Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2016 | May. 09, 2016 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | CTD HOLDINGS INC | |
Entity Central Index Key | 922,247 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2016 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q1 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 58,776,820 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 1,078,961 | $ 1,842,233 |
Accounts receivable, net | 107,790 | 55,636 |
Inventory | 621,453 | $ 610,166 |
Current portion of mortgage note receivable | 27,228 | |
Other current assets | 37,429 | $ 14,851 |
Total current assets | 1,872,861 | 2,522,886 |
PROPERTY AND EQUIPMENT, NET | $ 1,856,723 | 1,892,943 |
OTHER ASSETS | ||
Property held for sale | 275,000 | |
Deferred costs, net | $ 65,883 | $ 66,424 |
Mortgage note receivable, less current portion | 235,058 | |
Total other assets | 300,941 | $ 341,424 |
TOTAL ASSETS | 4,030,525 | 4,757,253 |
CURRENT LIABILITIES | ||
Accounts payable and accrued expenses | 282,042 | 257,537 |
Notes payable | 704,275 | 719,737 |
Line of credit | 4,296 | 34,296 |
Total current liabilities | 990,613 | 1,011,570 |
STOCKHOLDERS' EQUITY | ||
Common stock, par value $.0001 per share, 100,000,000 shares authorized, 58,670,347 and 58,670,347 shares issued and outstanding, respectively | $ 5,867 | $ 5,867 |
Preferred stock, par value $.0001 per share, 5,000,000 shares authorized, no shares issued or outstanding | ||
Additional paid-in capital | $ 9,015,582 | $ 9,015,582 |
Accumulated deficit | (5,981,537) | (5,275,766) |
Total stockholders' equity | 3,039,912 | 3,745,683 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 4,030,525 | $ 4,757,253 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 58,670,347 | 58,670,347 |
Common stock, shares outstanding | 58,670,347 | 58,670,347 |
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
REVENUES | ||
Product sales | $ 312,685 | $ 173,198 |
EXPENSES | ||
Personnel | 301,291 | 241,631 |
Cost of products sold (exclusive of amortization and depreciation, shown separately below) | 36,834 | 22,466 |
Research and development | 282,682 | 67,231 |
Repairs and maintenance | 5,934 | 9,456 |
Professional fees | 201,800 | 92,149 |
Office and other | 145,312 | 42,745 |
Board of Director fees and costs | 24,581 | 37,736 |
Amortization and depreciation | 41,147 | 41,295 |
Freight and shipping | 1,665 | 1,726 |
Loss (gain) on disposal of property and equipment | 4,489 | (700) |
Total expenses | 1,045,735 | 555,735 |
LOSS FROM OPERATIONS | (733,050) | (382,537) |
OTHER INCOME (EXPENSE) | ||
Investment and other income | 34,859 | 2,160 |
Interest expense | (7,580) | (7,879) |
Total other income (expense) | 27,279 | (5,719) |
LOSS BEFORE INCOME TAXES | $ (705,771) | $ (388,256) |
Provision for income taxes | ||
NET LOSS | $ (705,771) | $ (388,256) |
BASIC AND FULLY DILUTED NET LOSS PER COMMON SHARE | $ (0.01) | $ (0.01) |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING | 58,670,347 | 54,452,382 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (705,771) | $ (388,256) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 41,146 | 41,295 |
Loss (gain) on disposal of property and equipment | 4,489 | (700) |
Increase or decrease in: | ||
Accounts receivable | (52,154) | 41,658 |
Inventory | (6,329) | (45,169) |
Other current assets | (22,578) | (31,057) |
Accounts payable and accrued expenses | 24,505 | 23,253 |
Total adjustments | (10,921) | 29,280 |
NET CASH USED IN OPERATING ACTIVITIES | (716,692) | (358,976) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchase of equipment and building improvements | (9,343) | (159,834) |
Proceeds from sale of property, net of closing costs | 5,511 | $ 700 |
Proceeds from mortgage note receivable | 2,714 | |
NET CASH USED IN INVESTING ACTIVITIES | (1,118) | $ (159,134) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Payments on notes payable | (15,462) | $ (14,792) |
Payments on line of credit | (30,000) | |
NET CASH USED IN FINANCING ACTIVITIES | (45,462) | $ (14,792) |
NET DECREASE IN CASH AND CASH EQUIVALENTS | (763,272) | (532,902) |
CASH AND CASH EQUIVALENTS, beginning of period | 1,842,233 | 2,380,054 |
