of common stock as provided in the Certificate. Additionally, each holder of Series C Preferred Stock shall be entitled to vote on all matters submitted for a vote of the holders of Common Stock a number of votes equal to the number of full shares of Common Stock into which such holders Series C shares could then be converted. As of March 31, 2016 and December 31, 2015, there were 83,503 and 80,218 shares of Series C Preferred Stock issued and outstanding, respectively. On November 13, 2013, the Company filed a Certificate of Designations, Number, Voting Power, Preferences and Rights of Series D Convertible Preferred Stock (the Certificate of Designations), under which it designated 25,000 shares of Series D Preferred Stock. Shares of Series D Preferred Stock are not entitled to any preference with respect to dividend or upon liquidation, and will automatically convert (at a ratio of 1,000-to-1) into shares of the Companys common stock, par value $0.001 upon approval of the Companys stockholders (and filing of) and amendment to the Companys Certificate of Incorporation increasing the number of authorized shares of Common Stock from 100,000,000 to 250,000,000. As of March 31, 2016 and December 31, 2015, there are no shares of Series D Preferred Stock issued and outstanding. On May 30, 2014, the Company filed a Certificate of Designations, Number, Voting Power, Preferences and Rights of Series E Convertible Preferred Stock (The Certificate of Designations), under which it designated 5,000 shares of Series E Preferred Stock. Shares of Series E Preferred Stock are not entitled to any preference with respect to dividends or upon liquidation, and will automatically convert (at a ratio of 1,000 shares of Common Stock for every one share of Series E Preferred Stock) into shares of the Companys common stock, $0.001 par value upon approval of the Companys stockholders (and filing of) and amendment to the Companys Certificate of Incorporation increasing the number of authorized shares of Common Stock from 100,000,000 to 250,000,000. As of March 31, 2016 and December 31, 2015, there are no shares of Series E Preferred Stock issued and outstanding. During the three months ended March 31, 2016, the Company sold an aggregate of 4,285 shares of Series C preferred stock for cash proceeds of $300,000. On January 29, 2016, the Company issued 1,098,904 common shares in exchange for the conversion of 1,000 Series C preferred stock and dividends earned. The Series C preferred stock earned dividends of $73,269 and $63,478 for the three months ended March 31, 2016 and 2015, respectively. As of March 31, 2016, no Series C preferred stock dividends have been declared. Common Stock During three months ended March 31, 2016, the Company recorded an aggregate of $5,482 of stock-based compensation related to the amortization of previously granted stock awards to employees and nonemployees. Warrants A summary of the status of the warrants granted for the three months ended March 31, 2016, and changes during the period then ended is presented below: For the Three Months Ended March 31, 2016 Shares Weighted Outstanding at beginning of period 9,736,844 $ 0.19 Granted - - Exercised - - Forfeited - - Expired - - Outstanding at end of period 9,736,844 $ 0.19 As of March 31, 2016 As of March 31, 2016 Warrants Outstanding Warrants Exercisable Range of Exercise Number Weighted-Average Weighted- Average Number Exercisable Weighted-Average $ 0.06 4,500,000 2.5 $ 0.06 4,500,000 $ 0.06 0.075 550,000 1.9 0.08 550,000 0.08 0.09 625,000 2.0 0.09 625,000 0.09 0.15 1,571,300 1.4 0.15 1,571,300 0.15 0.44 1,515,544 0.4 0.44 1,515,544 0.44 0.60 975,000 0.5 0.60 975,000 0.60 $ 0.06-0.60 9,736,844 1.7 $ 0.19 9,736,844 $ 0.19 The aggregate intrinsic value of the exercisable warrants as of March 31, 2016 was $0. Stock Options A summary of the