Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Nov. 17, 2017 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | PURADYN FILTER TECHNOLOGIES INC | |
Entity Central Index Key | 1,019,787 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 69,016,468 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,017 |
CONDENSED BALANCE SHEETS
CONDENSED BALANCE SHEETS - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash | $ 22,652 | $ 12,806 |
Accounts receivable, net of allowance for uncollectible accounts of $17,000 and $17,000, respectively | 211,321 | 260,171 |
Inventories, net | 420,653 | 682,108 |
Prepaid expenses and other current assets | 80,744 | 55,447 |
Total current assets | 735,370 | 1,010,532 |
Property and equipment, net | 55,596 | 42,502 |
Other noncurrent assets | 513,608 | 470,408 |
Total assets | 1,304,574 | 1,523,442 |
Current liabilities: | ||
Accounts payable | 178,836 | 147,584 |
Accrued liabilities | 360,581 | 334,910 |
Sales incentives | 30,708 | |
Current portion of capital lease obligation | 3,755 | 3,755 |
Deferred compensation | 1,594,283 | 1,602,826 |
Notes Payable - stockholders | 7,188,349 | |
Total current liabilities | 2,168,163 | 9,277,424 |
Capital lease obligation, less current portion | 627 | 3,443 |
Notes Payable - stockholders | 7,688,349 | |
Total Long Term Liabilities | 7,688,976 | 3,443 |
Total Liabilities | 9,857,139 | 9,280,867 |
Commitments and contingencies (Note 12) | ||
Stockholders' deficit: | ||
Preferred stock, $.001 par value: Authorized shares - 500,000; None issued and outstanding | ||
Common stock, $.001 par value, Authorized shares - 100,000,000; Issued and outstanding 69,016,468 and 69,016,468, respectively | 69,016 | 69,016 |
Additional paid-in capital | 53,562,512 | 53,504,744 |
Accumulated deficit | (62,184,093) | (61,331,185) |
Total stockholders' deficit | (8,552,565) | (7,757,425) |
Total liabilities and stockholders' deficit | $ 1,304,574 | $ 1,523,442 |
CONDENSED BALANCE SHEETS (Paren
CONDENSED BALANCE SHEETS (Parenthetical) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Allowance for uncollectible accounts of accounts receivable | $ 17,000 | $ 17,000 |
Preferred stock, par value per share | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 500,000 | 500,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value per share | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 69,016,468 | 69,016,468 |
Common stock, shares outstanding | 69,016,468 | 69,016,468 |
CONDENSED STATEMENTS OF OPERATI
CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Statement [Abstract] | ||||
Net sales | $ 515,846 | $ 438,263 | $ 1,780,006 | $ 1,455,137 |
Cost of products sold | 385,738 | 341,618 | 1,364,849 | 1,077,533 |
Gross profit | 130,108 | 96,645 | 415,157 | 377,604 |
Costs and expenses: | ||||
Salaries and wages | 223,049 | 217,998 | 640,137 | 672,364 |
Selling and administrative | 131,098 | 160,646 | 424,459 | 533,781 |
Total operating costs | 354,147 | 378,644 | 1,064,596 | 1,206,145 |
Loss from operations | (224,039) | (281,999) | (649,439) | (828,541) |
Other income (expense): | ||||
Interest expense | (70,300) | (94,434) | (203,469) | (269,862) |
Total other expense, net | (70,300) | (94,434) | (203,469) | (269,862) |
Loss before income taxes | (294,339) | (376,433) | (852,908) | (1,098,403) |
Income tax expense | ||||
Net loss | $ (294,339) | $ (376,433) | $ (852,908) | $ (1,098,403) |
Basic and diluted loss per common share | $ 0 | $ (0.01) | $ (0.01) | $ (0.02) |
Weighted average common shares outstanding (basic and diluted) | 69,016,468 | 48,683,135 | 69,016,468 | 48,683,135 |
CONDENSED STATEMENTS OF CASH FL
CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Operating activities | ||
Net loss | $ (852,908) | $ (1,098,403) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 24,938 | 28,013 |
Provision for slow moving inventory | 121,998 | 2,950 |
Compensation expense on stock-based arrangements with employees and consultants | 31,396 | 80,861 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 48,851 | (139,212) |
Inventories | 139,457 | 71,844 |
Prepaid expenses and other current assets | (25,297) | (19,011) |
Accounts payable | 31,247 | 38,092 |
Sales incentives | 30,708 | |
Deferred compensation | (8,543) | (33,043) |
Accrued liabilities | 27,045 | 22,342 |
Net cash used in operating activities | (431,108) | (1,045,567) |
Investing activities | ||
Capitalized patent costs | (53,385) | (103,082) |
Purchases of property and equipment | (27,845) | (3,180) |
Net cash used in investing activities | (81,230) | (106,262) |
Financing activities | ||
Proceeds from issuance of notes payable to stockholders | 575,000 | 1,113,912 |
Repayment of note payable to stockholder | (50,000) | |
Proceeds from Stockholder loan | 25,000 | |
Payment of capital lease obligations | (2,816) | (2,816) |
Net cash provided by financing activities | 522,184 | 1,136,096 |
Net (decrease) /increase in cash | 9,846 | (15,733) |
Cash at beginning of period | 12,806 | 34,471 |
Cash at end of period | 22,652 | 18,738 |
Supplemental cash flow information: | ||
Cash paid for interest | 180,317 | 258,356 |
Supplemental disclosure of non-cash transactions: | ||
Forgiveness of stockholder loan and accrued interest | $ 26,373 |
Basis of Presentation, Going Co
Basis of Presentation, Going Concern and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation, Going Concern and Summary of Significant Accounting Policies | 1. Basis of Presentation, Going Concern and Summary of Significant Accounting Policies Organization Puradyn Filter Technologies Incorporated (the Company), a Delaware corporation, is engaged in the manufacturing, distribution and sale of bypass oil filtration systems under the trademark Puradyn ® Basis of Presentation The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim information and with the instructions to Form 10-Q and Regulation S-K. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments consisting of a normal and recurring nature considered necessary for a fair presentation have been included. Operating results for the three-month and nine-month periods ended September 30, 2017 may not necessarily be indicative of the results that may be expected for the year ending December 31, 2017. For further information, refer to the Company's financial statements and footnotes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2016. Revenue Recognition The Company recognizes revenue from product sales to customers, distributors and resellers when products that do not require further services or installation by the Company are shipped, when there are no uncertainties surrounding customer acceptance and when collectability is reasonably assured in accordance with FASB ASC 605, Revenue Recognition Amounts billed to customers in sales transactions related to shipping and handling, represent revenues earned for the goods provided and are included in net sales. Costs of shipping and handling are included in cost of products sold. Use of Estimates The preparation of condensed financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the condensed financial statements and accompanying notes. Actual results could differ from those estimates. Cash and Cash Equivalents Cash and cash equivalents include all highly liquid investments with original maturities of three months or less at the time of purchase. At September 30, 2017 and December 31, 2016, the Company did not have any cash equivalents. Fair Value of Financial Instruments The carrying amounts of cash, accounts receivable, prepaid expenses and other assets, accounts payable, accrued liabilities and notes payable to stockholder approximate their fair values as of September 30, 2017 and December 31, 2016, respectively, because of their short-term natures. Accounts Receivable Accounts receivable are recorded at fair value on the date revenue is recognized. The Company provides allowances for doubtful accounts for estimated losses resulting from the inability of its customers to repay their obligation. If the financial condition of the Company's customers were to deteriorate, resulting in an impairment of their ability to repay, additional allowances may be required. The Company provides for potential uncollectible accounts receivable based on specific customer identification