CASH AND CASH EQUIVALENTS, end of period | 1,078,961 | 1,847,152 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||
Cash paid for interest | $ 7,580 | $ 7,879 |
Cash paid for income taxes | ||
NONCASH INVESTING AND FINANCING | ||
Exchange of property held for sale for a mortgage note receivable | $ 265,000 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2016 | |
Summary of Significant Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: | (1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: The following is a summary of the more significant accounting policies of CTD Holdings, Inc. and subsidiaries (the “Company”) that affect the accompanying consolidated financial statements. (a) ORGANIZATION AND OPERATIONS––The Company was incorporated in August 1990, as a Florida corporation with operations beginning in July 1992. We are a biotechnology company focused on the use of cyclodextrins in drug development. We recently filed a Type II Drug Master File with the U.S. Food and Drug Administration (“FDA”) for our lead drug candidate, Trappsol® Cyclo™. The Company has launched an International Clinical Program for its Trappsol® Cyclo™ as a treatment for Niemann-Pick Type C disease (“NPC”). We also sell cyclodextrins and related products to the pharmaceutical, nutritional, and other industries, primarily for use in diagnostics and specialty drugs with continuing growth in research and new product development. In 2012, we began offering pulse drying services for the production of raw materials used primarily in industrial and consumer products. Our core business has transitioned to a biotechnology company primarily focused on the development of cyclodextrin-based biopharmaceuticals for the treatment of disease from a business which had been primarily reselling basic cyclodextrin products. Our strategy going forward is to pursue biopharmaceutical opportunities in healthcare where we believe cyclodextrin applications have maximum value, while continuing to sell our cyclodextrin products and services. (b) BASIS OF PRESENTATION––The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three month period ended March 31, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2015, as filed with the Securities and Exchange Commission on March 30, 2016. (c) CASH AND CASH EQUIVALENTS––Cash and cash equivalents consist of cash and any highly liquid investments with an original maturity of three months or less. (d) ACCOUNTS RECEIVABLE––Accounts receivable are unsecured and non-interest bearing and stated at the amount we expect to collect from outstanding balances. Based on our assessment of the credit history with customers having outstanding balances and current relationships with them, we have concluded that losses on balances outstanding at March 31, 2016 and December 31, 2015 will be immaterial. (e) INVENTORY AND COST OF PRODUCTS SOLD––Inventory consists of our pharmaceutical drug Trappsol® Cyclo™, cyclodextrin products and chemical complexes purchased for resale recorded at the lower of cost (first-in, first-out) or market. Cost of products sold includes the acquisition cost of the products sold and does not include any allocation of inbound or outbound freight charges, indirect overhead expenses, warehouse and distribution expenses, or depreciation and amortization expense. (f) PROPERTY AND EQUIPMENT––Property and equipment are recorded at cost. Depreciation on property and equipment is computed using primarily the straight-line method over the estimated useful lives of the assets (generally three to five years for computers and vehicles, seven to ten years for machinery and furniture, fifteen years for certain land improvements, and forty years for buildings and building improvements). We periodically review our long-lived assets to determine if the carrying value of assets may not be recoverable. If an impairment is identified, we recognize a loss for the difference between the carrying amount and the estimated fair value of the asset. No impairments were identified or recorded for the three months ended March 31, 2016 or 2015. (g) REVENUE RECOGNITION––We recognize revenue from product sales, royalties, and drying services rendered when the following four revenue recognition criteria are met: persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the selling price is fixed or determinable, and collectability is reasonably assured. Product sales and shipping revenues, net of any discounts or return allowances, are recorded when the products are shipped and title passes to customers. Sales to customers are made pursuant to a sales contract that provides for transfer of both title and risk of loss upon our delivery to the carrier. Return allowances, which reduce product revenue, have been historically infrequent, and are recorded when they become known. Amounts received in advance are deferred and recognized as revenue when all four revenue recognition criteria have been met. There is no deferred revenue at March 31, 2016 and December 31, 2015. (h) RESEARCH AND DEVELOPMENT COSTS––Research and development costs are expensed as incurred. (i) INCOME TAXES––Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective income tax bases. Deferred tax assets and liabilities are measured using enacted rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. In addition, tax benefits related to positions considered uncertain are recognized only when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions shall initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts. (j) NET LOSS PER COMMON SHARE––Basic and fully diluted net loss per common share is computed using a simple weighted average of common shares outstanding during the periods presented, as outstanding warrants to purchase 577,500 and 656,965 common shares were antidilutive for the three months ended March 31, 2016 and 2015, respectively, and have been excluded from the calculation of loss per common share. (k) STOCK BASED COMPENSATION––The Company periodically awards stock to employees, directors, and consultants. An expense is recognized equal to the fair value of the stock determined using the closing trading price of the stock on the award date. (l) CONCENTRATIONS OF CREDIT RISK––Significant concentrations of credit risk for all financial instruments owned by the Company are as follows: (i) DEMAND AND CERTIFICATE OF DEPOSITS––We maintain bank accounts in Federal credit unions and other financial institutions, which are insured up to the Federal Deposit Insurance Corporation limits. The bank accounts may exceed Federally insured levels; however, we have not experienced any losses in such accounts. (ii) ACCOUNTS RECEIVABLE––Our accounts receivable consist of amounts due primarily from chemical supply and pharmaceutical companies located primarily in the United States. Four customers accounted for 86% of the accounts receivable balance at March 31, 2016. Five customers accounted for 89% of the accounts receivable balance at December 31, 2015. We have no policy requiring collateral or other security to support our accounts receivable. (m) LIQUIDITY––For the year ended December 31, 2015, the Company incurred a net loss of $2,551,000 and used net cash in operations in the amount of $1,989,000. For the three months ended March 31, 2016, the Company incurred a net loss of $706,000 and used net cash in operations in the amount of $717,000. At March 31, 2016, the Company had a cash balance of $1,079,000 and working capital of $882,000. The Company is actively seeking to raise capital through the sale of its common stock. In the event that the Company cannot raise sufficient capital, management may have to reduce expenditures related to its operations. (n) USE OF ESTIMATES––The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Although management bases its estimates on historical experience and assumptions that are believed to be reasonable under the circumstances, actual results could significantly differ from these estimates. (o) NEW ACCOUNTING PRONOUNCEMENTS––The Financial Accounting Standards Board (FASB) has issued various Accounting Standards Updates (ASUs), including ASU 2014-09, Revenue from Contracts with Customers, as subsequently amended; ASU 2014-15, Presentation of Financial Statements-Going Concern; ASU 2015-03, Interest-Imputation of Interest (Simplifying the Presentation of Debt Issuance Costs); ASU 2015-17, Income Taxes; and ASU 2016-02, Leases, which are effective in future fiscal years. We do not expect the adoption of these standards to have a material effect on our financial position or results of operations. |
