Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Nov. 07, 2016 | |
Document And Entity Information | ||
Entity Registrant Name | HealthWarehouse.com, Inc. | |
Entity Central Index Key | 754,813 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity a Well-known Seasoned Issuer | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 42,582,613 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,016 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash | $ 3,950 | $ 11,217 |
Restricted cash | 161,792 | 145,088 |
Accounts receivable, net of allowance of $47,143 as of September 30, 2016 and December 31, 2015 | 57,734 | 51,627 |
Inventories - finished goods, net | 217,692 | 182,647 |
Prepaid expenses and other current assets | 105,088 | 81,718 |
Total current assets | 546,256 | 472,297 |
Property and equipment, net of accumulated depreciation of $875,106 and $801,270 as of September 30, 2016 and December 31, 2015 | 339,060 | 409,248 |
Web development costs, net of accumulated amortization of $197,760 and $146,448 as of September 30, 2016 and December 31, 2015 | 33,250 | 84,562 |
Total assets | 918,566 | 966,107 |
Current liabilities: | ||
Accounts payable - trade | 1,916,528 | 2,189,649 |
Accounts payable - related parties | 862 | |
Accrued expenses and other current liabilities | 942,244 | 597,665 |
Equipment lease payable | 46,143 | |
Notes payable and other advances, net of debt discount of $1,722 as of September 30, 2016 | 1,298,278 | 991,089 |
Note payable and other advances - related parties | 23,889 | |
Redeemable preferred stock - Series C; par value $0.001 per share; 10,000 designated Series C: 10,000 issued and outstanding as of September 30, 2016 and December 31, 2015 (aggregate liquidation preference of $1,000,000) | 1,000,000 | 1,000,000 |
Total current liabilities | 5,157,050 | 4,849,297 |
Total liabilities | 5,157,050 | 4,849,297 |
Commitments and contingencies | ||
Stockholders' deficiency: | ||
Preferred stock - par value $0.001 per share; authorized 1,000,000 shares; issued and outstanding as of September 30, 2016 and December 31, 2015 as follows: | ||
Convertible preferred stock - Series A - 200,000 shares designated Series A; 44,443 shares available to be issued; no shares issued and outstanding | ||
Convertible preferred stock - Series B - 625,000 shares designated Series B; 517,359 and 483,512 shares issued and outstanding as of September 30, 2016 and December 31, 2015, respectively (aggregate liquidation preference of $5,145,717 and $4,889,043 as of September 30, 2016 and December 31, 2015, respectively) | 517 | 484 |
Common stock - par value $0.001 per share; authorized 100,000,000 shares; 43,761,825 and 38,844,374 shares issued and 42,582,613 and 37,665,162 shares outstanding as of September 30, 2016 and December 31, 2015, respectively | 43,761 | 38,844 |
Additional paid-in capital | 31,864,288 | 30,656,598 |
Treasury stock, at cost, 1,179,212 shares as of September 30, 2016 and December 31, 2015 | (3,419,715) | (3,419,715) |
Accumulated deficit | (32,727,335) | (31,159,401) |
Total stockholders' deficiency | (4,238,484) | (3,883,190) |
Total liabilities and stockholders' deficiency | $ 918,566 | $ 966,107 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Current assets: | ||
Accounts receivable, net of allowance | $ 47,143 | $ 47,143 |
Property and equipment, net of accumulated depreciation | 875,106 | 801,270 |
Web development costs, net of accumulated amortization | 197,760 | 146,448 |
Current liabilities: | ||
Current portion of notes payable, net of debt discount | $ 1,722 | $ 0 |
Redeemable preferred stock Series C, par value | 0.001 | 0.001 |
Redeemable preferred stock Series C, shares designated | 10,000 | 10,000 |
Redeemable preferred stock Series C, shares issued | 10,000 | 10,000 |
Redeemable preferred stock Series C, shares outstanding | 10,000 | 10,000 |
Redeemable preferred stock Series C, aggregate liquidation preference | $ 1,000,000 | $ 1,000,000 |
Stockholders' deficiency: | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, authorized | 1,000,000 | 1,000,000 |
Series A Convertible preferred stock, shares designated | 200,000 | 200,000 |
Series A Convertible preferred stock, shares available to be issued | 44,443 | 44,443 |
Series A Convertible preferred stock, shares issued | 0 | 0 |
Series A Convertible preferred stock, shares outstanding | 0 | 0 |
Series B Convertible preferred stock, shares designated | 625,000 | 625,000 |
Series B Convertible preferred stock, shares issued | 517,359 | 483,512 |
Series B Convertible preferred stock, shares outstanding | 517,359 | 483,512 |
Series B Convertible preferred stock, aggregate liquidation preference | $ 5,145,717 | $ 4,889,043 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 43,761,825 | 38,844,374 |
Common stock, shares outstanding | 42,582,613 | 37,665,162 |
Treasury stock, shares | 1,179,212 | 1,179,212 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Consolidated Statements Of Operations | ||||
Net sales | $ 2,716,982 | $ 1,689,457 | $ 7,468,754 | $ 5,172,974 |
Cost of sales | 928,342 | 604,153 | 2,678,998 | 1,853,707 |
Gross profit | 1,788,640 | 1,085,304 | 4,789,756 | 3,319,267 |
Operating expenses: | ||||
Selling, general and administrative expenses | 2,728,240 | 1,211,401 | 6,009,026 | 3,605,876 |
Net loss from operations | (939,600) | (126,097) | (1,219,270) | (286,609) |
Interest expense | (38,541) | (36,507) | (91,989) | (156,464) |
Net loss | (978,141) | (162,604) | (1,311,259) | (443,073) |
Preferred stock: | ||||
Series B convertible contractual dividends | (85,559) | (79,960) | (256,675) | (239,882) |
Loss attributable to common stockholders | $ (1,063,700) | $ (242,564) | $ (1,567,934) | $ (682,955) |
Per share data: | ||||
Net loss - basic and diluted | $ (0.03) | $ (0.01) | $ (0.04) | $ (0.01) |
Series B convertible contractual dividends | 0 | 0 | (0.01) | (0.01) |
Net loss attributable to common stockholders - basic and diluted | $ (0.03) | $ (0.01) | $ (0.04) | $ (0.02) |
Weighted average number of common shares outstanding - basic and diluted | 38,789,595 | 37,570,383 | 40,994,678 | 37,570,383 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Cash flows from operating activities | ||
Net loss | $ (1,311,259) | $ (443,073) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Provision for employee advance reserve | 2,143 | |
Depreciation and amortization | 125,148 | 138,157 |
Stock-based compensation | 213,860 | 258,114 |
Gain on settlement of accounts payable | (55,432) | (105,764) |
Amortization of debt discount | 13,778 | 98,134 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (6,107) | 20,898 |
Inventories - finished goods | (35,045) | (28,458) |
Prepaid expenses and other current assets | (23,370) | (32,768) |
Accounts payable - trade | 480,921 | (167,259) |
Accounts payable - related parties | (862) | (44,314) |
Accrued expenses and other current liabilities | 370,757 | (98,618) |
Deferred revenue | (5,017) | |
Net cash used in operating activities | (227,611) | (407,825) |
Cash flows from investing activities | ||
