Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Mar. 31, 2017 | Jun. 30, 2016 | |
Document and Entity Information: | |||
Entity Registrant Name | SIGMA LABS, INC. | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Trading Symbol | sglb | ||
Amendment Flag | false | ||
Entity Central Index Key | 788,611 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Common Stock, Shares Outstanding | 64,570,199 | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | No | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY | ||
Entity Public Float | $ 16,641,690 |
Condensed Balance Sheets
Condensed Balance Sheets - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Current Assets: | ||
Cash | $ 398,391 | $ 1,539,809 |
Accounts Receivable, net | 288,236 | 280,222 |
Inventory | 187,241 | 20,129 |
Prepaid Assets | 36,056 | 38,687 |
Total Current Assets | 909,924 | 1,878,847 |
Other Assets: | ||
Property and Equipment, net | 564,933 | 714,754 |
Intangible Assets, net | 226,450 | 167,644 |
Investment in Joint Venture | 500 | 9,222 |
Prepaid Stock Compensation | 167,562 | 418,547 |
Total Other Assets | 959,445 | 1,310,167 |
TOTAL ASSETS | 1,869,369 | 3,189,014 |
Current Liabilities: | ||
Accounts Payable | 112,175 | 38,393 |
Notes Payable, net of original issue discount $79,886 | 561,834 | 0 |
Accrued Expenses | 125,116 | 71,523 |
Total Current Liabilities | 799,125 | 109,916 |
Long-Term Liabilities | ||
Derivative Liability | 93,206 | 0 |
Total Long-Term Liability | 93,206 | 0 |
TOTAL LIABILITIES | 892,331 | 109,916 |
Stockholders' Equity | ||
Preferred Stock, $0.001 par; 10,000,000 shares authorized; None issued and outstanding | 0 | 0 |
Common Stock, $0.001 par; 7,500,000 shares authorized; 3,133,789 and 3,119,537 issued and outstanding at December 31, 2016 and 2015, respectively | 3,135 | 3,120 |
Additional Paid-In Capital | 10,734,857 | 10,640,098 |
Accumulated Deficit | (9,760,954) | (7,564,120) |
Total Stockholders' Equity | 977,038 | 3,079,098 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 1,869,369 | $ 3,189,014 |
Balance Sheets Parentheticals
Balance Sheets Parentheticals - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Parentheticals | ||
Net of original issue discount, Notes Payable | $ 79,886 | $ 79,886 |
Preferred Stock, par value | $ 0.001 | $ 0.001 |
Preferred Stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred Stock, shares issued | 0 | 0 |
Preferred Stock, shares outstanding | 0 | 0 |
Common Stock, par value | $ 0.001 | $ 0.001 |
Common Stock, shares authorized | 7,500,000 | 7,500,000 |
Common Stock, shares issued | 3,133,789 | 3,119,537 |
Common Stock, shares outstanding | 3,133,789 | 3,119,537 |
Condensed Statements of Operati
Condensed Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Revenue | ||
Revenues | $ 966,422 | $ 1,234,810 |
COST OF REVENUE | 228,902 | 214,004 |
GROSS PROFIT | 737,520 | 1,020,806 |
EXPENSES: | ||
Other General and Administration | 1,790,096 | 1,282,952 |
Payroll Expense | 1,026,840 | 585,706 |
Stock-Based Compensation | 341,558 | 518,438 |
Research and Development | 92,992 | 330,554 |
Total Expenses | 3,251,486 | 2,717,650 |
OTHER INCOME (EXPENSE) | ||
Interest Income | 355 | 1,340 |
Other Income | 51,703 | 0 |
Other Income-Decrease in fair value of derivative liabilities | 354,644 | 0 |
Other Expense - Debt discount amortization | (89,570) | 0 |
Loss on Investment in Joint Venture | 0 | (778) |
Total Other Income | 317,132 | 562 |
LOSS BEFORE PROVISION FOR INCOME TAXES | (2,196,834) | (1,696,282) |
Provision for income Taxes | 0 | 0 |
Net Loss | $ (2,196,834) | $ (1,696,282) |
Net Loss per Common Share - Basic and Diluted | $ (0.70) | $ (0.54) |
Weighted Average Number of Shares Outstanding - Basic and Diluted | 3,125,022 | 3,114,241 |
Statement of Stockholders' Equi
Statement of Stockholders' Equity - USD ($) | Common Stock Shares | Common Stock Amount | Additional Paid in Capital | Accumulated Deficit | Totals |
Balance at Dec. 31, 2014 | 3,098,705 | 3,099 | 10,414,931 | (5,867,838) | 4,550,192 |
Shares issued for services at a price of $10.60 | 18,019 | 18 | 190,983 | 191,001 | |
Shares issued for services at a price of $11.80 | 1,250 | 1 | 14,749 | 14,750 | |
Shares issued for services at a price of $13.00 | 313 | 1 | 4,062 | 4,063 | |
Shares issued for services at a price of $12.30 | 1,250 | 1 | 15,373 | 15,374 | |
Net loss for the year ended December 31, 2015 | $ (1,696,282) | $ (1,696,282) | |||
Balance. at Dec. 31, 2015 | 3,119,537 | 3,120 | 10,640,098 | (7,564,120) | 3,079,098 |
Shares forfeited | (10,000) | (10) | (257,990) | (258,000) | |
Shares issued for services at a price of $9.64 | 313 | 1 | 3,010 | 3,011 | |
Shares issued for services at a price of $9.74 | 1,540 | 2 | 14,997 | 14,999 | |
Shares issued for services at a price of $8.50 | 1,764 | 2 | 14,998 | 15,000 | |
Shares issued for services at a price of $6.10 | 1,230 | 1 | 7,499 | 7,500 | |
Shares issued for services at a price of $5.96 | 1,257 | 1 | 7,498 | 7,499 | |
Fractional shares issued at reverse stock split | 565 | 1 | 1 | ||
Stock options awarded to employees | $ 200,504 | $ 200,504 | |||
Shares issued for services at a price of $6.00 | 2,083 | 2 | 12,498 | 12,500 | |
Shares issued for services at a price of $5.92 | 15,500 | 15 | 91,745 | 91,760 | |
Derivative value on issuance date - warrants and notes payable conversion feature | $ (447,850) | $ (447,850) | |||
Debt discount on notes payable | $ 447,850 | 447,850 | |||
Net loss for the twelve months ended December 31, 2016 | $ (2,196,834) | $ (2,196,834) | |||
Balance at Dec. 31, 2016 | 3,133,789 | 3,135 | 10,734,857 | (9,760,954) | 977,038 |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
OPERATING ACTIVITIES | ||
Net Loss | $ (2,196,834) | $ (1,696,282) |
Noncash Expenses: | ||
Amortization | 6,526 | 2,308 |
Depreciation | 172,315 | 166,744 |
Stock Compensation | (345,759) | 518,438 |
Net effect of derivative liability and debt discount related to notes payable | 354,644 | 0 |
Note payable original issue discount. | 20,114 | 0 |
Note payable debt discount amortization | 89,570 | 0 |
Change in assets and liabilities: | ||
Accounts Receivable | (8,014) | (157,612) |
Allowance for Doubtful Accounts | 0 | 95,511 |
(Decrease in allowance for Doubtful Accounts) | 0 | (4,884) |
Inventory | (167,112) | 36,046 |
Prepaid Assets | 2,631 | 23,702 |
Accounts Payable | 73,782 | (271,305) |
Accrued Expenses | 53,593 | 26,871 |
NET CASH USED IN OPERATING ACTIVITIES | (1,962,314) | (1,260,463) |
INVESTING ACTIVITIES | ||
Purchase of Furniture and Equipment | (22,494) | (78,471) |
Purchase of Intangible Assets | (65,332) | (74,104) |
Investment in Joint Venture | 8,722 | (10,000) |
Loss on Investment in Joint Venture | 0 | 778 |
NET CASH USED IN INVESTING ACTIVITIES | (79,104) | (161,797) |
FINANCING ACTIVITIES | ||
Proceeds from issuance of notes payable | 900,000 | 0 |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 900,000 | 0 |
NET CASH DECREASE FOR PERIOD | (1,141,418) | (1,422,260) |
CASH AT BEGINNING OF PERIOD | 1,539,809 | 2,962,069 |
CASH AT END OF PERIOD | 398,391 | 1,539,809 |
Cash paid during the period for: | ||
Interest | 0 | 0 |
Income Taxes | 0 | 0 |
Supplemental Schedule of Noncash Investing and Financing Activities: | ||
Issuance of Common Stock for services | 152,265 | 0 |
Cancellation of Common Stock previously issued for services | (258,000) | 0 |
Derivative Liability | $ 93,206 | $ 0 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Summary of Significant Accounting Policies: | |
Summary of Significant Accounting Policies | NOTE 1 Summary of Significant Accounting Policies Nature of Business On September 13, 2010 Sigma Labs, Inc., formerly named Framewaves, Inc., a Nevada corporation, acquired 100% of the shares of B6 Sigma, Inc. by exchanging 6.67 shares of Framewaves, Inc. restricted common stock for each issued and outstanding share of B6 Sigma, Inc. The acquisition has been accounted for as a reverse purchase, and accordingly the operations of Framewaves, Inc. prior to the date of acquisition have been eliminated. Unless otherwise indicated or the context otherwise requires, the term B6 Sigma refers to B6 Sigma, Inc., a Delaware corporation, which, until the short-form merger referenced below, was our wholly-owned, operating company acquired in September 2010; the terms the Company, Sigma, we, us and our refer to Sigma Labs, Inc., together with B6 Sigma, Inc. Prior to December 29, 2015, we conducted substantially all of our operations through B6 Sigma. On December 29, 2015, we completed a short-form merger of B6 Sigma into Sigma. As a result, B6 Sigma became part of Sigma and no longer exists as a subsidiary. B6 Sigma, Inc., incorporated February 5, 2010, was founded by a group of scientists, engineers and businessmen to develop and commercialize novel and unique manufacturing and materials technologies. The Company believes that some of these technologies will fundamentally redefine conventional quality assurance and process control practices by embedding them into the manufacturing processes in real time, enabling process intervention and ultimately leading to closed loop process control. The Company anticipates that its core technologies will allow its clientele to combine advanced manufacturing quality assurance and process control protocols with novel materials to achieve breakthrough product potential in many industries including aerospace, defense, oil and gas, bio-medical, and power generation. Basis of Presentation The accompanying financial statements have been prepared by the Company in accordance with Article 8 of U.S. Securities and Exchange Commission Regulation S-X. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows at December 31, 2016 and 2015 and for the periods then ended have been made. Reclassification Certain amounts in prior-period financial statements have been reclassified for comparative purposes to conform to presentation in the current-period financial statements. Loss Per Share The computation of loss per share is based on the weighted average number of shares outstanding during the period in accordance with ASC Topic No. 260, Earnings Per Share. Property and Equipment Property and equipment are stated at cost. Expenditures for major renewals and betterments that extend the useful lives of property and equipment are capitalized upon being placed in service. Expenditures for maintenance and repairs are charged to expense as incurred. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. The estimated life has been determined to be three years unless a unique circumstance exists, which is then fully documented as an exception to the policy. Fair Value of Financial Instruments - The Company applies ASC 820, Fair Value Measurements . · Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. · Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. · Level 3 inputs to valuation methodology are unobservable and significant to the fair measurement. Fair Value of Financial Instruments The Company adopted ASC 820, Fair Value Measurements and Disclosures ASC 820 defines fair value as 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. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below: Level 1: Observable inputs such as quoted market prices in active markets for identical assets or liabilities Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data Level 3: Unobservable inputs for which there is little or no market data, which require the use of the reporting entitys own assumptions. The carrying amounts reported in the balance sheets for the cash and cash equivalents, prepaid stock compensation, receivables accounts payable, and accrued liabilities each qualify as financial instruments and are a reasonable estimate of fair value because on the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. In addition, FASB ASC 825-10-25, Fair Value Option Fair value of financial instruments is as follows: December 31, 2016 Date of Issuance October 17, 2016 Fair Value Input Level Fair Value Input Level Derivative liability $1 million of Notes issued October 17, 2016 $56,557 Level 3 $271,754 Level 3 Derivative liability 160,000 warrants issued October 17, 2016 $36,649 Level 3 $176,096 Level 3 The derivative liability is the result of the $1 million of Notes, and the 160,000 warrants, that were issued in October 2016, both of which contain anti-dilution provisions in the event the Company engages in specified transactions. The Notes mature on October 17, 2017 and the warrants expire on October 17, 2019. The following table presents a reconciliation of the derivative liability measured at fair value on a recurring basis using significant unobservable input (Level 3) on October 17, 2016 and December 31, 2016: Conversion feature derivative liability Fair value on issuance date $ 447,850 Change in fair value (354,644) Balance December 31, 2016 $ 93,206 At December 31, 2015, the Company had two outstanding warrants to purchase a total of 12,500 shares of common stock but the warrants did not contain anti-dilution provisions, and thus were not derivative liabilities. The fair value of one of the warrants of $271,250 was expensed on the date of issuance in 2014, and was calculated using a Black-Scholes option pricing model with the following assumptions: expected life of two years, expected volatility of 201%, a risk-free interest rate of 0.39%, and an expected dividend yield of 0%. The fair value of the other warrant of $36,250 was expensed on the date of issuance in 2014, and was calculated using a Black-Scholes option pricing model with the following assumptions: expected life of two years, expected volatility of 287%, a risk-free interest rate of 0.41%, and an expected dividend yield of 0%. Income Taxes The Company adopted the provisions of ASC Topic No. 740, Accounting for Income Taxes, at the date of inception on February 5, 2010. As a result of the implementation of ASC Topic No. 740, the Company recognized no increase in the liability for unrecognized tax benefits. The Company has no tax positions at December 31, 2016 and 2015 for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility. The Company recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. During the year ended December 31, 2016, the Company recognized no interest and penalties. The Company had no accruals for interest and penalties at December 31, 2016 or 2015. All tax years starting with 2010 are open for examination. Loss Per Share The computation of loss per share is based on the weighted average number of shares outstanding during the period in accordance with ASC Topic No. 260, Earnings Per Share. Accounts Receivable and Allowance for Doubtful Accounts - Trade accounts receivable are carried at original invoice amount less an estimate made for doubtful accounts. We determine the allowance for doubtful accounts by identifying potential troubled accounts and by using historical experience and future expectations applied to an aging of accounts. Trade accounts receivable are written off when deemed uncollectible. Recoveries of trade accounts receivable previously written off are recorded as income when received. There no allowance for doubtful accounts at December 31, 2016 or 2015. Long-Lived and Intangible Assets Long-lived assets and certain identifiable definite life intangibles to be held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company continuously evaluates the recoverability of its long-lived assets based on estimated future cash flows and the estimated liquidation value of such long-lived assets, and provides for impairment if such undiscounted cash flows are insufficient to recover the carrying amount of the long-lived assets. If impairment exists, an adjustment is made to write the asset down to its fair value, and a loss is recorded as the difference between the carrying value and fair value. Fair values are determined based on quoted market values, discounted cash flows or internal and external appraisals, as applicable. Assets to be disposed of are carried at the lower of carrying value or estimated net realizable value. No impairment was recorded in the years ended December 31, 2016 or 2015. Recently Enacted Accounting Standards The FASB established the Accounting Standards Codification (Codification or ASC) as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in accordance with generally accepted accounting principles in the United States (GAAP). Rules and interpretive releases of the Securities and Exchange Commission (SEC) issued under authority of federal securities laws are also sources of GAAP for SEC registrants. Recent Accounting Standards Updates (ASU) through ASU No. 2015-01 contain technical corrections to existing guidance or affects guidance to specialized industries or situations. The Company has evaluated recently issued technical pronouncements and has determined that these updates have no current applicability to the Company or their effect on the financial statements would not have been significant. Cash Equivalents - The Company considers all highly liquid investments with an original maturity of three months or less at date of purchase to be cash equivalents. Concentration of Credit Risk - The Company maintains its cash in bank deposit accounts, which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash and cash equivalents. Organization Expenditures Organizational expenditures are expensed as incurred for SEC filings, but capitalized and amortized for income tax purposes. Stock Based Compensation The Company recognizes compensation costs to employees under ASC Topic No. 718, Compensation Stock Compensation. Under ASC Topic No. 718, companies are required to measure the compensation costs of share-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over the period during which employees are required to provide services. Share based compensation arrangements may include stock options, grants of shares of common stock with and without restrictions, performance based awards, share appreciation rights and employee share purchase plans. As such, compensation cost is measured on the date of grant at its fair value. Such compensation amounts, if any, are amortized over the respective vesting periods of the option or stock grants. Unvested option or stock grants for compensation are included in the Statement of Stockholders Equity as a contra-equity account as Deferred Compensation. Equity instruments issued to non-employees are recorded on the basis of the fair value of the instruments, as required by ASC Topic No. 505, Equity Based Payments to Non-Employees. In general, the measurement date is either (a) when a performance commitment, as defined, is reached or (b) the earlier of the date that (i) the non-employee performance requirement is complete or (ii) the instruments are vested. The measured value related to the instruments is recognized over a period based on the facts and circumstances of each particular grant as defined in the FASB Accounting Standards Codification. Amortization - Utility patents are amortized over a 17 year period. Patents which are pending are not amortized. Accounting Estimates - The preparation of financial statements in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimated by management. Significant accounting estimates that may materially change in the near future are impairment of long-lived assets, values of stock compensation awards and stock equivalents granted as offering costs, and allowance for bad debts and inventory obsolescence. Revenue Recognition The Companys revenue is derived primarily from providing services under contracts. The Company recognizes revenue in accordance with ASC Topic No. 605 based on the following criteria: Persuasive evidence of an arrangement exists, services have been rendered, the price is fixed or determinable, and collectability is reasonably assured. In general, the Company recognizes service revenue as significant services under the relevant arrangement have been performed. Deferred Stock Offering Costs Costs related to stock offerings (if any) are deferred and will be offset against the proceeds of the offering in additional paid-in capital. In the event a stock offering is unsuccessful, the costs relating to the offering will be written-off directly to expense. Inventory Inventories consist of raw materials used in the production of customized parts totaling $187,241 and $20,129, as of December 31, 2016 and 2015, respectively, and nominal work-in-process components which will be sold to customers. Inventories are valued at the lower of cost or market, using the first-in, first-out (FIFO) method. Research and Development Research and development costs are expensed as they are incurred. Research and development costs for the years ended December 31, 2016 and 2015 were $92,992 and $330,554, respectively. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2016 | |
Stockholders' Equity {1} | |
