Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | May 12, 2017 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | CTD HOLDINGS INC | |
Entity Central Index Key | 922,247 | |
Trading Symbol | CTDH | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 72,879,361 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 1,638,097 | $ 960,197 |
Accounts receivable | 222,698 | 89,667 |
Inventory | 500,018 | 497,397 |
Current portion of mortgage note receivable | 34,393 | 34,393 |
Other current assets | 61,912 | 53,879 |
Total current assets | 2,457,118 | 1,635,533 |
FURNITURE AND EQUIPMENT, NET | 25,992 | 29,984 |
MORTGAGE NOTE RECEIVABLE, LESS CURRENT PORTION | 194,562 | 203,028 |
TOTAL ASSETS | 2,677,672 | 1,868,545 |
CURRENT LIABILITIES | ||
Accounts payable and accrued expenses | 220,987 | 342,542 |
STOCKHOLDERS' EQUITY | ||
Common stock, par value $.0001 per share, 100,000,000 shares authorized, 72,879,361 and 66,952,529 shares issued and outstanding, at March 31, 2017 and December 31, 2016, respectively | 7,287 | 6,695 |
Preferred stock, par value $.0001 per share, 5,000,000 shares authorized, no shares issued or outstanding | ||
Additional paid-in capital | 12,936,478 | 11,018,915 |
Accumulated deficit | (10,487,080) | (9,499,607) |
Total stockholders' equity | 2,456,685 | 1,526,003 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 2,677,672 | $ 1,868,545 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2017 | Dec. 31, 2016 |
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 | 72,879,361 | 66,952,529 |
Common stock, shares outstanding | 72,879,361 | 66,952,529 |
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, 2017 | Mar. 31, 2016 | |
REVENUES | ||
Product sales | $ 305,057 | $ 312,685 |
EXPENSES | ||
Personnel | 334,529 | 301,291 |
Cost of products sold (exclusive of amortization and depreciation, shown separately below) | 19,378 | 36,834 |
Research and development | 643,645 | 282,682 |
Repairs and maintenance | 2,792 | 5,934 |
Professional fees | 123,800 | 201,800 |
Office and other | 132,189 | 145,312 |
Board of Director fees and costs | 46,807 | 24,581 |
Depreciation | 2,208 | 41,147 |
Freight and shipping | 1,461 | 1,665 |
Loss (gain) on disposal of property and equipment | (1,261) | 4,489 |
Total expenses | 1,295,548 | 1,045,735 |
LOSS FROM OPERATIONS | (990,491) | (733,050) |
OTHER INCOME (EXPENSE) | ||
Investment and other income | 3,018 | 34,859 |
Interest expense | (7,580) | |
Total other income | 3,018 | 27,279 |
LOSS BEFORE INCOME TAXES | (987,473) | (705,771) |
Provision for income taxes | ||
NET LOSS | $ (987,473) | $ (705,771) |
BASIC AND FULLY DILUTED NET LOSS PER COMMON SHARE | $ (0.01) | $ (0.01) |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING | 69,320,315 | 58,670,347 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (987,473) | $ (705,771) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 2,208 | 41,146 |
Loss (gain) on disposal of property and equipment | (1,261) | 4,489 |
Accrued stock compensation | 21,500 | |
Increase or decrease in: | ||
Accounts receivable | (133,031) | (52,154) |
Inventory | (2,621) | (6,329) |
Other current assets | (8,033) | (22,578) |
Accounts payable and accrued expenses | (75,955) | 24,505 |
Total adjustments | (197,193) | (10,921) |
NET CASH USED IN OPERATING ACTIVITIES | (1,184,666) | (716,692) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchase of equipment and building improvements | (1,605) | (9,343) |
Proceeds from sale of property, net of closing costs | 4,650 | 5,511 |
Proceeds from mortgage note receivable | 8,466 | 2,714 |
NET CASH PROVIDED BY(USED IN) INVESTING ACTIVITIES | 11,511 | (1,118) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from sale of common stock and warrants, net of issue costs | 1,851,055 | |
Payments on notes payable | (15,462) | |
Payments on line of credit | (30,000) | |
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | 1,851,055 | (45,462) |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 677,900 | (763,272) |
CASH AND CASH EQUIVALENTS, beginning of period | 960,197 | 1,842,233 |
CASH AND CASH EQUIVALENTS, end of period | 1,638,097 | 1,078,961 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||
Cash paid for interest | 7,580 | |
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, 2017 | |