Mortgage Note Receivable
Mortgage Note Receivable | 3 Months Ended |
Mar. 31, 2016 | |
Mortgage Note Receivable [Abstract] | |
MORTGAGE NOTE RECEIVABLE | (2) MORTGAGE NOTE RECEIVABLE On January 21, 2016, we sold our real property located in High Springs, Florida to an unrelated party. This property was previously classified on our balance sheet as property held for sale, with a carrying value of $275,000. Pursuant to the terms of the sale, at the closing, the buyer paid $10,000 in cash, less selling costs and settlement charges, and delivered to us a promissory note in the principal amount of $265,000, and a mortgage in our favor securing the buyer’s obligations under the promissory note. The promissory note provides for monthly payments of $3,653, including principal and interest at 4.25%, over a seven-year period commencing March 1, 2016, with the unpaid balance due in February 2023. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2016 | |
Debt [Abstract] | |
DEBT | (3) DEBT We owed $511,362 and $516,685, at March 31, 2016 and December 31, 2015, respectively, on a mortgage note payable, collateralized by land and a building we acquired in September 2010. Monthly payments of $3,506, including principal and interest at 3.99%, are due, with a final balloon payment of approximately $350,000 due in July 2023. The note is secured by a mortgage on our Alachua property. The note has a voluntary prepayment penalty which was 3% of the principal repaid as of the date of this filing, and which decreases 1% on July 17 of each year. We were not in compliance with a debt coverage ratio covenant for the year ending December 31, 2015. As a result, we have reclassified the principal due in 2016 and beyond one year as current in the accompanying balance sheet. We also owed this lender $192,913 and $203,052 at March 31, 2016 and December 31, 2015, respectively, under an equipment loan related to the installation of the pulse dryer and related building renovations. Monthly payments of $4,051, including principal and interest at 3.99%, are due through and including July 2020. The note is collateralized by all of our equipment. There is a prepayment penalty of 2% of the outstanding balance if we voluntarily repay the loan prior to July 17, 2018. Principal due under this loan has also been reclassified as current in the accompanying balance sheet due to our non-compliance with the loan covenant referred to above. Scheduled debt obligations on both loans for the next five years and thereafter are as follows, assuming the bank does not call the loans due to the debt covenant non-compliance: Year Ending December 31, Year 2016 $ 62,411 2017 64,982 2018 67,658 2019 70,446 2020 42,750 Thereafter 396,028 $ 704,275 |
Equity Transactions
Equity Transactions | 3 Months Ended |
Mar. 31, 2016 | |
Equity Transactions [Abstract] | |
EQUITY TRANSACTIONS: | (4) EQUITY TRANSACTIONS: On January 21, 2015, the Company awarded 35,000 shares of common stock to a consultant for past services. The Company accrued and expensed $16,520 for this award in 2014. On July 10, 2015, the Company entered into a Securities Purchase Agreement under which it issued 2.6 million shares of its common stock in a private placement, at a purchase price of $0.50 per share, for aggregate gross proceeds to the Company of $1.3 million. Scarsdale Equities LLC (“Scarsdale”) acted as financial advisor to the Company in connection with the private placement and was paid a cash fee in an amount equal to 6% of the gross proceeds of the private placement and it and its designees were issued seven-year warrants to purchase 156,000 shares of common stock at an exercise price of $0.50 per share. On July 28, 2015, the Company received $78,616 from the exercise of previously outstanding warrants for 314,465 shares of common stock at an exercise price of $0.25 per share. On August 20, 2015, the Company issued 1.3 million shares of its common stock in a private placement, at a purchase price of $0.50 per share, for aggregate gross proceeds to the company of $650,000. Scarsdale acted as financial advisor to the company in connection with the private placement and was paid a cash fee in an amount equal to 6% of the gross proceeds of the private placement and it and its designees were issued seven-year warrants to purchase 78,000 shares of common stock at an exercise price of $0.50 per share. As of March 31, 2016, the Company had warrants outstanding to purchase 577,500 shares of common stock at exercise prices of $0.25 - $1.00 per share that expire in 2021 and 2022. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2016 | |