Stockholders' Equity | NOTE 2 Stockholders Equity Common Stock In March 2015, the Company issued 5,000 shares of stock to a director. The Company also issued 2,500 shares of stock to an officer, and an aggregate of 10,519 shares of stock to two consultants, subject to vesting restrictions. The shares were issued pursuant to the 2013 Plan. The shares were valued at $10.60 or $191,000. During the years ended December 31, 2016 and 2015, 1,501 and 16,159 of the shares vested, respectively. The 1,501 shares unvested at December 31, 2015 (valued at $15,905) was reflected as prepaid assets. In August 2015, in conjunction with the hiring of Ron Fisher, the Company's Vice President of Business Development, the Company issued to Mr. Fisher 1,250 shares of common stock, subject to performance-based vesting restrictions. In November 2015, the Company issued 313 shares of common stock to an employee valued at $13.00 per share, or $4,063, and issued 1,250 shares of common stock to an employee valued at $12.30 per share, or $15,375. Effective March 17, 2016, our Amended and Restated Articles of Incorporation were amended pursuant to a Certificate of Change Pursuant to Nevada Revised Statutes 78.209 (the Certificate of Change) filed with the Nevada Secretary of State. The Certificate of Change provided for both a reverse stock split of the outstanding shares of our common stock on a 1-for-100 basis (the Reverse Stock Split), and a corresponding decrease in the number of shares of our common stock that we are authorized to issue (the Share Decrease). As a result of the Reverse Stock Split, the number of issued and outstanding shares of our common stock decreased from 311,484,918 pre-Reverse Stock Split shares to 3,114,855 post-Reverse Stock Split shares (after adjustment for any fractional shares). Pursuant to the Share Decrease, the number of authorized shares of our common stock decreased from 375,000,000 to 3,750,000 shares of common stock. All amounts shown for common stock included in these financial statements are presented post-Reverse Stock Split. In February 2016, the Company issued 313 shares of common stock to a new employee, valued at $9.64 per share, or $3,012. In March 2016, the Company issued 1,540 shares of common stock to a consultant, valued at $9.74 per share, or $14,999. In April 2016, the Company issued 1,764 shares of common stock to a consultant, valued at $8.50per share, or $15,000. In May 2016, the Company issued 1,230 shares of common stock to a consultant, valued at $6.10 per share, or $7,499. In June 2016, the Company issued 1,257 shares of common stock to a consultant, valued at $5.964 per share, or $7,498. In July 2016, the Company issued 2,083 shares of common stock to a consultant, valued at $6.00 per share, or $12,501. In July 2016, the Company issued 15,500 shares of common stock to an employee, valued at $5.92 per share, or $91,760. On April 28, 2016, the Company's Amended and Restated Articles of Incorporation were amended to increase the number of authorized shares of the Company's common stock from 3,750,000 to 7,500,000 shares of common stock. As of December 31, 2016, the Company had 7,500,000 shares of authorized common stock, $0.001 par value per share. As of December 31, 2016 and 2015, there were 3,133,789 and 6,239,073 shares of common stock issued and outstanding, respectively. Deferred Compensation During July 2014, the Company issued to three employees an aggregate of 30,000 shares of the Companys common stock, subject to restrictions, pursuant to the 2013 Plan. Such shares were valued at the fair value of $774,000 or $25.80 per share. This compensation is being expensed over the vesting period. As of December 31, 2016 and 2015, the balance of unvested compensation cost expected to be recognized was $64,500 (2,500 shares valued at $25.80) and $387,000 (15,000 shares valued at $25.80), respectively, and is recorded as a reduction of stockholders equity. The unvested compensation is being recognized over the weighted average period of approximately 2 years (through July 2017). In November 2014, the Company issued 7,500 shares of stock to a director, subject to restrictions, pursuant to the Company's 2013 Equity Incentive Plan (the 2013 Plan). The shares were valued at $18.80 or $141,000. All shares vested during the year ended December 31, 2015. As described under the Common Stock heading above, the Company issued 5,000 shares of stock to a director in March 2015. The Company also issued 2,500 shares of stock to an officer, and an aggregate of 10,519 shares of stock to two consultants, subject to vesting restrictions. The shares were issued pursuant to the 2013 Plan. The shares were valued at $10.60 or $191,000. 16,519 of the shares vested during the year ended December 31, 2015. The remaining 1,501 shares vested during the year ended December 31, 2016 (valued at $15,905). As described under the Common Stock heading above, in August 2015, the Company issued 1,250 shares of stock to an employee, subject to performance-based vesting restrictions, pursuant to the Company's 2013 Equity Incentive Plan (the 2013 Plan). The shares were valued at $11.80 or $14,750. As of December 31, 2016, 1,000 of the 1,250 shares are unvested. All of the 1,250 shares were unvested as of December 31, 2015. As of December 31, 2016 and 2015, the balance of unvested compensation cost expected to be recognized was $167,562 and $418,547, respectively and is recorded as prepaid stock compensation. The unvested compensation is being recognized over the weighted average period of approximately 2 years (through July, 2017). Preferred Stock The Company is authorized to issue 10,000,000 shares of preferred stock, $0.001 par value. No shares of preferred stock were issued and outstanding at December 31, 2016 and 2015. Stock Options On April 28, 2016, at the Annual Meeting of Stockholders of the Company, the Company's stockholders approved an amendment to the 2013 Plan to increase the number of shares of the Company's common stock reserved for issuance under the 2013 Plan by 319,269 shares of our common stock to a total of 375,000 shares (on a post-Reverse Stock Split basis). As of December 31, 2016, an aggregate of 750 shares and 199,669 shares of common stock were reserved for issuance under the 2011 Plan and the 2013 Plan, respectively. During 2016, the Company granted a total of 73,688 options to 10 employees with vesting periods ranging from 3 to 4 years beginning March 14, 2017. In 2016, 2,938 options vested, and $168,411 of compensation cost had been recognized during the year. As of December 31, 2016, there were options to purchase 101,188 shares outstanding under the plans. Of this amount, there are vested options exercisable into 2,938 shares of common stock. As of December 31, 2016, the Company had 200,419 shares reserved for future grant under its plans and there were no shares exercised during the years ended December 31, 2016 or 2015. During 2015, the Company granted a total of 28,438 options to three employees with vesting periods ranging from one to four years beginning August 10, 2015. As of December 31, 2015, none of the option grants had vested, and only a nominal amount of compensation cost had been recognized during the year. The weighted average period over which total compensation cost of the options of $306,796 will be recognized is 3.81 years. The weighted average exercise price of the options was $11.88 and the weighted average fair value of the options on the dates of grant was $11.82. The Company generally grants stock options to employees and directors at exercise prices equal to the fair market value of the Company's stock on the dates of grant. Stock options are typically granted throughout the year and generally vest over four years of service and expire ten years from the date of the award, unless otherwise specified. The Company recognizes compensation expense for the fair value of the stock options over the requisite service period for each stock option award. Total share-based compensation expense included in the consolidated statements of operations for the years ended December 31, 2016 and 2015 is $341,558 and $518,438, respectively. There was no capitalized share-based compensation cost as of December 31, 2016 and 2015, and there were no recognized tax benefits during the years ended December 31, 2016 and 2015. To estimate the value of an award, the Company uses the Black-Scholes option-pricing model. This model requires inputs such as expected life, expected volatility and risk-free interest rate. The forfeiture rate also impacts the amount of aggregate compensation. These inputs are subjective and generally require significant analysis and judgment to develop. While estimates of expected life, volatility and forfeiture rate are derived primarily from the Companys historical data, the risk-free rate is based on the yield available on U.S. Treasury constant maturity rates with similar terms to the expected term of the stock option awards. The fair value of share-based awards was estimated using the Black-Scholes model with the following weighted-average assumptions for the years ended December 31, 2016 and 2015: Assumptions: 2016 2015 Dividend yield 0.00 0.00 Risk-free interest rate 1.13-2.32% 2.24-2.32% Expected volatility 67.3-78.9% 80.5-184% Expected life (in years) 10 10 Option activity for the year ended December 31, 2016 was as follows: Weighted Average Weighted Average Exercise Remaining Aggregate Price Contractual Intrinsic Options ($) Life (Yrs.) Value ($) Options outstanding at December 31, 2015 28,438 11.90 9.65 - Granted 73,688 7.09 9.53 - Exercised - - - - Forfeited or cancelled (938) 13.00 - - Options outstanding at December 31, 2016 101,188 8.39 9.29 - Options expected to vest in the future as of December 31, 2016 98,250 8.29 9.30 - Options exercisable at December 31, 2016 2,938 11.78 8.78 - Options vested, exercisable and options expected to vest at December 31, 2016 101,188 8.39 9.29 - The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the quoted price of our common stock for those awards that have an exercise price currently below the $3.24 closing price of our Common Stock on December 31, 2016. None of the options have an exercise price currently below $3.24. At December 31, 2016 and 2015, there was $452,551 and $619,300, respectively, of unrecognized share-based compensation expense related to unvested share options with a weighted average remaining recognition period of 9.29 and 9.65 years, respectively. Warrants At December 31, 2016, the Company had two outstanding warrants to purchase a total of 80,000 shares of common stock at an exercise price of $8.10 per share. If not exercised, the warrants to purchase 80,000 shares will expire on October 17, 2019. At December 31, 2015, the Company had two outstanding warrants to purchase a total of 12,500 shares of common stock at an exercise price of $16.00 per share. Warrants to purchase 10,938 shares expired on January 10, 2016 and warrants to purchase 1,563 expired on June 4, 2016. During the year ended December 31, 2015, a warrant to purchase 10,186 shares of common stock at an exercise price of $30.00 per share as well as a warrant to purchase 71,297 shares of common stock at an exercise price of $30.00 per share expired. |
Notes Payable
Notes Payable | 12 Months Ended |
Dec. 31, 2016 | |
Notes Payable {1} | |