Change in restricted cash | (16,704) | 36,077 |
Capital expenditures | (3,648) | (5,539) |
Website development costs | (18,125) | |
Net cash (used in) provided by investing activities | (20,352) | 12,413 |
Cash flows from financing activities | ||
Principal payments on equipment leases payable | (46,143) | (47,665) |
Proceeds from exercise of common stock options | 1,817 | |
Proceeds from issuance of notes payable | 308,911 | |
Repayment of notes payable - related parties | (23,889) | (37,700) |
Net cash provided by (used in) financing activities | 240,696 | (85,365) |
Net decrease in cash | (7,267) | (480,777) |
Cash - beginning of period | 11,217 | 506,019 |
Cash - end of period | 3,950 | 25,242 |
Cash paid for: | ||
Interest | 69,870 | 58,416 |
Non-cash investing and financing activities: | ||
Issuance of Series B preferred stock for settlement of accrued dividends | 319,854 | 298,918 |
Warrants issued as debt discount in connection with notes payable | 15,500 | 41,300 |
Accrual of contractual dividends on Series B convertible preferred stock | 256,675 | 239,882 |
Cashless exercise of common stock purchase warrants | 2,647 | |
Conversion of accounts payable to common stock | $ 698,594 |
Organization and Basis of Prese
Organization and Basis of Presentation | 9 Months Ended |
Sep. 30, 2016 | |
Notes to Financial Statements | |
1. Organization and Basis of Presentation | HealthWarehouse.com, Inc. ("HEWA" or the "Company"), a Delaware company incorporated in 1998, is an online mail order pharmacy, licensed and/or authorized to sell and deliver prescriptions in 50 states and the District of Columbia focusing on the out-of-pocket prescription drug market. The Company is Verified Internet Pharmacy Practice Site ("VIPPS") accredited by the National Association of Boards of Pharmacy ("NABP"). The Company markets a complete range of generic, brand name, and pet prescription medications as well as over-the-counter ("OTC") medications and products. 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 with the instructions for Form 10-Q and Regulation S-X. Accordingly, they do not include all of the information and disclosures required by U.S. GAAP for annual financial statements. In the opinion of management, such statements include all adjustments (consisting only of normal recurring items) which are considered necessary for a fair presentation of the condensed consolidated financial statements of the Company as of September 30, 2016 and for the nine months ended September 30, 2016 and 2015. The results of operations for the three and nine months ended September 30, 2016 are not necessarily indicative of the operating results for the full year ending December 31, 2016 or any other period. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related disclosures of the Company as of December 31, 2015 and for the year then ended, which were filed with the Securities and Exchange Commission on Form 10-K on March 25, 2016. |
Going Concern and Management's
Going Concern and Management's Liquidity Plans | 9 Months Ended |
Sep. 30, 2016 | |
Notes to Financial Statements | |
2. Going Concern and Management's Liquidity Plans | Since inception, the Company has financed its operations primarily through debt and equity financings and advances from related parties. As of September 30, 2016, the Company had a working capital deficiency of $4,610,794 and an accumulated deficit of $32,727,335. During the nine months ended September 30, 2016, the Company incurred net losses of $1,311,259 and used cash in operating activities of $227,611. These conditions raise substantial doubt about the Company's ability to continue as a going concern. The Company is subject to a 2013 Notice of Redemption related to its Series C Redeemable Preferred Stock aggregating $1,000,000, whereby the Company must now apply all of its assets to redemption of the Series C Preferred Stock and to no other corporate purpose, except to the extent prohibited by Delaware law governing distributions to stockholders (the Company is not permitted to utilize toward the redemption those assets required to pay its debts as they come due and those assets required to continue as a going concern). The Company recognizes it will need to raise additional capital in order to fund operations, meet its payment obligations, including its obligations under a loan and security agreement (see Note 5), and execute its business plan. There is no assurance that additional financing will be available when needed or that management will be able to obtain financing on terms acceptable to the Company and whether the Company will become profitable and generate positive operating cash flow. If the Company is unable to raise sufficient additional funds, it will have to develop and implement a plan to further extend payables, attempt to extend note repayments, attempt to negotiate the preferred stock redemption and reduce overhead until sufficient additional capital is raised to support further operations. There can be no assurance that such a plan will be successful. If the Company is unable to obtain financing on a timely basis, the Company could be forced to sell its assets, discontinue its operation and /or seek reorganization under the U.S. bankruptcy code. Accordingly, the accompanying condensed consolidated financial statements have been prepared in conformity with U.S. GAAP, which contemplates continuation of the Company as a going concern and the realization of assets and the satisfaction of liabilities in the normal course of business. The carrying amounts of assets and liabilities presented in the condensed consolidated financial statements do not necessarily represent realizable or settlement values. The condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2016 | |
Notes to Financial Statements | |
3. Summary of Significant Accounting Policies | Principles of Consolidation The condensed consolidated financial statements include the accounts of HealthWarehouse.com, Inc., Hwareh.com, Inc., Hocks.com, Inc., ION Holding NV and ION Belgium NV, its wholly-owned subsidiaries. ION Holding NV and ION Belgium NV are inactive subsidiaries. All material inter-company balances and transactions have been eliminated in consolidation. Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company's significant estimates include reserves related to accounts receivable and inventory, the recoverability and useful lives of long-lived assets, the valuation allowance related to deferred tax assets, the valuation of equity instruments and debt discounts. Reclassifications Certain accounts in the prior period condensed consolidated financial statements have been reclassified for comparison purposes to conform to the presentation of the current period condensed consolidated financial statements. These reclassifications had no effect on the previously reported net loss. Net Earnings (Loss) Per Share of Common Stock Basic net earnings (loss) per share is computed by dividing net earnings (loss) attributable to Common Stockholders by the weighted average number of common shares outstanding during the period. Diluted net earnings (loss) per share reflects the potential dilution that could occur if securities or other instruments to issue Common Stock were exercised or converted into Common Stock. Potentially dilutive securities are excluded from the computation of diluted net earnings (loss) per share if their inclusion would be anti-dilutive and consist of the following: September 30, 2016 2015 Options 1,864,716 5,266,128 Warrants 8,076,118 9,976,474 Series B Convertible Preferred Stock 6,032,406 5,507,202 Total potentially dilutive shares 15,973,240 20,749,804 Recently Issued Accounting Pronouncements In March 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting ("ASU 2016-09"). ASU 2016-09 simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. ASU 2016-09 is effective for the Company beginning January 1, 2017. The Company is currently evaluating the potential impact of adopting this guidance but does not expect it to have a material impact on our condensed consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15, Classification of Certain Cash Receipts and Cash Payments (Topic 230) |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 9 Months Ended |
Sep. 30, 2016 | |
Notes to Financial Statements | |
4. Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consisted of the following: September 30, December 31, 2016 2015 Deferred Rent $ 6,463 $ 25,852 Advertising 75,000 76,639 Salaries and Benefits 70,521 64,007 Severance 235,000 - Dividend Payable 256,675 319,854 Proxy and Solicitation Costs 160,000 - Accrued Interest 44,249 44,249 Accrued Rent 50,863 49,614 Other 43,473 17,450 Total $ 942,244 $ 597,665 |
Notes Payable
Notes Payable | 9 Months Ended |
Sep. 30, 2016 | |
Notes to Financial Statements | |
5. Notes Payable | The Company is a party to a Loan and Security Agreement (the "Loan Agreement") with a lender (the "Lender"). Under the terms of the Loan Agreement, the Company borrowed an aggregate of $1,200,000 from the Lender (the "Loan"), including $200,000 and $308,911 during the three and nine months ended September 30, 2016. The Loan is evidenced by a promissory note (the "Senior Note") in the face amount of $1,200,000 (as amended). The Senior Note bears interest on the unpaid principal balance of the Note until the full amount of principal has been paid at a floating rate equal to the Prime Rate plus 4.25% per annum (7.75% as of September 30, 2016). Under the terms of the Loan Agreement, the Company has agreed to make monthly payments of accrued interest on the first day of every month. The principal amount and all unpaid accrued interest on the Note was payable on September 30, 2016, or earlier in the event of default or a sale or liquidation of the Company. The Loan may be prepaid in whole or in part at any time by the Company without penalty. The Company granted the Lender a first, priority security interest in all Company's assets, to secure the Company's obligation to repay the Loan, including a Deposit Account Control Agreement, which grants the Lender a security interest in certain bank accounts. In addition, the Company is required to direct the proceeds of its credit card receipts to a cash collateral account controlled by the Lender. The Company also borrowed and repaid $50,000 from the Lender in a separate transaction during the three months ended September 30, 2016. See Note 10 – Subsequent Events for additional information. Beginning on October 4, 2016, the Company has executed three successive amendments to the Senior Note, effective September 30, 2016, pursuant to which the Lender agreed to extend the maturity date of the Senior Note from September 30, 2016 to November 30, 2016. On January 11, 2016, the Company executed an Amendment to an existing promissory note ("Promissory Note") in the face amount of $100,000 with a different lender, effective October 31, 2015, which extended the maturity date of the note payable from November 1, 2015 to October 31, 2016. In consideration of the extension of the maturity date of the note payable, the Company issued to the lender a five-year warrant to purchase 75,000 shares of Common Stock at an exercise price of $0.25 per share. The warrants had a fair value of $15,500 using the Black-Scholes model (see Note 6 – Stockholders' Deficiency) which was established as debt discount during the nine months ended September 30, 2016 and is being amortized using the effective interest method over the remaining term of the Promissory Note. Including the value of the warrants issued in connection with the extension of the maturity date of the Promissory Note, the Promissory Note has an effective interest rate of 23% per annum during the extension period. The Company recorded amortization of debt discount associated with notes payable of $5,167 and $13,778 for the three and nine months ended September 30, 2016, respectively, and $18,367 and $98,134 for the three and nine months ended September 30, 2015, respectively. |
Stockholders' Deficiency
Stockholders' Deficiency | 9 Months Ended |
Sep. 30, 2016 | |
Notes to Financial Statements | |
6. Stockholders' Deficiency | Common Stock On July 28, 2016, the Company entered an Exchange Agreement with Dellave Holdings LLC ("Dellave") whereby the Company issued an aggregate of 2,253,528 shares of Common Stock in exchange for the extinguishment of accounts payable balances totaling $698,594 held by Dellave. The exchange was based on the prior day's closing price of $0.31. The $698,594 aggregate fair value of the common stock issued was credited to equity at conversion. Mr. Timothy Reilly is the managing member of Dellave. Mr. Reilly is also the managing member of Melrose Capital Advisors, LLC, the Company's senior lender at the time of the transaction. Preferred Stock As of September 30, 2016 and December 31, 2015, the Company had accrued contractual dividends of $256,675 and $319,853, respectively, related to the Series B Preferred Stock. On January 1, 2016 and 2015, the Company issued 33,847 and 31,633 shares of Series B convertible preferred stock valued at approximately $320,000 and $299,000, respectively, representing approximately $0.66 in value per share of Series B Preferred Stock outstanding on each date, to the Series B convertible preferred stock holders as payment in kind for dividends. Stock Options Valuation In applying the Black-Scholes option pricing model to stock options, the Company used the following weighted average assumptions: Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Risk free interest rate 1.00% 1.74% to 2.28% 1.00% to 2.12% 1.35% to 2.28% Dividend yield 0.00% 0.00% 0.00% 0.00% Expected volatility 199.0% 196.0% to 197.0% 199.0% to 200.0% 195.0% to 197.0% Expected life in years 5.5 5.5 to 10.0 5.5 to 10.0 5.5 to 10.0 The Company estimated forfeitures at a weighted average annual rate of 3% to 4% for the three and nine months ended September 30, 2016 and 2015. Grants The weighted average fair value of the stock options granted during the three and nine months ended September 30, 2016 was $0.35 and $0.29 per