and historical collection experience adjusted for existing market conditions. If market conditions decline, actual collection experience may not meet expectations and may result in decreased cash flows and increased bad debt expense. The policy for determining past due status is based on the contractual payment terms of each customer, which are generally net 30 or net 60 days. Once collection efforts by the Company and its collection agency are exhausted, the determination for charging off uncollectible receivables is made. Inventories Inventories are stated at the lower of cost or market using the first in, first out (FIFO) method. Production costs, consisting of labor and overhead, are applied to ending finished goods inventories at a rate based on estimated production capacity. Excess production costs are charged to cost of products sold. Provisions have been made to reduce excess or obsolete inventories to their net realizable value. Property and Equipment Property and equipment are stated at cost. Depreciation and amortization are provided using the straight-line method over the estimated useful lives of the related assets, except for assets held under capital leases, for which the Company records depreciation and amortization based on the shorter of the assets useful life or the term of the lease. The estimated useful lives of property and equipment range from 3 to 5 years. Upon sale or retirement, the cost and related accumulated depreciation and amortization are eliminated from their respective accounts, and the resulting gain or loss is included in results of operations. Repairs and maintenance charges, which do not increase the useful lives of the assets, are charged to operations as incurred. Patents Patents are stated at cost. Amortization is provided using the straight-line method over the estimated useful lives of the patents. The estimated useful lives of patents are 17 to 20 years. Upon retirement, the cost and related accumulated amortization are eliminated from their respective accounts, and the resulting gain or loss is included in results of operations. Impairment of Long-Lived Assets Management assesses the recoverability of its long-lived assets when indicators of impairment are present. If such indicators are present, recoverability of these assets is determined by comparing the undiscounted net cash flows estimated to result from those assets over the remaining life to the assets net carrying amounts. If the estimated undiscounted net cash flows are less than the net carrying amount, the assets would be adjusted to their fair value, based on appraisal or the present value of the undiscounted net cash flows. Sales Incentives and Consideration Paid to Customers The Company accounts for certain promotional costs such as sales incentives and cooperative advertising as a reduction of sales. Product Warranty Costs As required by FASB ASC 460, Guarantors Guarantees The Company accrues for warranty costs based on the expected material and labor costs to provide warranty replacement products. The methodology used in determining the liability for warranty cost is based upon historical information and experience. The Company's warranty reserve is included in accrued liabilities in the accompanying condensed financial statements and is calculated as the gross sales multiplied by the historical warranty expense return rate. For the nine months ended September 30, 2017, there was no change to the reserve for warranty liability as the reserve balance was deemed sufficient to absorb any warranty costs that might be incurred from the sales activity for the period. The following table shows the changes in the aggregate product warranty liability for the nine -months ended September 30, 2017: Balance as of December 31, 2016 $ 20,000 Less: Payments made Add: Provision for current period warranties Balance as of September 30, 2017 (unaudited) $ 20,000 Advertising Costs Advertising costs are expensed as incurred. During the three and nine months ended September 30, 2017 and 2016, advertising costs incurred by the Company totaled approximately $430, $731, $0, and $761, respectively, and are included in selling and administrative expenses in the accompanying statements of operations. Research and Development Research and development costs are expensed as incurred. During the three and nine months ended September 30, 2017 and 2016, research and development costs incurred by the Company totaled $4,970, $4,970, $4,766 and $7,575, respectively, and are included in selling and administrative expenses in the accompanying statements of operations. Income Taxes The Company accounts for income taxes under FASB ASC 740, Income Taxes Stock Option Plans We adopted FASB ASC 718, Compensation-Stock Compensation, The Company leases its employees from a payroll leasing company. The Companys leased employees meet the definition of employees as specified by FASB Interpretation No. 44 for purposes of applying FASB ASC 718. Stock options and warrants issued to consultants and other non-employees as compensation for services provided to the Company are accounted for based on the fair value of the services provided or the estimated fair market value of the option or warrant, whichever is more reliably measurable in accordance with FASB ASC 505, Equity, , Compensation-Stock Compensation, Credit Risk The Company minimizes the concentration of credit risk associated with its cash by maintaining its cash with high quality federally insured financial institutions. However, cash balances in excess of the FDIC insured limit of $250,000 are at risk. At September 30, 2017 and December 31, 2016, respectively, the Company did not have cash balances above the FDIC insured limit. The Company performs ongoing evaluations of its significant trade accounts receivable customers and generally does not require collateral. An allowance for doubtful accounts is maintained against trade accounts receivable at levels which management believes is sufficient to cover probable credit losses. The Company also has some customer concentrations, and the loss of business from one or a combination of these significant customers, or an unexpected deterioration in their financial condition, could adversely affect the Companys operations. Please refer to Note 15 for further details. Basic and Diluted Loss Per Share FASB ASC 260, Earnings Per Share Reclassifications Certain prior year amounts have been reclassified to conform to the current year presentation. Recent Accounting Pronouncements In August 2015, FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date In August 2016, the FASB issued ASU 2016-15, " Classification of Certain Cash Receipts and Cash Payments Compensation Stock Compensation (Topic 718) In February 2016, the FASB issued ASU 2016-02, Leases All other newly issued accounting pronouncements not yet effective have been deemed either immaterial or not applicable. |
Going Concern
Going Concern | 9 Months Ended |
Sep. 30, 2017 | |
Going Concern [Abstract] | |
Going Concern | 2. Going Concern The Company's financial statements have been prepared on the assumption that it will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company has sustained losses since inception through the nine-months ended September 30, 2017, and used net cash in operations of $431,108 and $1,045,567 during the nine-months ended September 30, 2017 and 2016, respectively. As a result, the Company has had to rely principally on stockholder loans to fund its activities to date. The principal stockholder, who is a member of our Board of Directors and Chief Executive Officer, has recently advised the Company that he is unable to continue to provide working capital advances to the Company. In addition, we owe this affiliate $7,768,349 in notes payable which mature on December 31, 2018. We do not have sufficient funds to pay our operating expenses through the balance of the fiscal year or to satisfy our obligations as they become due. If the Company does not raise funds as needed, of which there are no assurances, the Company will be unable to continue our existing business and operations. These recurring operating losses, liabilities exceeding assets and the reliance on cash inflows from affiliates have led the Companys independent registered public accounting firm, Liggett & Webb, P.A., to include a statement in its audit report relating to the Companys audited financial statements for the year ended December 31, 2016 expressing substantial doubt as to the Companys ability to continue as a going concern. The financial statements do not include any adjustments that may result from the outcome of this uncertainty. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Inventories | 3. Inventories Inventories consisted of the following at September 30, 2017 and December 31, 2016, respectively: September 30, 2017 December 31, 2016 (Unaudited) Raw materials $ 917,189 1,074,156 Work In Progress 1,962 Finished goods 128,082 112,535 Valuation allowance (626,580 ) (504,583 ) Inventory, net $ 420,653 682,108 |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 9 Months Ended |