Notes Payable | NOTE 3 Notes Payable Effective October 17, 2016, the Company entered into a Securities Purchase Agreement with two accredited investors (the Investors) for the private placement by the Company of Secured Convertible Notes in the aggregate principal amount of $1,000,000 (the "Notes") and warrants (the "Warrants") to purchase up to 80,000 shares (the "Warrant Shares") of the Company's common stock ("Common Stock") (subject to adjustment in certain circumstances), for aggregate gross proceeds, before expenses, to the Company of $900,000 (the Financing Transaction). The Notes carry a one-time upfront interest charge of a total of $100,000, which is being expensed to interest expense monthly over the 1-year term of the Notes and correspondingly increases in the Notes Payable balance each period. As of December 31, 2016, the Notes Payable balance is $920,114. However, the effective Notes Payable balance is $1 million since that is the amount we would have to pay in order to payoff the note anytime between now and the maturity date of October 17, 2017, in addition to accrued interest and a 15% pre-payment penalty. The Notes carry an interest rate of 10% per annum, calculated on the basis of a 360-day year, based on the $1 million Notes Payable effective balance. Such interest is payable every three months in cash, or, at the holders option, in unrestricted shares of Common Stock, if a registration statement is then in effect for such shares of common stock. In connection with the Financing Transaction, the Company entered into a Registration Rights Agreement, dated October 17, 2016, with the Investors (the Registration Rights Agreement), pursuant to which the Company agreed to file a registration statement related to the Financing Transaction with the Securities and Exchange Commission (SEC) covering the resale of (i) the shares of Common Stock that will be issued to the Investors upon conversion of the Notes (the "Conversion Shares"), and (ii) the Warrant Shares that will be issued to the Investors upon exercise of the Warrants. The Notes are secured by the assets of the Company pursuant to a Security Agreement, dated October 17, 2016, between the Company and the "collateral agent" (as defined in the Notes) for the benefit of itself and each of the Investors. The Notes are convertible into shares of Common Stock at a conversion price equal to the lesser of (i) the final unit price of the Companys proposed public offering initially filed with the SEC on July 28, 2016, and (ii) 150% of the closing price of the Common Stock as reported by the OTC Markets Group, Inc. on the date of issuance of the Notes (subject to adjustment as provided therein). As such, as of December 31, 2016, the conversion price of the Notes was $8.10, which is 150% of the closing price of the Common Stock as reported by the OTC Markets Group, Inc. on the date of issuance. Each Warrant has an initial exercise price equal to the lesser of (i) the final unit price of the Companys proposed public offering initially filed with the SEC on July 28, 2016, and (ii) 150% of the closing price of the Common Stock as reported by the OTC Markets Group, Inc. on the date of issuance of the Warrants (subject to adjustment as provided therein), which Warrants may be exercised on a cashless basis as provided in the Warrants. As such, as of December 31, 2016, the exercise price of the Warrants was $4.05, which is 150% of the closing price of the Common Stock as reported by the OTC Markets Group, Inc. on the date of issuance. |
Continuing Operations
Continuing Operations | 12 Months Ended |
Dec. 31, 2016 | |
Continuing Operations: | |
Continuing Operations | NOTE 4 - Continuing Operations The Company has sustained losses and has negative cash flows from operating activities since its inception. However, the Company has had increasing revenues in recent periods. In addition, the Company has raised significant equity capital and is currently securing new product lines to increase future revenues. On February 21, 2017, the Company closed an underwritten public offering of equity securities resulting in net proceeds of approximately $5.25 million, after deducting underwriting discounts and commissions and other offering expenses payable by the Company. As such, the Company believes it has adequate working capital and cash to fund operations through 2017, and has entered into significant revenue contracts that are expected to generate cash flow in the near term. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Taxes: | |
Income Tax Disclosure | NOTE 5 Income Taxes The Company accounts for income taxes in accordance with ASC Topic No. 740. This standard requires the Company to provide a net deferred tax asset or liability equal to the expected future tax benefit or expense of temporary reporting differences between book and tax accounting methods and any available operating loss or tax credit carryforwards. Income tax returns open for examination by the Internal Revenue Service consist of tax years ended December 31, 2012 through 2014. The Company has available at December 31, 2016, unused operating loss carryforwards of approximately $8,328,160, which may be applied against future taxable income and which expire in various years through 2035. However, if certain substantial changes in the Companys ownership should occur, there could be an annual limitation on the amount of net operating loss carryforward which can be utilized. The amount of and ultimate realization of the benefits from the operating loss carryforwards for income tax purposes is dependent, in part, upon the tax laws in effect, the future earnings of the Company and other future events, the effects of which cannot be determined. Because of the uncertainty surrounding the realization of the loss carryforwards, the Company has established a valuation allowance equal to the tax effect of the loss carryforwards and other temporary differences of approximately $3,767,996 and $2,914,526 at December 31, 2016 and 2015, respectively, and, therefore, no deferred tax asset has been recognized for the loss carryforwards. The change in the valuation allowance is approximately $853,470 and $659,006 for the years ended December 31, 2016 and 2015, respectively. Deferred tax assets are comprised of the following: 2016 2015 Deferred tax assets: NOL carryover $ 3,235,490 $ 2,382,020 Impairments 33,931 33,931 Warrants 498,575 498,575 Valuation allowance (3,767,996) (2,914,526) Net deferred tax asset $ - $ - The reconciliation of the provision for income taxes computed at the U.S. federal statutory tax rate (34%) to the Companys effective tax rate for the period ended December 31, 2016 and 2015 is as follows: 2016 2015 Book Loss $ 746,924 $ 576,736 State taxes 106,546 82,270 Deductible differences - - Change in valuation allowance (853,470) (659,006) Provision for Income Taxes $ - $ - |
Loss Per Share
Loss Per Share | 12 Months Ended |
Dec. 31, 2016 | |
Loss Per Share | |
Loss Per Share | NOTE 6 Loss Per Share The following data show the amounts used in computing loss per share and the effect on income and the weighted average number of shares of dilutive potential common stock for the periods ended December 31, 2016 and 2015: Year Ended December 31 2016 2015 Loss from continuing Operations available to Common stockholders (numerator) $ (2,196,834) $ (1,696,282) Weighted average number of common shares Outstanding used in loss per share during the Period (denominator) 3,125,022 3,114,241 Dilutive loss per share was not presented as the Company had no common equivalent shares for all periods presented that would affect the computation of diluted loss per share or its effect is anti-dilutive. |
Furniture and Equipment
Furniture and Equipment | 12 Months Ended |
Dec. 31, 2016 | |
Furniture and Equipment | |
Furniture and Equipment | NOTE 7 Furniture and Equipment The following is a summary of property and equipment, purchased, used and depreciated over a three-year period, less accumulated depreciation, as of December 31, 2016 and 2015: Year Ended December 31, 2016 2015 Property and Equipment $ 993,843 $ 966,936 Less: Accumulated Depreciation (428,910) (252,182) Net Property and Equipment $ 564,933 $ 714,754 Depreciation expense on property and equipment was $172,315 and $166,744 for the years ended December 31, 2016 and 2015, respectively. |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2016 | |
Intangible Assets | |
Intangible Assets | NOTE 8 Intangible Assets The Companys intangible assets consist of Patents, Patent Pending Applications and Customer Contacts. Provisional patent applications are not amortized until a patent has been granted. Once a patent is granted, the Company will amortize the related costs over the estimated useful life of the patent. If a patent application is denied, then the costs will be expensed at that time. The customer contacts were acquired in a business acquisition on December 31, 2011 and were to be amortized over their estimated useful life of 3 years. The following is a summary of definite-life intangible assets less accumulated amortization as of December 31, 2016 and 2015, respectively: Year Ended December 31, 2016 2015 Provisional Patent Applications $ 183,574 $ 137,927 Patents 59,701 39,252 Customer Contacts 262,009 262,009 Less: Accumulated Amortization (278,833) (271,544) Net Intangible Assets $ 226,450 $ 167,644 Amortization expense on intangible assets was $2,309 and $2,308 for the years ended December 31, 2016 and 2015. The estimated aggregate amortization expense for each of the succeeding years ending December 31 is as follows: 2017 2,309 2018 2,309 2019 2,309 2020 2,309 Thereafter 18,172 $ 29,717 |
Commitment and Contingencies
Commitment and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitment and Contingencies | |
Commitments and Contingencies | NOTE 9 Commitments and Contingencies Operating Leases The Company leases office and laboratory space under operating leases. Expense relating to these operating leases was $56,025 and $49,637 for the years ended December 31, 2016 and 2015, respectively. The future minimum lease payments required under non-cancellable operating leases at December 31, 2016 was $40,275. The future minimum lease payments are due during the year 2017. |
Concentrations
Concentrations | 12 Months Ended |
Dec. 31, 2016 | |
Concentrations | |
Concentrations | NOTE 10 Concentrations Revenues During the years ended December 31, 2016 and 2015, the Company had the following significant customers who accounted for more than 10% each of the Companys revenue in at least one of the periods presented. The loss of the revenues generated by these customers would have a significant effect on the operations of the Company. Customer 2016 2015 A 40.93% 42.93% B 29.97% 10.06% D 8.72% 19.57% E 7.03% 3.04% F 4.61% 3.85% Accounts Receivable The Company had the following significant customers who accounted for more than 10% each of the Companys accounts receivable balance at December 31, 2016 and 2015, respectively. Customer 2016 2015 A 75,74% 37.30% B 5.31% 14.01% C 5.24% 27.49% D 4.12% 7.18% E 3.18% 0% F 3.0% 0% |
Joint Venture
Joint Venture | 12 Months Ended |
Dec. 31, 2016 | |
Joint Venture | |