share, respectively. The weighted average fair value of the stock options granted during the three and nine months ended September 30, 2015 was $0.12 and $0.10 per share, respectively. During the nine months ended September 30, 2016, the Company granted options to consultants and directors of the Company to purchase an aggregate of 428,906 shares of common stock under a previously approved plan at exercise price ranging between $0.24 and $0.35 per share for an aggregate grant date value of $123,931. The options vested on the grant date and have a term of ten years. Stock-based compensation expense related to stock options was recorded in the condensed consolidated statements of operations as a component of selling, general and administrative expenses and totaled $101,421 and $213,860 for the three and nine months ended September 30, 2016, respectively, and $59,546 and $258,114 for the three and nine months ended September 30, 2015, respectively. As of September 30, 2016, stock-based compensation expense related to stock options of $63,721 remains unamortized, which is being amortized over the weighted average remaining period of 1.7 years. Exercise During the nine months ended September 30, 2016, the Company issued an aggregate of 1,492,078 shares of Common Stock to holders of options who elected to exercise options to purchase 3,108,141 shares of Common Stock on a "cashless" basis under the terms of the options. The options had exercise prices ranging from $0.09 and $0.30 per share. During the nine months ended September 30, 2016, the Company received proceeds of $1,817 from the exercise of options to purchase 16,666 shares of Common Stock. The aggregate intrinsic value of the options exercised was $480,041 for the three and nine months ended September 30, 2016. Summary A summary of the stock option activity during the nine months ended September 30, 2016 is presented below: Weighted Weighted Average Average Remaining Aggregate Number of Exercise Life Intrinsic Options Price In Years Value Outstanding, January 1, 2016 5,341,284 $ 0.70 Granted 428,906 0.29 Exercised (3,108,141 ) 0.16 Forfeited (797,333 ) 2.21 Outstanding, September 30, 2016 1,864,716 $ 0.85 7.6 $ 224,059 Exercisable, September 30, 2016 1,167,449 $ 1.28 6.9 $ 96,992 The following table presents information related to stock options at September 30, 2016: Options Outstanding Options Exercisable Weighted Weighted Weighted Range of Average Outstanding Average Average Exercisable Exercise Exercise Number of Exercise Remaining Life Number of Price Price Options Price In Years Options $ 0.09 - $2.20 $ 0.31 1,582,716 $ 0.45 7.8 885,449 $ 2.21 - $3.80 2.50 150,000 2.50 3.1 150,000 $ 3.81 - $6.99 5.49 132,000 5.49 5.0 132,000 $ 0.85 1,864,716 $ 1.28 6.9 1,167,449 Warrants Valuation In applying the Black-Scholes option pricing model to stock warrants, the Company used the following weighted average assumptions: Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Risk free interest rate n/a 1.75% 1.58% 1.26% to 1.75% Dividend yield n/a 0.00% 0.00% 0.00% Expected volatility n/a 196.0% 200.0% 195.0% to 197.0% Contractual term in years n/a 7.10 5.0 5.0 to 7.5 Grants The weighted average fair value of the stock warrants granted during the nine months ended September 30, 2016 and 2015 was $0.36 and $0.08 per share, respectively. There were no stock warrants granted during the three months ended September 30, 2016 and 2015. Exercise During the nine months ended September 30, 2016, the Company issued an aggregate of 1,155,361 shares of Common Stock to holders of warrants who elected to exercise warrants to purchase 1,795,080 shares of Common Stock on a cashless basis under the terms of the warrants. The warrants had exercise prices ranging from $0.10 and $0.25 per share. The aggregate intrinsic value of the warrants exercised was $414,176 and $425,501 for the three and nine months ended September 30, 2016, respectively. There was no stock-based compensation expense related to warrants recorded in the three and nine months ended September 30, 2016. Stock-based compensation expense related to warrants for the three and nine months ended September 30, 2015 was recorded in the condensed consolidated statements of operations as a component of selling, general and administrative expenses totaled $21 and $12,300, respectively. As of September 30, 2016, there was no stock-based compensation expense related to warrants that remained unamortized. A summary of the stock warrant activity during the nine months ended September 30, 2016 is presented below: Weighted Average Average Remaining Aggregate Number of Exercise Life Intrinsic Warrants Price In Years Value Outstanding, January 1, 2016 10,046,198 $ 0.41 Granted 75,000 0.25 Exercised (1,795,080 ) 0.13 Forfeited (250,000 ) 2.90 Outstanding, September 30, 2016 8,076,118 $ 0.39 2.6 $ 188,679 Exercisable, September 30, 2016 8,076,118 $ 0.39 2.6 $ 188,679 The following table presents information related to stock warrants at September 30, 2016: Warrants Outstanding Warrants Exercisable Weighted Weighted Weighted Range of Average Outstanding Average Average Exercisable Exercise Exercise Number of Exercise Remaining Life Number of Price Price Warrants Price In Years Warrants $ 0.10 - $0.35 $ 0.29 7,776,118 $ 0.29 2.7 7,776,118 $ 0.36 - $3.00 2.90 270,000 2.90 0.1 270,000 $ 3.01 - $4.95 4.95 30,000 4.95 1.0 30,000 $ 0.10 - $4.95 $ 0.39 8,076,118 $ 0.39 2.6 8,076,118 |
Commitments and Contingent Liab
Commitments and Contingent Liabilities | 9 Months Ended |
Sep. 30, 2016 | |
Notes to Financial Statements | |
7. Commitments and Contingent Liabilities | Operating Leases The Company leases approximately 28,500 square feet of office and storage space. On March 15, 2016, the Company entered into an amendment of the lease agreement which extended the lease for an additional three years. The amended monthly lease rate will be $5,462 in 2016, $6,649 in 2017, $6,886 in 2018 and $7,124 in 2019. The lease expires on December 31, 2019. The Company accounts for rent expense using the straight-line method of accounting, deferring the difference between actual rent due and the straight-line amount. Deferred rent payable of $6,463 and $25,852 as of September 30, 2016 and December 31, 2015, respectively, has been included in accrued expenses and other current liabilities on the condensed consolidated balance sheets. On June 7, 2013, Pagosa Health LLC ("Pagosa"), a former wholly-owned subsidiary of the Company, signed a three-year lease for $1,000 per month to house an office, pharmacy as well as inventory and is in Lawrenceburg, IN. On July 8, 2013, the parties agreed to extend the lease for two additional years, such that the new termination date is now June 7, 2018. On January 14, 2014, the Company closed Pagosa and vacated its Lawrenceburg facility. The present value of the remaining lease payments of $50,863 is reflected as a component of accrued expenses and other liabilities on the condensed consolidated financial statements as of September 30, 2016. Future minimum payments, by year and in the aggregate, under