Document And Entity Information
Document And Entity Information | 3 Months Ended |
Mar. 31, 2019 | |
Document And Entity Information | |
Entity Registrant Name | SANUWAVE Health, Inc. |
Document Type | S-1 |
Document Period End Date | Mar. 31, 2019 |
Amendment Flag | false |
Entity Central Index Key | 0001417663 |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | true |
Entity Emerging Growth Company | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
CURRENT ASSETS | |||
Cash and cash equivalents | $ 98,946 | $ 364,549 | $ 730,184 |
Accounts receivable, net of allowance for doubtful accounts of $33,045 in 2018 and $92,797 in 2017 | 139,840 | 234,774 | 152,520 |
Due from related party | 2,699 | 1,228 | 0 |
Inventory | 328,384 | 357,820 | 231,532 |
Prepaid expenses and other current assets | 196,561 | 125,111 | 90,288 |
TOTAL CURRENT ASSETS | 766,430 | 1,083,482 | 1,204,524 |
PROPERTY AND EQUIPMENT, net | 91,452 | 77,755 | 60,369 |
RIGHT OF USE ASSETS | 437,363 | 0 | 0 |
OTHER ASSETS | 23,504 | 16,491 | 13,917 |
TOTAL ASSETS | 1,318,749 | 1,177,728 | 1,278,810 |
CURRENT LIABILITIES | |||
Accounts payable | 1,780,108 | 1,592,643 | 1,496,523 |
Accrued expenses | 753,394 | 689,280 | 673,600 |
Accrued employee compensation | 577,220 | 340,413 | 1,680 |
Contract liabilities | 129,264 | 131,797 | 0 |
Lease liability - right of use | 164,521 | 0 | 0 |
Advances payable | 26,200 | 0 | 310,000 |
Line of credit, related parties | 895,967 | 883,224 | 370,179 |
Accrued interest, related parties | 1,391,469 | 1,171,782 | 685,907 |
Short term notes payable | 2,611,731 | 1,883,163 | 0 |
Convertible promissory notes, net | 2,756,427 | 2,652,377 | 455,606 |
Notes payable, related parties, net | 5,372,743 | 5,372,743 | 5,222,259 |
Warrant liability | 195,310 | 1,769,669 | 1,943,883 |
TOTAL CURRENT LIABILITIES | 16,654,354 | 16,487,091 | 11,159,637 |
NON-CURRENT LIABILITIES | |||
Contract liabilities | 42,612 | 46,736 | 0 |
Lease liability - right of use | 315,730 | 0 | 0 |
TOTAL NON-CURRENT LIABILITIES | 358,342 | 46,736 | 0 |
TOTAL LIABILITIES | 17,012,696 | 16,533,827 | 11,159,637 |
COMMITMENTS AND CONTINGENCIES | |||
STOCKHOLDERS' DEFICIT | |||
PREFERRED STOCK | 0 | 0 | 0 |
COMMON STOCK | 160,323 | 155,665 | 139,300 |
ADDITIONAL PAID-IN CAPITAL | 101,731,430 | 101,153,882 | 94,995,040 |
ACCUMULATED DEFICIT | (117,520,434) | (116,602,778) | (104,971,384) |
ACCUMULATED OTHER COMPREHENSIVE LOSS | (65,266) | (62,868) | (43,783) |
TOTAL STOCKHOLDERS' DEFICIT | (15,693,947) | (15,356,099) | (9,880,827) |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | 1,318,749 | 1,177,728 | 1,278,810 |
Series A Convertible Preferred Stock [Member] | |||
STOCKHOLDERS' DEFICIT | |||
PREFERRED STOCK | 0 | 0 | 0 |
Series B Convertible Preferred Stock [Member] | |||
STOCKHOLDERS' DEFICIT | |||
PREFERRED STOCK | $ 0 | $ 0 | $ 0 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Accounts receivable, allowance for doubtful accounts | $ 24,400 | $ 33,045 | $ 92,797 |
Preferred stock, par value | $ 0.001 | $ .001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 | 0 |
Common stock, par value | $ 0.001 | $ .001 | $ 0.001 |
Common stock, shares authorized | 350,000,000 | 350,000,000 | 350,000,000 |
Common stock, shares issued | 160,322,580 | 155,665,138 | 139,300,122 |
Common stock, shares outstanding | 160,322,580 | 155,665,138 | 139,300,122 |
Series A Convertible Preferred Stock [Member] | |||
Preferred stock, par value | $ 0.001 | $ .001 | $ 0.001 |
Preferred stock, shares authorized | 6,175 | 6,175 | 6,175 |
Preferred stock, shares issued | 6,175 | 6,175 | 6,175 |
Preferred stock, shares outstanding | 6,175 | 0 | 0 |
Series B Convertible Preferred Stock [Member] | |||
Preferred stock, par value | $ 0.001 | $ .001 | $ 0.001 |
Preferred stock, shares authorized | 293 | 293 | 293 |
Preferred stock, shares issued | 293 | 293 | 293 |
Preferred stock, shares outstanding | 293 | 0 | 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
REVENUES | $ 177,963 | $ 344,272 | $ 1,850,060 | $ 738,527 |
COST OF REVENUES (exclusive of depreciation shown below) | 93,853 | 165,466 | 693,664 | 241,970 |
GROSS MARGIN | 84,110 | 178,806 | 1,156,396 | 496,557 |
OPERATING EXPENSES | ||||
Research and development | 261,002 | 238,477 | 1,663,838 | 1,292,531 |
Sales and marketing | 158,083 | 51,959 | ||
General and administrative | 1,517,101 | 1,004,614 | 6,650,484 | 3,004,403 |
Depreciation | 8,357 | 5,016 | 22,332 | 24,069 |
TOTAL OPERATING EXPENSES | 1,944,542 | 1,300,066 | 8,336,654 | 4,321,003 |
OPERATING LOSS | (1,860,432) | (1,121,260) | (7,180,258) | (3,824,446) |
OTHER INCOME (EXPENSE) | ||||
Gain (loss) on warrant valuation adjustment | 32,359 | (2,973,682) | 55,376 | (568,729) |
Interest expense | (148,261) | (1,555,756) | (4,496,148) | (1,139,711) |
Interest expense, related party | (219,687) | (189,211) | (787,586) | (634,169) |
Other income, net | 9,952 | 0 | ||
Loss on foreign currency exchange | (1,296) | (16,746) | (20,316) | (5,050) |
TOTAL OTHER INCOME (EXPENSE), NET | (336,885) | (4,735,395) | (4,451,136) | (1,713,490) |
NET LOSS | (2,197,317) | (5,856,655) | (11,631,394) | (5,537,936) |
OTHER COMPREHENSIVE INCOME (LOSS) | ||||
Foreign currency translation adjustments | (2,398) | 935 | (19,085) | 8,286 |
TOTAL COMPREHENSIVE LOSS | $ (2,199,715) | $ (5,855,720) | $ (11,650,479) | $ (5,529,650) |
LOSS PER SHARE: | ||||
Net loss - basic and diluted | $ (0.01) | $ (0.04) | $ (0.08) | $ (0.04) |
Weighted average shares outstanding - basic and diluted | 157,112,875 | 139,754,044 | 149,537,777 | 138,838,602 |
Product | ||||
REVENUES | $ 64,565 | $ 238,568 | $ 949,601 | $ 456,765 |
COST OF REVENUES (exclusive of depreciation shown below) | 65,112 | 125,594 | 525,216 | 129,512 |
License fees | ||||
REVENUES | 106,250 | 84,116 | 819,696 | 235,878 |
Other | ||||
REVENUES | 7,148 | 21,588 | 80,763 | 45,884 |
COST OF REVENUES (exclusive of depreciation shown below) | $ 28,741 | $ 39,872 | $ 168,448 | $ 112,458 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Deficit - USD ($) | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Accumulated Other Comprehensive Loss [Member] | Total |
Balances (in shares) at Dec. 31, 2016 | 0 | 137,219,968 | ||||
Balances at Dec. 31, 2016 | $ 0 | $ 137,220 | $ 92,436,697 | $ (99,433,448) | $ (52,069) | $ (6,911,600) |
Net loss | (5,417,936) | (5,537,936) | ||||
Proceeds from warrant exercise (in shares) | 1,163,333 | |||||
Proceeds from warrant exercise | $ 1,163 | 91,903 | 93,066 | |||
Cashless warrant exercises (in shares) | 866,625 | |||||
Cashless warrant exercises | $ 867 | 66,100 | 66,967 | |||
Shares issued for services (in shares) | 50,196 | |||||
Shares issued for services | $ 50 | 7,950 | 8,000 | |||
Reclassification of warrant liability to equity | 66,967 | |||||
Warrants issued for services | 182,856 | 182,856 | ||||
Stock-based compensation - options and warrants | 768,105 | 768,105 | ||||
Warrants issued with convertible promissory note | 620,748 | 620,748 | ||||
Beneficial conversion feature on debt | 820,681 | 820,681 | ||||
Foreign currency translation adjustment | 8,286 | 8,286 | ||||
Balances (in shares) at Dec. 31, 2017 | 0 | 139,300,122 | ||||
Balances at Dec. 31, 2017 | $ 0 | $ 139,300 | 94,995,040 | (104,971,384) | (43,783) | (9,880,827) |
Net loss | (5,856,655) | (5,856,655) | ||||
Proceeds from warrant exercise (in shares) | 175,666 | |||||
Proceeds from warrant exercise | $ 176 | 13,352 | 13,528 | |||
Cashless warrant exercises (in shares) | 1,023,130 | |||||
Cashless warrant exercises | $ 1,023 | 117,815 | 118,838 | |||
Shares issued for services (in shares) | 551,632 | |||||
Shares issued for services | $ 552 | 78,448 | 79,000 | |||
Warrants issued with convertible promissory note | 808,458 | 808,458 | ||||
Beneficial conversion feature on debt | 709,827 | 709,827 | ||||
Warrants issued with promissory note | 36,104 | 36,104 | ||||
Beneficial conversion feature on promissory notes | 35,396 | 35,396 | ||||
Foreign currency translation adjustment | 935 | 935 | ||||
Balances (in shares) at Mar. 31, 2018 | 0 | 141,050,550 | ||||
Balances at Mar. 31, 2018 | $ 0 | $ 141,051 | 96,794,440 | (110,828,039) | (42,848) | (13,935,396) |
Balances (in shares) at Dec. 31, 2017 | 0 | 139,300,122 | ||||
Balances at Dec. 31, 2017 | $ 0 | $ 139,300 | 94,995,040 | (104,971,384) | (43,783) | (9,880,827) |
Net loss | (11,631,394) | (11,631,394) | ||||
Proceeds from warrant exercise (in shares) | 422,939 | |||||
Proceeds from warrant exercise | $ 423 | 40,305 | 40,728 | |||
Cashless warrant exercises (in shares) | 6,395,499 | |||||
Cashless warrant exercises | $ 6,396 | (6,396) | 0 | |||
Shares issued for services (in shares) | 1,049,340 | |||||
Shares issued for services | $ 1,049 | 180,451 | 181,500 | |||
Conversion of promissory notes (in shares) | 8,497,238 | |||||
Conversion of promissory notes | $ 8,497 | 926,199 | 934,696 | |||
Reclassification of warrant liability to equity | 118,838 | |||||
Warrants issued for services | 828,690 | 828,690 | ||||
Stock-based compensation - options and warrants | 2,480,970 | 2,480,970 | ||||
Warrants issued with convertible promissory note | 808,458 | 808,458 | ||||
Beneficial conversion feature on convertible promissory notes | 709,827 | 709,827 | ||||
Warrants issued with promissory note | 36,104 | 36,104 | ||||
Beneficial conversion feature on promissory notes | 35,396 | 35,396 | ||||
Foreign currency translation adjustment | (19,085) | (19,085) | ||||
Balances (in shares) at Dec. 31, 2018 | 0 | 155,665,138 | ||||
Balances at Dec. 31, 2018 | $ 0 | $ 155,665 | 101,153,882 | (116,602,778) | (62,868) | (15,356,099) |
Net loss | (2,197,317) | (2,197,317) | ||||
Proceeds from warrant exercise (in shares) | 620,000 | |||||
Proceeds from warrant exercise | $ 620 | 52,580 | 53,200 | |||
Cashless warrant exercises (in shares) | 704,108 | |||||
Cashless warrant exercises | $ 704 | (704) | ||||
Shares issued for services | 0 | |||||
Conversion of promissory notes (in shares) | 3,333,334 | |||||
Conversion of promissory notes | $ 3,334 | 263,333 | 266,667 | |||
Reclassification of warrant liability to equity | 262,339 | 1,279,661 | 1,542,000 | |||
Foreign currency translation adjustment | (2,398) | (2,398) | ||||
Balances (in shares) at Mar. 31, 2019 | 0 | 160,322,580 | ||||
Balances at Mar. 31, 2019 | $ 0 | $ 160,323 | $ 101,731,430 | $ (117,520,434) | $ (65,266) | $ (15,693,947) |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||||
Net loss | $ (2,197,317) | $ (5,856,655) | $ (11,631,394) | $ (5,537,936) |
Adjustments to reconcile loss from operations to net cash used by operating activities | ||||
Depreciation | 8,357 | 5,016 | 22,332 | 24,069 |
Change in allowance for doubtful accounts | (8,645) | (19,613) | ||
Bad debt expense (recovery) | (59,752) | 57,601 | ||
Stock-based compensation | 2,480,970 | 768,105 | ||
Loss (gain) on warrant valuation adjustment | (32,359) | 2,973,682 | (55,376) | 568,729 |
Amortization of operating lease | 38,666 | 0 | ||
Amortization of debt issuance costs | 0 | 1,473,872 | 2,767,361 | 431,087 |
Amortization of debt discount | 0 | 37,984 | 150,484 | 110,247 |
Stock issued for consulting services | 0 | 79,000 | 181,500 | 8,000 |
Warrants issued for consulting services | 828,690 | 182,856 | ||
Accrued interest | 147,028 | 0 | 410,289 | 21,896 |
Interest payable, related parties | 219,687 | 80,613 | 485,875 | 576,481 |
Changes in assets and liabilities | ||||
Accounts receivable - trade | 103,579 | 20,449 | (22,502) | 250,678 |
Inventory | 29,436 | (32,734) | (123,118) | (7,079) |
Prepaid expenses | (71,450) | (110,672) | (34,823) | (2,465) |
Other | (7,013) | (3,336) | (3,802) | (131) |
Accounts payable | 187,465 | (553,763) | 276,120 | 783,559 |
Accrued expenses | 64,114 | (64,744) | 188,708 | 298,512 |
Accrued employee compensation | 236,807 | 68,822 | 338,733 | (63,180) |
Operating leases | 4,222 | 0 | ||
Contract liabilties | (6,657) | 109,214 | 178,533 | 0 |
NET CASH USED BY OPERATING ACTIVITIES | (1,285,551) | (1,848,565) | (3,621,172) | (1,528,971) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||||
Purchases of property and equipment | (22,054) | (7,720) | (42,888) | 0 |
NET CASH USED BY INVESTING ACTIVITIES | (22,054) | (7,720) | (42,888) | 0 |
CASH FLOWS FROM FINANCING ACTIVITIES | ||||
Proceeds from short term note | 965,000 | 0 | 1,637,497 | 0 |
Proceeds from convertible promissory notes, net | 0 | 1,159,785 | 1,159,785 | 1,384,232 |
Proceeds from line of credit, related party | 624,000 | 370,000 | ||
Advances from related parties | 26,200 | 12,000 | 0 | 310,000 |
Proceeds from note payable, product | 0 | 96,708 | 96,708 | 0 |
Proceeds from warrant exercise | 53,200 | 13,528 | 40,728 | 93,066 |
Payment on line of credit, related party | (144,500) | 0 | ||
Payments on note payable, product | 0 | (2,650) | (96,708) | 0 |
Payments on short term loan | 0 | (40,000) | ||
NET CASH PROVIDED BY FINANCING ACTIVITIES | 1,044,400 | 1,279,371 | 3,317,510 | 2,117,298 |
EFFECT OF EXCHANGE RATES ON CASH | (2,398) | 935 | (19,085) | 8,286 |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (265,603) | (575,979) | (365,635) | 596,613 |
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 364,549 | 730,184 | 730,184 | 133,571 |
CASH AND CASH EQUIVALENTS, END OF PERIOD | 98,946 | 154,205 | 364,549 | 730,184 |
SUPPLEMENTAL INFORMATION | ||||
Cash paid for interest, related parties | 151,227 | 0 | ||
NONCASH INVESTING ACTIVITIES | ||||
Reclassification of warrant liability to equity | 1,542,000 | 118,838 | 66,967 | |
Advances payable converted to convertible promissory notes | 0 | 310,000 | 310,000 | 0 |
Accounts payable converted to convertible promissory notes | 0 | 120,000 | 120,000 | 0 |
Beneficial conversion feature on convertible debt | 0 | 745,223 | 745,223 | 820,681 |
Warrants issued for debt | 0 | 844,562 | 844,562 | 620,748 |
Conversion of 10% convertible promissory notes | $ 934,696 | $ 0 | ||
Conversion of short term notes payable | 266,667 | 0 | ||
Reclassification of warrant liability to equity | $ 262,339 | $ 0 |
Nature of the Business
Nature of the Business | 3 Months Ended |
Mar. 31, 2019 | |
Notes To Financial Statements [Abstract] | |
Nature of the Business | SANUWAVE Health, Inc. and subsidiaries (the “Company”) is a shock wave technology company using a patented system of noninvasive, high-energy, acoustic shock waves for regenerative medicine and other applications. The Company’s initial focus is regenerative medicine – utilizing noninvasive, acoustic shock waves to produce a biological response resulting in the body healing itself through the repair and regeneration of tissue, musculoskeletal and vascular structures. The Company’s lead regenerative product in the United States is the dermaPACE® device, used for treating diabetic foot ulcers, which was subject to two double-blinded, randomized Phase III clinical studies. On December 28, 2017, the U.S. Food and Drug Administration (the “FDA”) notified the Company to permit the marketing of the dermaPACE System for the treatment of diabetic foot ulcers in the United States. The Company’s portfolio of healthcare products and product candidates activate biologic signaling and angiogenic responses, including new vascularization and microcirculatory improvement, helping to restore the body’s normal healing processes and regeneration. The Company intends to apply its Pulsed Acoustic Cellular Expression (PACE®) technology in wound healing, orthopedic, plastic/cosmetic and cardiac conditions. In 2019, the Company has been marketing the dermaPACE System for sale in the United States and the European Conformity Marking (CE Mark) devices and accessories in Europe, Canada, Asia and Asia/Pacific. The Company generates revenues streams from product sales, licensing transactions and other activities. Basis of Presentation The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8-03 of Regulation S-X. Accordingly, these condensed consolidated financial statements do not include all the information and footnotes required by GAAP for complete financial statements. The financial information as of March 31, 2019 and for the three months ended March 31, 2019 and 2018 is unaudited; however, in the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2019 are not necessarily indicative of the results that may be expected for any other interim period or for the year ending December 31, 2019. The condensed consolidated balance sheet at December 31, 2018 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements. These financial statements should be read in conjunction with the Company’s Form 10-K filed with the Securities and Exchange Commission on April 1, 2019 (“the 2018 Annual Report”). |
Going Concern
Going Concern | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Notes To Financial Statements [Abstract] | ||
Going Concern | The Company does not currently generate significant recurring revenue and will require additional capital during 2019. As of March 31, 2019, the Company had an accumulated deficit of $117,520,434 and cash and cash equivalents of $98,946. For the three months ended March 31, 2019 and 2018, the net cash used by operating activities was $1,285,551 and $1,848,565, respectively. The Company incurred a net loss of $2,197,317 for the three months ended March 31, 2019. The operating losses and the events of default on the Company’s short term notes payable (see Note 7), the Company’s convertible promissory notes and the notes payable, related parties (see Note 8) indicate substantial doubt about the Company’s ability to continue as a going concern for a period of at least twelve months from the filing of this report. The continuation of the Company’s business is dependent upon raising additional capital during the final three quarters of 2019 to fund operations. Management’s plans are to obtain additional capital through investments by strategic partners for market opportunities, which may include strategic partnerships or licensing arrangements, or raise capital through the conversion of outstanding warrants, the issuance of common or preferred stock, securities convertible into common stock, or secured or unsecured debt. These possibilities, to the extent available, may be on terms that result in significant dilution to the Company’s existing shareholders. Although no assurances can be given, management of the Company believes that potential additional issuances of equity or other potential financing transactions as discussed above should provide the necessary funding for the Company to continue as a going concern. If these efforts are unsuccessful, the Company may be forced to seek relief through a filing under the U.S. Bankruptcy Code. The condensed consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. | The Company is a shock wave technology company using a patented system of noninvasive, high-energy, acoustic shock waves for regenerative medicine and other applications. The Company’s initial focus is regenerative medicine – utilizing noninvasive, acoustic shock waves to produce a biological response resulting in the body healing itself through the repair and regeneration of tissue, musculoskeletal and vascular structures. The Company’s lead regenerative product in the United States is the dermaPACE® device, used for treating diabetic foot ulcers, which was subject to two double-blinded, randomized Phase III clinical studies. On December 28, 2017, the U.S. Food and Drug Administration (the “FDA”) notified the Company to permit the marketing of the dermaPACE System for the treatment of diabetic foot ulcers in the United States. In 2018, the Company started marketing its dermaPACE System for sale in the United States and will continue to generate revenue from sales of the European Conformity Marking (CE Mark) devices and accessories in Europe, Canada, Asia, and Asia/Pacific. The Company generates revenue streams from product sales, licensing transactions and other activities. As shown in the accompanying consolidated financial statements, SANUWAVE Health, Inc. and Subsidiaries (the “Company”) incurred a net loss of $11,631,394 and $5,537,936 during the years ended December 31, 2018 and 2017, respectively, and the net cash used by operating activities was $3,621,172 and $1,528,971, respectively. As of December 31, 2018, the Company had a net working capital deficit of $15,403,609, total stockholders’ deficit of $15,356,099 and cash and cash equivalents of $364,549. These factors and the events of default on the notes payable to HealthTronics, Inc. (see Note 12), the Company’s convertible promissory notes (see Note 10) and the Company’s short term notes payable (see Note 9) raise substantial doubt about the Company’s ability to continue as a going concern for a period of at least twelve months from the financial statement issuance date. The Company does not currently generate significant recurring revenue and will require additional capital during 2019. Although no assurances can be given, management of the Company believes that existing capital resources should enable the Company to fund operations into the second quarter of 2019. The continuation of the Company’s business is dependent upon raising additional capital to fund operations. Management’s plans are to obtain additional capital in 2019 through investments by strategic partners for market opportunities, which may include strategic partnerships or licensing arrangements, or raise capital through the conversion of outstanding warrants, the issuance of common or preferred stock, securities convertible into common stock, or secured or unsecured debt. These possibilities, to the extent available, may be on terms that result in significant dilution to the Company’s existing shareholders. Although no assurances can be given, management of the Company believes that potential additional issuances of equity or other potential financing transactions as discussed above should provide the necessary funding for the Company to continue as a going concern. If these efforts are unsuccessful, the Company may be required to significantly curtail or discontinue operations or obtain funds through financing transactions with unfavorable terms. The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business. The carrying amounts of assets and liabilities presented in the financial statements do not necessarily purport to represent realizable or settlement values. The consolidated financial statements do not include any adjustment that might result from the outcome of this uncertainty. The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. |