Joint Venture | NOTE 11 - Joint Venture As previously reported in our Form 8-K filed with the SEC on July 6, 2015, we entered into an Operating Agreement and Statement of Work with Arete Innovative Solutions LLC (Arete). The Operating Agreement and Statement of Work governed the operations of Arete-Sigma LLC (the "Joint Venture"), a joint venture formed by us and Arete for the purpose of pursuing business opportunities related to AM utilizing our EOS M290 or like machines, including enabling and implementing sales and manufacturing transactions. Under the Operating Agreement and Statement of Work, among other matters reported in our Form 8-K and set forth in the Operating Agreement and Statement of Work, (i) each of Sigma and Arete held a 50% ownership interest in the Joint Venture, and (ii) the Joint Venture was managed by William F. Herman, President of Arete, subject to certain limitations. Based on the Operating Agreement, the Company held the non-controlling interest in the Joint Venture. Therefore, the Joint Venture was not consolidated, but rather was accounted for on the equity method of recording investments. During the years ended December 31, 2016 and 2015, net operations resulted in a loss on the investment of $105 and $778, respectively. The Company terminated the Joint Venture in 2016, but is continuing to pursue business opportunities related to AM utilizing the Company's EOS M290 or like machines. |
Defined Contribution Plan
Defined Contribution Plan | 12 Months Ended |
Dec. 31, 2016 | |
Defined Contribution Plan | |
Defined Contribution Plan | Note 12 - Defined Contribution Plan In 2014, the Company adopted a qualified 401(K) plan (Plan), in which all employees over the age of 21 may participate. The Company has elected to match 100% of each participants contribution up to 3% of salary, and 50% of the next 2% of salary contributed. The Company may also elect, on an annual basis, to make a discretionary contribution to the plan. Company matches and elective contributions vest to participant accounts as follows: 20% after two years of service, and 20% per year thereafter until the participant reaches 6 years of service, at which time, employer contributions vest 100%. The cost of matching contributions were $35,488 in 2016 and $18,315 in 2015. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2016 | |
Subsequent Events | |
Subsequent Events | NOTE 13 Subsequent Events In connection with their appointment to the Companys Board of Directors, on January 10, 2017, the Company granted each of Sam Bell and Frank Garofalo 5,000 shares of common stock of the Company, under the Companys 2013 Equity Incentive Plan, with such shares to vest in four equal, successive quarterly installments of 1,250 shares each, beginning on April 10, 2017, subject to the requirement that each of Messrs. Bell and Garofalo, as applicable, must remain a director of the Company. Effective February 15, 2017, our Amended and Restated Articles of Incorporation were amended pursuant to a Certificate of Change Pursuant to Nevada Revised Statutes 78.209 (the Certificate of Change) filed with the Nevada Secretary of State. The Certificate of Change provided for both a reverse stock split of the outstanding shares of our common stock on a 1-for-2 basis (the Reverse Stock Split), and a corresponding decrease in the number of shares of our common stock that we are authorized to issue (the Share Decrease). As a result of the Reverse Stock Split, the number of issued and outstanding shares of our common stock decreased from 6,307,577 pre-Reverse Stock Split shares to 3,153,801 post-Reverse Stock Split shares (after adjustment for any fractional shares). Pursuant to the Share Decrease, the number of authorized shares of our common stock decreased from 15,000,000 to 7,500,000 shares of common stock, $0.001 par value per share. On February 21, 2017, the Company closed an underwritten public offering of 1,410,000 units, with each unit consisting of one share of the Company's common stock and one warrant to purchase one share of common stock. The underwriter exercised the over-allotment option covering additional warrants to purchase up to 211,500 additional shares of common stock. Gross proceeds to the Company from the offering, including the exercise of the over-allotment option, were approximately $5.8 million, before deducting underwriting discounts and commissions and other offering expenses payable by the Company. Dawson James Securities, Inc. acted as the sole underwriter for the offering. The shares and warrants described above were offered by Sigma Labs pursuant to a registration statement previously filed with and subsequently declared effective by the Securities and Exchange Commission ("SEC"). A final prospectus relating to the offering was filed with the SEC and is available on the SEC's website at http://www.sec.gov, or by contacting Dawson James: 1 N. Federal Hwy; Suite 500, Boca Raton, FL 33432, ATTN: Prospectus Department. On February 14, 2017, in connection with the offering, The NASDAQ Stock Market LLC informed the Company that it had approved the listing of the Companys common stock and warrants on The NASDAQ Capital Market, effective as of February 15, 2017 (the "Listing"). The Companys common stock ceased trading on the OTCQB on February 15, 2017, and on such date the common stock and the above described warrants commenced trading on The NASDAQ Capital Market under the ticker symbols SGLB and SGLBW, respectively. On February 15, 2017, in conjunction with John Rice's appointment as a director of the Company, the Company issued Mr. Rice 5,231 shares of common stock, which shares will vest in four equal, successive quarterly installments beginning on the first quarterly anniversary of the grant date, provided that an installment will not vest if Mr. Rice is not a director of the Company as of the applicable quarterly anniversary date. On February 16, 2017, the Company and Mark J. Cola entered into an employment agreement (the "Employment Agreement") for a three-year term, pursuant to which Mr. Cola will continue to serve as the Companys President, Chief Executive Officer and Chief Operating Officer. The Employment Agreement became effective as of the closing of the public offering described above. Under the Employment Agreement, Mr. Cola is entitled to receive an annual base salary of $220,000, which will be subject to increase in the discretion of the board of directors or Compensation Committee based on its annual assessment of Mr. Colas performance and other factors. Pursuant to the Employment Agreement, the Company granted Mr. Cola a stock option to purchase up to 123,750 shares of our common stock under the Company's 2013 Equity Incentive Plan, as amended, vesting in equal quarterly installments over an 18-month period. The Company agreed in the Employment Agreement that, on each of the first and second anniversaries of the effectiveness of the Employment Agreement, Mr. Cola will receive a stock option to purchase 61,875 shares of our common stock. Each stock option will have an exercise price equal to the closing price of our common stock on the date of grant and will vest and become exercisable in equal quarterly installments over an 18-month period, provided, in each case, that Mr. Cola remains an employee of the Company through such vesting date. On March 27, 2017, we completed funding a loan in the principal amount of $500,000 to Morf3D pursuant to a Secured Convertible Promissory Note dated March 27, 2017 delivered by Morf3D to us. The loan bears interest at the rate of 7% per annum, is due and payable in full on March 27, 2018, is secured by certain assets of Morf3D, and is convertible at our option into 10% of the outstanding shares of the common stock of Morf3D unless Morf3D exercises its right under specified circumstances to repay all principal and accrued interest on the loan. The Secured Convertible Promissory Note also contains representations, warranties, and affirmative and negative covenants of Morf3D and its principal stockholders. The purpose of the loan is to provide working capital to Morf3D to, among other things, lease an EOS M 400 system for Morf3D for Morf3D to expand production for contracts related to AM of high-precision aerospace & defense components, in furtherance of our strategic alliance and in contemplation of a possible acquisition of or merger with Morf3D. |
Accounting Policies (Policies)
Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies: | |
Nature of Business, Policy | Nature of Business On September 13, 2010 Sigma Labs, Inc., formerly named Framewaves, Inc., a Nevada corporation, acquired 100% of the shares of B6 Sigma, Inc. by exchanging 6.67 shares of Framewaves, Inc. restricted common stock for each issued and outstanding share of B6 Sigma, Inc. The acquisition has been accounted for as a reverse purchase, and accordingly the operations of Framewaves, Inc. prior to the date of acquisition have been eliminated. Unless otherwise indicated or the context otherwise requires, the term B6 Sigma refers to B6 Sigma, Inc., a Delaware corporation, which, until the short-form merger referenced below, was our wholly-owned, operating company acquired in September 2010; the terms the Company, Sigma, we, us and our refer to Sigma Labs, Inc., together with B6 Sigma, Inc. Prior to December 29, 2015, we conducted substantially all of our operations through B6 Sigma. On December 29, 2015, we completed a short-form merger of B6 Sigma into Sigma. As a result, B6 Sigma became part of Sigma and no longer exists as a subsidiary. B6 Sigma, Inc., incorporated February 5, 2010, was founded by a group of scientists, engineers and businessmen to develop and commercialize novel and unique manufacturing and materials technologies. The Company believes that some of these technologies will fundamentally redefine conventional quality assurance and process control practices by embedding them into the manufacturing processes in real time, enabling process intervention and ultimately leading to closed loop process control. The Company anticipates that its core technologies will allow its clientele to combine advanced manufacturing quality assurance and process control protocols with novel materials to achieve breakthrough product potential in many industries including aerospace, defense, oil and gas, bio-medical, and power generation. |
Basis of Presentation, Policy | Basis of Presentation The accompanying financial statements have been prepared by the Company in accordance with Article 8 of U.S. Securities and Exchange Commission Regulation S-X. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows at December 31, 2016 and 2015 and for the periods then ended have been made. |
Reclassification, Policy | Reclassification Certain amounts in prior-period financial statements have been reclassified for comparative purposes to conform to presentation in the current-period financial statements. |