status of the stock options granted for the three month period ended March 31, 2016, and changes during the period then ended is presented below: For the Three Months Ended March 31, 2016 Options Weighted Outstanding at beginning of period 1,093,500 $ 0.15 Granted - - Exercised - - Forfeited - - Expired - - Outstanding at end of Period 1,093,500 $ 0.15 As of March 31, 2016 As of March 31, 2016 Stock Options Outstanding Stock Options Exercisable Exercise Price Number Outstanding Weighted-Average Weighted- Average Number Exercisable Weighted-Average $ 0.15 943,500 1.40 0.15 943,500 $ 0.15 (a) 150,000 - - - - $ 0.15 1,093,500 1.40 0.15 943,500 $ 0.15 (a) On January 1, 2015, the company granted three tranches of options, 25,000, 25,000, and 100,000 which vest upon meeting specific performance measures agreed upon. The measures include achieving three specific sales targets per month for 3 consecutive months. The exercise price and expiration date of each tranche will be set upon achieving the targets. As of the date of this filing the performance measures have not been met. As a result the exercise price is undetermined and these options are excluded from the calculation of weighted average remaining life. The aggregate intrinsic value of the exercisable options as of March 31, 2016 was $0. |
5. DERIVATIVE LIABILITIES
5. DERIVATIVE LIABILITIES | 3 Months Ended |
Mar. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE LIABILITIES | As of December 31, 2013, the Company did not have a sufficient number of common shares authorized to fulfill the possible exercise of all outstanding warrants and the conversion of all convertible notes payable. As a result, the Company determined that the warrants and the embedded conversion features of the outstanding debt instruments did not qualify for equity classification. Accordingly, the warrants and conversion features were treated as derivative liabilities and were carried at fair value. During the year ended December 31, 2015, all of the outstanding convertible notes that qualified as derivative liabilities were paid in full or converted to common stock. As of March 31, 2016, only 910,000 warrants remained as derivative liabilities due to the existence of reset provisions that qualify the instruments as derivative liabilities under FASB ASC 815. The following table sets forth the fair value hierarchy within our financial assets and liabilities by level that they were accounted for at fair value on a recurring basis as of March 31, 2016 and December 31, 2015. Fair Value Measurement at March 31, 2016 Liabilities: Carrying Level 1 Level 2 Level 3 Warrant derivative liabilities $ 276 $ - $ - $ 276 Total $ 276 $ - $ - $ 276 Fair Value Measurement at December 31, 2015 Liabilities: Carrying Level 1 Level 2 Level 3 Warrant derivative liabilities $ 310 $ - $ - $ 310 Total $ 310 $ - $ - $ 310 The Company estimates the fair value of the derivative warrant liabilities by using the Black-Scholes Option Pricing Model and the derivative liabilities related to the conversion features in the outstanding convertible notes using the lack-Scholes Option Pricing Model assuming maximum value, Level 3 inputs, with the following assumptions used: Dividend yield: 0% Expected 0% to 117% Risk 0.13% to 0.25% Expected 0.58 to 1.32 The following table sets forth the changes in the fair value of derivative liabilities for the three months ended March 31, 2016: Balance, December 31, 2015 $ (310 ) Gain on change in fair value of derivative liabilities 34 Balance, March 31, 2016 $ (276 ) The aggregate gain on derivative liabilities for the three months ended March 31, 2016 was $34. |
6. RELATED PARTY TRANSACTIONS
6. RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2016 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | On September 29, 2009, the Company entered into an Asset Purchase Agreement (the Asset Purchase Agreement), by and among the Company, RSI-ACQ, LLC, a wholly-owned subsidiary of the Company (RSI), Resorbable Orthopedic Products, LLC (Resorbable) and Resorbables members, pursuant to which, RSI acquired substantially all of Resorbables assets, in exchange for (i) 500,000 shares of the Companys common stock, and (ii) a royalty equal to eight percent (8%) of the net revenues generated from products sold by the Company or any of its affiliates, which products are developed from or otherwise utilize any of the patented technology acquired from Resorbable. The royalty is paid to Barry Constantine whom holds the positon of Director of R&D. In June of 2015, Mr. S Oden Howell, Jr. was elected to the Board of Directors. Mr. Howell in June of 2015 is the holder of a convertible notes payable in the principle amount of $600,000 and accrued interest at 8% per annum compounded. In September of 2015, Mr. James Stuckert was elected to the Board of Directors. Mr. Stuckert in June of 2015 is the holder of a convertible notes payable in the principle amount of $600,000 and accrued interest at 8% per annum compounded. |
7. CAPITAL LEASE OBLIGATION
7. CAPITAL LEASE OBLIGATION | 3 Months Ended |
Mar. 31, 2016 | |
Leases, Capital [Abstract] | |
CAPITAL LEASE OBLIGATION | In December 2014, the Company entered into a Capital Lease agreement for the purchase of a phone system. The agreement required a down payment of $2,105 and 36 monthly payments of $375. The Company recorded an asset of $13,512 and a capital lease obligation of $13,512. Aggregate payments under the lease were $1,125 for the three months ended March 31, 2016. At March 31, 2016 a total lease liability of $7,283 remained. Of that, $4,504 will be due in the next 12 months. |
8. SUBSEQUENT EVENTS
8. SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2016 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | On April 25, 2016, Wound Management Technologies, Inc. (the Company) and John Siedhoff, a member of the Companys Board of Directors, entered into a Consulting Agreement (the Agreement), pursuant to which Mr. Siedhoff will provide certain consulting services to the Company for a payment of $200,000 followed by monthly compensation of $15,000 thereafter. On April 26, 2016, Wound Management Technologies, Inc. (the Company), Evolution Venture Partners, LLC (EVP) and Middlebury Securities, LLC (Middlebury, and together with EVP, Service Provider) entered into a Letter Agreement (the Agreement), pursuant to which Service Provider will serve as the Companys exclusive strategic advisor in connection with potential financing and strategic transactions. The Agreement has a term of one year (with an automatic six-month renewal term) and provides for: A $60,000 consulting fee payable upon execution of the Agreement, refundable only upon cancellation of the Agreement by EVP during the initial one-year term. A success fee in an amount equal to 5% of the transaction value of any strategic transaction. A selling fee equal to 3% of the gross proceeds of any debt financing transaction or 5% of the gross proceeds of any equity financing transaction. As described in further detail under Item 3.02 below, the issuance to EVP of a warrant (the Warrant) for the purchase of 60,000,000 shares of the Companys common stock, par value $0.001 per share, at an exercise price of $0.12 per share. |
1. SUMMARY OF SIGNIFICANT ACC14