Sep. 30, 2017 | |
Prepaid Expense and Other Assets, Current [Abstract] | |
Prepaid Expenses and Other Current Assets | 4. Prepaid Expenses and Other Current Assets At September 30, 2017 and December 31, 2016, prepaid expenses and other current assets consisted of the following: September 30, 2017 December 31, 2016 (Unaudited) Prepaid expenses $ 45,052 27,447 Deposits 35,692 28,000 $ 80,744 55,447 |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | 5. Property and Equipment At September 30, 2017 and December 31, 2016, property and equipment consisted of the following: September 30, 2017 December 31, 2016 (Unaudited) Machinery and equipment $ 1,050,462 $ 1,045,217 Furniture and fixtures 56,558 56,558 Leasehold improvements 152,322 129,722 Software and website development 88,842 88,842 Computer hardware and software 153,249 153,249 1,501,433 1,473,588 Less accumulated depreciation and amortization (1 ,445,837 ) (1,431,086 ) $ 55 ,596 $ 42,502 Depreciation and amortization expense of property and equipment for the three and nine months ended September 30, 2017 and 2016 is $9,010, $14,751, $5,381 and $17,363, respectively. |
Patents
Patents | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Patents | 6. Patents Included in other assets at September 30, 2017 and December 31, 2016 are capitalized patent costs as follows: September 30, 2017 December 31, 2016 (Unaudited) Patent costs $ 535,527 $ 482,142 Less accumulated amortization (57,739 ) (47,555 ) $ 477,788 $ 434,587 Amortization expense for the three and nine months ended September 30, 2017 and 2016 amounted to $3,394, $10,184, $3,395, and $10,647, respectively. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2017 | |
Leases [Abstract] | |
Leases | 7. Leases The Company leases its office and warehouse facilities in Boynton Beach, Florida under a long-term non-cancellable lease agreement, which contains renewal options and rent escalation clauses. As of September 30, 2017, a security deposit of $34,970 is included in noncurrent assets in the accompanying balance sheet. On September 27, 2012 the Company entered into a non-cancellable six-year lease agreement for the same facilities commencing August 1, 2013 and expiring July 31, 2019. The total minimum lease payments over the term of the current lease amount to $302,639. In January 2017, the Company renewed the lease at an annual expense of $8,500 on a condominium in Ocean Ridge, Florida until December 20, 2017. In January 2015 the Company entered into a capital lease for office equipment in the amount of $15,020. |
Accrued Liabilities
Accrued Liabilities | 9 Months Ended |
Sep. 30, 2017 | |
Accrued Liabilities [Abstract] | |
Accrued Liabilities | 8. Accrued Liabilities At September 30, 2017 and December 31, 2016, accrued liabilities consisted of the following: September 30, 2017 December 31, 2016 (Unaudited) Accrued vacation and benefits $ 64,230 $ 60,904 Accrued expenses relating to vendors and others 106,143 138,863 Accrued warranty costs 20,000 20,000 Accrued interest payable relating to stockholder notes 145,435 84,988 Deferred rent 24,773 30,155 $ 360,581 $ 334,910 |
Deferred Compensation
Deferred Compensation | 9 Months Ended |
Sep. 30, 2017 | |
Compensation Related Costs [Abstract] | |
Deferred Compensation | 9. Deferred Compensation Deferred compensation represents amounts owed to three employees for salary. As there is no written agreement with these employees which memorializes the terms of the salary deferral, only a voluntary election to do so. It is possible that one or more of the employees could demand payment in full at any time. As of September 30, 2017 and December 31, 2016 the Company recorded deferred compensation of $1,594,283 and $1,602,826, respectively. |
Sales Incentives
Sales Incentives | 9 Months Ended |
Sep. 30, 2017 | |
Other Liabilities Disclosure [Abstract] | |
Sales Incentives | 10. Sales Incentives On September 7, 2017 the Company entered into an exclusive distribution agreement for the worldwide rights to sell its product in the oil and gas industry effective August 1, 2017. The distributor will receive sales incentive credits toward future product, based upon the difference in current pricing and new pricing detailed in the agreement. The credits toward future product are only redeemable if targeted quarterly goals are achieved. If the goals are not achieved the credits will be carried forward and are redeemable when the quarterly goals are achieved. As of September 30, 2017 the Company recorded a credit toward future product of $30,708. Targeted quarterly goals, if achieved, represent an aggregate of approximately $4 million in sales revenue between August 1, 2017 and June 30, 2018. Sales under the agreement amount to $154,470 for the period from August 1, 2017 to September 30, 2017. |
Notes Payable to Stockholders -
Notes Payable to Stockholders - Related Party | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Notes Payable to Stockholders - Related Party | 11. Notes Payable to Stockholders Related Party On March 28, 2002 the Company executed a binding agreement with one of its principal stockholders, who is also the Chairman of the Board and Chief Executive Officer, to initially fund up to $2.5 million. In March 2003 the Company and its Chairman and CEO entered into a second funding commitment pursuant to which he agreed to fund up to an additional $3 million which was subsequently increased to $3.5 million. Under the terms of the agreements, the Company can draw amounts as needed to fund operations. Amounts drawn bear interest at the BBA LIBOR Daily Floating Rate plus 1.4 percentage points (3.61% per annum at September 30, 2017), payable monthly and were to become due and payable on December 31, 2005 or upon a change in control of the Company or the consummation of any other financing over $7.0 million. Beginning in March 2006 and through February 2012, the maturity date for the agreements was extended annually from December 31, 2007 to the agreements current maturity date of December 31, 2018. Refer to Note 14. During the year ended December 31, 2016 we borrowed an additional $1,363,732 from him and repaid $100,000, and at September 30, 2017 and December 31, 2016 we owed him $7,688,349 and $7,088,349, respectively which represented approximately 78% and 76%, respectively of our total liabilities. During the nine months ended September 30, 2017, he has advanced an additional $575,000 in working capital funding. On November 11, 2016, $6.1 million of principal and interest was converted into 20 , Additionally, the Company had unsecured loans outstanding from a member of the board of directors who is also a significant stockholder, totaling $100,000 at December 31, 2016. During the nine months ended September 30, 2017 we repaid him $50,000 and in addition he forgave $25,000 and accrued interest of $1,374. The forgiveness was treated as a capital contribution. The notes bear interest at a rate of 5% per annum and are due upon demand. During the three and nine months ended September 30, 2017 and 2016, the Company incurred interest expense of $111,555, $200,405, $93,759, and $268,139, respectively, on its loan from the Chairman of the Board, which is included in interest expense in the accompanying statements of operations as well as interest expense of $0 and $753 for the three and nine months ended September 30, 2017 related to the loan from a former Board member. These amounts, in addition to interest expense