Loss Per Share , Policy | Loss Per Share The computation of loss per share is based on the weighted average number of shares outstanding during the period in accordance with ASC Topic No. 260, Earnings Per Share. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost. Expenditures for major renewals and betterments that extend the useful lives of property and equipment are capitalized upon being placed in service. Expenditures for maintenance and repairs are charged to expense as incurred. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. The estimated life has been determined to be three years unless a unique circumstance exists, which is then fully documented as an exception to the policy. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments - The Company applies ASC 820, Fair Value Measurements . · Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. · Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. · Level 3 inputs to valuation methodology are unobservable and significant to the fair measurement. Fair Value of Financial Instruments The Company adopted ASC 820, Fair Value Measurements and Disclosures ASC 820 defines fair value as 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. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below: Level 1: Observable inputs such as quoted market prices in active markets for identical assets or liabilities Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data Level 3: Unobservable inputs for which there is little or no market data, which require the use of the reporting entitys own assumptions. The carrying amounts reported in the balance sheets for the cash and cash equivalents, prepaid stock compensation, receivables accounts payable, and accrued liabilities each qualify as financial instruments and are a reasonable estimate of fair value because on the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. In addition, FASB ASC 825-10-25, Fair Value Option Fair value of financial instruments is as follows: December 31, 2016 Date of Issuance October 17, 2016 Fair Value Input Level Fair Value Input Level Derivative liability $1 million of Notes issued October 17, 2016 $56,557 Level 3 $271,754 Level 3 Derivative liability 160,000 warrants issued October 17, 2016 $36,649 Level 3 $176,096 Level 3 The derivative liability is the result of the $1 million of Notes, and the 160,000 warrants, that were issued in October 2016, both of which contain anti-dilution provisions in the event the Company engages in specified transactions. The Notes mature on October 17, 2017 and the warrants expire on October 17, 2019. The following table presents a reconciliation of the derivative liability measured at fair value on a recurring basis using significant unobservable input (Level 3) on October 17, 2016 and December 31, 2016: Conversion feature derivative liability Fair value on issuance date $ 447,850 Change in fair value (354,644) Balance December 31, 2016 $ 93,206 At December 31, 2015, the Company had two outstanding warrants to purchase a total of 12,500 shares of common stock but the warrants did not contain anti-dilution provisions, and thus were not derivative liabilities. The fair value of one of the warrants of $271,250 was expensed on the date of issuance in 2014, and was calculated using a Black-Scholes option pricing model with the following assumptions: expected life of two years, expected volatility of 201%, a risk-free interest rate of 0.39%, and an expected dividend yield of 0%. The fair value of the other warrant of $36,250 was expensed on the date of issuance in 2014, and was calculated using a Black-Scholes option pricing model with the following assumptions: expected life of two years, expected volatility of 287%, a risk-free interest rate of 0.41%, and an expected dividend yield of 0%. |
Income Taxes | Income Taxes The Company adopted the provisions of ASC Topic No. 740, Accounting for Income Taxes, at the date of inception on February 5, 2010. As a result of the implementation of ASC Topic No. 740, the Company recognized no increase in the liability for unrecognized tax benefits. The Company has no tax positions at December 31, 2016 and 2015 for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility. The Company recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. During the year ended December 31, 2016, the Company recognized no interest and penalties. The Company had no accruals for interest and penalties at December 31, 2016 or 2015. All tax years starting with 2010 are open for examination. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts - Trade accounts receivable are carried at original invoice amount less an estimate made for doubtful accounts. We determine the allowance for doubtful accounts by identifying potential troubled accounts and by using historical experience and future expectations applied to an aging of accounts. Trade accounts receivable are written off when deemed uncollectible. Recoveries of trade accounts receivable previously written off are recorded as income when received. There no allowance for doubtful accounts at December 31, 2016 or 2015. |
Long-Lived and Intangible Assets | Long-Lived and Intangible Assets Long-lived assets and certain identifiable definite life intangibles to be held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company continuously evaluates the recoverability of its long-lived assets based on estimated future cash flows and the estimated liquidation value of such long-lived assets, and provides for impairment if such undiscounted cash flows are insufficient to recover the carrying amount of the long-lived assets. If impairment exists, an adjustment is made to write the asset down to its fair value, and a loss is recorded as the difference between the carrying value and fair value. Fair values are determined based on quoted market values, discounted cash flows or internal and external appraisals, as applicable. Assets to be disposed of are carried at the lower of carrying value or estimated net realizable value. No impairment was recorded in the years ended December 31, 2016 or 2015. |
Recently Enacted Accounting Standards , Policy | Recently Enacted Accounting Standards The FASB established the Accounting Standards Codification (Codification or ASC) as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in accordance with generally accepted accounting principles in the United States (GAAP). Rules and interpretive releases of the Securities and Exchange Commission (SEC) issued under authority of federal securities laws are also sources of GAAP for SEC registrants. Recent Accounting Standards Updates (ASU) through ASU No. 2015-01 contain technical corrections to existing guidance or affects guidance to specialized industries or situations. The Company has evaluated recently issued technical pronouncements and has determined that these updates have no current applicability to the Company or their effect on the financial statements would not have been significant. |
Cash Equivalents | Cash Equivalents - The Company considers all highly liquid investments with an original maturity of three months or less at date of purchase to be cash equivalents |
Concentration of Credit Risk | Concentration of Credit Risk - The Company maintains its cash in bank deposit accounts, which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash and cash equivalents. |
Organization Expenditures | Organization Expenditures Organizational expenditures are expensed as incurred for SEC filings, but capitalized and amortized for income tax purposes. |
Stock Based Compensation | Stock Based Compensation The Company recognizes compensation costs to employees under ASC Topic No. 718, Compensation Stock Compensation. Under ASC Topic No. 718, companies are required to measure the compensation costs of share-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over the period during which employees are required to provide services. Share based compensation arrangements may include stock options, grants of shares of common stock with and without restrictions, performance based awards, share appreciation rights and employee share purchase plans. As such, compensation cost is measured on the date of grant at its fair value. Such compensation amounts, if any, are amortized over the respective vesting periods of the option or stock grants. Unvested option or stock grants for compensation are included in the Statement of Stockholders Equity as a contra-equity account as Deferred Compensation. Equity instruments issued to non-employees are recorded on the basis of the fair value of the instruments, as required by ASC Topic No. 505, Equity Based Payments to Non-Employees. In general, the measurement date is either (a) when a performance commitment, as defined, is reached or (b) the earlier of the date that (i) the non-employee performance requirement is complete or (ii) the instruments are vested. The measured value related to the instruments is recognized over a per |
Amortization | Amortization - Utility patents are amortized over a 17 year period. Patents which are pending are not amortized. |
Accounting Estimates | Accounting Estimates - The preparation of financial statements in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimated by management. Significant accounting estimates that may materially change in the near future are impairment of long-lived assets, values of stock compensation awards and stock equivalents granted as offering costs, and allowance for bad debts and inventory obsolescence. |
Revenue Recognition | Revenue Recognition The Companys revenue is derived primarily from providing services under contracts. The Company recognizes revenue in accordance with ASC Topic No. 605 based on the following criteria: Persuasive evidence of an arrangement exists, services have been rendered, the price is fixed or determinable, and collectability is reasonably assured. In general, the Company recognizes service revenue as significant services under the relevant arrangement have been performed. |
Deferred Stock Offering Costs | Deferred Stock Offering Costs Costs related to stock offerings (if any) are deferred and will be offset against the proceeds of the offering in additional paid-in capital. In the event a stock offering is unsuccessful, the costs relating to the offering will be written-off directly to expense. |
Inventory | Inventory Inventories consist of raw materials used in the production of customized parts totaling $187,241 and $20,129, as of December 31, 2016 and 2015, respectively, and nominal work-in-process components which will be sold to customers. Inventories are valued at the lower of cost or market, using the first-in, first-out (FIFO) method. |
Research and Development | Research and Development Research and development costs are expensed as they are incurred. Research and development costs for the years ended December 31, 2016 and 2015 were $92,992 and $330,554, respectively. |
Fair value of financial instrum
Fair value of financial instruments (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Measures and Disclosures: | |
Fair Value, Measurements in Financial Reporting | Fair value of financial instruments is as follows: December 31, 2016 Date of Issuance October 17, 2016 Fair Value Input Level Fair Value Input Level Derivative liability $1 million of Notes issued October 17, 2016 $56,557 Level 3 $271,754 Level 3 Derivative liability 160,000 warrants issued October 17, 2016 $36,649 Level 3 $176,096 Level 3 |