operating leases as of September 30, 2016 are as follows: For years ending December 31, Amount 2016 (Remainder) $ 19,384 2017 91,783 2018 87,633 2019 85,482 Total future minimum lease payments $ 284,282 During the three and nine months ended September 30, 2016, the Company recorded aggregate rent expense of $18,147 and $56,985, respectively, and $23,536 and $85,151 (net of sub-lease) during the three and nine months ended September 30, 2015, respectively. Employment Agreement On May 9, 2016, the Company entered into an employment agreement (the "Employment Agreement") with Mr. Lalit Dhadphale. The terms of the Employment Agreement include a term of two years beginning on January 1, 2016 with an extension provision, the titles and positions of Chief Executive Officer and President, an initial base salary of $175,000 per year, subject to certain bonus and severance provisions. Mr. Dhadphale's agreement was bound by restrictive covenants regarding disclosure of confidential information, non-solicitation and employee non-competition. See Note 9 – Board of Directors and Management Changes for additional information. Litigation In the ordinary course of business, we may become subject to lawsuits and other claims and proceedings that might arise from litigation matters or regulatory audits. Such matters are subject to uncertainty and outcomes are often not predictable with assurance. Our management does not presently expect that any such matters will have a material adverse effect on the Company's condensed consolidated financial condition or condensed consolidated results of operations. On June 7, 2016, Shipping & Transit LLC filed suit against the Company for infringing on certain claims of patents held by Shipping & Transit. On July 20, 2016, the Company entered into a Settlement, Release and License Agreement whereby the Company paid $11,000 for any past violations and future licensing of the patents. On May 13, 2016, Taft Stettinius & Hollister, LLP (the "Plaintiff") filed a complaint in the Court of Common Pleas for Hamilton County, Ohio against Healthwarehouse.com, Inc. (the "Company"). The complaint alleges that the Plaintiff provided legal services to the Company beginning in April 2011 until January 2015 and billed the Company in the amount of $936,777, and for which the Company has not made payment. The complaint seeks damages against the Company in the amount of $936,777 plus interest. The Company is in the process of investigating such claims and intends to defend the action vigorously. The Company has accounted for this matter in accordance with ASC 450 ("Contingencies"). |
Concentrations
Concentrations | 9 Months Ended |
Sep. 30, 2016 | |
Notes to Financial Statements | |
8. Concentrations | During the three months ended September 30, 2016, three vendors represented 40%, 18% and 17% of total inventory purchases and 45%, 17% and 17% of total inventory purchases for the nine months ended September 30, 2016. During the three months ended September 30, 2015, two vendors represented 61% and 11% of total inventory purchases and 67% and 11% of total inventory purchases for the nine months ended September 30, 2015. At September 30, 2016, one vendor represented 50% of the accounts payable balance and two vendors represented 43% and 13% of the accounts payable balance as of December 31, 2015. |
Board of Directors and Manageme
Board of Directors and Management Changes | 9 Months Ended |
Sep. 30, 2016 | |
Notes to Financial Statements | |
9. Board of Directors and Management Changes | On September 2, 2016, the Company's shareholders elected four new directors who had run as an alternative slate to the slate the Company had recommended to its shareholders. These directors are Mr. Jeffrey T. Holtmeier, Mr. Brian A. Ross, Mark Scott and Dr. Stephen Weiss. Effective as of September 12, 2016, the newly elected board along with the remaining director, Joseph Heimbrock, whom the Series B shareholders anointed as a class, elected Mr. Holtmeier as Chairman of the Board on October 11, 2016. On September 12, 2016, the Board of Directors formed audit, compensation and nominating governance committees. Committee membership, which the directors subsequently revised per the appointment of Mr. Holtmeier as CEO (See Note 10 - Subsequent Events), are as follows: · Audit: Ross (Chair), Scott and Weiss · Compensation: Ross, Scott (Chair) · Nominating & Governance: Scott, Weiss (Chair) Subsequent to the election of the new Board of Directors and on September 13, 2016, the Company's Chief Executive Officer, Mr. Lalit Dhadphale, tendered his resignation which the Board of Directors of the Company subsequently accepted. Mr. Dhadphale's separation from the Company was effective October 13, 2016. Mr. Dhadphale's contract provided for severance payments under certain conditions, including a change in the composition of the Board of Directors, and contained restrictive covenants regarding disclosure of confidential information, non-solicitation and employee non-competition. Subsequent to the election of the new Board of Directors and on September 9, 2016, the Company's Chief Financial Officer, Mr. Daniel Seliga, tendered his resignation which the Board of Directors of the Company subsequently accepted. Mr Seliga's separation from the Company was effective October 9, 2016. Mr. Seliga's contract provides for severance payments under certain conditions, including a change in the composition of the Board of Directors, and contained restrictive covenants regarding disclosure of confidential information, non-solicitation and employee non-competition. Related to the solicitation of shareholders' proxies and subsequent resignations per certain employment agreements mentioned above, the Company incurred proxy, solicitation and severance costs of $548,303 and severance costs of $240,000 during the three and nine months ended September 30, 2016 of, which are included in Selling, General and Administrative expenses. At September 30, 2016, $204,323 and $395,000 of these costs are recorded in Accounts Payable and Accrued Expenses and Other Current Liabilities, respectfully. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2016 | |
Notes to Financial Statements | |