Description of the Business and
Description of the Business and Going Concern and Management's Plans | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Description Of Business And Going Concern And Managements Plans | ||
Description of the Business and Going Concern and Management's Plans | The Company does not currently generate significant recurring revenue and will require additional capital during 2019. As of March 31, 2019, the Company had an accumulated deficit of $117,520,434 and cash and cash equivalents of $98,946. For the three months ended March 31, 2019 and 2018, the net cash used by operating activities was $1,285,551 and $1,848,565, respectively. The Company incurred a net loss of $2,197,317 for the three months ended March 31, 2019. The operating losses and the events of default on the Company’s short term notes payable (see Note 7), the Company’s convertible promissory notes and the notes payable, related parties (see Note 8) indicate substantial doubt about the Company’s ability to continue as a going concern for a period of at least twelve months from the filing of this report. The continuation of the Company’s business is dependent upon raising additional capital during the final three quarters of 2019 to fund operations. Management’s plans are to obtain additional capital through investments by strategic partners for market opportunities, which may include strategic partnerships or licensing arrangements, or raise capital through the conversion of outstanding warrants, the issuance of common or preferred stock, securities convertible into common stock, or secured or unsecured debt. These possibilities, to the extent available, may be on terms that result in significant dilution to the Company’s existing shareholders. Although no assurances can be given, management of the Company believes that potential additional issuances of equity or other potential financing transactions as discussed above should provide the necessary funding for the Company to continue as a going concern. If these efforts are unsuccessful, the Company may be forced to seek relief through a filing under the U.S. Bankruptcy Code. The condensed consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. | The Company is a shock wave technology company using a patented system of noninvasive, high-energy, acoustic shock waves for regenerative medicine and other applications. The Company’s initial focus is regenerative medicine – utilizing noninvasive, acoustic shock waves to produce a biological response resulting in the body healing itself through the repair and regeneration of tissue, musculoskeletal and vascular structures. The Company’s lead regenerative product in the United States is the dermaPACE® device, used for treating diabetic foot ulcers, which was subject to two double-blinded, randomized Phase III clinical studies. On December 28, 2017, the U.S. Food and Drug Administration (the “FDA”) notified the Company to permit the marketing of the dermaPACE System for the treatment of diabetic foot ulcers in the United States. In 2018, the Company started marketing its dermaPACE System for sale in the United States and will continue to generate revenue from sales of the European Conformity Marking (CE Mark) devices and accessories in Europe, Canada, Asia, and Asia/Pacific. The Company generates revenue streams from product sales, licensing transactions and other activities. As shown in the accompanying consolidated financial statements, SANUWAVE Health, Inc. and Subsidiaries (the “Company”) incurred a net loss of $11,631,394 and $5,537,936 during the years ended December 31, 2018 and 2017, respectively, and the net cash used by operating activities was $3,621,172 and $1,528,971, respectively. As of December 31, 2018, the Company had a net working capital deficit of $15,403,609, total stockholders’ deficit of $15,356,099 and cash and cash equivalents of $364,549. These factors and the events of default on the notes payable to HealthTronics, Inc. (see Note 12), the Company’s convertible promissory notes (see Note 10) and the Company’s short term notes payable (see Note 9) raise substantial doubt about the Company’s ability to continue as a going concern for a period of at least twelve months from the financial statement issuance date. The Company does not currently generate significant recurring revenue and will require additional capital during 2019. Although no assurances can be given, management of the Company believes that existing capital resources should enable the Company to fund operations into the second quarter of 2019. The continuation of the Company’s business is dependent upon raising additional capital to fund operations. Management’s plans are to obtain additional capital in 2019 through investments by strategic partners for market opportunities, which may include strategic partnerships or licensing arrangements, or raise capital through the conversion of outstanding warrants, the issuance of common or preferred stock, securities convertible into common stock, or secured or unsecured debt. These possibilities, to the extent available, may be on terms that result in significant dilution to the Company’s existing shareholders. Although no assurances can be given, management of the Company believes that potential additional issuances of equity or other potential financing transactions as discussed above should provide the necessary funding for the Company to continue as a going concern. If these efforts are unsuccessful, the Company may be required to significantly curtail or discontinue operations or obtain funds through financing transactions with unfavorable terms. The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business. The carrying amounts of assets and liabilities presented in the financial statements do not necessarily purport to represent realizable or settlement values. The consolidated financial statements do not include any adjustment that might result from the outcome of this uncertainty. The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Accounting Policies [Abstract] | ||
Summary of Significant Accounting Policies | The significant accounting policies followed by the Company are summarized below and should be read in conjunction with the 2018 Annual Report: Principles of consolidation Estimates Reclassifications – Inventory Recently Issued or Adopted Accounting Standards In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842). In May 2017, the FASB issued ASU No. 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting In July 2017, the FASB issued ASU No. 2017-11, Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480): Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception. In June 2018, the FASB issued ASU 2018-07, Compensation – Stock Compensation (Topic 718) – Improvements to Nonemployee Share-Based Payment Accounting In July 2018, the FASB issued ASU No. 2018-09, Codification Improvements In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement | The significant accounting policies followed by the Company are summarized below: Foreign currency translation Principles of consolidation Estimates Reclassifications – Cash and cash equivalents Concentration of credit risk and limited suppliers The Company depends on suppliers for product component materials and other components that are subject to stringent regulatory requirements. The Company currently purchases most of their product component materials from single suppliers and the loss of any of these suppliers could result in a disruption in our production. If this were to occur, it may be difficult to arrange a replacement supplier because certain of these materials may only be available from one or a limited number of sources. In addition, establishing additional or replacement suppliers for these materials may take a substantial period of time, as certain of these suppliers must be approved by regulatory authorities. Accounts receivable Inventory Depreciation of property and equipment Fair value of financial instruments The Company has adopted ASC 820-10, Fair Value Measurements The ASC 820-10 hierarchy ranks the quality and reliability of inputs, or assumptions, used in the determination of fair value and requires financial assets and liabilities carried at fair value to be classified and disclosed in one of the following three categories: Level 1 - Observable inputs that reflect quoted prices (unadjusted) in active markets for identical assets and liabilities; Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and Level 3 - Unobservable inputs that are not corroborated by market data, therefore requiring the Company to develop its own assumptions. The Company recognizes all derivatives on the balance sheet at fair value. The fair value of the warrant liability is determined based on a lattice solution, binomial approach pricing model, and includes the use of unobservable inputs such as the expected term, anticipated volatility and risk-free interest rate, and therefore is classified within level 3 of the fair value hierarchy. (See Note 15). The Company’s notes payable approximate fair value because the terms are substantially similar to comparable debt in the marketplace. Impairment of long-lived assets Revenue recognition Shipping and handling costs Income taxes A provision of ASC 740, Income Taxes The Company will recognize in income tax expense, interest and penalties related to income tax matters. For the years ended December 31, 2018 and 2017, the Company did not have any amounts recorded for interest and penalties. Loss per share 2018 2017 Stock options 31,703,385 21,593,385 Warrants 103,994,927 97,977,851 Convertible promissory notes 24,112,518 14,641,190 Anti-dilutive equity securities 159,810,830 134,212,426 Comprehensive income Stock-based compensation Research and development Liabilities related to warrants issued Warrants related to debt issued Beneficial conversion feature on convertible debt Recently issued or adopted accounting standards In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) In February 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-02, "Leases (Topic 842)." ASU 2016-02 requires that a lessee recognize the assets and liabilities that arise from operating leases. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. This amendment will be effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The FASB issued ASU No. 2018-10 “Codification Improvements to Topic 842, Leases” and ASU No. 2018-11 “Leases (Topic 842) Targeted Improvements" in July 2018, and ASU No. 2018-20 "Leases (Topic 842) - Narrow Scope Improvements for Lessors" in December 2018. ASU 2018-10 and ASU 2018-20 provide certain amendments that affect narrow aspects of the guidance issued in ASU 2016-02. ASU 2018-11 allows all entities adopting ASU 2016-02 to choose an additional (and optional) transition method of adoption, under which an entity initially applies the new leases standard at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company expects to adopt ASU 2016-02 effective January 1, 2019. Upon adoption of Topic 842, the Company expects recognition of additional assets and corresponding liabilities pertaining to its operating leases on its consolidated balance sheets. The Company is evaluating the requirements of this guidance and has not yet determined the impact on its consolidated balance sheet and statements of operations. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments (Topic 230) In May 2017, the FASB issued ASU No. 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting In July 2017, the FASB issued ASU No. 2017-11, Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480): Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception. In June 2018, the FASB issued ASU 2018-07, Compensation – Stock Compensation (Topic 718) – Improvements to Nonemployee Share-Based Payment Accounting In July 2018, the FASB issued ASU No. 2018-09, Codification Improvements In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement |
Inventory
Inventory | 12 Months Ended |
Dec. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Inventory | Inventory consists of the following at December 31, 2018 and 2017: 2018 2017 Inventory - finished goods $ 250,821 $ 136,534 Inventory - parts 226,299 167,613 Gross inventory 477,120 304,147 Provision for losses and obsolescence (119,300 ) (72,615 ) Net inventory $ 357,820 $ 231,532 |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and equipment consists of the following at December 31, 2018 and 2017: 2018 2017 Machines and equipment $ 240,295 $ 240,295 Office and computer equipment 196,150 156,860 Devices 81,059 89,704 Software 38,126 34,528 Furniture and fixtures 16,019 16,019 Other assets 2,259 2,259 Total 573,908 539,665 Accumulated depreciation (496,153 ) (479,296 ) Net property and equipment $ 77,755 $ 60,369 Depreciation expense was $22,332 and $24,069 for the years ended December 31, 2018 and 2017, respectively. The depreciation policies followed by the Company are described in Note 2. |
Accrued Expenses
Accrued Expenses | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Accrued Liabilities [Abstract] | ||
Accrued Expenses | Accrued expenses consist of the following: March 31, December 31, 2019 2018 Accrued board of directors' fees $ 250,000 $ 200,000 Accrued outside services 148,576 115,118 Accrued executive severance 140,500 136,000 Accrued related party advances 102,370 101,137 Accrued travel 58,993 58,993 Deferred rent - 44,623 Accrued legal fees 38,098 - Accrued clinical study expenses 13,650 13,650 Accrued computer equipment - 8,752 Accrued other 1,207 11,007 $ 753,394 $ 689,280 | Accrued expenses consist of the following at December 31, 2018 and 2017: 2018 2017 Accrued board of director's fees $ 200,000 $ 125,000 Accrued executive severance 136,000 118,000 Accrued outside services 115,118 165,427 Accrued related party 101,137 - Accrued travel 58,993 39,926 Deferred rent 44,623 51,191 Accrued clinical study expenses 13,650 13,650 Accrued computer equipment 8,752 - Accrued audit and tax preparation - 73,800 Accrued legal and professional fees - 61,890 Deferred revenue - 13,317 Accrued other 11,007 11,399 $ 689,280 $ 673,600 The Company is a party to a Severance and Advisory Agreement (the “Severance Agreement”) with its former President and Chief Executive Officer, and a director of the Company. Pursuant to the Severance Agreement, the former executive will receive, as severance along with other non-cash items, six months of his base salary payable over the following six month period and bonus payments of $100,000 upon each of four bonus payment events tied to the Company’s clinical trial plan for the dermaPACE device, or December 31, 2016, whichever occurs first. The Company achieved three of the four bonus payment events in 2014 and paid $300,000 in accrued executive severance in 2014. The accrued executive severance at December 31, 2018 and 2017 represents the unpaid portion of the bonus payments plus accrued interest due to late payment. On October 10, 2018, the Company entered into accrued related party with Shri P. Parikh, the President of the Company, in the total principal amount of $100,000 with an interest rate of 5% per annum. The principal and accrued interest are due and payable on the earlier of (i) one day after receipt of payment from Johnfk Medical Inc., (ii) six months from the date of issuance and (iii) the acceleration of the maturity of the short term note by the holder upon the occurrence of an event of default. On May 1, 2017, the Company entered into an agreement with a firm to provide business advisory and consulting services. The compensation for those services was to be paid in a combination of cash and common stock. At December 31, 2017, the Company accrued $120,000 of expense for the services provided. In March 2018, the Company issued 467,423 shares of common stock for services provided in 2017 and 66,026 shares of common stock for services provided in 2018. |
Contract Liabilities
Contract Liabilities | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Contract with Customer, Asset and Liability [Abstract] | ||