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The terms WMT, we, the Company, and us as used in this report refer to Wound Management Technologies, Inc. The accompanying unaudited consolidated balance sheet as of March 31, 2016 and unaudited consolidated statements of operations for the three months ended March 31, 2016 and 2015 have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. In the opinion of management of WMT, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three month period ended March 31, 2016, are not necessarily indicative of the results that may be expected for the year ending December 31, 2016, or any other period. These financial statements and notes should be read in conjunction with the financial statements for each of the two years ended December 31, 2015, and December 31, 2014, included in the Companys Annual Report on Form 10-K. The accompanying consolidated balance sheet as of December 31, 2015, has been derived from the audited financial statements filed in our Form 10-K and is included for comparison purposes in the accompanying balance sheet. Certain prior year amounts have been reclassified to conform to current year presentation. |
Principles of Consolidation | The accompanying consolidated financial statements include the accounts of WMT and its wholly-owned subsidiaries: Wound Care Innovations, LLC a Nevada limited liability company (WCI); Resorbable Orthopedic Products, LLC, a Texas limited liability company (Resorbable); and Innovate OR, Inc. InnovateOR formerly referred to as BioPharma Management Technologies, Inc., a Texas corporation (BioPharma). All intercompany accounts and transactions have been eliminated. |
Fair Value Measurements | As defined in Accounting Standards Codification (ASC) Topic No. 820, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. ASC 820 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurement). This fair value measurement framework applies at both initial and subsequent measurement. The three levels of the fair value hierarchy defined by ASC Topic No. 820 are as follows: Level 1 Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives, marketable securities and listed equities. Level 2 Pricing inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reported date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Instruments in this category generally include non-exchange-traded derivatives such as commodity swaps, interest rate swaps, options and collars. Level 3 Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in managements best estimate of fair value. At March 31, 2016, the Companys financial instruments consist of the derivative liabilities related to stock purchase warrants. The derivative liability on stock purchase warrants was valued using the Black-Scholes Option Pricing Model, a Level 3 input. The fair value of the conversion features associated with the convertible debt was estimated in accordance with ASC Topic No. 470-20-25-4. The change in fair value of the derivative liabilities is classified in other income (expense) in the statement of operations. Our intangible assets have also been valued using the fair value accounting treatment and a description of the methodology used, including the valuation category, is described in the Companys Annual Report on Form 10-K. |
Income (Loss) Per Share | The Company computes income (loss) per share in accordance with Accounting Standards Codification ASC Topic No. 260, Earnings per Share, which requires the Company to present basic and dilutive income (loss) per share when the effect is dilutive. Basic income (loss) per share is computed by dividing loss available to common stockholders by the weighted average number of common shares available. Diluted income (loss) per share is computed similar to basic income (loss) per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. The dilutive effect of the outstanding warrants for the three months ended March 31, 2016 and 2015 was 626,166 and -0- shares, respectively. The outstanding convertible preferred stock and convertible notes were excluded from the calculation of dilutive income (loss) per share as their effect would have been antidilutive. |
4. STOCKHOLDERS' EQUITY (Tables