10. Subsequent Events | The Company evaluates events that have occurred after the balance sheet date but before the financial statements are issued. Based upon the evaluation, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the condensed consolidated financial statements, except as disclosed. Amended Loan Agreement On October 4, 2016, the Company and the Lender for its $1,200,000 Senior Note executed an amendment to the Senior Note. Effective September 30, 2016, the Lender agreed to extend the maturity date of the Senior Note from September 30, 2016 to October 14, 2016. Effective Employment Agreement On October 11, 2016, the Board of Directors of the Company appointed Jeffrey T. Holtmeier as the President and Chief Executive Officer of the Company. Subsequently, the Company and Mr. Holtmeier entered into a written agreement outlining compensation and other terms of Mr. Holtmeier's employment. Mr Holtmeier will be paid an annual salary of $175,000, and will have an annual bonus target of 100% of base salary, with the amount of bonus to be determined according to the Company achieving certain financial metrics. Mr. Holtmeier was also granted options under the Company's Long Term Incentive Plan to purchase 125,000 shares of the Company's Common Stock, at a price of $0.29 per share, which was the closing price for the Company's common stock on the date of grant. Mr. Holtmeier will also be granted an additional 125,000 options after six months of employment, at a price equal to the closing price on the last trading day immediately prior to then-date of grant. After one year of employment, Mr. Holtmeier will also be eligible for severance equal to six months of his salary in the event his employment is terminated by the Company for any reason other than good cause, or if Mr. Holtmeier terminates his employment for good reason, as defined in the employment agreement. Director Compensation and Options Grant On November 2, 2016, the Board of Directors of the Company set independent director compensation at $65,000 annually, such compensation to be effective beginning in the third quarter of 2016. So long as such director is still serving on the Board, director compensation will be paid quarterly in the form of a cash payment of $3,000 and a grant of options to purchase shares of the Company equal to $13,250, vesting immediately, with the exercise price equal to the closing price for the Company's Common stock on the last trading day immediately prior to the date of grant. In addition, the chair of the Audit Committee will receive an additional monthly payment of $2,000, payable quarterly, until such time as the Company has retained a Chief Financial Officer. |
Summary of Significant Accoun16
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
Summary Of Significant Accounting Policies Policies | |
Principles of Consolidation | The condensed consolidated financial statements include the accounts of HealthWarehouse.com, Inc., Hwareh.com, Inc., Hocks.com, Inc., ION Holding NV and ION Belgium NV, its wholly-owned subsidiaries. ION Holding NV and ION Belgium NV are inactive subsidiaries. All material inter-company balances and transactions have been eliminated in consolidation. |
Use of Estimates | The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company's significant estimates include reserves related to accounts receivable and inventory, the recoverability and useful lives of long-lived assets, the valuation allowance related to deferred tax assets, the valuation of equity instruments and debt discounts. |
Reclassifications | Certain accounts in the prior period condensed consolidated financial statements have been reclassified for comparison purposes to conform to the presentation of the current period condensed consolidated financial statements. These reclassifications had no effect on the previously reported net loss. |
Net Earnings (Loss) Per Share of Common Stock | Basic net earnings (loss) per share is computed by dividing net earnings (loss) attributable to Common Stockholders by the weighted average number of common shares outstanding during the period. Diluted net earnings (loss) per share reflects the potential dilution that could occur if securities or other instruments to issue Common Stock were exercised or converted into Common Stock. Potentially dilutive securities are excluded from the computation of diluted net earnings (loss) per share if their inclusion would be anti-dilutive and consist of the following: September 30, 2016 2015 Options 1,864,716 5,266,128 Warrants 8,076,118 9,976,474 Series B Convertible Preferred Stock 6,032,406 5,507,202 Total potentially dilutive shares 15,973,240 20,749,804 |
Recently Issued Accounting Pronouncements | In March 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting ("ASU 2016-09"). ASU 2016-09 simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. ASU 2016-09 is effective for the Company beginning January 1, 2017. The Company is currently evaluating the potential impact of adopting this guidance but does not expect it to have a material impact on our condensed consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15, Classification of Certain Cash Receipts and Cash Payments (Topic 230) |
Summary of Significant Accoun17
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Summary Of Significant Accounting Policies Tables | |
Schedule of Potentially Dilutive Securities | Potentially dilutive securities are excluded from the computation of diluted net earnings (loss) per share if their inclusion would be anti-dilutive and consist of the following: September 30, 2016 2015 Options 1,864,716 5,266,128 Warrants 8,076,118 9,976,474 Series B Convertible Preferred Stock 6,032,406 5,507,202 Total potentially dilutive shares 15,973,240 20,749,804 |
Accrued Expenses and Other Cu18
Accrued Expenses and Other Current Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Accrued Expenses And Other Current Liabilities Tables | |
Accrued expenses and other current liabilities | Accrued expenses and other current liabilities consisted of the following: September 30, December 31, 2016 2015 Deferred Rent $ 6,463 $ 25,852 Advertising 75,000 76,639 Salaries and Benefits 70,521 64,007 Severance 235,000 - Dividend Payable 256,675 319,854 Proxy and Solicitation Costs 160,000 - Accrued Interest 44,249 44,249 Accrued Rent 50,863 49,614 Other 43,473 17,450 Total $ 942,244 $ 597,665 |
Stockholders' Deficiency (Table
Stockholders' Deficiency (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Stock Option [Member] | |
Schedule of Stock Granted | In applying the Black-Scholes option pricing model to stock options, the Company used the following weighted average assumptions: Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Risk free interest rate 1.00% 1.74% to 2.28% 1.00% to 2.12% 1.35% to 2.28% Dividend yield 0.00% 0.00% 0.00% 0.00% Expected volatility 199.0% 196.0% to 197.0% 199.0% to 200.0% 195.0% to 197.0% Expected life in years 5.5 5.5 to 10.0 5.5 to 10.0 5.5 to 10.0 |
Summary of Stock Activity | A summary of the stock option activity during the nine months ended September 30, 2016 is presented below: Weighted Weighted Average Average Remaining Aggregate Number of Exercise Life Intrinsic Options Price In Years Value Outstanding, January 1, 2016 5,341,284 $ 0.70 Granted 428,906 0.29 Exercised (3,108,141 ) 0.16 Forfeited (797,333 ) 2.21 Outstanding, September 30, 2016 1,864,716 $ 0.85 7.6 $ 224,059 Exercisable, September 30, 2016 1,167,449 $ 1.28 6.9 $ 96,992 |
Summary of Stock Outstanding and Exercisable | The following table presents information related to stock options at September 30, 2016: Options Outstanding Options Exercisable Weighted Weighted Weighted Range of Average Outstanding Average Average Exercisable Exercise Exercise Number of Exercise Remaining Life Number of Price Price Options Price In Years Options $ 0.09 - $2.20 $ 0.31 1,582,716 $ 0.45 7.8 885,449 $ 2.21 - $3.80 2.50 150,000 2.50 3.1 150,000 $ 3.81 - $6.99 5.49 132,000 5.49 5.0 132,000 $ 0.85 1,864,716 $ 1.28 6.9 1,167,449 |