Schedule of reconciliation of the derivative liability measured at fair value | The following table presents a reconciliation of the derivative liability measured at fair value on a recurring basis using significant unobservable input (Level 3) on October 17, 2016 and December 31, 2016: Conversion feature derivative liability Fair value on issuance date $ 447,850 Change in fair value (354,644) Balance December 31, 2016 $ 93,206 |
Schedule of Stock Options (Tabl
Schedule of Stock Options (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Schedule of Stock Options (Tables): | |
Schedule of Stock Options (Tables) | The fair value of share-based awards was estimated using the Black-Scholes model with the following weighted-average assumptions for the years ended December 31, 2016 and 2015: Assumptions: 2016 2015 Dividend yield 0.00 0.00 Risk-free interest rate 1.13-2.32% 2.24-2.32% Expected volatility 67.3-78.9% 80.5-184% Expected life (in years) 10 10 Option activity for the year ended December 31, 2016 was as follows: Weighted Average Weighted Average Exercise Remaining Aggregate Price Contractual Intrinsic Options ($) Life (Yrs.) Value ($) Options outstanding at December 31, 2015 28,438 11.90 9.65 - Granted 73,688 7.09 9.53 - Exercised - - - - Forfeited or cancelled (938) 13.00 - - Options outstanding at December 31, 2016 101,188 8.39 9.29 - Options expected to vest in the future as of December 31, 2016 98,250 8.29 9.30 - Options exercisable at December 31, 2016 2,938 11.78 8.78 - Options vested, exercisable and options expected to vest at December 31, 2016 101,188 8.39 9.29 - |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Taxes (Tables): | |
Schedule of Deferred Tax Assets and Liabilities | Deferred tax assets are comprised of the following: 2016 2015 Deferred tax assets: NOL carryover $ 3,235,490 $ 2,382,020 Impairments 33,931 33,931 Warrants 498,575 498,575 Valuation allowance (3,767,996) (2,914,526) Net deferred tax asset $ - $ - |
Schedule of Effective Income Tax Rate Reconciliation | The reconciliation of the provision for income taxes computed at the U.S. federal statutory tax rate (34%) to the Companys effective tax rate for the period ended December 31, 2016 and 2015 is as follows: 2016 2015 Book Loss $ 746,924 $ 576,736 State taxes 106,546 82,270 Deductible differences - - Change in valuation allowance (853,470) (659,006) Provision for Income Taxes $ - $ - |
Schedule of Loss Per Share (Tab
Schedule of Loss Per Share (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Schedule of Loss Per Share (Tables): | |
Schedule of Loss Per Share (Tables) | The following data show the amounts used in computing loss per share and the effect on income and the weighted average number of shares of dilutive potential common stock for the periods ended December 31, 2016 and 2015: Year Ended December 31 2016 2015 Loss from continuing Operations available to Common stockholders (numerator) $ (2,196,834) $ (1,696,282) Weighted average number of common shares Outstanding used in loss per share during the Period (denominator) 3,125,022 3,114,241 |
Furniture and Equipment (Tables
Furniture and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Furniture and Equipment (Tables): | |
Property, Plant and Equipment | The following is a summary of property and equipment, purchased, used and depreciated over a three-year period, less accumulated depreciation, as of December 31, 2016 and 2015: Year Ended December 31, 2016 2015 Property and Equipment $ 993,843 $ 966,936 Less: Accumulated Depreciation (428,910) (252,182) Net Property and Equipment $ 564,933 $ 714,754 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Intangible Assets (Tables): | |
Schedule of Finite-Lived Intangible Assets | The following is a summary of definite-life intangible assets less accumulated amortization as of December 31, 2016 and 2015, respectively: Year Ended December 31, 2016 2015 Provisional Patent Applications $ 183,574 $ 137,927 Patents 59,701 39,252 Customer Contacts 262,009 262,009 Less: Accumulated Amortization (278,833) (271,544) Net Intangible Assets $ 226,450 $ 167,644 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | The estimated aggregate amortization expense for each of the succeeding years ending December 31 is as follows: 2017 2,309 2018 2,309 2019 2,309 2020 2,309 Thereafter 18,172 $ 29,717 |
Concentrations (Tables)
Concentrations (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Risks and Uncertainties | |
Schedule of Revenue by Major Customers by Reporting Segments | The loss of the revenues generated by these customers would have a significant effect on the operations of the Company. Customer 2016 2015 A 40.93% 42.93% B 29.97% 10.06% D 8.72% 19.57% E 7.03% 3.04% F 4.61% 3.85% |
Schedule Of Accounts Receivable By Major Customers By Reporting Segments | Accounts Receivable The Company had the following significant customers who accounted for more than 10% each of the Companys accounts receivable balance at December 31, 2016 and 2015, respectively. Customer 2016 2015 A 75,74% 37.30% B 5.31% 14.01% C 5.24% 27.49% D 4.12% 7.18% E 3.18% 0% F 3.0% 0% |
Summary of Significant Accoun28
Summary of Significant Accounting Policies (Details Textual) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Sep. 13, 2010shares |
Summary Of Significant Accounting Policies Details | |||
Subsidiary or Equity Method Investee, Cumulative Percentage Ownership after All Transactions | 100.00% | ||
Number Of Shares Exchanged For Each Share Of Acquired Entity (in shares) | shares | 6.67 | ||
Research and Development Expense, Total | $ 92,992 | $ 330,554 | |
Inventory, Raw Materials, Gross | $ 187,241 | $ 20,129 | |
Finite-Lived Intangible Assets, Useful Life, Maximum | 17 |
Fair value of financial instr29
Fair value of financial instruments is as follows (Details) - USD ($) | Dec. 31, 2016 | Oct. 17, 2016 |
Fair value of financial instruments is as follows Details | ||
Derivative liability - $1 million of Notes issued October 17, 2016 | $ 56,557 | $ 271,754 |
Derivative liability - 160,000 warrants issued October 17, 2016 | $ 36,649 | $ 176,096 |
Derivative liability measured a
Derivative liability measured at fair value on a recurring basis using significant unobservable input (Details) - USD ($) | Dec. 31, 2016 | Oct. 17, 2016 |
Derivative liability measured at fair value on a recurring basis using significant unobservable input Details | ||
Fair value on issuance date | $ 447,850 | $ 447,850 |
Change in fair value | (354,644) | (354,644) |
Balance December 31, 2016 | $ 93,206 | $ 93,206 |
Fair value of financial instr31
Fair value of financial instruments Narrative (Details) | Dec. 31, 2015USD ($) |
Fair value of financial instruments Narrative Details | |
Company had outstanding warrants to purchase | $ 12,500 |
Fair value of one of the warrants was expensed | 271,250 |
Fair value of the other warrant was expensed | $ 36,250 |
Expected Life (in years) | 2 |
Expected Volatility, Minimum | 201.00% |
Expected Volatility, Maximum | 287.00% |
Expected Dividend yield | 0.00% |
Risk-free interest rate, Minimum | 0.39% |
Risk-free interest rate, Maximum | 0.41% |
Equity Textual (Details)
Equity Textual (Details) - USD ($) | Dec. 31, 2016 | Jul. 31, 2016 | Jun. 30, 2016 | May 31, 2016 | Apr. 30, 2016 | Apr. 28, 2016 | Mar. 31, 2016 | Mar. 17, 2016 | Feb. 28, 2016 | Dec. 31, 2015 | Mar. 31, 2015 |
Equity Textual Details | |||||||||||
Company issued shares of stock to a director | 5,000 | ||||||||||
Issued shares of stock to an officer | 2,500 | ||||||||||
Aggregate of shares of stock to two consultants | $ 10,519 | ||||||||||
Shares were valued at | $ 191,000 | ||||||||||
Shares were valued at per share | $ 10.6 | ||||||||||
Number of issued and outstanding shares of our common stock decreased | 311,484,918 | ||||||||||
Reverse Stock Split shares | 3,114,855 | ||||||||||
Number of authorized shares of our common stock decreased from 750,000,000 to | 3,750,000 | ||||||||||
Company issued shares of common stock to a new employee | 2,083 | 1,257 | 1,230 | 1,764 | 1,540 | 313 | |||||
Company issued shares of common stock to a new employee valued at | $ 12,501 | $ 7,498 | $ 7,499 | $ 15,000 | $ 14,999 | $ 3,012 | |||||
Company issued shares of common stock to a new employee valued at per share | $ 6 | $ 5.964 | $ 6.1 | $ 8.5 | $ 9.74 | $ 9.64 | |||||
Company issued shares of common stock to an employee | 15,500 | ||||||||||
Company issued shares of common stock to an employee valued at | $ 91,760 | ||||||||||
Company issued shares of common stock to an employee at per share | $ 5.92 | ||||||||||
Increase the number of authorized shares of the Company's common stock from 3,750,000 to | 7,500,000 | ||||||||||
Shares of our common stock to a total of shares (on a post-Reverse Stock Split basis) | 750,000 | ||||||||||
Shares vested during the year | 1,501 | 16,159 | |||||||||
Shares unvested | 1,501 | ||||||||||
Shares unvested was reflected as prepaid assets | 15,905 | ||||||||||
Shares of authorized common stock | 7,500,000 | ||||||||||
Shares of authorized common stock par value per share | $ 0.001 | ||||||||||
Shares of common stock issued and outstanding | 3,133,789 | 6,239,073 |
Deferred Compensation (Details)
Deferred Compensation (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 | Aug. 31, 2015 | Nov. 30, 2014 | Jul. 31, 2014 |
Deferred Compensation Details | |||||
Company issued shares to three employees an aggregate of | $ 30,000 | ||||
Shares were valued at the fair value | $ 774,000 | ||||
Shares were valued at the fair value per share | $ 25.8 | ||||
Balance of unvested compensation cost expected to be recognized | $ 167,562 | $ 418,547 | |||
Balance of unvested compensation cost expected | 64,500 | 387,000 | |||
Balance of unvested compensation cost expected valued at | $ 2,500 | $ 15,000 | |||
Balance of unvested compensation cost expected per share | $ 25.8 | $ 25.8 | |||
Company issued shares of stock to a director | 7,500 | ||||
Issued shares of stock to an officer | 2,500 | ||||
Shares of stock to two consultants, subject to vesting restrictions | 10,519 | ||||
Company issued shares of stock to a director valued at | $ 191,000 | $ 141,000 | |||
Company issued shares of stock to a director at per share | $ 10.6 | $ 18.8 | |||
Company issued shares vested | 16,519 | 33,037 | |||
Company issued shares of stock to an employee | 1,250 | ||||
Company issued shares of stock to an employee valued at | $ 11.8 | ||||
Company issued shares of stock to an employee at per share | $ 14,750 | ||||
Remaining shares vested during the year | 1,501 | ||||
Remaining shares vested during the year valued at | $ 15,905 | ||||
Shares were unvested | 1,250 | ||||
Preferred Stock | |||||
Company is authorized to issue shares of preferred stock | 10,000,000 | ||||
Company is authorized to issue shares of preferred stock par value per share | $ 0.001 |
Stock Options (Details)
Stock Options (Details) | Dec. 31, 2016USD ($)shares | Apr. 28, 2016shares | Dec. 31, 2015USD ($)$ / sharesshares |