of $1,495, $1,996, $364, and $802, for the three and nine months ended September 30, 2017 and 2016, respectively, related to capital lease obligations, financing and loans from a stockholder. Notes payable and capital leases consisted of the following at September 30, 2017 and December 31, 2016: September 30, 2017 December 31, 2016 Notes payable to stockholders $ 7,688,349 $ 7,188,349 Capital lease obligation 4,382 7,198 7,692,731 7,195,547 Less: long term maturities (7,688,976 ) (3,443 ) $ 3,755 $ 7,192,140 Maturities of Long Term Obligations for Five Years and Beyond The minimum annual principal payments of notes payable and capital lease obligations at September 30, 2017 were: 2017 $ 3,755 2018 7,688,976 $ 7,692,731 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 12. Commitments and Contingencies Agreements In January 2017, the Company renewed the lease at an annual expense of $8,500 on a condominium in Ocean Ridge, Florida until December 20, 2017. On March 7, 2016, the Company entered into an Advisory Agreement for duration of six months with an outside consultant, who is also a stockholder. We issued the consultant five year warrants to purchase 350,000 shares of the Company's common stock with an exercise price of $0.05 per share. These warrants vested immediately. On September 27, 2012, the Company entered into a 72 month lease for its corporate offices and warehouse facility in Boynton Beach, Florida. The renewed lease commences August 1, 2013 and requires an initial rent of $12,026 per month beginning in the second month of the first year, increasing in varying amounts to $13,941 per month in the sixth year. In addition, the Company is responsible for all operating expenses and utilities. On October 20, 2009, the Company entered into a consulting agreement for management and strategic development services with Boxwood Associates, Inc., pursuant to which the Company pays a $2,000 monthly service fee. The contract remains in effect until terminated by either party providing 30 days written notice. A former member of our board of directors and a significant stockholder is President of Boxwood Associates, Inc. Refer to Note 14. |
Stock Options and Warrants
Stock Options and Warrants | 9 Months Ended |
Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Options and Warrants | 13. Stock Options and Warrants For the three and nine months ended September 30, 2017 and September 30, 2016, respectively, the Company recorded non-cash stock-based compensation expense of $9,999, $31,396, $17,699, and $80,861, relating to employee stock options and warrants issued for consulting services. Stock options and warrants issued to consultants and other non-employees as compensation for services provided to the Company are accounted for based on the fair value of the services provided or the estimated fair market value of the option or warrant, whichever is more reliably measurable in accordance with FASB ASC 505, Equity, Compensation Stock Compensation A summary of the Companys stock option plans as of September 30, 2017, and changes during the nine month period then ended is presented below: Nine Months Ended September 30, 2017 Number of Options Weighted Average Exercise Price Options outstanding at December 31, 2016 3,365,500 $ 0.20 Options granted 5,000 0.03 Options exercised Options forfeited (37,500 ) 0.34 Options expired (148,000 ) 0.18 Options at end of period 3,185,000 $ 0.20 Options exercisable at September 30, 2017 2,914,160 $ 0.20 Changes in the Companys nonvested options for the nine months ended September 30, 2017 are summarized as follows: Nine Months Ended September 30, 2017 Number of Options Weighted Average Exercise Price Nonvested options at December 31, 2016 560,840 $ 0.16 Granted 5,000 0.03 Vested 258,333 0.16 Forfeited (36,667 ) 0.14 Nonvested options at September 30, 2017 270,840 $ 0.15 Options Outstanding Options Exercisable Range of Exercise Price Number Outstanding Remaining Average Contractual Life (In Years) Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price $0.04-$0.35 3,185,000 3.87 $ 0.20 2,914,160 $ 0.20 Totals 3,185,000 3.87 $ 0.20 2,914,160 $ 0.20 A summary of the Companys warrant activity as of September 30, 2017 and changes during the nine month period then ended is presented below: Nine months ended September 30, 2017 Weighted Average Exercise Warrants Price Warrants outstanding at December 31, 2016 1,315,340 $ 0.24 Granted Expired 325,178 0.35 Warrants outstanding at September 30, 2017 990,162 $ 0.20 Warrants Outstanding Range of Exercise Price Number Outstanding Remaining Average Contractual Life (In Years) Weighted Average Exercise Price $0.05-$0.35 990,162 2.17 $ 0.20 Totals 990,162 2.17 $ 0.20 |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 14. Related Party Transactions On March 28, 2002 the Company executed a binding agreement with one of its principal stockholders, who is also the Chairman of the Board and Chief Executive Officer, to initially fund up to $2.5 million. In March 2003 the Company and its Chairman and CEO entered into a second funding commitment pursuant to which he agreed to fund up to an additional $3 million which was subsequently increased to $3.5 million. Under the terms of the agreements, the Company can draw amounts as needed to fund operations. Amounts drawn bear interest at the BBA LIBOR Daily Floating Rate plus 1.4 percentage points (3.61% per annum at September 30, 2017), payable monthly and were to become due and payable on December 31, 2005 or upon a change in control of the Company or the consummation of any other financing over $7.0 million. Beginning in March 2006 and through February 2012, the maturity date for the agreements was extended annually from December 31, 2007 to the agreements current maturity date of December 31, 2018. During the year ended December 31, 2016 we borrowed an additional $1,363,732 from him and repaid $100,000, and at September 30, 2017 and December 31, 2016 we owed him $7,688,349 and $7,088,349, respectively, which represented approximately 78% and 76%, respectively, of our total liabilities. During the nine months ended September 30, 2017, he has advanced an additional $575,000 in working capital funding. On November 11, 2016, $6.1 million of principal and interest was converted into 20 , Additionally, the Company had unsecured loans outstanding from a member of the board of directors who is also a significant stockholder, totaling $100,000 at December 31, 2016. During the nine months ended September 30, 2017 we repaid him $50,000 and in addition he forgave $25,000 and accrued interest of $1,374. The forgiveness was treated as a capital contribution. The notes bear interest at a rate of 5% per annum and are due upon demand. On October 20, 2009, the Company entered into a consulting agreement with Boxwood Associates, Inc., whereby the Company pays $2,000 monthly for management and strategic development services performed. The contract remains in effect until terminated by either party providing 30 days written notice. During each of three and nine months ended September 30, 2017 and 2016, we paid Boxwood Associates, Inc. $6,000 and $18,000, respectively under this agreement. A former member of our board of directors is President of Boxwood Associates, Inc. |
Major Customers
Major Customers | 9 Months Ended |
Sep. 30, 2017 | |
Risks and Uncertainties [Abstract] | |
Major Customers | 15. Major Customers There are concentrations of credit risk with respect to accounts receivables due to the amounts owed by five customers at September , |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | 16. Subsequent Events From October 1, 2017 through November 17, 2017, the Company received additional loans in the amount of $80,000 from the Companys Chairman and CEO, as advances for working capital needs. The loans bear interest at the BBA Libor Daily Floating Rate plus 1.4 points. In November 2017, the Company received an additional loan in the amount of $25,000 from a former member of the Board of Directors. The loan bears interest at a rate of 5% per annum. On November 16, 2017, our Chairman and Chief Executive Officer extended the due date of the funding commitment to December 31, 2018. |
Basis of Presentation, Going 22