4. STOCKHOLDERS' EQUITY (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Stockholders' Equity Note [Abstract] | |
A Summary Of The Status Of The Warrants Granted | For the Three Months Ended March 31, 2016 Shares Weighted Outstanding at beginning of period 9,736,844 $ 0.19 Granted - - Exercised - - Forfeited - - Expired - - Outstanding at end of period 9,736,844 $ 0.19 |
Schedule of warrants by warrant price range | As of March 31, 2016 As of March 31, 2016 Warrants Outstanding Warrants Exercisable Range of Exercise Number Weighted-Average Weighted- Average Number Exercisable Weighted-Average $ 0.06 4,500,000 2.5 $ 0.06 4,500,000 $ 0.06 0.075 550,000 1.9 0.08 550,000 0.08 0.09 625,000 2.0 0.09 625,000 0.09 0.15 1,571,300 1.4 0.15 1,571,300 0.15 0.44 1,515,544 0.4 0.44 1,515,544 0.44 0.60 975,000 0.5 0.60 975,000 0.60 $ 0.06-0.60 9,736,844 1.7 $ 0.19 9,736,844 $ 0.19 |
Schedule of option activity | For the Three Months Ended March 31, 2016 Options Weighted Outstanding at beginning of period 1,093,500 $ 0.15 Granted - - Exercised - - Forfeited - - Expired - - Outstanding at end of Period 1,093,500 $ 0.15 |
Schedule of options by option price range | As of March 31, 2016 As of March 31, 2016 Stock Options Outstanding Stock Options Exercisable Exercise Price Number Outstanding Weighted-Average Weighted- Average Number Exercisable Weighted-Average $ 0.15 943,500 1.40 0.15 943,500 $ 0.15 (a) 150,000 - - - - $ 0.15 1,093,500 1.40 0.15 943,500 $ 0.15 |
5. DERIVATIVE LIABILITIES (Tabl
5. DERIVATIVE LIABILITIES (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of financial assets and liabilities by level | Fair Value Measurement at March 31, 2016 Liabilities: Carrying Level 1 Level 2 Level 3 Warrant derivative liabilities $ 276 $ - $ - $ 276 Total $ 276 $ - $ - $ 276 Fair Value Measurement at December 31, 2015 Liabilities: Carrying Level 1 Level 2 Level 3 Warrant derivative liabilities $ 310 $ - $ - $ 310 Total $ 310 $ - $ - $ 310 |
Fair Value Of Derivative Warrant Liabilities Using Black-Scholes Option Pricing Model | Dividend yield: 0% Expected 0% to 117% Risk 0.13% to 0.25% Expected 0.58 to 1.32 |
The Following Table Sets Forth The Changes In Derivative Liabilities | Balance, December 31, 2015 $ (310 ) Gain on change in fair value of derivative liabilities 34 Balance, March 31, 2016 $ (276 ) |
1. SUMMARY OF SIGNIFICANT ACC17
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - shares | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Accounting Policies [Abstract] | ||
Dilutive effect of the outstanding warrants | 626,166 | 0 |
3. NOTES PAYABLE (Details Narra
3. NOTES PAYABLE (Details Narrative) | 3 Months Ended |
Mar. 31, 2016USD ($) | |
Furniture purchase agreement note Paid | $ 900 |
Furniture purchase agreement note Original Amount | 11,700 |
Tonaquint, Inc [Member] | |
Repayments of note payable | 60,000 |
Outstanding convertible note | $ 170,000 |
4. STOCKHOLDERS' EQUITY (Detail
4. STOCKHOLDERS' EQUITY (Details) | 3 Months Ended |
Mar. 31, 2016$ / sharesshares | |
Number Outstanding, Beginning | shares | 1,093,500 |
Number of Warrants Granted | shares | 0 |
Number of Warrants Exercised | shares | 0 |
Number of Warrants Forfeited | shares | 0 |
Number of Warrants Expired | shares | 0 |
Number Outstanding, Ending | shares | 1,093,500 |
Weighted Average Exercise Price Outstanding, Beginning | $ / shares | $ 0.15 |
Weighted Average Exercise Price Granted | $ / shares | 0 |
Weighted Average Exercise Price Exercised | $ / shares | 0 |
Weighted Average Exercise Price Forfeited | $ / shares | 0 |
Weighted Average Exercise Price Expired | $ / shares | 0 |
Weighted Average Exercise Price Outstanding, Ending | $ / shares | $ 0.15 |
Warrant | |
Number Outstanding, Beginning | shares | 9,736,844 |
Number of Warrants Granted | shares | 0 |
Number of Warrants Exercised | shares | 0 |
Number of Warrants Forfeited | shares | 0 |