Warrant [Member] | |
Schedule of Stock Granted | In applying the Black-Scholes option pricing model to stock warrants, the Company used the following weighted average assumptions: Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Risk free interest rate n/a 1.75% 1.58% 1.26% to 1.75% Dividend yield n/a 0.00% 0.00% 0.00% Expected volatility n/a 196.0% 200.0% 195.0% to 197.0% Contractual term in years n/a 7.10 5.0 5.0 to 7.5 |
Summary of Stock Activity | A summary of the stock warrant activity during the nine months ended September 30, 2016 is presented below: Weighted Average Average Remaining Aggregate Number of Exercise Life Intrinsic Warrants Price In Years Value Outstanding, January 1, 2016 10,046,198 $ 0.41 Granted 75,000 0.25 Exercised (1,795,080 ) 0.13 Forfeited (250,000 ) 2.90 Outstanding, September 30, 2016 8,076,118 $ 0.39 2.6 $ 188,679 Exercisable, September 30, 2016 8,076,118 $ 0.39 2.6 $ 188,679 |
Summary of Stock Outstanding and Exercisable | The following table presents information related to stock warrants at September 30, 2016: Warrants Outstanding Warrants Exercisable Weighted Weighted Weighted Range of Average Outstanding Average Average Exercisable Exercise Exercise Number of Exercise Remaining Life Number of Price Price Warrants Price In Years Warrants $ 0.10 - $0.35 $ 0.29 7,776,118 $ 0.29 2.7 7,776,118 $ 0.36 - $3.00 2.90 270,000 2.90 0.1 270,000 $ 3.01 - $4.95 4.95 30,000 4.95 1.0 30,000 $ 0.10 - $4.95 $ 0.39 8,076,118 $ 0.39 2.6 8,076,118 |
Commitments and Contingent Li20
Commitments and Contingent Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Commitments And Contingent Liabilities Tables | |
Summary of future minimum payments under operating leases | Future minimum payments, by year and in the aggregate, under operating leases as of September 30, 2016 are as follows: For years ending December 31, Amount 2016 (Remainder) $ 19,384 2017 91,783 2018 87,633 2019 85,482 Total future minimum lease payments $ 284,282 |
Going Concern and Management'21
Going Concern and Management's Liquidity Plans (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Going Concern And Managements Liquidity Plans Details Narrative | |||||
Working Capital Deficiency | $ (4,610,794) | $ (4,610,794) | |||
Accumulated deficit | (32,727,335) | (32,727,335) | $ (31,159,401) | ||
Net losses | $ (978,141) | $ (162,604) | (1,311,259) | $ (443,073) | |
Net Cash Used in Operating Activities | $ (227,611) | $ (407,825) |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Details) - shares | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Total potentially dilutive shares | 15,973,240 | 20,749,804 |
Stock Option [Member] | ||
Total potentially dilutive shares | 1,864,716 | 5,266,128 |
Warrant [Member] | ||
Total potentially dilutive shares | 8,076,118 | 9,976,474 |
Series B Convertible Preferred Stock [Member] | ||
Total potentially dilutive shares | 6,032,406 | 5,507,202 |
Accrued Expenses and Other Cu23
Accrued Expenses and Other Current Liabilities (Details) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Accrued Expenses And Other Current Liabilities Details | ||
Deferred rent | $ 6,463 | $ 25,852 |
Advertising | 75,000 | 76,639 |
Salaries and benefits | 70,521 | 64,007 |
Severance | 235,000 | |
Dividends payable | 256,675 | 319,854 |
Proxy and Solicitation Costs | 160,000 | |
Accrued interest | 44,249 | 44,249 |
Accrued Rent | 50,863 | 49,614 |
Other | 43,473 | 17,450 |
Total | $ 942,244 | $ 597,665 |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Borrowed loan | $ 200,000 | $ 308,911 | ||
Borrowed and repaid amount | $ 50,000 | |||
Interest rate on Senior Note | 7.75% | 7.75% | ||
Fair value related to warrants | $ 15,500 | $ 15,500 | ||
Amortization of debt discount | $ 5,167 | $ 18,367 | 13,778 | $ 98,134 |
Lender [Member] | ||||
Borrowed loan | $ 1,200,000 |
Stockholders' Deficiency (Detai
Stockholders' Deficiency (Details) - Stock Option [Member] | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Risk free interest rate | 1.00% | |||
Dividend yield | 0.00% | 0.00% | 0.00% | 0.00% |
Expected volatility | 199.00% | |||
Expected life in years | 5 years 6 months | |||
Minimum [Member] | ||||
Risk free interest rate | 1.74% | 1.00% | 1.35% | |
Expected volatility | 196.00% | 199.00% | 195.00% | |
Expected life in years | 5 years 6 months | 5 years 6 months | 5 years 6 months | |
Maximum [Member] | ||||
Risk free interest rate | 2.28% | 2.12% | 2.28% | |
Expected volatility | 197.00% | 200.00% | 197.00% | |
Expected life in years | 10 years | 10 years | 10 years |
Stockholders' Deficiency (Det26
Stockholders' Deficiency (Details 1) - Stock Option [Member] | 9 Months Ended |
Sep. 30, 2016USD ($)$ / sharesshares | |
Number of Options, outstanding | |
Outstanding, beginning of period (in shares) | shares | 5,341,284 |
Granted | shares | 428,906 |
Exercised | shares | (3,108,141) |
Forfeited | shares | (797,333) |
Outstanding, end of period (in shares) | shares | 1,864,716 |
Exercisable, September 30, 2016 | shares | 1,167,449 |
Weighted average exercise price | |
Outstanding, beginning of period (in dollars per share) | $ / shares | $ 0.70 |
Granted | $ / shares | 0.29 |
Exercised | $ / shares | 0.16 |
Forfeited | $ / shares | 2.21 |
Outstanding, end of period (in dollars per share) | $ / shares | 0.85 |
Exercisable, September 30, 2016 | $ / shares | $ 1.28 |
Weighted Average Remaining Life In Years | |
Weighted Average Remaining Life (in years) Outstanding | 7 years 7 months 6 days |
Weighted Average Remaining Life (in years) Exercisable | 6 years 10 months 24 days |
Aggregate Intrinsic Value | |
Aggregate Intrinsic Value Outstanding | $ | $ 224,059 |
Aggregate Intrinsic Value Exercisable, September 30, 2016 | $ | $ 96,992 |
Stockholders' Deficiency (Det27
Stockholders' Deficiency (Details 2) - Stock Option [Member] - $ / shares | 9 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2015 | |
Weighted Average Exercise Price Outstanding | $ 0.85 | $ 0.70 |
Number Outstanding | 1,864,716 | 5,341,284 |
Weighted Average Exercise Price Exercisable | $ 1.28 | |
Weighted Average Remaining Years of Contractual Life | 6 years 10 months 24 days | |
Number Exercisable | 1,167,449 | |
$0.09 - $2.20 | ||
Weighted Average Exercise Price Outstanding | $ 0.31 | |
Number Outstanding | 1,582,716 | |
Weighted Average Exercise Price Exercisable | $ 0.45 | |
Weighted Average Remaining Years of Contractual Life | 7 years 9 months 18 days | |
Number Exercisable | 885,449 | |
$2.21 - $3.80 | ||
Weighted Average Exercise Price Outstanding | $ 2.50 | |
Number Outstanding | 150,000 | |
Weighted Average Exercise Price Exercisable | $ 2.50 | |
Weighted Average Remaining Years of Contractual Life | 3 years 1 month 6 days | |
Number Exercisable | 150,000 | |
$3.81 - $6.99 | ||
Weighted Average Exercise Price Outstanding | $ 5.49 | |
Number Outstanding | 132,000 | |
Weighted Average Exercise Price Exercisable | $ 5.49 | |
Weighted Average Remaining Years of Contractual Life | 5 years | |