Contract Liabilities | As of March 31, 2019, the Company has contract assets and liabilities from contracts with customers (see Note 12). Contract liabilities consist of the following: March 31, December 31, 2019 2018 Deposit on product $ 82,950 $ 92,950 Service agreement 53,787 57,365 Other 35,139 28,218 Total Contract liabilities 171,876 178,533 Non-Current (42,612 ) (46,736 ) Total Current $ 129,264 $ 131,797 The timing of the Company’s revenue recognition may differ from the timing of payment by its customers. A receivable is recorded when revenue is recognized prior to payment and the Company has an unconditional right to payment. Alternatively, when payment precedes the satisfaction of performance obligations, the Company records a contract liability (deferred revenue) until the performance obligations are satisfied. Of the aggregate $171,876 of contract liability balances as of March 31, 2019, the Company expects to satisfy its remaining performance obligations associated with $129,264 and $42,612 of contract liability balances within the next twelve months and following twelve months, respectively. Of the aggregate $178,533 of contract liability balances as of December 31, 2018, the Company expects to satisfy its remaining performance obligations associated with $131,797 and $46,736 of contract liability balances within the next twelve months and following twelve months, respectively. | As of December 31, 2018, the Company has contract assets and liabilities from contracts with customers, due to the implementation of ASC 606, Revenue from Contracts with Customers Contract liabilities consist of the following: December 31, December 31, 2018 2017 Deposit on product $ 92,950 $ - Service agreement 57,365 - Other 28,218 - Total Contract liabilities 178,533 - Non-Current (46,736 ) - Total Current $ 131,797 $ - The timing of the Company’s revenue recognition may differ from the timing of payment by its customers. A contract asset (receivable) is recorded when revenue is recognized prior to payment and the Company has an unconditional right to payment. Alternatively, when payment precedes the satisfaction of performance obligations, the Company records a contract liability (deferred revenue) until the performance obligations are satisfied. Of the aggregate $178,533 of contract liability balances as of December 31, 2018, the Company expects to satisfy its remaining performance obligations associated with $131,797 and $46,736 of contract liability balances within the next twelve months and following twelve months, respectively. |
Advances Payable
Advances Payable | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Payables and Accruals [Abstract] | ||
Advances Payable | During the three months ended March 31, 2019, the Company has received $26,200 for warrant exercises. Due to the timing of receipt of cash and issuance of the Company’s common stock the funds have been recorded as advances from related parties and will be properly recorded as equity when the common stock is issued. | The Company has received cash advances to help fund the Company’s operations. On January 10, 2018, the outstanding balance of the $310,000 of advances payable was converted into two 10% Convertible Promissory Notes (see Note 10). On November 12, 2018, the advances payable balance was added to the outstanding balance line of credit, related parties. As of December 31, 2017, A. Michael Stolarski and Kevin A. Richardson II, both members of the Company’s board of directors and existing shareholders of the Company, had subscribed $130,000 and $140,000, respectively, to the Company as advances from related parties to be used to purchase 10% Convertible Promissory Notes. The convertible promissory notes for this balance were issued on January 10, 2018 (see Note 10). |
Line of Credit, Related Parties
Line of Credit, Related Parties | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Line of Credit, Related Parties | The Company entered into a line of credit agreement with a member of the board of directors and an existing shareholder at December 29, 2017. The agreement established a line of credit in the amount of $370,000 with an annualized interest rate of 6%. On November 12, 2018, the Company entered into an amendment to the line of credit agreement. The line of credit was increased to $1,000,000 with an annualized interest rate of 6%. The line of credit may be called for payment upon demand of the holder. The line of credit, related parties had an aggregate outstanding balance of $883,224 and $370,179 as of December 31, 2018 and 2017, respectively. Interest expense on line of credit, related parties totaled $33,724 and $179 for the years ended December 31, 2018 and 2017, respectively. |
Short Term Notes Payable
Short Term Notes Payable | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Debt Disclosure [Abstract] | ||
Short Term Notes Payable | During the three months ended March 31, 2019, the Company entered into short term notes payable in the total principal amount of $965,000 with an interest rate of 5% per annum. The total principal and accrued interest of short term notes payable was $2,611,731 as of March 31, 2019 and are due and payable six months from the date of issuance of the respective notes. On December 26, 2018, the Company defaulted on the short term notes payable issued on June 26, 2018 and began accruing interest at the default interest rate of 10%. On January 2, 2019, the Company defaulted on the short term notes payable issued on July 2, 2018 and began accruing interest at the default interest rate of 10%. On January 30, 2019, the Company defaulted on the short term notes payable issued on July 30, 2018 and began accruing interest at the default interest rate of 10%. | The Company entered into short term notes payable between June 26, 2018 and December 31, 2018 in the total principal amount of $1,870,525 with an interest rate of 5% per annum. The principal and accrued interest of $1,883,163 as of December 31, 2018 are due and payable six months from the date of issuance of the respective notes. On December 26, 2018, the Company defaulted on the short term notes payable issued on June 26, 2018 and began accruing interest at the default interest rate of 10%. On January 2, 2019, the Company defaulted on the short term notes payable issued on July 2, 2018 and began accruing interest at the default interest rate of 10%. On January 30, 2019, the Company defaulted on the short term notes payable issued on July 30, 2018 and began accruing interest at the default interest rate of 10%. |
Convertible Promissory Notes
Convertible Promissory Notes | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Convertible Promissory Notes | In 2017, the Company began offering subscriptions for 10% convertible promissory notes (the “10% Convertible Promissory Notes”) to selected investors. The 10% Convertible Promissory Notes have a six month term from the subscription date and the note holders can convert the 10% Convertible Promissory Notes at any time during the term to the number of shares of Company common stock, $0.001 par value (the “Common Stock”), equal to the amount obtained by dividing (i) the amount of the unpaid principal and interest on the note by (ii) $0.11. During the year ended December 31, 2018, the Company issued $1,596,000 in the aggregate principal amount of 10% Convertible Promissory Notes, including $430,000 purchased by officers and directors. During the year ended December 31, 2017, the Company issued $1,533,750 in the aggregate principal amount of 10% Convertible Promissory Notes. The 10% Convertible Promissory Notes include a warrant agreement (the “Class N Warrant”) to purchase Common Stock equal to the amount obtained by dividing the (i) sum of the principal amount by (ii) $0.11. The Class N Warrants expire March 17, 2019. On January 23, 2019, the Company extended the expiration date to May 1, 2019 and on March 1, 2019, the Company extended the expiration date to June 28, 2019. During the years ended December 31, 2018 and 2017, the Company issued 14,509,090 and 13,943,180, respectively, Class N Warrants in connection with the closings of 10% Convertible Promissory Notes. Pursuant to the terms of a Registration Rights Agreement (the “Registration Rights Agreement”) that the Company entered with the investors in connection with the 10% Convertible Promissory Notes, the Company is required to file a registration statement that covers the shares of Common Stock issuable upon conversion of the 10% Convertible Promissory Notes or upon exercise of the Class N Warrants. The failure on the part of the Company to satisfy certain deadlines described in the Registration Rights Agreement may subject the Company to payment of certain monetary penalties. As of the date of the filing of this report the registration statement has not yet been filed. At this time, the monetary penalty has been determined by management to be de minimis. The Company recorded $709,827 debt discount for the beneficial conversion feature of the promissory notes, $808,458 in debt discount for the discount on the Class N Warrant agreement and $77,715 in debt issuance costs to be amortized over the lives of the 10% Convertible Promissory Notes during 2018. The Company recorded $820,681 debt discount for the beneficial conversion feature of the promissory notes, $620,748 in debt discount for the discount on the Class N Warrant agreement and $89,518 in debt issuance costs to be amortized over the lives of the 10% Convertible Promissory Notes during 2017. The Company recorded $508,866 in debt issuance costs for Class N Warrants issued per the engagement letter with West Park Capital. The calculated fair value of the Class N Warrants was determined using the Black-Scholes pricing model based on the following assumptions: December 31, December 31, 2018 2017 Weighted average contractual term in years 1.13 - 1.19 1.25 - 1.39 Weighted average risk free interest rate 1.98% - 2.15% 1.63% - 1.89% Weighted average volatility 94.43% - 98.63% 86.62% - 103.21% Forfeiture rate 0.0% 0.0% Expected dividend yield 0.0% 0.0% Additional debt issuance costs will be incurred and amortized over the remaining lives of the 10% Convertible Promissory Notes when Class N Warrants are issued per the engagement letter with West Park Capital. On June 29, 2018, the Company issued 1,242,955 Class N Warrants to West Park Capital per the terms of a placement agent agreement and $417,633 was expensed as interest expense. On October 4, 2018, the Company issued 1,242,954 Class N Warrants to West Park Capital per the terms of a placement agent agreement and $91,233 was expensed as interest expense. On February 15, 2018, the Company defaulted on the 10% Convertible Promissory Notes issued on August 15, 2017 and began accruing interest at the default interest rate of 18%. On May 3, 2018, the Company defaulted on the 10% Convertible Promissory Notes issued on November 3, 2017 and began accruing interest at the default interest rate of 18%. On May 30, 2018, the Company defaulted on the 10% Convertible Promissory Notes issued on November 30, 2017 and began accruing interest at the default interest rate of 18%. On June 22, 2018, the Company defaulted on the 10% Convertible Promissory Notes issued on December 22, 2017 and began accruing interest at the default interest rate of 18%. On July 10, 2018, the Company defaulted on the 10% Convertible Promissory Notes issued on January 10, 2018 and began accruing interest at the default interest rate of 18%. On August 2, 2018, the Company defaulted on the 10% Convertible Promissory Notes issued on February 2, 2018 and began accruing interest at the default interest rate of 18%. The 10% Convertible Promissory Notes had an aggregate outstanding principal balance of $2,652,377, net of $0 beneficial conversion feature, warrant discount and debt issuance costs and $455,606, net of $1,099,861 beneficial conversion feature, warrant discount and debt issuance costs at December 31, 2018 and 2017, respectively. Interest expense on the 10% Convertible Promissory Notes totaled $3,565,198 and $452,803 for the years ended December 31, 2018 and 2017, respectively. Kevin A. Richardson II, CEO, chairperson of the Company’s board of directors and an existing shareholder of the Company, was a purchaser in the 10% Convertible Promissory Notes in the amount of $260,000 and was issued 2,363,636 Class N Warrants for the year ended December 31, 2018. A. Michael Stolarski, a member of the Company’s board of directors and an existing shareholder of the Company, was a purchaser in the 10% Convertible Promissory Notes in the amount of $170,000 and $330,000 and was issued 1,545,455 and 3,000,000 Class N Warrants for the years ended December 31, 2018 and 2017, respectively. On January 29, 2018, the Company entered into an additional 10% Convertible Promissory Note with an accredited investor in the amount of $71,500 and issued 650,000 Class N Warrants in connection with such 10% Convertible Promissory Note. The Company intends to use the proceeds from such 10% Convertible Promissory Note for payment of services to an investor relations company and the account of the attorney updating the Registration Statement on Form S-1 of the Company filed under the Securities Act of 1933, as amended, on January 3, 2017 (File No. 333-213774), which registration statement shall also register the shares issuable upon conversion of such 10% Convertible Promissory Note and issuable upon the exercise of a Class N Warrants issued concurrently with the issuance of such 10% Convertible Promissory Note. The Company recorded $35,396 debt discount for the beneficial conversion feature of the 10% Convertible Promissory Note and $36,104 in debt discount for the discount on the Class N Warrant agreement to be amortized over the life of the 10% Convertible Promissory Note. The 10% Convertible Promissory Note was converted in full in August 2018 (See Note 14). |
Notes Payable, Product, Related
Notes Payable, Product, Related Parties | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Notes Payable, Product, Related Parties | On January 26, 2018, the Company entered into a Master Equipment Lease with NFS Leasing Inc. to provide financing for equipment purchases to enable the Company to begin placing the dermaPACE System in the marketplace. This agreement provides for a lease line of credit up to $1,000,000 with a term of 36 months, and grants NFS a security interest in the Company’s accounts receivable, tangible and intangible personal property and cash and deposit accounts of the Company. NFS Leasing Inc. was a purchaser of the 10% Convertible Promissory Notes (see Note 10) and thus, is considered a related party. On March 1, 2018, the Company entered into the first drawdown of the Master Equipment Lease in the amount of $96,708. Interest expense on note payable, product totaled $0 for the three months ended September 30, 2018 and $20,909 for the nine months ended September 30, 2018, respectively. As of February 27, 2018, we were in default of Master Equipment Lease due to the sale of equipment purchased under the Master Lease Agreement to a third party and, as a result, the note was callable by NFS Leasing, Inc. or NFS Leasing, Inc. could have notified the Company to assemble all equipment for pick up. The notes payable, product was paid in full on June 27, 2018. |
Notes Payable, Related Parties
Notes Payable, Related Parties | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Debt Disclosure [Abstract] | ||
Notes Payable, Related Parties | The notes payable, related parties as amended were issued in conjunction with the Company’s purchase of the orthopedic division of HealthTronics, Inc. The notes payable, related parties bear interest at 8% per annum, as amended. All remaining unpaid accrued interest and principal was due on December 31, 2018, as amended. HealthTronics, Inc. is a related party because they are a shareholder in the Company and have a security agreement with the Company detailed below. The Company is a party to a security agreement with HealthTronics, Inc. to provide a first security interest in the assets of the Company. During any period when an Event of Default occurs, the applicable interest rate shall increase by 2% per annum. Events of Default under the notes payable, related parties have occurred and are continuing on account of the failure of SANUWAVE, Inc., a Delaware corporation, a wholly owned subsidiary of the Company and the borrower under the notes payable, related parties, to make the required payments of interest which were due on December 31, 2016, March 31, 2017, June 30, 2017, September 30, 2017, December 31, 2017, June 30, 2018, September 30, 2018, December 31, 2018 and March 31, 2019 (collectively, the “Defaults”). As a result of the Defaults, the notes payable, related parties have been accruing interest at the rate of 10% per annum since January 2, 2017 and continue to accrue interest at such rate. The Company will be required to make mandatory prepayments of principal on the notes payable, related parties equal to 20% of the proceeds received by the Company through the issuance or sale of any equity securities in cash or through the licensing of the Company’s patents or other intellectual property rights. The notes payable, related parties had an aggregate outstanding principal balance of $5,372,743 at March 31, 2019 and December 31, 2018. Accrued interest, related parties currently payable totaled $1,391,469 at March 31, 2019 and $1,171,782 at December 31, 2018. Interest expense on notes payable, related parties totaled $219,687 and $189,211 for the three months ended March 31, 2019 and 2018, respectively. | The notes payable, related parties as amended were issued in conjunction with the Company’s purchase of the orthopedic division of HealthTronics, Inc. The notes payable, related parties bear interest at 8% per annum, as amended. All remaining unpaid accrued interest and principal is due on December 31, 2018, as amended. HealthTronics, Inc. is a related party because they are a shareholder in the Company and have a security agreement with the Company detailed below. On June 15, 2015, the Company and HealthTronics, Inc. entered into an amendment (the “Note Amendment”) to amend certain provisions of the notes payable, related parties. The Note Amendment provides for the extension of the due date to January 31, 2017. In connection with the Note Amendment, the Company entered into a security agreement with HealthTronics, Inc. to provide a first security interest in the assets of the Company. The notes payable, related parties bear interest at 8% per annum effective August 1, 2015 and during any period when an Event of Default occurs, the applicable interest rate shall increase by 2% per annum. Events of Default under the notes payable, related parties have occurred and are continuing on account of the failure of SANUWAVE, Inc., a Delaware corporation, a wholly owned subsidiary of the Company and the borrower under the notes payable, related parties, to make the required payments of interest which were due on December 31, 2016, March 31, 2017, June 30, 2017, September 30, 2017, December 31, 2017, June 30, 2018, September 30, 2018 and December 31, 2018 (collectively, the “Defaults”). As a result of the Defaults, the notes payable, related parties have been accruing interest at the rate of 10% per annum since January 2, 2017 and continue to accrue interest at such rate. The Company will be required to make mandatory prepayments of principal on the notes payable, related parties equal to 20% of the proceeds received by the Company through the issuance or sale of any equity securities in cash or through the licensing of the Company’s patents or other intellectual property rights. The notes payable, related parties had an aggregate outstanding principal balance of $5,372,743, net of $0 debt discount and $5,222,259, net of $150,484 debt discount at December 31, 2018, and 2017, respectively. Accrued interest currently payable totaled $1,171,782 and $685,907 at December 31, 2018 and 2017, respectively. Interest expense on notes payable, related parties totaled $787,586 and $634,169 for the years ended December 31, 2018 and 2017, respectively. As of January 1, 2017, we are in default with our interest payment and the note is callable by HealthTronics, Inc. The notes payable, related parties are shown as a current liability. As of December 31, 2018, we are in default under the notes, as amended by the Third Amendment, and as a result HealthTronics, Inc. could, among other rights and remedies, exercise its rights under its first priority security interest in our assets. We are in negotiations with HealthTronics, Inc. to address the event of default. |