Basis of Presentation, Going Concern and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Organization | Organization Puradyn Filter Technologies Incorporated (the Company), a Delaware corporation, is engaged in the manufacturing, distribution and sale of bypass oil filtration systems under the trademark Puradyn ® |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim information and with the instructions to Form 10-Q and Regulation S-K. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments consisting of a normal and recurring nature considered necessary for a fair presentation have been included. Operating results for the three-month and nine-month periods ended September 30, 2017 may not necessarily be indicative of the results that may be expected for the year ending December 31, 2017. For further information, refer to the Company's financial statements and footnotes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2016. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue from product sales to customers, distributors and resellers when products that do not require further services or installation by the Company are shipped, when there are no uncertainties surrounding customer acceptance and when collectability is reasonably assured in accordance with FASB ASC 605, Revenue Recognition Amounts billed to customers in sales transactions related to shipping and handling, represent revenues earned for the goods provided and are included in net sales. Costs of shipping and handling are included in cost of products sold. |
Use of Estimates | Use of Estimates The preparation of condensed financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the condensed financial statements and accompanying notes. Actual results could differ from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include all highly liquid investments with original maturities of three months or less at the time of purchase. At September 30, 2017 and December 31, 2016, the Company did not have any cash equivalents. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying amounts of cash, accounts receivable, prepaid expenses and other assets, accounts payable, accrued liabilities and notes payable to stockholder approximate their fair values as of September 30, 2017 and December 31, 2016, respectively, because of their short-term natures. |
Accounts Receivable | Accounts Receivable Accounts receivable are recorded at fair value on the date revenue is recognized. The Company provides allowances for doubtful accounts for estimated losses resulting from the inability of its customers to repay their obligation. If the financial condition of the Company's customers were to deteriorate, resulting in an impairment of their ability to repay, additional allowances may be required. The Company provides for potential uncollectible accounts receivable based on specific customer identification and historical collection experience adjusted for existing market conditions. If market conditions decline, actual collection experience may not meet expectations and may result in decreased cash flows and increased bad debt expense. The policy for determining past due status is based on the contractual payment terms of each customer, which are generally net 30 or net 60 days. Once collection efforts by the Company and its collection agency are exhausted, the determination for charging off uncollectible receivables is made. |
Inventories | Inventories Inventories are stated at the lower of cost or market using the first in, first out (FIFO) method. Production costs, consisting of labor and overhead, are applied to ending finished goods inventories at a rate based on estimated production capacity. Excess production costs are charged to cost of products sold. Provisions have been made to reduce excess or obsolete inventories to their net realizable value. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost. Depreciation and amortization are provided using the straight-line method over the estimated useful lives of the related assets, except for assets held under capital leases, for which the Company records depreciation and amortization based on the shorter of the assets useful life or the term of the lease. The estimated useful lives of property and equipment range from 3 to 5 years. Upon sale or retirement, the cost and related accumulated depreciation and amortization are eliminated from their respective accounts, and the resulting gain or loss is included in results of operations. Repairs and maintenance charges, which do not increase the useful lives of the assets, are charged to operations as incurred. |
Patents | Patents Patents are stated at cost. Amortization is provided using the straight-line method over the estimated useful lives of the patents. The estimated useful lives of patents are 17 to 20 years. Upon retirement, the cost and related accumulated amortization are eliminated from their respective accounts, and the resulting gain or loss is included in results of operations. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Management assesses the recoverability of its long-lived assets when indicators of impairment are present. If such indicators are present, recoverability of these assets is determined by comparing the undiscounted net cash flows estimated to result from those assets over the remaining life to the assets net carrying amounts. If the estimated undiscounted net cash flows are less than the net carrying amount, the assets would be adjusted to their fair value, based on appraisal or the present value of the undiscounted net cash flows. |
Sales Incentives and Consideration Paid to Customers | Sales Incentives and Consideration Paid to Customers The Company accounts for certain promotional costs such as sales incentives and cooperative advertising as a reduction of sales. |
Product Warranty Costs | Product Warranty Costs As required by FASB ASC 460, Guarantors Guarantees The Company accrues for warranty costs based on the expected material and labor costs to provide warranty replacement products. The methodology used in determining the liability for warranty cost is based upon historical information and experience. The Company's warranty reserve is included in accrued liabilities in the accompanying condensed financial statements and is calculated as the gross sales multiplied by the historical warranty expense return rate. For the nine months ended September 30, 2017, there was no change to the reserve for warranty liability as the reserve balance was deemed sufficient to absorb any warranty costs that might be incurred from the sales activity for the period. The following table shows the changes in the aggregate product warranty liability for the nine -months ended September 30, 2017: Balance as of December 31, 2016 $ 20,000 Less: Payments made Add: Provision for current period warranties Balance as of September 30, 2017 (unaudited) $ 20,000 |
Advertising Costs | Advertising Costs Advertising costs are expensed as incurred. During the three and nine months ended September 30, 2017 and 2016, advertising costs incurred by the Company totaled approximately $430, $731, $0, and $761, respectively, and are included in selling and administrative expenses in the accompanying statements of operations. |
Research and Development | Research and Development Research and development costs are expensed as incurred. During the three and nine months ended September 30, 2017 and 2016, research and development costs incurred by the Company totaled $4,970, $4,970, $4,766 and $7,575, respectively, and are included in selling and administrative expenses in the accompanying statements of operations. |
Income Taxes | Income Taxes The Company accounts for income taxes under FASB ASC 740, Income Taxes |
Stock Option Plans | Stock Option Plans We adopted FASB ASC 718, Compensation-Stock Compensation, The Company leases its employees from a payroll leasing company. The Companys leased employees meet the definition of employees as specified by FASB Interpretation No. 44 for purposes of applying FASB ASC 718. Stock options and warrants issued to consultants and other non-employees as compensation for services provided to the Company are accounted for based on the fair value of the services provided or the estimated fair market value of the option or warrant, whichever is more reliably measurable in accordance with Equity, , Compensation-Stock Compensation, |