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 that develops cyclodextrin-based products for the treatment of disease. We have filed a Type II Drug Master File with the U.S. Food and Drug Administration (“FDA”) for our lead drug candidate, Trappsol® Cyclo™ as a treatment for Niemann-Pick Type C disease (“NPC”). The FDA recently approved our Investigational New Drug application (IND) which describes our Phase I clinical plans in the US for Trappsol® Cyclo™. We have also filed Clinical Trial Applications with the United Kingdom's Medicines and Healthcare Products Regulatory Agency and other European regulators, and launched an International Clinical Program for Trappsol® Cyclo™. 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. However, 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. (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, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017. 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, 2016, as filed with the Securities and Exchange Commission on March 17, 2017. (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, 2017 and December 31, 2016 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) FURNITURE AND EQUIPMENT –– Furniture 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, and seven to ten years for machinery and furniture). (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, 2017 and December 31, 2016. (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 15,085,787 and 577,500 common shares were antidilutive for the three months ended March 31, 2017 and 2016, 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. Two customers accounted for 73% of the accounts receivable balance at March 31, 2017. Two customers accounted for 81% of the accounts receivable balance at December 31, 2016. We have no policy requiring collateral or other security to support our accounts receivable. (m) LIQUIDITY––For the year ended December 31, 2016, the Company incurred a net loss of $4,223,841 and used $2,950,938 of cash flows in its operations. At December 31, 2016, the Company had a cash balance of $960,197 and its current assets less current liabilities were $1,292,991. For the three months ended March 31, 2017, the Company incurred a net loss of $987,473 and used net cash in operations in the amount of $1,184,666. At March 31, 2017, the Company had a cash balance of $1,638,097 and its current assets less current liabilities were $2,236,131. On February 23, 2017, the Company generated additional net proceeds of $1,851,055 from the sale of equity securities in a private placement. The Company has concluded that proceeds from the private placement of its securities are currently the primary source of its cash flows that will permit the Company to meet its financial obligations as they come due through May 2018 despite its history of net losses. The Company continues to actively seek additional capital through the sale of its common stock. In the event that the Company cannot raise sufficient capital, management may be required 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, including contingencies. 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 2015-17, 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, 2017 | |
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. 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 that commenced March 1, 2016, with the unpaid balance due in February 2023. |
Equity Transactions
Equity Transactions | 3 Months Ended |
Mar. 31, 2017 | |
Equity Transactions [Abstract] | |
EQUITY TRANSACTIONS: | (3) EQUITY TRANSACTIONS: The Company expensed $21,500 in employee and board member stock compensation for the three months ended March 31, 2017. There was no stock compensation expense for the three months ended March 31, 2016. The Company accrues stock compensation expense over the period earned for employees and board members. On March 31, 2017, the Company issued 172,000 shares of common stock valued at $67,100 to eight board members and the Company’s secretary as settlement of accrued stock compensation for prior service. On February 23, 2017, the Company issued 5,754,832 units (“Units”) at a purchase price of $0.35 per Unit in a private placement, each Unit consisting of one share of its common stock, and a seven-year warrant to purchase an additional share of common stock at an exercise price of $0.35, for aggregate gross proceeds to the Company of $2 million. Scarsdale Equities LLC acted as financial advisor to the Company in connection with the private placement and was paid a cash fee of approximately $153,000, and it and its designees were issued seven-year warrants to purchase 273,455 Units at an exercise price of $0.35 per Unit. As of March 31, 2017, the Company had warrants outstanding to purchase 14,332,332 shares of common stock at exercise prices of $0.25 - $1.00 per share that expire in years until 2024. In addition, there are seven-year warrants outstanding at March 31, 2017 to purchase 753,455 Units at exercise prices of $0.25-$0.35 per Unit. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2017 | |