Number of Warrants Expired | shares | 0 |
Number Outstanding, Ending | shares | 9,736,844 |
Weighted Average Exercise Price Outstanding, Beginning | $ / shares | $ 0.19 |
Weighted Average Exercise Price Granted | $ / shares | 0 |
Weighted Average Exercise Price Exercised | $ / shares | 0 |
Weighted Average Exercise Price Forfeited | $ / shares | 0 |
Weighted Average Exercise Price Expired | $ / shares | 0 |
Weighted Average Exercise Price Outstanding, Ending | $ / shares | $ 0.19 |
4. STOCKHOLDERS' EQUITY (Deta20
4. STOCKHOLDERS' EQUITY (Details 1) - $ / shares | 3 Months Ended | |
Mar. 31, 2016 | Dec. 31, 2015 | |
Number Outstanding, Ending | 1,093,500 | 1,093,500 |
Weighted-Average Remaining Contract Life | 1 year 4 months 24 days | |
Weighted-Average Exercise Price | $ 0.15 | $ 0.15 |
Number Exercisable | 943,500 | |
Exercisable Weighted Average Exercise Price | $ 0.15 | |
0.06 | ||
Number Outstanding, Ending | 4,500,000 | |
Weighted-Average Remaining Contract Life | 2 years 6 months | |
Weighted-Average Exercise Price | $ 0.06 | |
Number Exercisable | 4,500,000 | |
Exercisable Weighted Average Exercise Price | $ 0.06 | |
0.075 | ||
Number Outstanding, Ending | 550,000 | |
Weighted-Average Remaining Contract Life | 1 year 10 months 24 days | |
Weighted-Average Exercise Price | $ 0.08 | |
Number Exercisable | 550,000 | |
Exercisable Weighted Average Exercise Price | $ 0.08 | |
0.09 | ||
Number Outstanding, Ending | 625,000 | |
Weighted-Average Remaining Contract Life | 2 years | |
Weighted-Average Exercise Price | $ 0.09 | |
Number Exercisable | 625,000 | |
Exercisable Weighted Average Exercise Price | $ 0.09 | |
0.15 | ||
Number Outstanding, Ending | 1,571,300 | |
Weighted-Average Remaining Contract Life | 1 year 4 months 24 days | |
Weighted-Average Exercise Price | $ 0.15 | |
Number Exercisable | 1,571,300 | |
Exercisable Weighted Average Exercise Price | $ 0.15 | |
0.44 | ||
Number Outstanding, Ending | 1,515,544 | |
Weighted-Average Remaining Contract Life | 4 months 24 days | |
Weighted-Average Exercise Price | $ 0.44 | |
Number Exercisable | 1,515,544 | |
Exercisable Weighted Average Exercise Price | $ 0.44 | |
0.60 | ||
Number Outstanding, Ending | 975,000 | |
Weighted-Average Remaining Contract Life | 6 months | |
Weighted-Average Exercise Price | $ 0.60 | |
Number Exercisable | 975,000 | |
Exercisable Weighted Average Exercise Price | $ 0.60 | |
0.06-0.60 | ||
Number Outstanding, Ending | 9,736,844 | |
Weighted-Average Remaining Contract Life | 1 year 8 months 12 days | |
Weighted-Average Exercise Price | $ 0.19 | |
Number Exercisable | 9,736,844 | |
Exercisable Weighted Average Exercise Price | $ 0.19 |
4. STOCKHOLDERS' EQUITY (Deta21
4. STOCKHOLDERS' EQUITY (Details 2) | 3 Months Ended |
Mar. 31, 2016$ / sharesshares | |
Stockholders Equity Details 2 | |
Number Outstanding, Beginning | shares | 1,093,500 |
Number of Options Granted | shares | 0 |
Number of Options Exercised | shares | 0 |
Number of Options Forfeited | shares | 0 |
Number of Options Expired | shares | 0 |
Number Outstanding, Ending | shares | 1,093,500 |
Weighted Average Exercise Price Outstanding, Beginning | $ / shares | $ 0.15 |
Weighted Average Exercise Price Granted | $ / shares | 0 |
Weighted Average Exercise Price Exercised | $ / shares | 0 |
Weighted Average Exercise Price Forfeited | $ / shares | 0 |
Weighted Average Exercise Price Expired | $ / shares | 0 |
Weighted Average Exercise Price Outstanding, Ending | $ / shares | $ 0.15 |
4. STOCKHOLDERS' EQUITY (Deta22
4. STOCKHOLDERS' EQUITY (Details 3) - $ / shares | 3 Months Ended | ||
Mar. 31, 2016 | Dec. 31, 2015 | ||
Number Outstanding, Ending | 1,093,500 | 1,093,500 | |
Weighted-average remaining contract life | 1 year 4 months 24 days | ||
Weighted Average Exercise Price Outstanding, Ending | $ 0.15 | $ 0.15 | |
Number Options Exercisable | 943,500 | ||