Credit Risk | Credit Risk The Company minimizes the concentration of credit risk associated with its cash by maintaining its cash with high quality federally insured financial institutions. However, cash balances in excess of the FDIC insured limit of $250,000 are at risk. At September 30, 2017 and December 31, 2016, respectively, the Company did not have cash balances above the FDIC insured limit. The Company performs ongoing evaluations of its significant trade accounts receivable customers and generally does not require collateral. An allowance for doubtful accounts is maintained against trade accounts receivable at levels which management believes is sufficient to cover probable credit losses. The Company also has some customer concentrations, and the loss of business from one or a combination of these significant customers, or an unexpected deterioration in their financial condition, could adversely affect the Companys operations. Please refer to Note 15 for further details. |
Basic and Diluted Loss Per Share | Basic and Diluted Loss Per Share FASB ASC 260, Earnings Per Share |
Reclassifications | Reclassifications Certain prior year amounts have been reclassified to conform to the current year presentation. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In August 2015, FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date In August 2016, the FASB issued ASU 2016-15, " Classification of Certain Cash Receipts and Cash Payments Compensation Stock Compensation (Topic 718) In February 2016, the FASB issued ASU 2016-02, Leases All other newly issued accounting pronouncements not yet effective have been deemed either immaterial or not applicable. |
Basis of Presentation, Going 23
Basis of Presentation, Going Concern and Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Schedule of Product Warrant Liability | The following table shows the changes in the aggregate product warranty liability for the nine -months ended September 30, 2017: Balance as of December 31, 2016 $ 20,000 Less: Payments made Add: Provision for current period warranties Balance as of September 30, 2017 (unaudited) $ 20,000 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories consisted of the following at September 30, 2017 and December 31, 2016, respectively: September 30, 2017 December 31, 2016 (Unaudited) Raw materials $ 917,189 1,074,156 Work In Progress 1,962 Finished goods 128,082 112,535 Valuation allowance (626,580 ) (504,583 ) Inventory, net $ 420,653 682,108 |
Prepaid Expenses and Other Cu25
Prepaid Expenses and Other Current Assets (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Prepaid Expense and Other Assets, Current [Abstract] | |
Schedule of Prepaid Expenses and Other Current Assets | At September 30, 2017 and December 31, 2016, prepaid expenses and other current assets consisted of the following: September 30, 2017 December 31, 2016 (Unaudited) Prepaid expenses $ 45,052 27,447 Deposits 35,692 28,000 $ 80,744 55,447 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | At September 30, 2017 and December 31, 2016, property and equipment consisted of the following: September 30, 2017 December 31, 2016 (Unaudited) Machinery and equipment $ 1,050,462 $ 1,045,217 Furniture and fixtures 56,558 56,558 Leasehold improvements 152,322 129,722 Software and website development 88,842 88,842 Computer hardware and software 153,249 153,249 1,501,433 1,473,588 Less accumulated depreciation and amortization (1 ,445,837 ) (1,431,086 ) $ 55 ,596 $ 42,502 |
Patents (Tables)
Patents (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of capitalized patent costs included in other assets | Included in other assets at September 30, 2017 and December 31, 2016 are capitalized patent costs as follows: September 30, 2017 December 31, 2016 (Unaudited) Patent costs $ 535,527 $ 482,142 Less accumulated amortization (57,739 ) (47,555 ) $ 477,788 $ 434,587 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Accrued Liabilities [Abstract] | |
Schedule of Accrued Liabilities | At September 30, 2017 and December 31, 2016, accrued liabilities consisted of the following: September 30, 2017 December 31, 2016 (Unaudited) Accrued vacation and benefits $ 64,230 $ 60,904 Accrued expenses relating to vendors and others 106,143 138,863 Accrued warranty costs 20,000 20,000 Accrued interest payable relating to stockholder notes 145,435 84,988 Deferred rent 24,773 30,155 $ 360,581 $ 334,910 |
Notes Payable to Stockholders29
Notes Payable to Stockholders - Related Party (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Notes Payable and Capital Leases | Notes payable and capital leases consisted of the following at September 30, 2017 and December 31, 2016: September 30, 2017 December 31, 2016 Notes payable to stockholders $ 7,688,349 $ 7,188,349 Capital lease obligation 4,382 7,198 7,692,731 7,195,547 Less: long term maturities (7,688,976 ) (3,443 ) $ 3,755 $ 7,192,140 |
Schedule of Maturities of Long-Term Obligations | The minimum annual principal payments of notes payable and capital lease obligations at September 30, 2017 were: 2017 $ 3,755 2018 7,688,976 $ 7,692,731 |
Stock Options and Warrants (Tab
Stock Options and Warrants (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of Stock Options Activity | A summary of the Companys stock option plans as of September 30, 2017, and changes during the nine month period then ended is presented below: Nine Months Ended September 30, 2017 Number of Options Weighted Average Exercise Price Options outstanding at December 31, 2016 3,365,500 $ 0.20 Options granted 5,000 0.03 Options exercised Options forfeited (37,500 ) 0.34 Options expired (148,000 ) 0.18 Options at end of period 3,185,000 $ 0.20 Options exercisable at September 30, 2017 2,914,160 $ 0.20 |
Schedule of Nonvested Options Activity | Changes in the Companys nonvested options for the nine months ended September 30, 2017 are summarized as follows: Nine Months Ended September 30, 2017 Number of Options Weighted Average Exercise Price Nonvested options at December 31, 2016 560,840 $ 0.16 Granted 5,000 0.03 Vested 258,333 0.16 Forfeited (36,667 ) 0.14 Nonvested options at September 30, 2017 270,840 $ 0.15 |
Summary of Options Outstanding by Price Range | Options Outstanding Options Exercisable Range of Exercise Price Number Outstanding Remaining Average Contractual Life (In Years) Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price $0.04-$0.35 3,185,000 3.87 $ 0.20 2,914,160 $ 0.20 Totals 3,185,000 3.87 $ 0.20 2,914,160 $ 0.20 |
Summary of Warrants Activity | A summary of the Companys warrant activity as of September 30, 2017 and changes during the nine month period then ended is presented below: Nine months ended September 30, 2017 Weighted Average Exercise Warrants Price Warrants outstanding at December 31, 2016 1,315,340 $ 0.24 Granted Expired 325,178 0.35 Warrants outstanding at September 30, 2017 990,162 $ 0.20 |
Summary of Warrants Outstanding by Price Range | Warrants Outstanding Range of Exercise Price Number Outstanding Remaining Average Contractual Life (In Years) Weighted Average Exercise Price $0.05-$0.35 990,162 2.17 $ 0.20 Totals 990,162 2.17 $ 0.20 |
Basis of Presentation, Going 31
Basis of Presentation, Going Concern and Summary of Significant Accounting Policies (Narrative) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Cash equivalents | |||||
Advertising costs | 430 | 0 | 731 | 761 | |
Engineering and development costs | 4,970 | $ 4,766 | 4,970 | $ 7,575 | |
FDIC insured limit | $ 250,000 | $ 250,000 | $ 250,000 | ||
Shares excluded from computation loss per share | 4,175,126 | 5,241,196 | |||
Minimum [Member] | |||||
Property and equipment, estimated useful life | 3 years | ||||
Estimated useful lives of patents | 17 years | ||||
Maximum [Member] | |||||
Property and equipment, estimated useful life | 5 years | ||||
Estimated useful lives of patents | 20 years |
Basis of Presentation, Going 32
Basis of Presentation, Going Concern and Summary of Significant Accounting Policies (Product Warrant Liability) (Details) | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Accounting Policies [Abstract] | |
Balance as of December 31, 2016 | $ 20,000 |
Less: Payments made | |
Add: Provision for current period warranties | |