Preferred Stock
Preferred Stock | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Preferred Stock | The Company’s Articles of Incorporation authorize the issuance of up to 5,000,000 shares of “blank check” preferred stock with designations, rights and preferences as may be determined from time to time by the board of directors. On January 12, 2016, the Company filed a Certificate of Designation of Preferences, Rights and Limitations for Series B Convertible Preferred Stock of the Company (the “Certificate of Designation”) with the Nevada Secretary of State. The Certificate of Designation amends the Company’s Articles of Incorporation to designate 293 shares of preferred stock, par value $0.001 per share, as Series B Convertible Preferred Stock. The Series B Convertible Preferred Stock has a stated value of $1,000 per share. Under the Certificate of Designation, holders of Series B Convertible Preferred Stock are entitled to receive dividends equal (on an as-if-converted-to-common-stock basis) to and in the same form as dividends (other than dividends in the form of common stock) actually paid on shares of the common stock when, as and if such dividends are paid. Such holders will participate on an equal basis per-share with holders of common stock in any distribution upon winding up, dissolution, or liquidation of the Company. Holders of Series B Convertible Preferred Stock are entitled to convert each share of Series A Convertible Preferred Stock into 2,000 shares of common stock, provided that after giving effect to such conversion, such holder, together with its affiliates, shall not beneficially own in excess of 9.99% of the number of shares of common stock outstanding (the “Beneficial Ownership Limitation”). Holders of the Series B Convertible Preferred Stock are entitled to vote on all matters affecting the holders of the common stock on an “as converted” basis, provided that such holder shall only vote such shares of Series B Convertible Preferred Stock eligible for conversion without exceeding the Beneficial Ownership Limitation. On March 14, 2014, the Company filed a Certificate of Designation of Preferences, Rights and Limitations for Series A Convertible Preferred Stock of the Company (the “Certificate of Designation”) with the Nevada Secretary of State. The Certificate of Designation amends the Company’s Articles of Incorporation to designate 6,175 shares of preferred stock, par value $0.001 per share, as Series A Convertible Preferred Stock. The Series A Convertible Preferred Stock has a stated value of $1,000 per share. |
Equity Transactions
Equity Transactions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Equity [Abstract] | ||
Equity Transactions | Warrant Exercise During the three months ended March 31, 2019, the Company issued 620,000 shares of Common Stock upon the exercise of 620,000 Class L Warrants and Class O Warrants to purchase shares of stock under the terms of the respective warrant agreements. Cashless Warrant Exercise During the three months ended March 31, 2019, the Company issued 704,108 shares of Common Stock upon the cashless exercise of 1,313,258 Class N Warrants and Class L Warrants to purchase shares of stock under the terms of the respective warrant agreements. Conversion of short term notes payable to equity During the three months ended March 31, 2019, the Company issued 3,333,334 shares of Common Stock upon the conversion of short term note payable in the principal amount of $266,667 with the receipt of notice of Class L warrant exercise of 3,333,334 Class L Warrants under the terms of the short term note payable. | Conversion of 10% Convertible Promissory Notes For the year ended December 31, 2018, the Company issued 8,497,238 shares of Common Stock upon the conversion of 10% Convertible Promissory Notes in the amount of $902,500 plus accrued interest of $32,197 at the conversion price of $0.11 per share per the terms of the 10% Convertible Promissory Notes agreement. Warrant Exercise For the year ended December 31, 2018, the Company issued 422,939 shares of common stock upon the exercise of 422,939 Class N Warrants, Series A Warrants and Class O Warrants to purchase shares of stock under the terms of the respective warrant agreements. For the year ended December 31, 2017, the Company issued 1,163,333 shares of common stock upon the exercise of 1,163,333 Class L Warrants to purchase shares of stock for $0.08 per share under the terms of the Class L Warrant agreement. Cashless Warrant Exercise For the year ended December 31, 2018, the Company issued 6,395,499 shares of common stock upon the exercise of 7,878,925 Class N Warrants, Series A Warrants and Class O Warrants to purchase shares of stock under the terms of the respective warrant agreements. For the year ended December 31, 2017, the Company issued 866,625 shares of common stock upon the cashless exercise of 1,428,745 Class L Warrants and Series A Warrants to purchase shares of stock based on the current market value per share as of the date of conversion as determined under the terms of the respective warrant agreements. Consulting Agreement In November 2017, the Company entered into a three month consulting agreement for which a portion of the fee for the services was to be paid with Common Stock. The number of shares to be paid with Common Stock was calculated by dividing the amount of the fee to be paid with Common Stock of $4,000 by the Company stock price at the close of business on the eighth business day of each month. The Company issued 26,667 and 23,529 shares, respectively in each of the first two months of the agreement. The $4,000 was recorded as a non-cash general and administrative expense during the year ended December 31, 2017. In April 2018, the Company verbally entered into a month-to-month consulting agreement with a consultant for which a portion of the fee for the services was to be paid with Common Stock. The number of shares to be paid with Common Stock was calculated by dividing the amount of the fee to be paid with Common Stock of $4,000 by the Company stock price at the close of business on the eighth business day of each month. The Company issued 74,714 shares of Common Stock for services performed from January through June 2018. $20,000 was recorded as a non-cash general and administrative expense during the year ended December 31, 2018. In May 2017, the Company entered into an agreement with an investment company to provide business advisory and consulting services. The compensation for those services was to be paid in a combination of cash and Common Stock. At December 31, 2017, the Company accrued $120,000 of expense for the services provided. The Common Stock was issued in March and June 2018 in the amount of 533,450 and 15,000 shares, respectively. On October 17, 2018, this agreement was verbally amended to provide for the cash compensation of services performed to be paid with Common Stock. The Common Stock was issued in October 2018 in the amount of 426,176 shares. The $37,500 was recorded as a non-cash general and administrative expense during the year ended December 31, 2018. |
Warrants
Warrants | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Warrants and Rights Note Disclosure [Abstract] | ||
Warrants | A summary of the warrant activity during the three months ended March 31, 2019, is presented as follows: Outstanding Outstanding as of as of December 31, March 31, Warrant class 2018 Issued Exercised Expired 2019 Class K Warrants 7,200,000 - - - 7,200,000 Class L Warrants 57,258,339 - (4,100,001 ) - 53,158,338 Class N Warrants 30,451,815 - (1,046,591 ) - 29,405,224 Class O Warrants 7,929,091 - (120,000 ) - 7,809,091 Series A Warrants 1,155,682 - - - 1,155,682 103,994,927 - (5,266,592 ) - 98,728,335 A summary of the warrant exercise price per share and expiration date is presented as follows: Exercise Expiration price per share date Class K Warrants $ 0.08 June 2025 Class K Warrants $ 0.11 August 2027 Class L Warrants $ 0.08 May 2019 Class N Warrants $ 0.11 June 2019 Class O Warrants $ 0.11 June 2019 Series A Warrants $ 0.03 May 2019 The exercise price of the Class K Warrants and the Series A Warrants are subject to a “down-round” anti-dilution adjustment if the Company issues or is deemed to have issued certain securities at a price lower than the then applicable exercise price of the warrants. Accordingly, the Company has classified such warrants as derivative liabilities. The Class K Warrants may be exercised on a physical settlement or on a cashless basis. The Series A Warrants may be exercised on a physical settlement basis if a registration statement underlying the warrants is effective. If a registration statement is not effective (or the prospectus contained therein is not available for use) for the resale by the holder of the Series A Warrants, then the holder may exercise the warrants on a cashless basis. The Class K Warrants and the Series A Warrants are derivative financial instruments. The estimated fair value of the Class K Warrants at the date of grant was $36,989 and recorded as debt discount, which is accreted to interest expense through the maturity date of the related notes payable, related parties. The estimated fair values of the Series A Warrants and the Series B Warrants at the date of grant were $557,733 for the warrants issued in conjunction with the 2014 Private Placement and $47,974 for the warrants issued in conjunction with the 18% Convertible Promissory Notes. The fair value of the Series A Warrants and Series B Warrants were recorded as equity issuance costs in 2014, a reduction of additional paid-in capital. The Series B Warrants expired unexercised in March 2015. The estimated fair values were determined using a binomial option pricing model based on various assumptions. The Company’s derivative liabilities have been classified as Level 3 instruments and are adjusted to reflect estimated fair value at each period end, with any decrease or increase in the estimated fair value being recorded in other income or expense accordingly, as adjustments to the fair value of derivative liabilities. Various factors are considered in the pricing models the Company uses to value the warrants, including the Company's current common stock price, the remaining life of the warrants of 0.085 years, the volatility of the Company's common stock price of 102%, and the risk-free interest rate of 2.43%. In addition, as of the valuation dates, management assessed the probabilities of future financing and other re-pricing events in the binominal valuation models. A summary of the changes in the warrant liability during the three months ended March 31, 2019, is presented as follows: Class K Series A Warrants Warrants Total Warrant liability as of December 31, 2018 $ 1,542,000 $ 227,669 $ 1,769,669 Issued - - - Exercised - - - Change in fair value - (32,359 ) (32,359 ) Reclassification due to adoption of ASU 2017-11 (see Note 3) (1,542,000 ) - (1,542,000 ) Warrant liability as of March 31, 2019 $ - $ 195,310 $ 195,310 | A summary of warrants as of December 31, 2018 and 2017, and the changes during the years ended December 31, 2018 and 2017, is presented as follows: Outstanding Outstanding Outstanding as of as of as of December 31, December 31, December 31, Warrant class 2016 Issued Exercised 2017 Issued Exercised Expired 2018 Class F Warrants 300,000 - - 300,000 - - (300,000 ) - Class G Warrants 1,503,409 - - 1,503,409 - - (1,503,409 ) - Class H Warrants 1,988,095 - - 1,988,095 - - (1,988,095 ) - Class I Warrants 1,043,646 - - 1,043,646 - - (1,043,646 ) - Class K Warrants 5,200,000 2,000,000 - 7,200,000 - - - 7,200,000 Class L Warrants 65,945,005 - (2,046,832 ) 63,898,173 - (6,639,834 ) - 57,258,339 Class N Warrants - 13,943,180 - 13,943,180 17,644,999 (1,136,364 ) - 30,451,815 Class O Warrants - 6,540,000 - 6,540,000 1,509,091 (120,000 ) - 7,929,091 Series A Warrants 2,106,594 - (545,246 ) 1,561,348 - (405,666 ) - 1,155,682 78,086,749 22,483,180 (2,592,078 ) 97,977,851 19,154,090 (8,301,864 ) (4,835,150 ) 103,994,927 A summary of the warrant exercise price per share and expiration date is presented as follows: Exercise Expiration price/share date Class K Warrants $ 0.08 June 2025 Class K Warrants $ 0.11 August 2027 Class L Warrants $ 0.08 May 2019 Class N Warrants $ 0.11 June 2019 Class O Warrants $ 0.11 June 2019 Series A Warrants $ 0.03 May 2019 On January 23, 2019, the Company extended the expiration date to May 1, 2019 for Series A Warrants, Class L Warrants and Class N Warrants. On March 1, 2019, the Company extended the expiration date to June 28, 2019 for Class N Warrants and Class O Warrants. The exercise price and the number of shares covered by the warrants will be adjusted if the Company has a stock split, if there is a recapitalization of the Company’s common stock, or if the Company consolidates with or merges into another company. The exercise price of the Class K Warrants and the Series A Warrants are subject to a “down-round” anti-dilution adjustment if the Company issues or is deemed to have issued securities at a price lower than the then applicable exercise price of the warrants. The Class K Warrants may be exercised on a physical settlement or on a cashless basis. The Series A Warrants may be exercised on a physical settlement basis if a registration statement underlying the warrants is effective. If a registration statement is not effective (or the prospectus contained therein is not available for use) for the resale by the holder of the Series A Warrants, then the holder may exercise the warrants on a cashless basis. On January 26, 2018, the Company issued Class O Warrant Agreements to a related party vendor to purchase 909,091 shares of common stock at an exercise price of $0.11 per share. Each Class O Warrant represents the right to purchase one share of Common Stock. The estimated fair value of the Class O Warrants at the grant date was $160,455 and was recorded as general and administrative expense and an increase to additional paid-in capital. The warrants vested upon issuance and expire on March 17, 2019. On March 1, 2019, the Company extended the expiration date to June 28, 2019. In 2018, the Company issued Class O Warrant Agreements to a vendor to purchase 600,000 shares of common stock at an exercise price of $0.11 per share. Each Class O Warrant represents the right to purchase one share of Common Stock. The estimated fair value of the Class O Warrants at their respective grant dates was $159,370 and was recorded as general and administrative expense and an increase to additional paid-in capital. The warrants vested upon issuance and expire on March 17, 2019. On March 1, 2019, the Company extended the expiration date to June 28, 2019. In August 2017, the Company, in connection with the Third Amendment (Note 10), issued to HealthTronics, Inc., an additional 2,000,000 Class K Warrants to purchase shares of the Company’s Common Stock at an exercise price of $0.11 per share, subject to certain anti-dilution protection. The warrants vested upon issuance and expire after ten years. On November 30, 2017, the Company issued Class O Warrant Agreements to a vendor to purchase 2,500,000 shares of common stock at an exercise price of $0.11 per share. Each Class O Warrant represents the right to purchase one share of Common Stock. The estimated fair value of the Class O Warrants at the grant date was $174,731 and was recorded as general and administrative expense and an increase to additional paid-in capital. The warrants vested upon issuance and expire on March 17, 2019. On December 6, 2017, the Company issued Class O Warrant Agreements to a vendor to purchase 100,000 shares of common stock at an exercise price of $0.11 per share. Each Class O Warrant represents the right to purchase one share of Common Stock. The estimated fair value of the Class O Warrants at the grant date was $8,125 and was recorded as general and administrative expense and an increase to additional paid-in capital. The warrants vested upon issuance and expire on March 17, 2019. On December 11, 2017, the Company issued Class O Warrant Agreements to active employees, independent contractors, members of the board of directors and members of the medical advisory boards to purchase 3,940,000 shares of common stock at an exercise price of $0.11 per share. Each Class O Warrant represents the right to purchase one share of Common Stock. The estimated fair value of the Class O Warrants at the grant date was $285,810 and was recorded as research and development expense in the amount of $98,655 and general and administrative expense in the amount of $187,155 and an increase to additional paid-in capital for the full amount of $285,810. The warrants vested upon issuance and expire on March 17, 2019. Kevin A. Richardson II and A. Michael Stolarski, both members of the Company’s board of directors and existing shareholders of the Company, were issued 640,000 and 200,000 warrants, respectively. John Nemelka, Alan Rubino and Maj-Britt Kaltoft, members of the Company’s board of directors, were each issued 200,000 warrants. Lisa E. Sundstrom, an officer of the Company was issued 440,000 warrants as well as other employees of the Company. The Class K Warrants and the Series A Warrants are derivative financial instruments. The estimated fair value of the Class K Warrants at the date of grant was $36,989 and recorded as debt discount, which is accreted to interest expense through the maturity date of the related notes payable, related parties. The estimated fair values of the Series A Warrants and the Series B Warrants at the date of grant were $557,733 for the warrants issued in conjunction with the 2014 Private Placement and $47,974 for the warrants issued in conjunction with the 18% Convertible Promissory Notes. The fair value of the Series A Warrants and Series B Warrants were recorded as equity issuance costs in 2014, a reduction of additional paid-in capital. The Series B Warrants expired unexercised in March 2015. The estimated fair values were determined using a binomial option pricing model based on various assumptions. The Company’s derivative liabilities have been classified as Level 3 instruments and are adjusted to reflect estimated fair value at each period end, with any decrease or increase in the estimated fair value being recorded in other income or expense accordingly, as adjustments to the fair value of derivative liabilities. Various factors are considered in the pricing models the Company uses to value the warrants, including the Company’s current common stock price, the remaining life of the warrants which ranged from 0.21 to 8.6 years, the volatility of the Company’s common stock price which ranged from 112% to 134%, and the risk-free interest rate which ranged from 2.43% to 2.64% for the year ended December 31, 2018. The remaining life of the warrants which ranged from 1.21 to 9.6 years, the volatility of the Company’s common stock price which ranged from 109% to 133%, and the risk-free interest rate which ranged from 1.79% to 2.39% for the year ended December 31, 2017. In addition, as of the valuation dates, management assessed the probabilities of future financing and other re-pricing events in the binominal valuation models. A summary of the changes in the warrant liability during the years ended December 31, 2018 and 2017, is as follows: Class K Series A Warrants Warrants Total Warrant