Number Exercisable | 132,000 |
Stockholders' Deficiency (Det28
Stockholders' Deficiency (Details 3) - Warrant [Member] | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Risk free interest rate | 1.75% | 1.58% | ||
Dividend yield | 0.00% | 0.00% | 0.00% | |
Expected volatility | 196.00% | 200.00% | ||
Contractual term in years | 7 years 1 month 6 days | 5 years | ||
Minimum [Member] | ||||
Risk free interest rate | 1.26% | |||
Expected volatility | 195.00% | |||
Contractual term in years | 5 years | |||
Maximum [Member] | ||||
Risk free interest rate | 1.75% | |||
Expected volatility | 197.00% | |||
Contractual term in years | 7 years 6 months |
Stockholders' Deficiency (Det29
Stockholders' Deficiency (Details 4) - Warrant [Member] | 9 Months Ended |
Sep. 30, 2016USD ($)$ / sharesshares | |
Number of Warrants, outstanding | |
Outstanding, beginning of period (in shares) | shares | 10,046,198 |
Granted | shares | 75,000 |
Exercised | shares | (1,795,080) |
Forfeited | shares | (250,000) |
Outstanding, end of period (in shares) | shares | 8,076,118 |
Exercisable, September 30, 2016 | shares | 8,076,118 |
Weighted average exercise price | |
Outstanding, beginning of period (in dollars per share) | $ / shares | $ 0.41 |
Granted | $ / shares | 0.25 |
Exercised | $ / shares | 0.13 |
Forfeited | $ / shares | 2.90 |
Outstanding, end of period (in dollars per share) | $ / shares | 0.39 |
Exercisable, September 30, 2016 | $ / shares | $ 0.39 |
Weighted Average Remaining Life In Years | |
Weighted Average Remaining Life (in years) Outstanding | 2 years 7 months 6 days |
Weighted Average Remaining Life (in years) Exercisable | 2 years 7 months 6 days |
Aggregate Intrinsic Value | |
Aggregate Intrinsic Value Outstanding | $ | $ 188,679 |
Aggregate Intrinsic Value Exercisable, September 30, 2016 | $ | $ 188,679 |
Stockholders' Deficiency (Det30
Stockholders' Deficiency (Details 5) - Warrant [Member] - $ / shares | 9 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2015 | |
Weighted Average Exercise Price Outstanding | $ 0.39 | $ 0.41 |
Number Outstanding | 8,076,118 | 10,046,198 |
Weighted Average Exercise Price Exercisable | $ 0.39 | |
Weighted Average Remaining Years of Contractual Life | 2 years 7 months 6 days | |
Number Exercisable | 8,076,118 | |
$0.10 - $0.35 | ||
Weighted Average Exercise Price Outstanding | $ 0.29 | |
Number Outstanding | 7,776,118 | |
Weighted Average Exercise Price Exercisable | $ 0.29 | |
Weighted Average Remaining Years of Contractual Life | 2 years 8 months 12 days | |
Number Exercisable | 7,776,118 | |
$0.36 - $3.00 | ||
Weighted Average Exercise Price Outstanding | $ 2.9 | |
Number Outstanding | 270,000 | |
Weighted Average Exercise Price Exercisable | $ 2.9 | |
Weighted Average Remaining Years of Contractual Life | 1 month 6 days | |
Number Exercisable | 270,000 | |
$3.01 - $4.95 | ||
Weighted Average Exercise Price Outstanding | $ 4.95 | |
Number Outstanding | 30,000 | |
Weighted Average Exercise Price Exercisable | $ 4.95 | |
Weighted Average Remaining Years of Contractual Life | 1 year | |
Number Exercisable | 30,000 | |
$0.10 - $4.95 | ||
Weighted Average Exercise Price Outstanding | $ 0.39 | |
Number Outstanding | 8,076,118 | |
Weighted Average Exercise Price Exercisable | $ 0.39 | |
Weighted Average Remaining Years of Contractual Life | 2 years 7 months 6 days | |
Number Exercisable | 8,076,118 |
Stockholders' Deficiency (Det31
Stockholders' Deficiency (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2016 | |
Proceeds from exercise of options | $ 1,817 | ||||
Stock Option [Member] | |||||
Weighted Average Fair Value | $ 0.35 | $ 0.12 | $ 0.29 | $ 0.10 | |
Common stock purchased | 16,666 | ||||
Proceeds from exercise of options | $ 1,817 | ||||
Selling, General And Administrative Expenses | $ 101,421 | $ 59,546 | 213,860 | $ 258,114 | |
Stock-based compensation expense, unamortized | $ 63,721 | ||||
Weighted Average Remaining Period | 1 year 8 months 12 days | ||||
Intrinsic value of the warrants exercised | $ 480,041 | $ 480,041 | |||
Aggregate shares of Common Stock | 1,492,078 | ||||
Exercise options to purchase | 3,108,141 | ||||
Stock option exercise price | $ 1.28 | $ 1.28 | |||
Stock Option [Member] | Minimum [Member] | |||||
Weighted average forfeited shares | 3.00% | 3.00% | 3.00% | 3.00% | |
Stock option exercise price | $ 0.09 | $ 0.09 | |||
Stock Option [Member] | Maximum [Member] | |||||
Weighted average forfeited shares | 4.00% | 4.00% | 4.00% | 4.00% | |
Stock option exercise price | $ 0.30 | $ 0.30 | |||
Warrant [Member] | |||||
Weighted Average Fair Value | $ 0.36 | $ 0 | $ 0.08 | $ 0 | |
Selling, General And Administrative Expenses | $ 21 | $ 12,300 | |||
Intrinsic value of the warrants exercised | $ 414,176 | $ 425,501 | |||
Aggregate shares of Common Stock | 1,155,361 | ||||
Exercise options to purchase | 1,795,080 | ||||
Stock option exercise price | $ 0.39 | $ 0.39 | |||
Warrant [Member] | Minimum [Member] | |||||
Stock option exercise price | 0.10 | 0.10 | |||
Warrant [Member] | Maximum [Member] | |||||
Stock option exercise price | $ 0.25 | $ 0.25 | |||
Series B Preferred Stock [Member] | |||||
Preferred Stock Contractual Dividends | $ 256,675 | $ 256,675 | $ 319,853 | ||
Consultants [Member] | Stock Option [Member] | |||||
Common stock purchased | 428,906 | ||||
Aggregate grant date value | $ 123,931 | ||||
Consultants [Member] | Stock Option [Member] | Minimum [Member] | |||||
Weighted Average Fair Value | $ 0.24 | ||||
Consultants [Member] | Stock Option [Member] | Maximum [Member] | |||||
Weighted Average Fair Value | $ 0.35 |
Commitments and Contingent Li32
Commitments and Contingent Liabilities (Details) | Sep. 30, 2016USD ($) |
Commitments And Contingent Liabilities Details | |
2016 (Remainder) | $ 19,384 |
2,017 | 91,783 |
2,018 | 87,633 |
2,019 | 85,482 |
Total future minimum lease payments | $ 284,282 |
Commitments and Contingent Li33
Commitments and Contingent Liabilities (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Commitments And Contingent Liabilities Details Narrative | |||||
Deferred rent payable | $ 6,463 | $ 6,463 | $ 25,852 | ||
Accrued expenses and other liabilities | 50,863 | 50,863 | |||
Rent Expense | $ 18,147 | $ 23,536 | $ 56,985 | $ 85,151 |
Concentrations (Details Narrati
Concentrations (Details Narrative) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Vendor 1 [Member] | |||||
Concentration Inventory Purchases Percentage | 40.00% | 61.00% | 45.00% | 67.00% | |
Concentration Accounts Payable Percentage | 50.00% | 50.00% | 43.00% | ||
Vendor 2 [Member] | |||||
Concentration Inventory Purchases Percentage | 18.00% | 11.00% | 17.00% | 11.00% | |
Concentration Accounts Payable Percentage | 13.00% | ||||
Vendor 3 [Member] | |||||
Concentration Inventory Purchases Percentage | 17.00% | 17.00% |
Board of Directors and Manage35
Board of Directors and Management Changes (Details Narrative) | Sep. 30, 2016USD ($) |
Board Of Directors And Management Changes Details Narrative | |
Accounts Payable and Accrued Expenses | $ 204,323 |
Other Current Liabilities | $ 395,000 |