Balance as of September 30, 2017 | $ 20,000 |
Going Concern (Details)
Going Concern (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Going Concern [Abstract] | ||
Net cash used in operating activities | $ 431,108 | $ 1,045,567 |
Notes payable owed to stockholder | $ 7,768,349 | |
Maturity date | Dec. 31, 2018 |
Inventories (Details)
Inventories (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 917,189 | $ 1,074,156 |
Work In Progress | 1,962 | |
Finished goods | 128,082 | 112,535 |
Valuation allowance | (626,580) | (504,583) |
Inventory, net | $ 420,653 | $ 682,108 |
Prepaid Expenses and Other Cu35
Prepaid Expenses and Other Current Assets (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Prepaid Expense and Other Assets, Current [Abstract] | ||
Prepaid expenses | $ 45,052 | $ 27,447 |
Deposits | 35,692 | 28,000 |
Prepaid expenses and other current assets | $ 80,744 | $ 55,447 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | $ 1,501,433 | $ 1,501,433 | $ 1,473,588 | ||
Less accumulated depreciation and amortization | (1,445,837) | (1,445,837) | (1,431,086) | ||
Property and equipment, net | 55,596 | 55,596 | 42,502 | ||
Depreciation and amortization expense of property and equipment | 9,010 | $ 5,381 | 14,751 | $ 17,363 | |
Machinery and Equipment [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | 1,050,462 | 1,050,462 | 1,045,217 | ||
Furniture and Fixtures [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | 56,558 | 56,558 | 56,558 | ||
Leasehold Improvements [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | 152,322 | 152,322 | 129,722 | ||
Software and website development [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | 88,842 | 88,842 | 88,842 | ||
Computer hardware and software [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | $ 153,249 | $ 153,249 | $ 153,249 |
Patents (Details)
Patents (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||||
Patent costs | $ 535,527 | $ 535,527 | $ 482,142 | ||
Less accumulated amortization | (57,739) | (57,739) | (47,555) | ||
Patent costs, less accumulated amortization | 477,788 | 477,788 | $ 434,587 | ||
Amortization expense | $ 3,394 | $ 3,395 | $ 10,184 | $ 10,647 |
Leases (Narrative) (Details)
Leases (Narrative) (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 27, 2012 | |
Operating Leased Assets [Line Items] | ||
Security deposit | $ 34,970 | |
Capital leased assets - office equipment, gross | $ 15,020 | |
Office and Warehouse Facilities, Boynton Beach, Florida [Member] | ||
Operating Leased Assets [Line Items] | ||
Aggregate total minimum lease payments | $ 302,639 | |
Lease expiration date | Jul. 31, 2019 | |
Operating Ridge Florida Condominium [Member] | ||
Operating Leased Assets [Line Items] | ||
Annual lease expense | $ 8,500 |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Accrued Liabilities [Abstract] | ||
Accrued vacation and benefits | $ 64,230 | $ 60,904 |
Accrued expenses relating to vendors and others | 106,143 | 138,863 |
Accrued warranty costs | 20,000 | 20,000 |
Accrued interest payable relating to stockholder notes | 145,435 | 84,988 |
Deferred rent | 24,773 | 30,155 |
Accrued liabilities | $ 360,581 | $ 334,910 |
Deferred Compensation (Details)
Deferred Compensation (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Compensation Related Costs [Abstract] | ||
Deferred compensation | $ 1,594,283 | $ 1,602,826 |
Sales Incentives (Details)
Sales Incentives (Details) - USD ($) | 2 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
Other Liabilities Disclosure [Abstract] | ||
Sales incentives | $ 30,708 | |
Targeted quarterly sales revenue for the period August 1, 2017 and June 30, 2018 | 4,000,000 | |
Actual sales revenue achieved under agreement | $ 154,470 |
Notes Payable to Stockholders42
Notes Payable to Stockholders - Related Party (Details) - USD ($) | Nov. 11, 2016 | Jan. 06, 2016 | Mar. 28, 2002 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Mar. 31, 2003 | Mar. 30, 2003 |
Debt Instrument [Line Items] | ||||||||||
Maturity date | Dec. 31, 2018 | |||||||||
Notes Payable - stockholders | $ 7,188,349 | |||||||||
Proceeds from stockholder loan | $ 25,000 | |||||||||
Repayments of stockholders loan | 50,000 | |||||||||
Debt amount forgiven | 26,373 | |||||||||
Interest expense related to capital lease obligations | $ 1,495 | $ 364 | $ 1,996 | 802 | ||||||
Chief Executive Officer [Member] | Note Payable to Chairman of Board [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Face amount of debt instrument | $ 2,500,000 | $ 3,500,000 | $ 3,000,000 | |||||||
Percent in addition to BBA LIBOR | 1.40% | |||||||||
Interest rate | 3.61% | 3.61% | ||||||||
Maturity date | Dec. 31, 2018 | |||||||||
Maximum amount of additional financing the company may obtain that will affect the repayment provisions of the debt instrument | $ 7,000,000 | |||||||||
Notes Payable - stockholders | $ 7,688,349 | $ 7,688,349 | $ 7,088,349 | |||||||
Percentage of total liabilities | 78.00% | 78.00% | 76.00% | |||||||
Proceeds from stockholder loan | $ 575,000 | $ 1,363,732 | ||||||||
Repayments of stockholders loan | 100,000 | |||||||||
Value of principal and interest converted | $ 6,100,000 | |||||||||
Shares issued for conversion | 20,333,333 | |||||||||
Conversion price per share | $ 0.30 | |||||||||
Interest expense, debt | $ 111,555 | $ 93,759 | $ 200,405 | $ 268,139 | ||||||
Board of Directors [Member] | Unsecured Loan [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Maturity date | Dec. 31, 2018 | |||||||||
Board of Directors [Member] | Unsecured Loan [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Face amount of debt instrument | $ 100,000 | |||||||||
Interest rate | 5.00% | 5.00% | ||||||||
Repayments of stockholders loan | $ 50,000 | |||||||||
Debt amount forgiven | 25,000 | |||||||||
Interest amount forgiven | $ 1,374 | |||||||||
Interest rate | 5.00% | 5.00% | ||||||||
Interest expense, debt | $ 0 | $ 753 |
Notes Payable to Stockholders43
Notes Payable to Stockholders - Related Party (Schedule of Notes Payable and Capital Leases) (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Debt Disclosure [Abstract] | ||
Notes payable to stockholders | $ 7,688,349 | $ 7,188,349 |
Capital lease obligation | 4,382 | 7,198 |
Total obligations | 7,692,731 | 7,195,547 |
Less: long term maturities | (7,688,976) | (3,443) |
Notes payable and capital leases, net of current maturities | $ 3,755 | $ 7,192,140 |
Notes Payable to Stockholders44
Notes Payable to Stockholders - Related Party (Schedule of Maturities of Long-Term Obligations) (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Debt Disclosure [Abstract] | ||
2,017 | $ 3,755 | |
2,018 | 7,688,976 | |
Total obligations | $ 7,692,731 | $ 7,195,547 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | Oct. 20, 2009 | Jan. 31, 2017 | Mar. 31, 2016 | Sep. 30, 2012 | Sep. 27, 2012 |
Purchase Commitment, Excluding Long-term Commitment [Line Items] | |||||
Lease term | 72 months | ||||
Initial monthly rent paid | $ 12,026 | ||||
Increase in monthly rent | $ 13,941 | ||||
Condominium, Ocean Ridge, Florida [Member] | |||||
Purchase Commitment, Excluding Long-term Commitment [Line Items] | |||||
Rent expense | $ 8,500 | ||||
Lease expiration date | Dec. 20, 2017 | ||||
Consulting Agreement with Boxwood Associates, Inc. [Member] | |||||
Purchase Commitment, Excluding Long-term Commitment [Line Items] | |||||
Monthly fee under agreement | $ 2,000 | ||||
Notice period to terminate the agreement | 30 days | ||||
Consultant [Member] | |||||
Purchase Commitment, Excluding Long-term Commitment [Line Items] | |||||
Issuance of common shares for exercise of warrants for compensation of services | 350,000 | ||||
Issuance of warrants, term | 5 years | ||||
Term of agreement | 6 months | ||||
Exercise price of warrants | $ 0.05 |
Stock Options and Warrants (Sto
Stock Options and Warrants (Stock Options Narrative) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||
Compensation expense | $ 9,999 | $ 17,699 | $ 31,396 | $ 80,861 |
Unrecognized compensation cost | $ 24,705 | $ 73,697 | $ 24,705 | $ 73,697 |
Stock Options and Warrants (Sum
Stock Options and Warrants (Summary of Stock Options Activity) (Details) | 9 Months Ended |
Sep. 30, 2017$ / sharesshares | |
Options | |
Options outstanding at December 31, 2016 | shares | 3,365,500 |