liability as of December 31, 2016 $ 884,000 $ 358,120 $ 1,242,120 Issued 200,000 - 200,000 Redeemed - (66,966 ) (66,966 ) Change in fair value 532,000 36,729 568,729 Warrant liability as of December 31, 2017 1,616,000 327,883 1,943,883 Issued - - - Redeemed - (118,838 ) (118,838 ) Change in fair value (74,000 ) 18,624 (55,376 ) Warrant liability as of December 31, 2018 $ 1,542,000 $ 227,669 $ 1,769,669 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Commitments and Contingencies | Operating Leases The Company is a party to certain operating leases. In August 2016, we entered into a lease agreement for 7,500 square feet of office space for office, research and development, quality control, production and warehouse space which expires on December 31, 2021. On February 1, 2018, we entered into an amendment to the lease agreement for an additional 380 square feet of office space for storage which expires on December 31, 2021. On January 2, 2019, we entered into a second amendment to the lease agreement for an additional 2,297 square feet of office space for office space which expires on December 31, 2021. Under the terms of the lease, we pay monthly rent of $14,651, subject to a 3% adjustment on an annual basis. Right of use assets and Lease liability - right of use consist of the following: March 31, 2019 Right of use assets $ 437,363 Lease liability - right of use Current portion $ 164,521 Long term portion 315,730 Total Lease liability - right of use $ 480,251 Cash paid for amounts included in the measurement of lease liabilities for the three months ended March 31, 2019 was $4,222 and were included in Net cash used in operating activities in it condensed consolidated statement of cash flows. Upon adoption of ASC 842 on January 1, 2019, the Company increased non-cash balances of right of use assets and lease liability – right of use by $476,029 and $520,652, respectively. As of March 31, 2019, the maturities of the Company's Lease liability - right of use consist of the following: Year ending December 31, Amount 2019 (remainder) $ 140,173 2020 191,713 2021 197,462 Total lease payments 529,348 Less: Present value adjustment (49,097 ) Total Lease liability - right of use $ 480,251 As required, the following disclosure is provided for periods prior to adoption. Minimum future lease payments that have initial or remaining lease terms in excess of one year consist of the following: Year ending December 31, Amount 2019 (remainder) $ 140,173 2020 191,713 2021 197,462 Total $ 529,348 Rent expense for the three months ended March 31, 2019 and 2018 was $52,838 and $35,882, respectively. As of March 31, 2019, the Company had no leases that were classified as a financing lease. As of March 31, 2019, the Company did not have additional operating or financing leases that have not yet commenced. Litigation The Company is a defendant in various legal actions, claims and proceedings arising in the ordinary course of business, including claims related to breach of contracts and intellectual property matters resulting from our business activities. As with most actions such as these, an estimation of any possible and/or ultimate liability cannot always be determined. We believe that all pending claims, if adversely decided, would not have a material adverse effect on our business, financial position or results of operations. | Operating Leases The Company leases office and storage space. Rent expense for the years ended December 31, 2018 and 2017, was $157,395 and $159,583, respectively. Minimum future lease payments under the operating lease consist of the following: Year ending December 31, Amount 2019 $ 186,132 2020 191,712 2021 197,464 Total $ 575,308 The Company has recorded a liability for deferred rent and is expensing this on a straight line basis over the life of the lease. Litigation The Company is involved in various legal matters that have arisen in the ordinary course of business. While the ultimate outcome of these matters is not presently determinable, it is the opinion of management that the resolution will not have a material adverse effect on the financial position or results of operations of the Company. Potential Liability Related to Issuances of Equity Securities The Company may have potential liability for certain sales, offers or issuances of equity securities of the Company in possible violation of federal securities laws. Pursuant to a Registration Statement on Form S-1 (Registration No. 333-208676), declared effective on February 16, 2016 (the “2016 Registration Statement”), the Company sought to register: a primary offering of up to $4,000,000 units, the Common Stock included as part of the units, the warrants included as part of the units, and the Common Stock issuable upon exercise of such warrants; a primary offering of up to $400,000 placement agent warrants and the Common Stock issuable upon exercise of such placement agent warrants; and a secondary offering of 23,545,144 shares of Common Stock held by certain selling stockholders named in the 2016 Registration Statement. The SEC Staff’s interpretations provide that, when an issuer is registering units composed of common stock, common stock purchase warrants, and the common stock underlying the warrants, the registration fee is based on the offer price of the units and the exercise price of the warrants. The registration fee paid did include the fee based on the offer price of the units, allocated to the unit line item in the fee table. Although the fee table in the 2016 Registration Statement included a line item for the Common Stock underlying the warrants, the Company did not include in that line item the fee payable based on the exercise price of $0.08 per share for such warrants, which amount should have been allocated to such line item based on the SEC Staff’s interpretations. As a result, a portion of the securities intended to be registered by the 2016 Registration Statement was not registered. In addition, in a post-effective amendment to the 2016 Registration Statement filed on September 23, 2016, too many placement agent warrants were inadvertently deregistered. The post-effective amendment stated that the Company had issued $180,100, based on 2,251,250 Class L warrants issued with a $0.08 exercise price of warrants to the placement agent and therefore deregistered $219,900, based on 2,748,750 Class L warrants issued with a $0.08 exercise price of placement agent warrants from the $400,000, based on 5,000,000 Class L warrants issued with a $0.08 exercise price total offering amount included in the Registration Statement. The actual warrants issued to the placement agent totaled $240,133.36, based on 3,001,667 Class L warrants issued with a $0.08 exercise price, and only $159,867, based on 1,998,338 Class L warrants issued with a $0.08 exercise price should have been deregistered in such post-effective amendment. To the extent that we have not registered or failed to maintain an effective registration statement with respect to any of the transactions in securities described above and with respect to our ongoing offering of shares of Common Stock underlying the warrants, and a violation of Section 5 of the Securities Act did in fact occur or is occurring, eligible holders of our securities that participated in these offerings would have a right to rescind their transactions, and the Company may have to refund any amounts paid for the securities, which could have a materially adverse effect on the Company’s financial condition. Eligible securityholders have not filed a claim against the Company alleging a violation of Section 5 of the Securities Act with respect to these transactions, but they could file a claim in the future. Furthermore, the ongoing offering of and issuance of shares of Common Stock underlying certain of our warrants from the 2016 Registration Statement may have been, and may continue to be, in violation of Section 5 of the Securities Act and the rules and regulations under the Securities Act, because we did not update the prospectus in the 2016 Registration Statement for a period of time after the 2016 Registration Statement was declared effective and because our reliance on Rule 457(p) under the Securities Act in an amendment to our Registration Statement on Form S-1 (Registration No. 333-213774) filed on September 23, 2016 effected a deregistration of the securities registered under the 2016 Registration Statement. Eligible securityholders have not filed a claim against the Company alleging a violation of Section 5 of the Securities Act, but they could file such a claim in the future. If a violation of Section 5 of the Securities Act did in fact occur or is occurring, eligible securityholders would have a right to rescind their transactions, and the Company may have to refund any amounts paid the securities, which could have a materially adverse effect on the Company’s financial condition. |
Revenue
Revenue | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | ||
Revenue | The Company began accounting for revenue in accordance with ASC 606, which we adopted beginning January 1, 2018, using the modified retrospective method. The core principle of ASC 606 requires that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. ASC 606 defines a five-step process to achieve this core principle and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process than required under GAAP, including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. Pursuant to ASC 606, we apply the following the five-step model: 1. Identify the contract(s) with a customer. A contract with a customer exists when (i) we enter into an enforceable contract with a customer that defines each party’s rights regarding the goods to be transferred and identifies the payment terms related to these goods, (ii) the contract has commercial substance and, (iii) we determine that collection of substantially all consideration for services that are transferred is probable based on the customer’s intent and ability to pay the promised consideration. 2. Identify the performance obligation(s) in the contract. If a contract promises to transfer more than one good or service to a customer, each good or service constitutes a separate performance obligation if the good or service is distinct or capable of being distinct. 3. Determine the transaction price. The transaction price is the amount of consideration to which the entity expects to be entitled in exchanging the promised goods or services to the customer. 4. Allocate the transaction price to the performance obligations in the contract. For a contract that has more than one performance obligation, an entity should allocate the transaction price to each performance obligation in an amount that depicts the amount of consideration to which an entity expects to be entitled in exchange for satisfying each performance obligation. 5. Recognize revenue when (or as) the Company satisfies a performance obligation. For each performance obligation, an entity should determine whether the entity satisfies the performance obligation at a point in time or over time. Appropriate methods of measuring progress include output methods and input methods. The Company recognizes revenue primarily from the following types of contracts: Product sales Product sales include devices and applicators (new and refurbished). Product sales revenue is recognized at the point in time where the customer obtains control of the goods and the Company satisfies its performance obligation, which is generally at the time the Company ships the product to the customer. Licensing transactions Licensing transaction include distribution licenses and intellectual property licenses. The Company’s licenses are primarily symbolic licenses, with no significant stand-alone functionality. Symbolic licensing fee revenue is recognized over the time period that the Company satisfies its performance obligations, which is generally the term of the licensing agreement. Other activities Other activities primarily include warranties, repairs and billed freight. Device product sales are bundled with an initial one-year warranty and the Company offers a separately priced second-year warranty. The Company allocates the device sales price to the product and the embedded warranty by reference to the stand-alone extended warranty price. Because the warranty represents a stand-ready obligation, revenue is recognized over the time period that the Company satisfies its performance obligations, which is generally the warranty term. Repairs (parts and labor) and billed freight revenue are recognized at the point in time that the service is performed, or the product is shipped, respectively. Disaggregation of Revenue The disaggregation of revenue is based on geographical region. The following table presents revenue from contracts with customers for the three months ended March 31, 2019 and 2018: Three months ended March 31, 2019 Three months ended March 31, 2018 United States International Total United States International Total Product $ 17,678 $ 46,887 $ 64,565 $ 116,447 $ 122,121 $ 238,568 License fees 6,250 100,000 106,250 6,250 77,866 84,116 Other Revenue - 7,148 7,148 - 21,588 21,588 $ 23,928 $ 154,035 $ 177,963 $ 122,697 $ 221,575 $ 344,272 Management routinely assesses the financial strength of its customers and, as a consequence, believes accounts receivable are stated at the net realizable value and credit risk exposure is limited. Three distributors accounted for 58%, 11% and 10% of revenues for the three months ended March 31, 2019 and 39%, 5% and 0% of accounts receivable at March 31, 2019. Four distributors accounted for 4%, 27%, 18% and 34% of revenues for the three months ended March 31, 2018. Three distributors and partners accounted for 24%, 60% and 7% of accounts receivable at December 31, 2018. | The Company began accounting for revenue in accordance with ASC 606, which we adopted beginning January 1, 2018, using the modified retrospective method (see Note 2). The core principle of ASC 606 requires that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. ASC 606 defines a five-step process to achieve this core principle and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process than required under GAAP, including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. Pursuant to ASC 606, we apply the following the five-step model: 1. Identify the contract(s) with a customer. A contract with a customer exists when (i) we enter into an enforceable contract with a customer that defines each party’s rights regarding the goods to be transferred and identifies the payment terms related to these goods, (ii) the contract has commercial substance and, (iii) we determine that collection of substantially all consideration for services that are transferred is probable based on the customer’s intent and ability to pay the promised consideration. 2. Identify the performance obligation(s) in the contract. If a contract promises to transfer more than one good or service to a customer, each good or service constitutes a separate performance obligation if the good or service is distinct or capable of being distinct. 3. Determine the transaction price. The transaction price is the amount of consideration to which the entity expects to be entitled in exchanging the promised goods or services to the customer. 4. Allocate the transaction price to the performance obligations in the contract. For a contract that has more than one performance obligation, an entity should allocate the transaction price to each performance obligation in an amount that depicts the amount of consideration to which an entity expects to be entitled in exchange for satisfying each performance obligation. 5. Recognize revenue when (or as) the Company satisfies a performance obligation. For each performance obligation, an entity should determine whether the entity satisfies the performance obligation at a point in time or over time. Appropriate methods of measuring progress include output methods and input methods. The Company recognizes revenue primarily from the following types of contracts: Product sales Product sales include devices and applicators (new and refurbished). Product sales revenue is recognized at the point in time where the customer obtains control of the goods and the Company satisfies its performance obligation, which is generally at the time the Company ships the product to the customer. Licensing transactions Licensing transaction include distribution licenses and intellectual property licenses. The Company’s licenses are primarily symbolic licenses, with no significant stand-alone functionality. Symbolic licensing fee revenue is recognized over the time period that the Company satisfies its performance obligations, which is generally the term of the licensing agreement. Other activities Other activities primarily include warranties, repairs and billed freight. Device product sales are bundled with an initial one-year warranty and the Company offers a separately priced second-year warranty. The Company allocates the device sales price to the product and the embedded warranty by reference to the stand-alone extended warranty price. Because the warranty represents a stand-ready obligation, revenue is recognized over the time period that the Company satisfies its performance obligations, which is generally the warranty term. Repairs (parts and labor) and billed freight revenue are recognized at the point in time that the service is performed, or the product is shipped, respectively. Disaggregation of Revenue The disaggregation of revenue is based on geographical region. The following table presents revenue from contracts with customers for the years ended December 31, 2018 and 2017: Year ended December 31, 2018 Year ended December 31, 2017 United States International Total United States International Total Product $ 209,842 $ 739,759 $ 949,601 $ - $ 456,765 $ 456,765 License fees 25,000 794,696 819,696 25,000 210,878 235,878 Other Revenue - 80,763 80,763 - 45,884 45,884 $ 234,842 $ 1,615,218 $ 1,850,060 $ 25,000 $ 713,527 $ 738,527 |
Related Party Transactions
Related Party Transactions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Related Party Transactions [Abstract] | ||