Income Taxes [Abstract] | |
INCOME TAXES: | (5) INCOME TAXES: The Company reported a net loss for the three months ended March 31, 2016 and 2015, respectively. The Company increased its deferred tax asset valuation allowance rather than recognize an income tax benefit. |
Sales Concentrations
Sales Concentrations | 3 Months Ended |
Mar. 31, 2016 | |
Sales Concentrations [Abstract] | |
CONCENTRATIONS: | (6) SALES CONCENTRATIONS: Sales to three major customers accounted for 80% of total sales for the three months ended March 31, 2016. Sales to three major customers accounted for 61% of total sales for the three months ended March 31, 2015. A loss of one of these customers could have a significant adverse effect on the Company’s financial condition, results of operations and cash flows. |
Other
Other | 3 Months Ended |
Mar. 31, 2016 | |
Other [Abstract] | |
OTHER: | (7) OTHER: On January 12, 2016, the Company entered into a non-binding Letter of Intent with C.E. Rick Strattan, a significant stockholder and one of the Company’s directors, to sell the Company’s cyclodextrin manufacturing and distribution business. Under the Letter of Intent, Mr. Strattan (or his designee) would acquire the purchased assets in exchange for 7.5 million shares of Company common stock that Mr. Strattan holds, and the assumption by Mr. Strattan of certain liabilities related to that business. The purchased assets will not include the Company’s real property or Trappsol® Cyclo™ assets. However, as part of the transaction, Mr. Strattan will lease the Company’s office and manufacturing facilities in Alachua, Florida, with an option to buy the facilities, including the pulse dryer. There can be no assurance that the Company will close the transaction. |
Summary of Significant Accoun13
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Summary of Significant Accounting Policies [Abstract] | |
ORGANIZATION AND OPERATIONS | (a) ORGANIZATION AND OPERATIONS––The Company was incorporated in August 1990, as a Florida corporation with operations beginning in July 1992. We are a biotechnology company focused on the use of cyclodextrins in drug development. We recently filed a Type II Drug Master File with the U.S. Food and Drug Administration (“FDA”) for our lead drug candidate, Trappsol® Cyclo™. The Company has launched an International Clinical Program for its Trappsol® Cyclo™ as a treatment for Niemann-Pick Type C disease (“NPC”). We also sell cyclodextrins and related products to the pharmaceutical, nutritional, and other industries, primarily for use in diagnostics and specialty drugs with continuing growth in research and new product development. In 2012, we began offering pulse drying services for the production of raw materials used primarily in industrial and consumer products. Our core business has transitioned to a biotechnology company primarily focused on the development of cyclodextrin-based biopharmaceuticals for the treatment of disease from a business which had been primarily reselling basic cyclodextrin products. Our strategy going forward is to pursue biopharmaceutical opportunities in healthcare where we believe cyclodextrin applications have maximum value, while continuing to sell our cyclodextrin products and services. |
BASIS OF PRESENTATION | (b) BASIS OF PRESENTATION––The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three month period ended March 31, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2015, as filed with the Securities and Exchange Commission on March 30, 2016. |
CASH AND CASH EQUIVALENTS | (c) CASH AND CASH EQUIVALENTS––Cash and cash equivalents consist of cash and any highly liquid investments with an original maturity of three months or less. |