Weighted-Average Exercise Price Options Exercisable | $ 0.15 | ||
Stock Options | |||
Number Outstanding, Ending | 943,500 | ||
Weighted-average remaining contract life | 1 year 4 months 24 days | ||
Weighted Average Exercise Price Outstanding, Ending | $ 0.15 | ||
Number Options Exercisable | 943,500 | ||
Weighted-Average Exercise Price Options Exercisable | $ 0.15 | ||
January 1, 2015 Grants | |||
Number Outstanding, Ending | [1] | 150,000 | |
Weighted-average remaining contract life | [1] | 0 years | |
Weighted Average Exercise Price Outstanding, Ending | [1] | $ 0 | |
Number Options Exercisable | [1] | 0 | |
Weighted-Average Exercise Price Options Exercisable | [1] | $ 0 | |
[1] | On January 1, 2015, the company granted three tranches of options, 25,000, 25,000, and 100,000 which vest upon meeting specific performance measures agreed upon. The measures include achieving three specific sales targets per month for 3 consecutive months. The exercise price and expiration date of each tranche will be set upon achieving the targets. As of the date of this filing the performance measures have not been met. As a result the exercise price is undetermined and these options are excluded from the calculation of weighted average remaining life. |
4. STOCKHOLDERS' EQUITY (Deta23
4. STOCKHOLDERS' EQUITY (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Stock-based compensation | $ 5,482 | ||
Intrinsic value of the exercisable warrants | 0 | ||
Intrinsic value of the exercisable options | $ 0 | ||
Series C Preferred Stock [Member] | |||
Preferred Stock, shares issued | 81,360 | 80,218 | |
Preferred Stock, shares outstanding | 81,360 | 80,218 | |
Proceeds from sale of preferred stock | $ 300,000 | ||
Proceeds from sale of preferred stock, Shares | 4,285 | ||
Preferred stock dividends | $ 73,269 | $ 63,478 | |
Series D Preferred Stock [Member] | |||
Preferred Stock, shares issued | 0 | 0 | |
Preferred Stock, shares outstanding | 0 | 0 | |
Series E Preferred Stock [Member] | |||
Preferred Stock, shares issued | 0 | 0 | |
Preferred Stock, shares outstanding | 0 | 0 |
5. DERIVATIVE LIABILITIES (Deta
5. DERIVATIVE LIABILITIES (Details) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Derivative Liability | $ 276 | $ 310 |
Warrant | ||
Derivative Liability | 276 | 310 |
Level 1 | ||
Derivative Liability | 0 | 0 |
Level 1 | Warrant | ||
Derivative Liability | 0 | 0 |
Level 2 | ||
Derivative Liability | 0 | 0 |
Level 2 | Warrant | ||
Derivative Liability | 0 | 0 |
Level 3 | ||
Derivative Liability | 276 | 310 |
Level 3 | Warrant | ||
Derivative Liability | $ 276 | $ 310 |
5. DERIVATIVE LIABILITIES (De25
5. DERIVATIVE LIABILITIES (Details 1) | 3 Months Ended |
Mar. 31, 2016 | |
Derivative Liabilities Details 1 | |
Dividend yield: | 0.00% |
Expected volatility, min | 0.00% |
Expected volatility, max | 117.00% |
Risk free interest rate, min | 0.13% |
Risk free interest rate, max | 0.25% |
Expected life (years), min | 6 months 29 days |
Expected life (years), max | 1 year 3 months 26 days |
5. DERIVATIVE LIABILITIES (De26
5. DERIVATIVE LIABILITIES (Details 2) | 3 Months Ended |
Mar. 31, 2016USD ($) | |
Derivative Liabilities Details 2 | |
Beginning Balance | $ (310) |
Gain on change in fair value of derivative liabilities | 34 |
Ending Balance | $ (276) |
5. DERIVATIVE LIABILITIES (De27
5. DERIVATIVE LIABILITIES (Details Narrative) | 3 Months Ended |
Mar. 31, 2016USD ($)shares | |
Derivative Liabilities Details Narrative | |
Warrants remained as derivative liabilities | shares | 910,000 |
Aggregate gain on derivative liabilities | $ | $ 34 |
7. CAPITAL LEASE OBLIGATION (De
7. CAPITAL LEASE OBLIGATION (Details Narrative) | 3 Months Ended |
Mar. 31, 2016USD ($) | |
Capital Lease Obligation Details Narrative | |
Aggregate payments under the lease | $ 1,125 |
Total lease liability | $ 7,283 |