Related Party Transactions | During the three months ended March 31, 2019 and 2018, the Company recorded $17,678 and $116,447, respectively, in revenue from an entity owned by A. Michael Stolarski, a member of the Company’s board of directors and an existing shareholder of the Company. Contract liabilities includes a balance at March 31, 2019 and 2018, of $138,887 and $48,553, respectively and the Accrued expenses balance includes a balance at March 31, 2019 and 2018, of $0 and $10,000, respectively from this related party. | On February 13, 2018, the Company entered into an Agreement for Purchase and Sale, Limited Exclusive Distribution and Royalties, and Servicing and Repairs with Premier Shockwave Wound Care, Inc., a Georgia Corporation (“PSWC”), and Premier Shockwave, Inc., a Georgia Corporation (“PS”). The agreement provides for the purchase by PSWC and PS of dermaPACE System and related equipment sold by the Company and includes a minimum purchase of 100 units over 3 years. The agreement grants PSWC and PS limited but exclusive distribution rights to provide dermaPACE Systems to certain governmental healthcare facilities in exchange for the payment of certain royalties to the Company. No royalties were earned during the year ended December 31, 2018. Under the agreement, the Company is responsible for the servicing and repairs of such dermaPACE Systems and equipment. The agreement also contains provisions whereby in the event of a change of control of the Company (as defined in the agreement), the stockholders of PSWC have the right and option to cause the Company to purchase all of the stock of PSWC, and whereby the Company has the right and option to purchase all issued and outstanding shares of PSWC, in each case based upon certain defined purchase price provisions and other terms. The agreement also contains certain transfer restrictions on the stock of PSWC. Each of PS and PSWC is owned by A. Michael Stolarski, a member of the Company’s board of directors and an existing shareholder of the Company. During the year ended December 31, 2018, the Company recorded $207,457 in product revenue from this related party. The Contract liabilities balance includes a balance of $156,565 from this related party. On December 29, 2017, the Company entered into a line of credit agreement with A. Michael Stolarski, a member of the Company’s board of directors and an existing shareholder of the Company. The agreement established a line of credit in the amount of $370,000 with an annualized interest rate of 6%. The line of credit may be called for payment upon demand. The outstanding balance as of December 31, 2017 with accrued interest was $370,179 and $0 interest was paid for the period ending December 31, 2017. On November 12, 2018, the Company entered into an amendment to the line of credit agreement with A. Michael Stolarski, a member of the Company’s board of directors and an existing shareholder of the Company. The line of credit was increased to $1,000,000 with an annualized interest rate of 6%. The line of credit may be called for payment upon demand of the holder. On December 11, 2017, the Company issued Class O Warrant Agreements to active employees, independent contractors, members of the board of directors and members of the medical advisory boards to purchase 3,940,000 shares of common stock at an exercise price of $0.11 per share. Kevin A. Richardson II and A. Michael Stolarski, both members of the Company’s board of directors and existing shareholders of the Company, were issued 640,000 and 200,000 warrants, respectively. John Nemelka, Alan Rubino and Maj-Britt Kaltoft, members of the Company’s board of directors, were each issued 200,000 warrants. Lisa E. Sundstrom, an officer of the Company was issued 440,000 warrants. On March 27, 2017, the Company began offering subscriptions for 10% convertible promissory notes (the “10% Convertible Promissory Notes”) to selected accredited investors. The 10% Convertible Promissory Notes include a warrant agreement (the “Class N Warrant Agreement”) to purchase Common Stock equal to the amount obtained by dividing the (i) sum of the principal amount, by (ii) $0.11. The Class N Warrant Agreement expires March 17, 2019. On January 23, 2019, the Company amended the expiration date of the Class N Warrants from March 17, 2019 to May 1, 2019, effective as of January 23, 2019. A. Michael Stolarski, a member of the Company’s board of directors and an existing shareholder of the Company, was a purchaser in the 10% Convertible Promissory Notes in the amount of $330,000. A. Michael Stolarski and Kevin A. Richardson II, both members of the Company’s board of directors and existing shareholders of the Company, had subscribed $130,000 and $140,000, respectively, to the Company as advances from related parties to be used to purchase 10% Convertible Promissory Notes. The 10% Convertible Promissory Notes associated with these subscriptions were issued in January 2018. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Share-based Payment Arrangement, Noncash Expense [Abstract] | ||
Stock-Based Compensation | The Company recognized as compensation cost for all outstanding stock options granted to employees, directors and advisors, $0 for each of the three months ended March 31, 2019 and 2018. The range of exercise prices for options was $0.04 to $2.00 for options outstanding at March 31, 2019 and December 31, 2018, respectively. The aggregate intrinsic value for all vested and exercisable options was $1,456,116 and $2,085,866 at March 31, 2019 and December 31, 2018, respectively. The weighted average remaining contractual term for outstanding exercisable stock options was 7.15 and 7.4 years as of March 31, 2019 and December 31, 2018, respectively. | On November 1, 2010, the Company approved the Amended and Restated 2006 Stock Incentive Plan of SANUWAVE Health, Inc. effective as of January 1, 2010 (the “Stock Incentive Plan”). The Stock Incentive Plan permits grants of awards to selected employees, directors and advisors of the Company in the form of restricted stock or options to purchase shares of common stock. Options granted may include non-statutory options as well as qualified incentive stock options. The Stock Incentive Plan is currently administered by the board of directors of the Company. The Stock Incentive Plan gives broad powers to the board of directors of the Company to administer and interpret the particular form and conditions of each option. The stock options granted under the Stock Incentive Plan are non-statutory options which generally vest over a period of up to three years and have a ten year term. The options are granted at an exercise price determined by the board of directors of the Company to be the fair market value of the common stock on the date of the grant. As of December 31, 2018 and 2017, the Stock Incentive Plan reserved a total of 32,500,000 and 22,500,000, respectively, shares of common stock for grant. On December 31, 2018, there were 4,628,281 shares of common stock available for grant under the Stock Incentive Plan. During the year ended December 31, 2018, the Company granted to employees, members of the board of directors and members of the Company’s Medical Advisory Board options to purchase an aggregate of 10,110,000 shares of common stock under a previously issued incentive plan. The options have an exercise price between $0.11 and $0.42 per share for an aggregate grant date value of $2,480,970. The options vested upon issuance and have a term of ten years. On June 15, 2017, the Company granted to the active employees, members of the board of directors and three members of the Company’s Medical Advisory Board options to purchase an aggregate total of 5,550,000 shares of the Company’s common stock at an exercise price of $0.11 per share and vested upon issuance. Using the Black-Scholes option pricing model, management has determined that the options had a fair value per share of $0.0869 per option resulting in compensation expense of $482,295. Compensation cost was recognized upon grant. The fair value of each option award is estimated on the date of grant using the Black-Scholes option pricing model using the following weighted average assumptions for the years ended December 31, 2018 and 2017: 2018 2017 Weighted average expected life in years 5.00 5.0 Weighted average risk free interest rate 2.84% - 3.21% 1.76% Weighted average volatility 134% - 144.15% 120.00% Forfeiture rate 0.0% 0.0% Expected dividend yield 0.0% 0.0% The expected life of options granted represent the period of time that options granted are expected to be outstanding and are derived from the contractual terms of the options granted. The risk-free rate for periods within the contractual life of the option is based on the United States Treasury yield curve in effect at the time of the grant. The expected volatility is based on the average volatility of the Company and that of peer group companies similar in size and value to us. We estimate pre-vesting forfeitures at the time of grant and revise those estimates in subsequent periods if actual forfeitures differ from those estimates. The expected dividend yield is based on our historical dividend experience, however, since our inception, we have not declared dividends. The amount of stock-based compensation expense recognized during a period is based on the portion of the awards that are ultimately expected to vest. Ultimately, the total expense recognized over the vesting period will equal the fair value of the awards that actually vest. For the years ended December 31, 2018 and 2017, the Company recognized $2,480,970 and $482,295, respectively, as compensation cost related to options granted. As of December 31, 2018, and 2017, there are no unamortized compensation costs related to options granted. A summary of option activity as of December 31, 2018 and 2017, and the changes during the years then ended, is presented as follows: Weighted Average Exercise Price Options per share Outstanding at December 31, 2016 16,203,385 $ 0.38 Granted 5,550,000 $ 0.11 Exercised - $ - Forfeited or expired (160,000 ) $ - Outstanding at December 31, 2017 21,593,385 $ 0.31 Granted 10,110,000 $ 0.25 Exercised - $ - Forfeited or expired - $ - Outstanding at December 31, 2018 31,703,385 $ 0.29 Vested and exercisable at December 31, 2018 31,703,385 $ 0.29 The range of exercise prices for options was $0.04 to $2.00 for options outstanding at December 31, 2018 and 2017, respectively. The aggregate intrinsic value for outstanding options was $2,085,866 and $2,073,641 at December 31, 2018 and 2017, respectively. The aggregate intrinsic value for all vested and exercisable options was $2,085,866 and $2,073,641 at December 31, 2018 and 2017, respectively. The weighted average remaining contractual term for outstanding exercisable stock options is 7.4 years and 7.37 years as of December 31, 2018 and 2017, respectively. A summary of the Company’s nonvested options as of December 31, 2018 and 2017, and changes during the years then ended, is presented as follows: Weighted Average Exercise Price Options per share Outstanding at December 31, 2016 - $ - Granted 5,550,000 $ 0.11 Vested (5,550,000 ) $ 0.11 Forfeited or expired - $ - Outstanding at December 31, 2017 - $ - Granted 10,110,000 $ 0.25 Vested (10,110,000 ) $ 0.25 Forfeited or expired - $ - Outstanding at December 31, 2018 - $ - |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 3 Months Ended |
Mar. 31, 2019 | |
Notes To Financial Statements [Abstract] | |
Earnings (Loss) Per Share | Basic net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding for the period. Diluted net loss per share reflects the potential dilution that could occur if securities or other instruments to issue common stock were exercised or converted into common stock. Potentially dilutive securities are excluded from the computation of diluted net loss per share as their inclusive would be anti-dilutive and consist of the following: March 31, March 31, 2019 2018 Options 31,703,385 21,593,385 Warrants 98,728,335 110,581,275 Convertible promissory notes 25,058,432 - 155,490,152 132,174,660 |
Joint Ventures
Joint Ventures | 12 Months Ended |
Dec. 31, 2018 | |
Joint Venture | |
Joint Ventures | On June 26, 2018, the Company entered into an Agreement with Johnfk Medical Inc. (“FKS”), effective as of June 14, 2018, pursuant to which the Company and FKS committed to enter into a joint venture for the manufacture, sale and distribution of the Company’s dermaPACE and orthoPACE devices. Under the Agreement, FKS paid the Company a fee of $500,000 for initial distribution rights in Taiwan on June 22, 2018, with an additional fee of $500,000 for initial distribution rights in Singapore, Malaysia, Brunei, Cambodia, Myanmar, Laos, Indonesia, Thailand, Philippines and Vietnam (the “SEA Region”) to be paid in the first quarter of 2019. On September 21, 2018, the Company entered into a joint venture agreement (the “JV Agreement”) with FKS setting forth the terms of the operation, management and control of a joint venture entity initially with the name of Holistic Health Institute Pte. Ltd., a private limited company to be incorporated in the Republic of Singapore, but with such company name subject to confirmation by Singapore Government. On November 9, 2018, the joint venture entity was incorporated in the Republic of Singapore with the name of Holistic Wellness Alliance Pte. Ltd. (“HWA”). HWA was formed as a joint venture of the Company and FKS for the manufacture, sale and distribution of the Company’s dermaPACE and orthoPACE devices. Under the JV Agreement, the Company and FKS each hold shares constituting fifty percent of the issued share capital of HWA. The Company provides to HWA FDA and CE approved products for an agreed cost, access to treatment protocols, training, marketing and sales materials and management expertise, and FKS provides to HWA capital, human capital and sales resources in Singapore, Malaysia, Brunei, Cambodia, Myanmar, Laos, Indonesia, Thailand, Philippines and Vietnam, certain reports and identification of new key opinion leaders as well as clinical trial and poster access availability. The JV Agreement also established the corporate governance of HWA, including a five-person board of directors consisting of two directors designated by the Company, two directors designated by FKS, and a third director appointed jointly by the parties. Initially, net profits under the JV Agreement shall be used to repay FKS for (i) the payment of $500,000 on June 22, 2018 to the Company for initial distribution rights in Taiwan and (ii) the cash advance to HWA per the terms of the JV Agreement. The JV Agreement includes other customary terms, including regarding the transfer of shares, indemnification and confidentiality. On September 27, 2017, the Company entered into a binding term sheet with MundiMed Distribuidora Hospitalar LTDA (“MundiMed”), for a joint venture for the manufacture, sale and distribution of our dermaPACE device. Under the binding term sheet, MundiMed was to pay the Company an initial upfront distribution fee, with monthly upfront distribution fees payable thereafter over the following eighteen months. Profits from the joint venture were to be distributed as follows: 45% to the Company, 45% to MundiMed and 5% each to LHS Latina Health Solutions Gestão Empresarial Ltda. and Universus Global Advisors LLC, who acted as advisors in the transaction. The initial upfront distribution fee was received on October 6, 2017. Monthly upfront distribution fee payments have been received aggregating $372,222. In August 2018, MundiMed advised the Company that it did not anticipate being able to make further payments under the binding term sheet due to operational and cash flow difficulties. On September 14, 2018, the Company sent a letter to MundiMed informing them of a breach in our agreement regarding payment of the upfront distribution fee. On September 28, 2018, the Company received a response letter stating that the Company was in default of the agreement. On October 9, 2018, the Company sent MundiMed a letter of termination of the agreement effective as of October 8, 2018. Accordingly, the Company derecognized the contract assets and contract liabilities associated with the MundiMed contract. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | The Company files income tax returns in the United States federal jurisdiction and various state and foreign jurisdictions. The Company is subject to United States federal and state income tax examinations by tax authorities for any years that have net operating losses open until the net operating losses are used. Deferred income taxes are provided for temporary differences between the carrying amounts and tax basis of assets and liabilities. Deferred taxes are classified as current or noncurrent based on the financial statement classification of the related asset or liability giving rise to the temporary difference. For those deferred tax assets or liabilities (such as the tax effect of the net operating loss carryforwards) which do not relate to a financial statement asset or liability, the classification is based on the expected reversal date of the temporary difference. The income tax provision (benefit) from continuing operations consists of the following at December 31, 2018 and 2017: 2018 2017 Current: Federal $ - $ - State - - Foreign - - - - Deferred: Federal (2,157,035 ) 8,371,516 State (383,705 ) 1,489,172 Foreign 2,673 (19,224 ) Change in valuation allowance 2,538,067 (9,841,464 ) $ - $ - On December 22, 2017, H.R. 1, commonly known as the Tax Cuts and Jobs Act (the “Act”) was signed into law. The Act reduced the Company’s corporate federal tax rate from 35% to 21% effective January 1, 2018 and changed certain other provisions. As a result, the Company is required to re-measure the deferred tax assets and liabilities using the enacted rate at which they expect them to be recovered or settled. The effect of this re-measurement is recorded to income tax expense in the year the tax law is enacted. For 2017, the re-measurement of our net deferred tax asset resulted in a $11.1 million adjustment to the income tax provision (benefit) at December 31, 2017. The transition tax is based on total post-1986 earnings and profits which were previously deferred from U.S. income taxes. At December 31, 2018 and 2017, the Company did not have any undistributed earnings of our foreign subsidiaries. As a result, no additional income or withholding taxes have been provided for. The Company does not anticipate any impacts of the global intangible low taxed income (“GILTI”) and base erosion anti-abuse tax (“BEAT”) and as such, the Company has not recorded any impact associated with either GILTI or BEAT. The income tax provision (benefit) amounts differ from the amounts computed by applying the United States federal statutory income tax rate of 21% for the years ended December 31, 2018 and 2017 to pretax loss from operations as a result of the following for the years ended December 31, 2018 and 2017: 2018 2017 Tax benefit at statutory rate $ (2,442,593 ) $ (1,938,278 ) Increase (reduction) in income taxes resulting from: State income benefit, net of federal benefit (343,257 ) (136,538 ) Non-deductible loss on warrant valuation adjustment (11,629 ) 199,055 Income (loss) from foreign subsidiaries 6,699 (34,552 ) Change in valuation allowance 2,538,067 (9,841,464 ) Tax reform rate adjustment - 11,827,143 Other 252,713 (75,366 ) Income tax expense (benefit) $ - $ - The tax effects of temporary differences that give rise to the deferred tax assets at December 31, 2018 and 2017 are as follows: 2018 2017 Deferred tax assets: Net operating loss carryforwards $ 21,320,935 $ 19,406,373 Net operating loss carryforwards - foreign 16,551 139,675 Excess of tax basis over book value of property and equipment (2,229 ) 6,978 Excess of tax basis over book value of intangible assets 146,943 220,180 Stock-based compensation 1,520,209 906,526 Accrued employee compensation 83,393 - Captialized equity costs 49,471 49,471 Inventory reserve 29,510 17,962 23,164,783 20,747,165 Valuation allowance (23,164,783 ) (20,747,165 ) Net deferred tax assets $ - $ - The Company’s ability to use its net operating loss carryforwards could be limited and subject to annual limitations. In connection with future offerings, the Company may realize a “more than 50% change in ownership” which could further limit its ability to use its net operating loss carryforwards accumulated to date to reduce future taxable income and tax liabilities. Additionally, because United States tax laws limit the time during which net operating loss carryforwards may be applied against future taxable income and tax liabilities, the Company may not be able to take advantage of all or portions of its net operating loss carryforwards for federal income tax purposes. The federal and state net operating loss carryforwards of approximately $77.9M from years ending December 31, 2005 through December 31, 2017 will begin to expire in 2025. The federal and state net operating loss carryforward for the year ended December 31, 2018 of $8.3M will not expire. The foreign net operating loss carryforward at December 31, 2018 of $86K will begin to expire in 2024. |