ACCOUNTS RECEIVABLE | (d) ACCOUNTS RECEIVABLE––Accounts receivable are unsecured and non-interest bearing and stated at the amount we expect to collect from outstanding balances. Based on our assessment of the credit history with customers having outstanding balances and current relationships with them, we have concluded that losses on balances outstanding at March 31, 2016 and December 31, 2015 will be immaterial. |
INVENTORY AND COST OF PRODUCTS SOLD | (e) INVENTORY AND COST OF PRODUCTS SOLD––Inventory consists of our pharmaceutical drug Trappsol® Cyclo™, cyclodextrin products and chemical complexes purchased for resale recorded at the lower of cost (first-in, first-out) or market. Cost of products sold includes the acquisition cost of the products sold and does not include any allocation of inbound or outbound freight charges, indirect overhead expenses, warehouse and distribution expenses, or depreciation and amortization expense. |
PROPERTY AND EQUIPMENT | (f) PROPERTY AND EQUIPMENT––Property and equipment are recorded at cost. Depreciation on property and equipment is computed using primarily the straight-line method over the estimated useful lives of the assets (generally three to five years for computers and vehicles, seven to ten years for machinery and furniture, fifteen years for certain land improvements, and forty years for buildings and building improvements). We periodically review our long-lived assets to determine if the carrying value of assets may not be recoverable. If an impairment is identified, we recognize a loss for the difference between the carrying amount and the estimated fair value of the asset. No impairments were identified or recorded for the three months ended March 31, 2016 or 2015. |
REVENUE RECOGNITION | (g) REVENUE RECOGNITION––We recognize revenue from product sales, royalties, and drying services rendered when the following four revenue recognition criteria are met: persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the selling price is fixed or determinable, and collectability is reasonably assured. Product sales and shipping revenues, net of any discounts or return allowances, are recorded when the products are shipped and title passes to customers. Sales to customers are made pursuant to a sales contract that provides for transfer of both title and risk of loss upon our delivery to the carrier. Return allowances, which reduce product revenue, have been historically infrequent, and are recorded when they become known. Amounts received in advance are deferred and recognized as revenue when all four revenue recognition criteria have been met. There is no deferred revenue at March 31, 2016 and December 31, 2015. |
RESEARCH AND DEVELOPMENT COSTS | (h) RESEARCH AND DEVELOPMENT COSTS––Research and development costs are expensed as incurred. |
INCOME TAXES | (i) INCOME TAXES––Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective income tax bases. Deferred tax assets and liabilities are measured using enacted rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. In addition, tax benefits related to positions considered uncertain are recognized only when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions shall initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts. |
NET LOSS PER COMMON SHARE | (j) NET LOSS PER COMMON SHARE––Basic and fully diluted net loss per common share is computed using a simple weighted average of common shares outstanding during the periods presented, as outstanding warrants to purchase 577,500 and 656,965 common shares were antidilutive for the three months ended March 31, 2016 and 2015, respectively, and have been excluded from the calculation of loss per common share. |
STOCK BASED COMPENSATION | (k) STOCK BASED COMPENSATION––The Company periodically awards stock to employees, directors, and consultants. An expense is recognized equal to the fair value of the stock determined using the closing trading price of the stock on the award date. |