Stock Options Details | |||
Common stock reserved for issuance under the 2013 Plan | 319,269 | ||
Shares of our common stock to a total of shares | 375,000 | ||
Shares of common stock were reserved for issuance under the 2011 Plan | 750 | ||
Shares of common stock were reserved for issuance under the 2013 Plan | 199,669 | ||
Company granted a total of options | 73,688 | 28,438 | |
Total compensation cost of the options | $ | $ 168,411 | $ 306,796 | |
Total compensation cost of the options will be recognized in years | 3.81 | ||
Weighted average exercise price of the options | $ / shares | $ 11.88 | ||
Weighted average fair value of the options on the dates of grant | $ / shares | $ 11.82 | ||
Options vested | 2,938 | ||
Options to purchase shares outstanding under the plans | 101,188 | ||
Vested options exercisable into shares of common stock | 2,938 | ||
Shares reserved for future grant | 200,419 | ||
Total share-based compensation expense | $ | $ 341,558 | $ 518,438 | |
Unrecognized share-based compensation expense | $ | $ 452,551 | $ 619,300 | |
Weighted average remaining recognition period | 9.29 | 9.65 |
Stock Options Valuation Assumpt
Stock Options Valuation Assumptions (Details) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Stock Options Valuation Assumptions Details | ||
Expected term (in years) | 10 | 10 |
Expected Volatility, Minimum | 67.30% | 80.50% |
Expected Volatility, Maximum | 78.90% | 184.00% |
Dividend yield | 0.00% | 0.00% |
Risk-free interest rate, Minimum | 1.13% | 2.24% |
Risk-free interest rate, Maximum | 2.32% | 2.32% |
Summary of Stock Option activit
Summary of Stock Option activity (Details) | Dec. 31, 2016USD ($)$ / shares | Dec. 31, 2015USD ($)$ / shares |
Summary of Stock Option activity | ||
Outstanding Options | $ | $ 101,188 | $ 28,438 |
Granted | $ | 73,688 | |
Forfeited or cancelled | $ | $ (938) | |
Options expected to vest in the future | $ | 98,250 | |
Options exercisable | $ | 2,938 | |
Options vested, exercisable and options expected to vest | $ | $ 101,188 | |
Weighted Average Exercise Price Per Share - Options | ||
Weighted Average Exercise Price Per Share - Outstanding Options | $ / shares | $ 8.39 | $ 11.9 |
Weighted Average Exercise Price Per Share - Granted | $ / shares | 7.09 | |
Weighted Average Exercise Price Per Share - Forfeited or cancelled | $ / shares | $ 13 | |
Weighted Average Exercise Price Per Share Options expected to vest in the future | $ / shares | 8.29 | |
Weighted Average Exercise Price Per Share Options exercisable | $ / shares | 11.78 | |
Weighted Average Exercise Price Per Share Options vested, exercisable and options expected to vest | $ / shares | $ 8.39 | |
Weighted Average Remaining Contractual Term - Options | ||
Weighted Average Remaining Contractual Term - Outstanding Options | 9.29 | 9.65 |
Weighted Average Remaining Contractual Term - Granted | 9.53 | |
Weighted Average Remaining Contractual Term Options expected to vest in the future | 9.3 | |
Weighted Average Remaining Contractual Term Options exercisable | 8.78 | |
Weighted Average Remaining Contractual Term Options vested, exercisable and options expected to vest | 9.29 |
Warants (Details)
Warants (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Warrants Details | ||
Warrant remaining to purchase a total shares of common stock | 80,000 | |
Warrant remaining to purchase a total shares of common stock at an exercise price per share | $ 8.10 | |
Warrants to purchase shares will expire on October 17, 2019 | 80,000 | |
Warrant to purchase shares expired on January 10, 2016 | 10,938 | |
Warrant to purchase shares will expire on June 4, 2016 | 1,563 | |
Warrant to purchase shares of common stock | 12,500 | |
Warrant to purchase shares of common stock at an exercise price per share | $ 16 | |
Warrant to purchase shares of common stock | 10,186 | |
Warrant to purchase shares of common stock at an exercise price per share | $ 30 | |
Warrant to purchase shares of common stock | 71,297 | |
Warrant to purchase shares of common stock at an exercise price per share | $ 30 |
Notes Payable (Details)
Notes Payable (Details) - USD ($) | Dec. 31, 2016 | Oct. 17, 2016 |
Notes Payable Details | ||
Secured Convertible Notes in the aggregate principal amount | $ 1,000,000 | |
Warrants to purchase shares of the Company's common stock | 80,000 | |
Aggregate gross proceeds before expenses to the Company | $ 900,000 | |
Notes carry a one-time upfront interest charge | $ 100,000 | |
Notes Payable balance | $ 920,114 | |
Accrued interest and a pre-payment penalty | 15.00% | |
Notes carry an interest rate per annum | 10.00% | |
Conversion price of the Notes | $ 8.1 | |
Conversion price of the Notes of the closing price of the Common Stock | 150.00% | |
Exercise price of the Warrants | $ 4.05 |
Continuing Operations (Details)
Continuing Operations (Details) | Dec. 31, 2016USD ($) |
Continuing Operations Details | |
Company closed an underwritten public offering of equity securities resulting in net proceeds | $ 5,250,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Income Taxes Details | ||
Operating loss carryforwards | $ 8,328,160 | |
Other temporary differences | 3,767,996 | $ 2,914,526 |
Valuation allowance | 853,470 | $ 659,006 |
Net deferred tax asset | $ 0 |
Deferred tax assets are compris
Deferred tax assets are comprised of the following (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred tax assets are comprised of the following Details | ||
NOL carryover | $ 3,235,490 | $ 2,382,020 |
Impairments | 33,931 | 33,931 |
Warrants | 498,575 | 498,575 |
Valuation allowance | (3,767,996) | $ (2,914,526) |
Net deferred tax asset | $ 0 |
Reconciliation of provision for
Reconciliation of provision for income taxes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Reconciliation of the provision for income taxes Details | ||
Book Loss | $ 746,924 | $ 576,736 |
State taxes | 106,546 | 82,270 |
Deductible differences | 0 | |
Change in valuation allowance | (853,470) | $ (659,006) |
Provision for Income Taxes | $ 0 |
Loss Per Share (Details)
Loss Per Share (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Loss Per Share Details | ||
Loss from continuing Operations available to Common stockholders (numerator) | $ (2,196,834) | $ (1,696,282) |
Weighted average number of common shares Outstanding used in loss per share during the Period (denominator) | 3,125,022 | 3,114,241 |
Furniture and Equipment (Detail
Furniture and Equipment (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Property, Plant and Equipment Details | ||
Property and Equipment | $ 993,843 | $ 966,936 |
Less: Accumulated Depreciation | (428,910) | (252,182) |
Net Property and Equipment | $ 564,933 | $ 714,754 |
Furniture and Equipment (Deta45
Furniture and Equipment (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Furniture and Equipment Details | ||
Depreciation expense on property and equipment | $ 172,315 | $ 166,744 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Finite-Lived Intangible Assets Details | ||
Provisional Patent Applications | $ 183,574 | $ 137,927 |
Patents | 59,701 | 39,252 |
Customer Contacts | 262,009 | 262,009 |
Less: Accumulated Amortization | (278,833) | (271,544) |
Net Intangible Assets | $ 226,450 | $ 167,644 |
Amortization of Intangible Asse
Amortization of Intangible Assets (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Amortization of Intangible Assets Details | ||
Finite-Lived Intangible Asset, Useful Life | $ 3 | |
Amortization of Intangible Assets | $ 2,309 | $ 2,308 |
Amortization expense (Details)
Amortization expense (Details) | Dec. 31, 2016USD ($) |
Amortization expense Details | |
Amortization expense for 2017 | $ 2,309 |
Amortization expense for 2018 | 2,309 |
Amortization expense for 2019 | 2,309 |
Amortization expense for 2020 | 2,309 |
Amortization expense for Thereafter | 18,172 |
Amortization expense Total | $ 29,717 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Commitments and Contingencies Details | ||
Operating Leases, Rent Expense | $ 56,025 | $ 49,637 |
Operating Leases, Future Minimum Payments Receivable, Total | $ 40,275 |
Concentrations (Details)
Concentrations (Details) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Concentrations Details | ||
Concentrations Customer A | 40.93% | 42.93% |
Concentrations Customer B | 29.97% | 10.06% |
Concentrations Customer D | 8.72% | 19.57% |
Concentrations Customer E | 7.03% | 3.04% |
Concentrations Customer F | 4.61% | 3.85% |
Concentrations Accounts Receiva
Concentrations Accounts Receivable (Details) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Concentrations Accounts Receivable Details | ||
Concentrations Accounts Receivable Customer A | 75.74% | 37.30% |
Concentrations Accounts Receivable Customer B | 5.31% | 14.01% |
Concentrations Accounts Receivable Customer C | 5.24% | 27.49% |
Concentrations Accounts Receivable Customer D | 4.12% | 7.18% |
Concentrations Accounts Receivable Customer E | 3.18% | 0.00% |
Concentrations Accounts Receivable Customer F | 3.00% | 0.00% |
Joint Venture (Details Textual)
Joint Venture (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Loss on Investment in Joint Venture Details | ||
Corporate Joint Venture | $ 105 | $ 778 |
Equity Method Investment, Ownership Percentage | 50.00% |
Defined Contribution Plan (Deta
Defined Contribution Plan (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Defined Contribution Plan Details | ||
Defined Contribution Plan, Employer Matching Contribution, Percent of Match | 100.00% | |
Defined Contribution Plan, Maximum Annual Contributions Per Employee, Percent | 3.00% | |
Defined Contribution Plan, Employer Matching Contribution, Percent of Match | 50.00% | |
Defined Contribution Plan, Maximum Annual Contributions Per Employee, Percent | 2.00% | |
Defined Contribution Plan, Cost Recognized | $ 35,488 | $ 18,315 |
Subsequent Events (Details Text
Subsequent Events (Details Textual) - USD ($) | Mar. 27, 2017 | Feb. 21, 2017 | Feb. 16, 2017 | Feb. 15, 2017 | Jan. 10, 2017 |
Subsequent Event Details | |||||
Company granted each of Sam Bell and Frank Garofalo shares of common stock | $ 5,000 | ||||
Issued and outstanding shares of our common stock decreased | 6,307,577 | ||||
Number of authorized shares of our common stock decreased from 15,000,000 to | 7,500,000 | ||||
Company closed an underwritten public offering | $ 1,410,000 | ||||
Additional warrants to purchase additional shares of common stock | 211,500 | ||||
Exercise of the over-allotment option | $ 5,800,000 | ||||
Company issued Mr. Rice shares of common stock | 5,231 | ||||
Under the Employment Agreement, Mr. Cola is entitled to receive an annual base salary | $ 220,000 | ||||
Company granted Mr. Cola a stock option to purchase shares of our common stock | 123,750 | ||||
Stock option to purchase shares of our common stock | 61,875 | ||||
Funding a loan in the principal amount | $ 500,000 | ||||
Loan bears interest at the rate per annum | 7.00% |