Segment and Geographic Informat
Segment and Geographic Information | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment and Geographic Information | The Company has one line of business with revenues being generated from sales in Europe, Canada, Asia and Asia/Pacific. All significant expenses are generated in the United States. All significant assets are located in the United States. |
Subsequent Events
Subsequent Events | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Subsequent Events [Abstract] | ||
Subsequent Events | The Company evaluates events that have occurred after the balance sheet date but before the financial statements are issued. Warrant Exercise Subsequent to March 31, 2019, the Company issued 13,693,435 shares of Common Stock upon the exercise of 13,693,435 Series A Warrants, Class L Warrants and Class O Warrants to purchase shares of stock under the terms of the respective warrant agreements. Cashless Warrant Exercise Subsequent to March 31, 2019, the Company issued 234,632 shares of Common Stock upon the cashless exercise of 251,356 Series A Warrants to purchase shares of stock under the terms of the warrant agreement. Warrant Exercise – Line of credit, related parties Subsequent to March 31, 2019, the Company issued 2,475,000 shares of Common Stock upon the exercise of 2,250,000 Class L Warrants converting funds from line of credit, related parties to purchase shares of stock under the terms of the warrant agreement. Warrant Exercise – Short term notes payable Subsequent to March 31, 2019, the Company issued 137,500 shares of Common Stock upon the exercise of 125,000 Series A Warrants converting funds from short term notes payable to purchase shares of stock under the terms of the warrant agreement. Non-Cash Warrant Exercise Subsequent to March 31, 2019, the Company issued 200,000 shares of Common Stock upon the exercise of 200,000 Class L Warrants to purchase shares of stock under the terms of the warrant agreement. The cash for this exercise was wired to an incorrect bank account due to the cyber security breach at the Company. The Company issued the shares of stock to the investor in lieu of the funds being received. Accrued related party advances On May 13, 2019, the Company repaid in full the outstanding balance with interest of $102,918 to Shri Parikh, the President of the Company. Short term notes payable Subsequent to March 31, 2019, the Company entered into short term notes payable with individuals in the total principal amount of $250,000 with an interest rate of 5% per annum. The principal and accrued interest are due and payable six months from the date of issuance or receipt of notice of warrant exercise. Advances from related parties Subsequent to March 31, 2019, the Company collected $345,696 for the exercise of Series A Warrants and Class L Warrants. The shares of Common Stock for the exercise of the Series A Warrants and Class L Warrants will be issued by the transfer agent upon receipt of authorized documentation. | The Company evaluates events that occur after the year-end date through the date the financial statements are available to be issued. Accordingly, the Company has evaluated subsequent events through March 28, 2019, and has determined that the following events require disclosure in the financial statements. Cashless Warrant Exercise Subsequent to December 31, 2018, the Company issued 704,108 shares of common stock upon the exercise of 1,313,258 Class N Warrants and Class L Warrants to purchase shares of stock under the terms of the respective warrant agreements. Warrant Exercise Subsequent to December 31, 2018, the Company issued 3,953,334 shares of common stock upon the exercise of 3,953,334Class L Warrants and Class O Warrants to purchase shares of stock under the terms of the respective warrant agreements. Short term notes payable Subsequent to December 31, 2018, the Company entered into short term notes payable with individuals in the total principal amount of $965,000 with an interest rate of 10% per annum. The principal and accrued interest are due and payable six months from the date of issuance or receipt of notice of warrant exercise. Contractual Obligations On January 2, 2019, we entered into a second amendment to the lease agreement for an additional 2,297 square feet of office space for office space which expires on December 31, 2021. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Accounting Policies [Abstract] | ||
Foreign currency translation | Foreign currency translation | |
Principles of consolidation | Principles of consolidation | Principles of consolidation |
Estimates | Estimates | Estimates |
Reclassifications | Reclassifications – | Reclassifications – |
Cash and cash equivalents | Cash and cash equivalents | |
Concentration of credit risk and limited suppliers | Concentration of credit risk and limited suppliers The Company depends on suppliers for product component materials and other components that are subject to stringent regulatory requirements. The Company currently purchases most of their product component materials from single suppliers and the loss of any of these suppliers could result in a disruption in our production. If this were to occur, it may be difficult to arrange a replacement supplier because certain of these materials may only be available from one or a limited number of sources. In addition, establishing additional or replacement suppliers for these materials may take a substantial period of time, as certain of these suppliers must be approved by regulatory authorities. | |
Accounts receivable | Accounts receivable | |
Inventory | Inventory | Inventory |
Depreciation of property and equipment | Depreciation of property and equipment | |
Fair value of financial instruments | Fair value of financial instruments The Company has adopted ASC 820-10, Fair Value Measurements The ASC 820-10 hierarchy ranks the quality and reliability of inputs, or assumptions, used in the determination of fair value and requires financial assets and liabilities carried at fair value to be classified and disclosed in one of the following three categories: Level 1 - Observable inputs that reflect quoted prices (unadjusted) in active markets for identical assets and liabilities; Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and Level 3 - Unobservable inputs that are not corroborated by market data, therefore requiring the Company to develop its own assumptions. The Company recognizes all derivatives on the balance sheet at fair value. The fair value of the warrant liability is determined based on a lattice solution, binomial approach pricing model, and includes the use of unobservable inputs such as the expected term, anticipated volatility and risk-free interest rate, and therefore is classified within level 3 of the fair value hierarchy. (See Note 15). The Company’s notes payable approximate fair value because the terms are substantially similar to comparable debt in the marketplace. | |
Impairment of long-lived assets | Impairment of long-lived assets | |
Revenue recognition | Revenue recognition | |
Shipping and handling costs | Shipping and handling costs | |
Income taxes | Income taxes A provision of ASC 740, Income Taxes The Company will recognize in income tax expense, interest and penalties related to income tax matters. For the years ended December 31, 2018 and 2017, the Company did not have any amounts recorded for interest and penalties. | |
Loss per share | Loss per share 2018 2017 Stock options 31,703,385 21,593,385 Warrants 103,994,927 97,977,851 Convertible promissory notes 24,112,518 14,641,190 Anti-dilutive equity securities 159,810,830 134,212,426 | |
Comprehensive income | Comprehensive income | |
Stock-based compensation | Stock-based compensation | |
Research and development | Research and development | |
Liabilities related to warrants issued | Liabilities related to warrants issued | |
Warrants related to debt issued | Warrants related to debt issued | |
Beneficial conversion feature on convertible debt | Beneficial conversion feature on convertible debt | |
Recently issued or adopted accounting standards | Recently Issued or Adopted Accounting Standards In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842). In May 2017, the FASB issued ASU No. 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting In July 2017, the FASB issued ASU No. 2017-11, Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480): Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception. In June 2018, the FASB issued ASU 2018-07, Compensation – Stock Compensation (Topic 718) – Improvements to Nonemployee Share-Based Payment Accounting In July 2018, the FASB issued ASU No. 2018-09, Codification Improvements In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement | Recently issued or adopted accounting standards In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) In February 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-02, "Leases (Topic 842)." ASU 2016-02 requires that a lessee recognize the assets and liabilities that arise from operating leases. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. This amendment will be effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The FASB issued ASU No. 2018-10 “Codification Improvements to Topic 842, Leases” and ASU No. 2018-11 “Leases (Topic 842) Targeted Improvements" in July 2018, and ASU No. 2018-20 "Leases (Topic 842) - Narrow Scope Improvements for Lessors" in December 2018. ASU 2018-10 and ASU 2018-20 provide certain amendments that affect narrow aspects of the guidance issued in ASU 2016-02. ASU 2018-11 allows all entities adopting ASU 2016-02 to choose an additional (and optional) transition method of adoption, under which an entity initially applies the new leases standard at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company expects to adopt ASU 2016-02 effective January 1, 2019. Upon adoption of Topic 842, the Company expects recognition of additional assets and corresponding liabilities pertaining to its operating leases on its consolidated balance sheets. The Company is evaluating the requirements of this guidance and has not yet determined the impact on its consolidated balance sheet and statements of operations. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments (Topic 230) In May 2017, the FASB issued ASU No. 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting In July 2017, the FASB issued ASU No. 2017-11, Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480): Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception. In June 2018, the FASB issued ASU 2018-07, Compensation – Stock Compensation (Topic 718) – Improvements to Nonemployee Share-Based Payment Accounting In July 2018, the FASB issued ASU No. 2018-09, Codification Improvements In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Accounting Policies [Abstract] | ||
Schedule of antidilutive securities | March 31, March 31, 2019 2018 Options 31,703,385 21,593,385 Warrants 98,728,335 110,581,275 Convertible promissory notes 25,058,432 - 155,490,152 132,174,660 | 2018 2017 Stock options 31,703,385 21,593,385 Warrants 103,994,927 97,977,851 Convertible promissory notes 24,112,518 14,641,190 Anti-dilutive equity securities 159,810,830 134,212,426 |
Inventory (Tables)
Inventory (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Inventory | 2018 2017 Inventory - finished goods $ 250,821 $ 136,534 Inventory - parts 226,299 167,613 Gross inventory 477,120 304,147 Provision for losses and obsolescence (119,300 ) (72,615 ) Net inventory $ 357,820 $ 231,532 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property and equipment | 2018 2017 Machines and equipment $ 240,295 $ 240,295 Office and computer equipment 196,150 156,860 Devices 81,059 89,704 Software 38,126 34,528 Furniture and fixtures 16,019 16,019 Other assets 2,259 2,259 Total 573,908 539,665 Accumulated depreciation (496,153 ) (479,296 ) Net property and equipment $ 77,755 $ 60,369 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Accrued Liabilities [Abstract] | ||
Accrued expenses | March 31, December 31, 2019 2018 Accrued board of directors' fees $ 250,000 $ 200,000 Accrued outside services 148,576 115,118 Accrued executive severance 140,500 136,000 Accrued related party advances 102,370 101,137 Accrued travel 58,993 58,993 Deferred rent - 44,623 Accrued legal fees 38,098 - Accrued clinical study expenses 13,650 13,650 Accrued computer equipment - 8,752 Accrued other 1,207 11,007 $ 753,394 $ 689,280 | 2018 2017 Accrued board of director's fees $ 200,000 $ 125,000 Accrued executive severance 136,000 118,000 Accrued outside services 115,118 165,427 Accrued related party 101,137 - Accrued travel 58,993 39,926 Deferred rent 44,623 51,191 Accrued clinical study expenses 13,650 13,650 Accrued computer equipment 8,752 - Accrued audit and tax preparation - 73,800 Accrued legal and professional fees - 61,890 Deferred revenue - 13,317 Accrued other 11,007 11,399 $ 689,280 $ 673,600 |
Contract Liabilities (Tables)
Contract Liabilities (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Contract with Customer, Asset and Liability [Abstract] | ||
Contract liabilities | March 31, December 31, 2019 2018 Deposit on product $ 82,950 $ 92,950 Service agreement 53,787 57,365 Other 35,139 28,218 Total Contract liabilities 171,876 178,533 Non-Current (42,612 ) (46,736 ) Total Current $ 129,264 $ 131,797 | December 31, December 31, 2018 2017 Deposit on product $ 92,950 $ - Service agreement 57,365 - Other 28,218 - Total Contract liabilities 178,533 - Non-Current (46,736 ) - Total Current $ 131,797 $ - |
Convertible Promissory Notes (T
Convertible Promissory Notes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Fair value assumptions | December 31, December 31, 2018 2017 Weighted average contractual term in years 1.13 - 1.19 1.25 - 1.39 Weighted average risk free interest rate 1.98% - 2.15% 1.63% - 1.89% Weighted average volatility 94.43% - 98.63% 86.62% - 103.21% Forfeiture rate 0.0% 0.0% Expected dividend yield 0.0% 0.0% |
Warrants (Tables)
Warrants (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Warrants and Rights Note Disclosure [Abstract] | ||
Summary of the warrant activity | Outstanding Outstanding as of as of December 31, March 31, Warrant class 2018 Issued Exercised Expired 2019 Class K Warrants 7,200,000 - - - 7,200,000 Class L Warrants 57,258,339 - (4,100,001 ) - 53,158,338 Class N Warrants 30,451,815 - (1,046,591 ) - 29,405,224 Class O Warrants 7,929,091 - (120,000 ) - 7,809,091 Series A Warrants 1,155,682 - - - 1,155,682 103,994,927 - (5,266,592 ) - 98,728,335 | Outstanding Outstanding Outstanding as of as of as of December 31, December 31, December 31, Warrant class 2016 Issued Exercised 2017 Issued Exercised Expired 2018 Class F Warrants 300,000 - - 300,000 - - (300,000 ) - Class G Warrants 1,503,409 - - 1,503,409 - - (1,503,409 ) - Class H Warrants 1,988,095 - - 1,988,095 - - (1,988,095 ) - Class I Warrants 1,043,646 - - 1,043,646 - - (1,043,646 ) - Class K Warrants 5,200,000 2,000,000 - 7,200,000 - - - 7,200,000 Class L Warrants 65,945,005 - (2,046,832 ) 63,898,173 - (6,639,834 ) - 57,258,339 Class N Warrants - 13,943,180 - 13,943,180 17,644,999 (1,136,364 ) - 30,451,815 Class O Warrants - 6,540,000 - 6,540,000 1,509,091 (120,000 ) - 7,929,091 Series A Warrants 2,106,594 - (545,246 ) 1,561,348 - (405,666 ) - 1,155,682 78,086,749 22,483,180 (2,592,078 ) 97,977,851 19,154,090 (8,301,864 ) (4,835,150 ) 103,994,927 |
Summary of the warrant exercise price per share | Exercise Expiration price per share date Class K Warrants $ 0.08 June 2025 Class K Warrants $ 0.11 August 2027 Class L Warrants $ 0.08 May 2019 Class N Warrants $ 0.11 June 2019 Class O Warrants $ 0.11 June 2019 Series A Warrants $ 0.03 May 2019 | Exercise Expiration price/share date Class K Warrants $ 0.08 June 2025 Class K Warrants $ 0.11 August 2027 Class L Warrants $ 0.08 May 2019 Class N Warrants $ 0.11 June 2019 Class O Warrants $ 0.11 June 2019 Series A Warrants $ 0.03 May 2019 |
Summary of changes in warrant liability | Class K Series A Warrants Warrants Total Warrant liability as of December 31, 2018 $ 1,542,000 $ 227,669 $ 1,769,669 Issued - - - Exercised - - - Change in fair value - (32,359 ) (32,359 ) Reclassification due to adoption of ASU 2017-11 (see Note 3) (1,542,000 ) - (1,542,000 ) Warrant liability as of March 31, 2019 $ - $ 195,310 $ 195,310 | Class K Series A Warrants Warrants Total Warrant liability as of December 31, 2016 $ 884,000 $ 358,120 $ 1,242,120 Issued 200,000 - 200,000 Redeemed - (66,966 ) (66,966 ) Change in fair value 532,000 36,729 568,729 Warrant liability as of December 31, 2017 1,616,000 327,883 1,943,883 Issued - - - Redeemed - (118,838 ) (118,838 ) Change in fair value (74,000 ) 18,624 (55,376 ) Warrant liability as of December 31, 2018 $ 1,542,000 $ 227,669 $ 1,769,669 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Right of use assets and lease liability | March 31, 2019 Right of use assets $ 437,363 Lease liability - right of use Current portion $ 164,521 Long term portion 315,730 Total Lease liability - right of use $ 480,251 | |
Lease liability maturities | Year ending December 31, Amount 2019 (remainder) $ 140,173 2020 191,713 2021 197,462 Total lease payments 529,348 Less: Present value adjustment (49,097 ) Total Lease liability - right of use $ 480,251 | |
Future minimum lease payments | Year ending December 31, Amount 2019 (remainder) $ 140,173 2020 191,713 2021 197,462 Total $ 529,348 | Year ending December 31, Amount 2019 $ 186,132 2020 191,712 2021 197,464 Total $ 575,308 |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | ||
Disaggregation of revenue | Three months ended March 31, 2019 Three months ended March 31, 2018 United States International Total United States International Total Product $ 17,678 $ 46,887 $ 64,565 $ 116,447 $ 122,121 $ 238,568 License fees 6,250 100,000 106,250 6,250 77,866 84,116 Other Revenue - 7,148 7,148 - 21,588 21,588 $ 23,928 $ 154,035 $ 177,963 $ 122,697 $ 221,575 $ 344,272 | Year ended December 31, 2018 Year ended December 31, 2017 United States International Total United States International Total Product $ 209,842 $ 739,759 $ 949,601 $ - $ 456,765 $ 456,765 License fees 25,000 794,696 819,696 25,000 210,878 235,878 Other Revenue - 80,763 80,763 - 45,884 45,884 $ 234,842 $ 1,615,218 $ 1,850,060 $ 25,000 $ 713,527 $ 738,527 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Share-based Payment Arrangement, Noncash Expense [Abstract] | |
Schedule of assumptions | 2018 2017 Weighted average expected life in years 5.00 5.0 Weighted average risk free interest rate 2.84% - 3.21% 1.76% Weighted average volatility 134% - 144.15% 120.00% Forfeiture rate 0.0% 0.0% Expected dividend yield 0.0% 0.0% |
Summary of option activity | Weighted Average Exercise Price Options per share Outstanding at December 31, 2016 16,203,385 $ 0.38 Granted 5,550,000 $ 0.11 Exercised - $ - Forfeited or expired (160,000 ) $ - Outstanding at December 31, 2017 21,593,385 $ 0.31 Granted 10,110,000 $ 0.25 Exercised - $ - Forfeited or expired - $ - Outstanding at December 31, 2018 31,703,385 $ 0.29 Vested and exercisable at December 31, 2018 31,703,385 $ 0.29 |
Schedule of other share-based compensation, activity | Weighted Average Exercise Price Options per share Outstanding at December 31, 2016 - $ - Granted 5,550,000 $ 0.11 Vested (5,550,000 ) $ 0.11 Forfeited or expired - $ - Outstanding at December 31, 2017 - $ - Granted 10,110,000 $ 0.25 Vested (10,110,000 ) $ 0.25 Forfeited or expired - $ - Outstanding at December 31, 2018 - $ - |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Earnings Loss Per Share | ||