CONCENTRATIONS OF CREDIT RISK | (l) CONCENTRATIONS OF CREDIT RISK––Significant concentrations of credit risk for all financial instruments owned by the Company are as follows: (i) DEMAND AND CERTIFICATE OF DEPOSITS––We maintain bank accounts in Federal credit unions and other financial institutions, which are insured up to the Federal Deposit Insurance Corporation limits. The bank accounts may exceed Federally insured levels; however, we have not experienced any losses in such accounts. (ii) ACCOUNTS RECEIVABLE––Our accounts receivable consist of amounts due primarily from chemical supply and pharmaceutical companies located primarily in the United States. Four customers accounted for 86% of the accounts receivable balance at March 31, 2016. Five customers accounted for 89% of the accounts receivable balance at December 31, 2015. We have no policy requiring collateral or other security to support our accounts receivable. |
LIQUIDITY | (m) LIQUIDITY––For the year ended December 31, 2015, the Company incurred a net loss of $2,551,000 and used net cash in operations in the amount of $1,989,000. For the three months ended March 31, 2016, the Company incurred a net loss of $706,000 and used net cash in operations in the amount of $717,000. At March 31, 2016, the Company had a cash balance of $1,079,000 and working capital of $882,000. The Company is actively seeking to raise capital through the sale of its common stock. In the event that the Company cannot raise sufficient capital, management may have to reduce expenditures related to its operations. |
USE OF ESTIMATES | (n) USE OF ESTIMATES––The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Although management bases its estimates on historical experience and assumptions that are believed to be reasonable under the circumstances, actual results could significantly differ from these estimates. |
NEW ACCOUNTING PRONOUNCEMENTS | (o) NEW ACCOUNTING PRONOUNCEMENTS––The Financial Accounting Standards Board (FASB) has issued various Accounting Standards Updates (ASUs), including ASU 2014-09, Revenue from Contracts with Customers, as subsequently amended; ASU 2014-15, Presentation of Financial Statements-Going Concern; ASU 2015-03, Interest-Imputation of Interest (Simplifying the Presentation of Debt Issuance Costs); ASU 2015-17, Income Taxes; and ASU 2016-02, Leases, which are effective in future fiscal years. We do not expect the adoption of these standards to have a material effect on our financial position or results of operations. |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Debt [Abstract] | |
Summary of long-term debt obligations | Year Ending December 31, Year 2016 $ 62,411 2017 64,982 2018 67,658 2019 70,446 2020 42,750 Thereafter 396,028 $ 704,275 |
Summary of Significant Accoun15
Summary of Significant Accounting Policies (Details) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2016USD ($)Customersshares | Mar. 31, 2015USD ($)Customersshares | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Summary of Significant Accounting Policies (Textual) | ||||
Antidilutive securities excluded from computation of earnings per share | shares | 577,500 | 656,965 | ||
Number of customers accounted | Customers | 4 | 5 | ||
Net loss | $ (705,771) | $ (388,256) | $ 2,551,000 | |
NET CASH USED IN OPERATING ACTIVITIES | (716,692) | (358,976) | 1,989,000 | |
Cash and cash equivalents | 1,078,961 | $ 1,847,152 | $ 1,842,233 | $ 2,380,054 |
Working capital | $ 882,000 | |||
Accounts Receivable [Member] | ||||
Summary of Significant Accounting Policies (Textual) | ||||
Concentration risk, percentage of major customer | 86.00% | 89.00% | ||
Computers And Vehicles [Member] | Maximum [Member] | ||||
Summary of Significant Accounting Policies (Textual) | ||||
Property, Plant and Equipment, Useful Life | 5 years | |||
Computers And Vehicles [Member] | Minimum [Member] | ||||
Summary of Significant Accounting Policies (Textual) | ||||
Property, Plant and Equipment, Useful Life | 3 years | |||
Machinery and Equipment [Member] | Maximum [Member] | ||||
Summary of Significant Accounting Policies (Textual) | ||||
Property, Plant and Equipment, Useful Life | 10 years | |||
Machinery and Equipment [Member] | Minimum [Member] | ||||
Summary of Significant Accounting Policies (Textual) | ||||
Property, Plant and Equipment, Useful Life | 7 years | |||
Land Improvements [Member] | ||||
Summary of Significant Accounting Policies (Textual) | ||||
Property, Plant and Equipment, Useful Life | 15 years | |||