Options granted | shares | 5,000 |
Options exercised | shares | |
Options forfeited | shares | (37,500) |
Options expired | shares | (148,000) |
Options at end of period | shares | 3,185,000 |
Options exercisable at September 30, 2017 | shares | 2,914,160 |
Weighted Average Exercise Price | |
Options outstanding at December 31, 2016 | $ / shares | $ 0.20 |
Options granted | $ / shares | 0.03 |
Options exercised | $ / shares | |
Options forfeited | $ / shares | 0.34 |
Options expired | $ / shares | 0.18 |
Options at end of period | $ / shares | 0.20 |
Options exercisable at September 30, 2017 | $ / shares | $ 0.20 |
Stock Options and Warrants (Sch
Stock Options and Warrants (Schedule of Nonvested Options Activity) (Details) | 9 Months Ended |
Sep. 30, 2017$ / sharesshares | |
Nonvested stock option activity, shares: | |
Nonvested options at December 31, 2016 | shares | 560,840 |
Granted | shares | 5,000 |
Vested | shares | 258,333 |
Forfeited | shares | (36,667) |
Nonvested options at September 30, 2017 | shares | 270,840 |
Nonvested stock option activity, weighted average exercise price: | |
Nonvested options at December 31, 2016 | $ / shares | $ 0.16 |
Granted | $ / shares | 0.03 |
Vested | $ / shares | 0.16 |
Forfeited | $ / shares | 0.14 |
Nonvested options at September 30, 2017 | $ / shares | $ 0.15 |
Stock Options and Warrants (S49
Stock Options and Warrants (Summary of Options Outstanding by Price Range) (Details) | 9 Months Ended |
Sep. 30, 2017$ / sharesshares | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Number Outstanding | shares | 3,185,000 |
Remaining Average Contractual Life | 3 years 10 months 14 days |
Weighted Average Exercise Price, Outstanding | $ 0.20 |
Number Exercisable | shares | 2,914,160 |
Weighted Average Exercise Price, Exercisable | $ 0.20 |
Range of Exercise Price [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Range of Exercise Price, lower limit | 0.04 |
Range of Exercise Price, upper limit | $ 0.35 |
Number Outstanding | shares | 3,185,000 |
Remaining Average Contractual Life | 3 years 10 months 14 days |
Weighted Average Exercise Price, Outstanding | $ 0.20 |
Number Exercisable | shares | 2,914,160 |
Weighted Average Exercise Price, Exercisable | $ 0.20 |
Stock Options and Warrants (S50
Stock Options and Warrants (Summary of Warrants Activity) (Details) - Warrant [Member] | 9 Months Ended |
Sep. 30, 2017$ / sharesshares | |
Warrant activity, number of shares: | |
Warrants outstanding at December 31, 2016 | shares | 1,315,340 |
Granted | shares | |
Expired | shares | 325,178 |
Warrants outstanding at September 30, 2017 | shares | 990,162 |
Warrants outstanding at December 31, 2016 | $ / shares | $ 0.24 |
Granted | $ / shares | |
Expired | $ / shares | 0.35 |
Warrants outstanding at September 30, 2017 | $ / shares | $ 0.20 |
Stock Options and Warrants (S51
Stock Options and Warrants (Summary of Warrants Outstanding by Price Range) (Details) | 9 Months Ended |
Sep. 30, 2017$ / sharesshares | |
Share Based Compensation Shares Authorized Under Equity Instruments Other Than Options Exercise Price Range [Line Items] | |
Number outstanding | shares | 990,162 |
Remaining Average Contractual Life | 2 years 2 months 1 day |
Weighted average exercise price, outstanding | $ 0.20 |
Range of Exercise Price from $0.05 - $0.35 [Member] | |
Share Based Compensation Shares Authorized Under Equity Instruments Other Than Options Exercise Price Range [Line Items] | |
Range of exercise price, lower limit | 0.05 |
Range of exercise price, upper limit | $ 0.35 |
Number outstanding | shares | 990,162 |
Remaining Average Contractual Life | 2 years 2 months 1 day |
Weighted average exercise price, outstanding | $ 0.20 |
Related Party Transactions - Re
Related Party Transactions - Related Party (Details) - USD ($) | Nov. 11, 2016 | Jan. 06, 2016 | Oct. 20, 2009 | Mar. 28, 2002 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Mar. 31, 2003 | Mar. 30, 2003 |
Debt Instrument [Line Items] | |||||||||||
Maturity date | Dec. 31, 2018 | ||||||||||
Proceeds from stockholder loan | $ 25,000 | ||||||||||
Repayments of stockholders loan | 50,000 | ||||||||||
Notes Payable - stockholders | $ 7,188,349 | ||||||||||
Interest expense related to capital lease obligations | 1,495 | $ 364 | 1,996 | 802 | |||||||
Debt amount forgiven | 26,373 | ||||||||||
Consulting Agreement with Boxwood Associates, Inc. [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Monthly fee under agreement | $ 2,000 | ||||||||||
Notice period to terminate the agreement | 30 days | ||||||||||
Payments to consultants | $ 6,000 | $ 6,000 | $ 18,000 | $ 18,000 | |||||||
Board of Directors [Member] | Unsecured Loan [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Maturity date | Dec. 31, 2018 | ||||||||||
Board of Directors [Member] | Unsecured Loan [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Face amount of debt instrument | 100,000 | ||||||||||
Interest rate on outstanding term loan | 5.00% | 5.00% | |||||||||
Repayments of stockholders loan | $ 50,000 | ||||||||||
Debt amount forgiven | 25,000 | ||||||||||
Interest amount forgiven | $ 1,374 | ||||||||||
Note Payable to Chairman of Board [Member] | Chief Executive Officer [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Face amount of debt instrument | $ 2,500,000 | $ 3,500,000 | $ 3,000,000 | ||||||||
Percent in addition to BBA LIBOR | 1.40% | ||||||||||
Interest rate on outstanding term loan | 3.61% | 3.61% | |||||||||
Maturity date | Dec. 31, 2018 | ||||||||||
Maximum amount of additional financing the company may obtain that will affect the repayment provisions of the debt instrument | $ 7,000,000 | ||||||||||
Proceeds from stockholder loan | $ 575,000 | 1,363,732 | |||||||||
Repayments of stockholders loan | 100,000 | ||||||||||
Notes Payable - stockholders | $ 7,688,349 | $ 7,688,349 | $ 7,088,349 | ||||||||
Percentage of total liabilities | 78.00% | 78.00% | 76.00% | ||||||||
Value of principal and interest converted | $ 6,100,000 | ||||||||||
Shares issued for conversion | 20,333,333 | ||||||||||
Conversion price per share | $ 0.30 |
Major Customers (Details)
Major Customers (Details) - item | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Accounts Receivable [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | 86.00% | 81.00% | |||
Number of customers representing concentration risk percentage | 5 | 3 | |||
Accounts Receivable [Member] | Customer One [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | 11.00% | 50.00% | |||
Accounts Receivable [Member] | Customer Two [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | 12.00% | 18.00% | |||
Accounts Receivable [Member] | Customer Three [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | 13.00% | 13.00% | |||
Accounts Receivable [Member] | Customer Four [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | 20.00% | ||||
Accounts Receivable [Member] | Customer Five [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | 30.00% | ||||
Sales [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | 77.00% | 48.00% | 62.00% | 47.00% | |
Number of customers representing concentration risk percentage | 4 | 3 | 3 | 3 | |
Sales [Member] | Customer One [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | 33.00% | 17.00% | 39.00% | 20.00% | |
Sales [Member] | Customer Two [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | 17.00% | 17.00% | 12.00% | 17.00% | |
Sales [Member] | Customer Three [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | 16.00% | 14.00% | 11.00% | 10.00% | |
Sales [Member] | Customer Four [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | 11.00% |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | 1 Months Ended | 9 Months Ended |
Nov. 17, 2017 | Sep. 30, 2017 | |
Subsequent Event [Line Items] | ||
Maturity date | Dec. 31, 2018 | |
Subsequent Event [Member] | Chief Executive Officer [Member] | Working capital loan from CEO [Member] | ||
Subsequent Event [Line Items] | ||
Face amount of debt instrument | $ 80,000 | |
Percent in addition to BBA LIBOR | 1.40% | |
Maturity date | Dec. 31, 2018 | |
Subsequent Event [Member] | Former Board of Directors Member [Member] | Loan Payable [Member] | ||
Subsequent Event [Line Items] | ||
Face amount of debt instrument | $ 25,000 | |
Interest rate | 5.00% |