Antidilutive shares | March 31, March 31, 2019 2018 Options 31,703,385 21,593,385 Warrants 98,728,335 110,581,275 Convertible promissory notes 25,058,432 - 155,490,152 132,174,660 | 2018 2017 Stock options 31,703,385 21,593,385 Warrants 103,994,927 97,977,851 Convertible promissory notes 24,112,518 14,641,190 Anti-dilutive equity securities 159,810,830 134,212,426 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of components of income tax expense (benefit) | 2018 2017 Current: Federal $ - $ - State - - Foreign - - - - Deferred: Federal (2,157,035 ) 8,371,516 State (383,705 ) 1,489,172 Foreign 2,673 (19,224 ) Change in valuation allowance 2,538,067 (9,841,464 ) $ - $ - |
Schedule of deferred tax assets and liabilities | 2018 2017 Deferred tax assets: Net operating loss carryforwards $ 21,320,935 $ 19,406,373 Net operating loss carryforwards - foreign 16,551 139,675 Excess of tax basis over book value of property and equipment (2,229 ) 6,978 Excess of tax basis over book value of intangible assets 146,943 220,180 Stock-based compensation 1,520,209 906,526 Accrued employee compensation 83,393 - Captialized equity costs 49,471 49,471 Inventory reserve 29,510 17,962 23,164,783 20,747,165 Valuation allowance (23,164,783 ) (20,747,165 ) Net deferred tax assets $ - $ - |
Going Concern (Details Narrativ
Going Concern (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Going Concern Details Narrative Abstract | |||||
Accumulated Deficit | $ (117,520,434) | $ (116,602,778) | $ (104,971,384) | ||
Cash and Cash Equivalents | 98,946 | $ 154,205 | 364,549 | 730,184 | $ 133,571 |
Net Cash Used in Operating Activities | (1,285,551) | (1,848,565) | (3,621,172) | (1,528,971) | |
Net Loss | $ (2,197,317) | $ (5,856,655) | $ (11,631,394) | $ (5,537,936) |
Description of the Business a_2
Description of the Business and Going Concern and Management's Plans (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Description Of Business And Going Concern And Managements Plans | |||||
Net loss | $ (2,197,317) | $ (5,856,655) | $ (11,631,394) | $ (5,537,936) | |
Net cash used in operating activities | (1,285,551) | (1,848,565) | (3,621,172) | (1,528,971) | |
Working capital deficit | (15,403,609) | ||||
Stockholders' deficit | (15,693,947) | (13,935,396) | (15,356,099) | (9,880,827) | $ (6,911,600) |
Cash and cash equivalents | $ 98,946 | $ 154,205 | $ 364,549 | $ 730,184 | $ 133,571 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - shares | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Anti-dilutive equity securities | 155,490,152 | 132,174,660 | 159,830,830 | 134,212,426 |
Stock Options | ||||
Anti-dilutive equity securities | 31,703,385 | 21,593,385 | ||
Warrant | ||||
Anti-dilutive equity securities | 31,703,385 | 21,593,385 | 104,014,927 | 97,977,851 |
Convertible Promissory Notes | ||||
Anti-dilutive equity securities | 24,112,518 | 14,641,190 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details Narrative) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues | Distributor 1 | ||
Concentration risk | 33.00% | 8.00% |
Revenues | Distributor 2 | ||
Concentration risk | 23.00% | 38.00% |
Revenues | Distributor 3 | ||
Concentration risk | 11.00% | 24.00% |
Accounts Receivable | Distributor 1 | ||
Concentration risk | 24.00% | 69.00% |
Accounts Receivable | Distributor 2 | ||
Concentration risk | 60.00% | 17.00% |
Accounts Receivable | Distributor 3 | ||
Concentration risk | 7.00% | 0.00% |
Inventory (Details)
Inventory (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Inventory Disclosure [Abstract] | |||
Inventory - finished goods | $ 250,821 | $ 136,534 | |
Inventory - parts | 226,299 | 167,613 | |
Gross inventory | 477,120 | 304,147 | |
Provision for losses and obsolescence | (119,300) | (72,615) | |
Net inventory | $ 328,384 | $ 357,820 | $ 231,532 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Property and equipment, gross | $ 573,908 | $ 539,665 | |
Accumulated depreciation | (496,153) | (479,296) | |
Property and equipment, net | $ 91,452 | 77,755 | 60,369 |
Machinery and Equipment | |||
Property and equipment, gross | 240,295 | 240,295 | |
Office Equipment | |||
Property and equipment, gross | 196,150 | 156,860 | |
Devices | |||
Property and equipment, gross | 81,059 | 89,704 | |
Software | |||
Property and equipment, gross | 38,126 | 34,528 | |
Furniture and Fixtures Gross | |||
Property and equipment, gross | 16,019 | 16,019 | |
Other Assets | |||
Property and equipment, gross | $ 2,259 | $ 2,259 |
Property and Equipment (Detai_2
Property and Equipment (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation | $ 8,357 | $ 5,016 | $ 22,332 | $ 24,069 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Accrued Liabilities [Abstract] | |||
Accrued board of director's fees | $ 250,000 | $ 200,000 | $ 125,000 |
Accrued executive severance | 140,500 | 136,000 | 118,000 |
Accrued outside services | 148,576 | 115,118 | 165,427 |
Accrued related party | 102,370 | 101,137 | 0 |
Accrued travel | 58,993 | 58,993 | 39,926 |
Deferred rent | 0 | 44,623 | 51,191 |
Accrued clinical study expenses | 13,650 | 13,650 | 13,650 |
Accrued computer equipment | 0 | 8,752 | 0 |
Accrued audit and tax preparation | 0 | 0 | 73,800 |
Accrued legal and professional fees | 38,098 | 0 | 61,890 |
Deferred revenue | 0 | 0 | 13,317 |
Accrued other | 1,207 | 11,007 | 11,399 |
Total accrued expenses | $ 753,394 | $ 689,280 | $ 673,600 |
Contract Liabilities (Details)
Contract Liabilities (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Total contract liabilities | $ 171,876 | $ 178,533 | $ 0 |
Non-current contract liabilities | (42,612) | (46,736) | 0 |
Current contract liabilities | 129,264 | 131,797 | 0 |
Deposit on product | |||
Total contract liabilities | 82,950 | 92,950 | 0 |
Service agreement | |||
Total contract liabilities | 53,787 | 57,365 | 0 |
Other | |||
Total contract liabilities | $ 35,139 | $ 28,218 | $ 0 |
Line of Credit, Related Parti_2
Line of Credit, Related Parties (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |||
Line of credit, related parties | $ 883,224 | $ 370,179 | $ 895,967 |
Interest expense on line of credit | $ 33,724 | $ 179 |
Short Term Notes Payable (Detai
Short Term Notes Payable (Details Narrative) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Debt Disclosure [Abstract] | |||
Short term notes payable | $ 2,611,731 | $ 1,883,163 | $ 0 |
Convertible Promissory Notes (D
Convertible Promissory Notes (Details) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Forfeiture rate | 0.00% | 0.00% |
Expected dividend yield | 0.00% | 0.00% |
Minimum | ||
Weighted average expected life in years | 1 year 1 month 17 days | 1 year 3 months |
Weighted average risk free interest rate | 1.98% | 1.63% |
Weighted average volatility | 94.43% | 86.62% |
Maximum | ||
Weighted average expected life in years | 1 year 2 months 8 days | 1 year 4 months 20 days |
Weighted average risk free interest rate | 2.15% | 1.89% |
Weighted average volatility | 98.63% | 103.21% |
Convertible Promissory Notes _2
Convertible Promissory Notes (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |||
Convertible promissory notes | $ 2,652,377 | $ 455,606 | $ 2,756,427 |
Convertible promissory notes beneficial conversion feature | 0 | 1,099,861 | |
Interest expense, convertible promissory notes | $ 3,565,199 | $ 452,804 |
Notes Payable, Related Parties
Notes Payable, Related Parties (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Debt Disclosure [Abstract] | ||||
Notes payable, related party principal | $ 5,372,743 | $ 5,372,743 | $ 5,222,259 | |
Notes payable, related party debt discount | 0 | 0 | 150,484 | |
Notes payable, related party accrued interest | 1,391,469 | 1,171,782 | 685,907 | |
Notes payable, related party interest expense | $ 219,687 | $ 189,211 | $ 787,586 | $ 634,169 |
Warrants (Details)
Warrants (Details) - shares | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Warrants outstanding, beginning | 103,994,927 | 97,977,851 | 78,086,749 |
Warrants issued | 0 | 19,154,090 | 22,483,180 |
Warrants exercised | (5,266,592) | (8,301,864) | (2,592,078) |
Warrants expired | 0 | (4,835,150) | |
Warrants outstanding, ending | 98,728,335 | 103,994,927 | 97,977,851 |
Class K Warrants [Member] | |||
Warrants outstanding, beginning | 7,200,000 | 7,200,000 | 5,200,000 |
Warrants issued | 0 | 0 | 2,000,000 |
Warrants exercised | 0 | 0 | 0 |
Warrants expired | 0 | 0 | |
Warrants outstanding, ending | 7,200,000 | 7,200,000 | 7,200,000 |
Class L Warrants [Member] | |||
Warrants outstanding, beginning | 57,258,339 | 63,898,173 | 65,945,005 |
Warrants issued | 0 | 0 | 0 |
Warrants exercised | (4,100,001) | (6,639,834) | (2,046,832) |
Warrants expired | 0 | 0 | |
Warrants outstanding, ending | 53,158,338 | 57,258,339 | 63,898,173 |
Class N Warrants [Member] | |||
Warrants outstanding, beginning | 30,451,815 | 13,943,180 | 0 |
Warrants issued | 0 | 17,644,999 | 13,943,180 |
Warrants exercised | (1,046,591) | (1,136,364) | 0 |
Warrants expired | 0 | 0 | |
Warrants outstanding, ending | 29,405,224 | 30,451,815 | 13,943,180 |
Class O Warrants [Member] | |||
Warrants outstanding, beginning | 7,929,091 | 6,540,000 | 0 |
Warrants issued | 0 | 1,509,091 | 6,540,000 |
Warrants exercised | (120,000) | (120,000) | 0 |
Warrants expired | 0 | 0 | |
Warrants outstanding, ending | 7,809,091 | 7,929,091 | 6,540,000 |
Series A Warrants [Member] | |||
Warrants outstanding, beginning | 1,155,682 | 1,561,348 | 2,106,594 |
Warrants issued | 0 | 0 | 0 |
Warrants exercised | 0 | (405,666) | (545,246) |
Warrants expired | 0 | 0 | |
Warrants outstanding, ending | 1,155,682 | 1,155,682 | 1,561,348 |
Class F Warrants [Member] | |||
Warrants outstanding, beginning | 0 | 300,000 | 300,000 |
Warrants issued | 0 | 0 | |
Warrants exercised | 0 | 0 | |
Warrants expired | (300,000) | ||
Warrants outstanding, ending | 0 | 300,000 | |
Class G Warrants [Member] | |||
Warrants outstanding, beginning | 0 | 1,503,409 | 1,503,409 |
Warrants issued | 0 | 0 | |
Warrants exercised | 0 | 0 | |
Warrants expired | (1,503,409) | ||
Warrants outstanding, ending | 0 | 1,503,409 | |
Class H Warrants [Member] | |||
Warrants outstanding, beginning | 0 | 1,988,095 | 1,988,095 |
Warrants issued | 0 | 0 | |
Warrants exercised | 0 | 0 | |
Warrants expired | (1,988,095) | ||
Warrants outstanding, ending | 0 | 1,988,095 | |
Class I Warrants [Member] | |||
Warrants outstanding, beginning | 0 | 1,043,646 | 1,043,646 |
Warrants issued | 0 | 0 | |
Warrants exercised | 0 | 0 | |
Warrants expired | (1,043,646) | ||
Warrants outstanding, ending | 0 | 1,043,646 |
Warrants (Details 1)
Warrants (Details 1) - $ / shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Class K Warrants [Member] | ||
Warrant exercise price/share | $ 0.08 | $ 0.08 |
Warrant expiration date | Jun-25 | June 2025 |
Class K Warrants [Member] | ||
Warrant exercise price/share | $ 0.11 | |
Warrant expiration date | Aug-27 | August 2027 |
Class L Warrants [Member] | ||
Warrant exercise price/share | $ 0.08 | $ 0.08 |
Warrant expiration date | May 2019 | May 2019 |
Class N Warrants [Member] | ||
Warrant exercise price/share | $ 0.11 | $ 0.11 |
Warrant expiration date | June 2019 | June 2019 |
Class O Warrants [Member] | ||
Warrant exercise price/share | $ 0.11 | $ 0.11 |
Warrant expiration date | June 2019 | June 2019 |
Series A Warrants [Member] | ||
Warrant exercise price/share | $ 0.03 | $ 0.03 |
Warrant expiration date | May 2019 | May 2019 |
Warrants (Details 2)
Warrants (Details 2) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Warrant liability, beginning | $ 1,769,669 | $ 1,943,883 | $ 1,242,120 |
Issued | 0 | 0 | 200,000 |
Exercised | 0 | ||
Redeemed | (32,359) | (118,838) | (66,966) |
Change in fair value | (1,542,000) | (55,376) | 568,729 |
Reclassification due to adoption of ASU 2017-11 (see Note 3) | 195,310 | ||
Warrant liability, ending | 1,769,669 | 1,943,883 | |
Class K Warrants [Member] | |||
Warrant liability, beginning | 1,542,000 | 1,616,000 | 884,000 |
Issued | 0 | 0 | 200,000 |
Exercised | 0 | ||
Redeemed | 0 | 0 | 0 |
Change in fair value | (1,542,000) | (74,000) | 532,000 |
Reclassification due to adoption of ASU 2017-11 (see Note 3) | 0 | ||
Warrant liability, ending | 1,542,000 | 1,616,000 | |
Series A Warrants [Member] | |||
Warrant liability, beginning | 227,669 | 327,883 | 358,120 |
Issued | 0 | 0 | 0 |
Exercised | 0 | ||
Redeemed | (32,359) | (118,838) | (66,966) |
Change in fair value | 0 | 18,624 | 36,729 |
Reclassification due to adoption of ASU 2017-11 (see Note 3) | $ 195,310 | ||
Warrant liability, ending | $ 227,669 | $ 327,883 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Commitments and Contingencies Disclosure [Abstract] | |||
Right of use assets | $ 437,363 | $ 0 | $ 0 |
Lease liability - right of use, current | 164,521 | 0 | 0 |
Lease liability - right of use, noncurrent | 315,730 | $ 0 | $ 0 |
Lease liability - right of use | $ 480,251 |
Commitments and Contingencies_3
Commitments and Contingencies (Details 1) | Mar. 31, 2019USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2019 (remainder) | $ 140,173 |
2020 | 191,713 |
2021 | 197,462 |
Total payments | 529,348 |
Less: imputed interest | (49,097) |
Total operating lease liability | $ 480,251 |
Commitments and Contingencies_4
Commitments and Contingencies (Details 2) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Commitments and Contingencies Disclosure [Abstract] | ||
2019 (remainder) | $ 140,173 | $ 186,132 |
2020 | 191,713 | 191,712 |
2021 | 197,462 | 197,464 |
Total | $ 529,348 | $ 575,308 |
Commitments and Contingencies_5
Commitments and Contingencies (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | ||||
Rent expense | $ 52,838 | $ 35,882 | $ 157,395 | $ 159,583 |
Revenue (Details)
Revenue (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
REVENUES | $ 177,963 | $ 344,272 | $ 1,850,060 | $ 738,527 |
Product | ||||
REVENUES | 64,565 | 238,568 | 949,601 | 456,765 |
License fees | ||||
REVENUES | 106,250 | 84,116 | 819,696 | 235,878 |
Other | ||||
REVENUES | 7,148 | 21,588 | 80,763 | 45,884 |
United States | ||||
REVENUES | 23,928 | 122,697 | 234,842 | 25,000 |
United States | Product | ||||
REVENUES | 17,678 | 116,447 | 209,842 | 0 |
United States | License fees | ||||
REVENUES | 6,250 | 6,250 | 25,000 | 25,000 |
United States | Other | ||||
REVENUES | 0 | 0 | 0 | 0 |
International | ||||
REVENUES | 154,035 | 221,575 | 1,615,218 | 713,527 |
International | Product | ||||
REVENUES | 46,887 | 122,121 | 739,759 | 456,765 |
International | License fees | ||||
REVENUES | 100,000 | 77,866 | 794,696 | 210,878 |
International | Other | ||||
REVENUES | $ 7,148 | $ 21,588 | $ 80,763 | $ 45,884 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Related Party Transactions [Abstract] | |
Revenue from this related party | $ 207,457 |
Contract liabilities with related party | $ 156,565 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - Stock Option | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Weighted average expected life in years | 5 years | 5 years |
Weighted average risk free interest rate | 1.76% | |
Weighted average volatility | 120.00% | |
Forfeiture rate | 0.00% | 0.00% |
Expected dividend yield | 0.00% | 0.00% |
Minimum | ||
Weighted average risk free interest rate | 2.84% | |
Weighted average volatility | 134.00% | |
Maximum | ||
Weighted average risk free interest rate | 3.21% | |
Weighted average volatility | 144.15% |
Stock-Based Compensation (Det_2
Stock-Based Compensation (Details 1) - $ / shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Payment Arrangement, Noncash Expense [Abstract] | ||
Options outstanding, beginning | 21,593,385 | 16,203,385 |
Options granted | 10,110,000 | 5,550,000 |
Options exercised | 0 | 0 |
Options forfeited or expired | 0 | (160,000) |
Options outstanding, ending | 31,703,385 | 21,593,385 |
Options exercisable | 31,703,385 | |
Weighted average exercise price, outstanding, beginning | $ 0.31 | $ 0.38 |
Weighted average exercise price, granted | .25 | 0.11 |
Weighted average exercise price, exercised | .00 | 0 |
Weighted average exercise price, forfeited or expired | .00 | .00 |
Weighted average exercise price, outstanding, ending | .29 | $ 0.31 |
Weighted average exercise price, exercisable | $ .29 |
Stock-Based Compensation (Det_3
Stock-Based Compensation (Details 2) - $ / shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Payment Arrangement, Noncash Expense [Abstract] | ||
Nonvested options outstanding, beginning | 0 | 0 |
Nonvested options granted | 10,110,000 | 5,550,000 |
Nonvested options vested | (10,110,000) | (5,550,000) |
Nonvested options forfeited or expired | 0 | 0 |
Nonvested options outstanding, ending | 0 | 0 |
Weighted average exercise price, outstanding, beginning | $ 0 | $ 0 |
Weighted average exercise price, granted | .25 | 0.11 |
Weighted average exercise price, vested | .25 | 0.11 |
Weighted average exercise price, forfeited or expired | .00 | 0 |
Weighted average exercise price, outstanding, ending | $ .00 | $ 0 |
Stock-Based Compensation (Det_4
Stock-Based Compensation (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Compensation cost related to options granted | $ 2,480,970 | $ 482,295 |
Range of exercise prices for options, lower range limit | $ 0.04 | $ 0.04 |
Range of exercise prices for options, upperr range limit | $ 2 | $ 2 |
Aggregate intrinsic value for outstanding options | $ 2,085,866 | $ 2,073,641 |
Aggregate intrinsic value for vested and exercisable options | $ 2,085,866 | $ 2,073,641 |
Weighted average remaining contractual term for outstanding exercisable stock options | 7 years 4 months 24 days | 7 years 4 months 13 days |
Stock Incentive Plan [Member] | ||
Shares available for grant | 32,500,000 | 22,500,000 |
Earnings (Loss) Per Share (Deta
Earnings (Loss) Per Share (Details) - shares | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Anti-dilutive securities | 155,490,152 | 132,174,660 | 159,830,830 | 134,212,426 |
Warrants | ||||
Anti-dilutive securities | 31,703,385 | 21,593,385 | 104,014,927 | 97,977,851 |
Options | ||||
Anti-dilutive securities | 98,728,335 | 110,581,275 | ||
Convertible Promissory Notes | ||||
Anti-dilutive securities | 25,058,432 | 0 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Current: | ||
Federal | $ 0 | $ 0 |
State | 0 | 0 |
Foreign | 0 | 0 |
Total | 0 | 0 |
Deferred: | ||
Federal | (2,157,035) | 8,371,516 |
State | (383,705) | 1,489,172 |
Foreign | 2,673 | (19,224) |
Change in valuation allowance | 2,538,067 | (9,841,464) |
Total | $ 0 | $ 0 |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Tax benefit at statutory rate | $ (2,442,593) | $ (1,938,278) |
Increase (reduction) in income taxes resulting from: | ||
State income benefit, net of federal benefit | (343,257) | (136,538) |
Non-deductible loss on warrant valuation adjustment | (11,629) | 199,055 |
Income (loss) from foreign subsidiaries | 6,699 | (34,552) |
Change in valuation allowance | 2,538,067 | (9,841,464) |
Tax reform rate adjustment | 0 | 11,827,143 |
Other | 252,713 | (75,366) |
Income tax expense (benefit) | $ 0 | $ 0 |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 21,320,935 | $ 19,406,373 |
Net operating loss carryforwards - foreign | 16,551 | 139,675 |
Excess of tax basis over book value of property and equipment | (2,229) | 6,978 |
Excess of tax basis over book value of intangible assets | 146,943 | 220,180 |
Stock-based compensation | 1,520,209 | 906,526 |
Accrued employee compensation | 83,393 | 0 |
Captialized equity costs | 49,471 | 49,471 |
Inventory reserve | 29,510 | 17,962 |
Gross deferred tax assets | 23,164,783 | 20,747,165 |
Valuation allowance | (23,164,783) | (20,747,165) |
Net deferred tax assets | $ 0 | $ 0 |