Income Taxes [Abstract] | |
INCOME TAXES: | (4) INCOME TAXES: The Company reported a net loss for the three months ended March 31, 2017 and 2016, 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, 2017 | |
Sales Concentrations [Abstract] | |
SALES CONCENTRATIONS: | (5) SALES CONCENTRATIONS: Sales to one major customer accounted for 52% of total sales for the three months ended March 31, 2017. Sales to three major customers accounted for 80% of total sales for the three months ended March 31, 2016. 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. |
Summary of Significant Accoun11
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
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 that develops cyclodextrin-based products for the treatment of disease. We have filed a Type II Drug Master File with the U.S. Food and Drug Administration (“FDA”) for our lead drug candidate, Trappsol® Cyclo™ as a treatment for Niemann-Pick Type C disease (“NPC”). The FDA recently approved our Investigational New Drug application (IND) which describes our Phase I clinical plans in the US for Trappsol® Cyclo™. We have also filed Clinical Trial Applications with the United Kingdom's Medicines and Healthcare Products Regulatory Agency and other European regulators, and launched an International Clinical Program for Trappsol® Cyclo™. 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. However, 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. |
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, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017. 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, 2016, as filed with the Securities and Exchange Commission on March 17, 2017. |
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, 2017 and December 31, 2016 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. |
FURNITURE AND EQUIPMENT | (f) FURNITURE AND EQUIPMENT –– Furniture 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, and seven to ten years for machinery and furniture). |
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, 2017 and December 31, 2016. |
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 15,085,787 and 577,500 common shares were antidilutive for the three months ended March 31, 2017 and 2016, 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. Two customers accounted for 73% of the accounts receivable balance at March 31, 2017. Two customers accounted for 81% of the accounts receivable balance at December 31, 2016. We have no policy requiring collateral or other security to support our accounts receivable. |
LIQUIDITY | (m) LIQUIDITY––For the year ended December 31, 2016, the Company incurred a net loss of $4,223,841 and used $2,950,938 of cash flows in its operations. At December 31, 2016, the Company had a cash balance of $960,197 and its current assets less current liabilities were $1,292,991. For the three months ended March 31, 2017, the Company incurred a net loss of $987,473 and used net cash in operations in the amount of $1,184,666. At March 31, 2017, the Company had a cash balance of $1,638,097 and its current assets less current liabilities were $2,236,131. On February 23, 2017, the Company generated additional net proceeds of $1,851,055 from the sale of equity securities in a private placement. The Company has concluded that proceeds from the private placement of its securities are currently the primary source of its cash flows that will permit the Company to meet its financial obligations as they come due through May 2018 despite its history of net losses. The Company continues to actively seek additional capital through the sale of its common stock. In the event that the Company cannot raise sufficient capital, management may be required to reduce expenditures related to its operations. |
USE OF ESTIMATES | (n) USE OF ESTIMATES –– The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes, including contingencies. Although management bases its estimates on historical experience and assumptions that are believed to be reasonable under the circumstances, actual results could significantly differ from these estimates. |