Building and Building Improvements [Member] | ||||
Summary of Significant Accounting Policies (Textual) | ||||
Property, Plant and Equipment, Useful Life | 40 years |
Mortgage Note Receivable (Detai
Mortgage Note Receivable (Details) - USD ($) | 1 Months Ended | ||
Jan. 21, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | |
Mortgage Note Receivable [Abstract] | |||
Carrying value of property held for sale | $ 275,000 | ||
Selling costs and settlement charges | $ 10,000 | ||
Promissory note, principal amount | $ 265,000 | ||
promissory not, interest rate | 4.25% | ||
promissory note, maturity description | Over a seven-year period commencing March 1, 2016, with the unpaid balance due in February 2023. | ||
Promissory note monthly payments | $ 3,653 |
Debt (Details)
Debt (Details) | Mar. 31, 2016USD ($) |
Summary of Long -term debt obligations | |
2,016 | $ 62,411 |
2,017 | 64,982 |
2,018 | 67,658 |
2,019 | 70,446 |
2,020 | 42,750 |
Thereafter | 396,028 |
Total Long-term debt obligations | $ 704,275 |
Debt (Details Textual)
Debt (Details Textual) - USD ($) | 1 Months Ended | 3 Months Ended | |
Jan. 21, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | |
Debt (Textual) | |||
Promissory note monthly payments | $ 3,653 | ||
Land and building acquired [Member] | |||
Debt (Textual) | |||
Note payable amount | $ 511,362 | $ 516,685 | |
Debt instrument, Payment terms | Monthly payments of $3,506, including principal and interest at 3.99%, are due, with a final balloon payment of approximately $350,000 due in July 2023. | ||
Maturity date of notes | Jul. 31, 2023 | ||
Accrued interest rate per year | 3.99% | ||
Promissory note monthly payments | $ 3,506 | ||
Payment of Final balloon (principal and accrued interest) | $ 350,000 | ||
Description of prepayment penalty | The note has a voluntary prepayment penalty which was 3% of the principal repaid as of the date of this filing, and which decreases 1% on July 17 of each year. | ||
Building and improvements [Member] | |||
Debt (Textual) | |||
Note payable amount | $ 192,913 | $ 203,052 | |
Debt instrument, Payment terms | Monthly payments of $4,051, including principal and interest at 3.99%, are due through and including July 2020. | ||
Maturity date of notes | Jul. 31, 2020 | ||
Accrued interest rate per year | 3.99% | ||
Promissory note monthly payments | $ 4,051 | ||
Description of prepayment penalty | Penalty of 2% of the outstanding balance if we voluntarily repay the loan prior to July 17, 2018. |
Equity Transactions (Details)
Equity Transactions (Details) - USD ($) | Jul. 10, 2015 | Aug. 20, 2015 | Jan. 21, 2015 | Mar. 31, 2016 | Jul. 28, 2015 |
Stock Transactions (Textual) | |||||
Shares issued under common stock transaction | 35,000 | ||||
Accrued and expensed | $ 16,520 | ||||
Warrant [Member] | |||||
Stock Transactions (Textual) | |||||
Term of warrant | 7 years | 7 years | |||
Warrants issued to purchase common stock | 156,000 | 78,000 | 577,500 | ||
Exercise price per share | $ 0.50 | $ 0.50 | $ 0.25 | ||
Outstanding warrants of common stock, Value | $ 78,616 | ||||
Outstanding warrants of common stock | 314,465 | ||||
Warrant expiration | Expire in 2021 and 2022. | ||||
Warrant [Member] | Maximum [Member] | |||||
Stock Transactions (Textual) | |||||
Exercise price per share | $ 1 | ||||
Warrant [Member] | Minimum [Member] | |||||
Stock Transactions (Textual) | |||||
Exercise price per share | $ 0.25 | ||||
Private Placement [Member] | |||||
Stock Transactions (Textual) | |||||
Shares issued under common stock transaction | 2,600,000 | 1,300,000 | |||
Aggregate gross proceeds from common stock issued | $ 1,300,000 | $ 650,000 | |||
Purchase price | $ 0.50 | $ 0.50 |
Sales Concentrations (Details)
Sales Concentrations (Details) - Sales [Member] - Customer Concentration Risk [Member] - Customers | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Concentrations (Textual) | ||
Number of major customers accounted for accounts receivable | 3 | 3 |
Percentage of revenue accounted by major customer | 80.00% | 61.00% |
Other (Details)
Other (Details) shares in Millions | 3 Months Ended |
Mar. 31, 2016shares | |
Other [Abstract] | |
Number of shares exchanged in purchased assets | 7.5 |