NEW ACCOUNTING PRONOUNCEMENTS | (o) NEW ACCOUNTING PRONOUNCEMENTS –– The Financial Accounting Standards Board (FASB) has issued various Accounting Standards Updates (ASUs), including ASU 2014-09, Revenue from Contracts with Customers, as subsequently amended; ASU 2014-15, Presentation of Financial Statements-Going Concern; ASU 2015-17, Income Taxes; and ASU 2016-02, Leases, which are effective in future fiscal years. We do not expect the adoption of these standards to have a material effect on our financial position or results of operations. |
Summary of Significant Accoun12
Summary of Significant Accounting Policies (Details) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Feb. 23, 2017USD ($) | Mar. 31, 2017USD ($)Customersshares | Mar. 31, 2016USD ($)shares | Dec. 31, 2016USD ($)Customers | Dec. 31, 2015USD ($) | |
Summary of Significant Accounting Policies (Textual) | |||||
Antidilutive common shares outstanding | shares | 15,085,787 | 577,500 | |||
Net loss | $ (987,473) | $ (705,771) | $ (4,223,841) | ||
Net cash used in operating activities | (1,184,666) | (716,692) | (2,950,938) | ||
Working capital | 2,236,131 | 1,292,991 | |||
Proceeds from sale of securities | $ 1,851,055 | ||||
Cash balance | $ 1,638,097 | $ 1,078,961 | $ 960,197 | $ 1,842,233 | |
Accounts Receivable [Member] | |||||
Summary of Significant Accounting Policies (Textual) | |||||
Number of customers accounted | Customers | 2 | 2 | |||
Percentage of customers accounted of the accounts receivable balance | 73.00% | 81.00% | |||
Computers and Vehicles [Member] | Minimum [Member] | |||||
Summary of Significant Accounting Policies (Textual) | |||||
Estimated useful lives of assets | 3 years | ||||
Computers and Vehicles [Member] | Maximum [Member] | |||||
Summary of Significant Accounting Policies (Textual) | |||||
Estimated useful lives of assets | 5 years | ||||
Machinery and Furniture [Member] | Minimum [Member] | |||||
Summary of Significant Accounting Policies (Textual) | |||||
Estimated useful lives of assets | 7 years | ||||
Machinery and Furniture [Member] | Maximum [Member] | |||||
Summary of Significant Accounting Policies (Textual) | |||||
Estimated useful lives of assets | 10 years |
Mortgage Note Receivable (Detai
Mortgage Note Receivable (Details) | 1 Months Ended |
Jan. 21, 2016USD ($) | |
Mortgage Note Receivable (Textual) | |
Selling costs and settlement charges | $ 10,000 |
Promissory note, principal amount | $ 265,000 |
promissory not, interest rate | 4.25% |
Promissory note monthly payments | $ 3,653 |
promissory note, maturity description | Over a seven-year period that commenced March 1, 2016, with the unpaid balance due in February 2023. |
Equity Transactions (Details)
Equity Transactions (Details) | 1 Months Ended | 3 Months Ended | |
Feb. 23, 2017USD ($)$ / sharesshares | Mar. 31, 2017USD ($)BoardMembers$ / sharesshares | Mar. 31, 2016USD ($) | |
Private Placement [Member] | |||
Equity Transactions (Textual) | |||
Shares issued under common stock transaction | shares | 5,754,832 | ||
Exercise price per share | $ 0.35 | ||
Cash fee | $ | $ 153,000 | ||
Warrants issued to purchase common stock | shares | 273,455 | ||
Warrants [Member] | |||
Equity Transactions (Textual) | |||
Aggregate gross proceeds from common stock issued | $ | $ 2,000,000 | ||
Purchase price | $ 0.35 | ||
Outstanding warrants of common stock | shares | 14,332,332 | ||
Term of warrant | 7 years | 7 years | |
Warrant expiration | Expire in years until 2024. | ||
Warrants [Member] | Minimum [Member] | |||
Equity Transactions (Textual) | |||
Exercise price per share | $ 0.25 | ||
Warrants [Member] | Maximum [Member] | |||
Equity Transactions (Textual) | |||
Exercise price per share | $ 1 | ||
Warrant One [Member] | |||
Equity Transactions (Textual) | |||
Outstanding warrants of common stock | shares | 753,455 | ||
Warrant One [Member] | Minimum [Member] | |||
Equity Transactions (Textual) | |||
Exercise price per share | $ 0.25 | ||
Warrant One [Member] | Maximum [Member] | |||
Equity Transactions (Textual) | |||
Exercise price per share | $ 0.35 | ||
Board [Member] | |||
Equity Transactions (Textual) | |||
Stock compensation | $ | $ 21,500 | ||
Shares issued under common stock transaction | shares | 172,000 | ||
Aggregate gross proceeds from common stock issued | $ | $ 67,100 | ||
Number of board member | BoardMembers | 8 |
Sales Concentrations (Details)
Sales Concentrations (Details) - Sales Concentrations [Member] - Customer accounted [Member] - Customers | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Sales Concentrations (Textual) | ||
Number of major customer accounted for total sales | 1 | 3 |
Percentage of major customer for total sales | 52.00% | 80.00% |