Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Apr. 16, 2018 | Jun. 30, 2017 | |
Document And Entity Information | |||
Entity Registrant Name | PROLUNG INC | ||
Entity Central Index Key | 1,541,884 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 23,514,247 | ||
Entity Common Stock, Shares Outstanding | 3,861,848 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,017 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Current Assets | ||
Cash | $ 636,639 | $ 28,922 |
Prepaid expenses | 31,844 | 8,831 |
Deferred offering costs | 303,401 | |
Total Current Assets | 971,884 | 37,753 |
Inventory, noncurrent | 255,637 | 291,559 |
Property and equipment, net of accumulated depreciation | 81,378 | 82,917 |
Intangible assets, net of accumulated amortization | 156,176 | 165,738 |
Total Assets | 1,465,075 | 577,967 |
Current Liabilities | ||
Accounts payable | 295,918 | 358,477 |
Accrued liabilities | 25,402 | 264,698 |
Related-party notes payable | 105,000 | |
Current portion of notes payable | 32,000 | |
Total Current Liabilities | 321,320 | 760,175 |
Long-Term Liabilities | ||
Notes payable, net of current portion | 1,206,931 | 2,653,370 |
Total Long-Term Liabilities | 1,206,931 | 2,653,370 |
Total Liabilities | 1,528,251 | 3,413,545 |
Stockholders' Deficit: | ||
Common stock, $0.001 par value; 120,000,000 shares authorized; 3,861,848 shares and 3,000,815 shares issued and outstanding, respectively | 3,862 | 3,001 |
Additional paid-in capital | 21,387,907 | 13,247,054 |
Accumulated deficit | (21,454,945) | (16,085,633) |
Total Stockholders' Deficit | (63,176) | (2,835,578) |
Total Liabilities and Stockholders' Deficit | $ 1,465,075 | $ 577,967 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 120,000,000 | 120,000,000 |
Common stock, shares issued | 3,861,848 | 3,000,815 |
Common stock, shares outstanding | 3,861,848 | 3,000,815 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Revenues: | ||
Revenue | $ 8,800 | |
Total revenue | 8,800 | |
Cost of revenue | 10,193 | |
Gross loss | (1,393) | |
Operating expenses: | ||
Research and development expense | 1,630,837 | 1,219,189 |
Selling, general and administrative expense | 3,615,495 | 1,288,960 |
Total operating expenses | 5,246,332 | 2,508,149 |
Loss from operations | (5,246,332) | (2,509,542) |
Other expense: | ||
Interest expense | (122,980) | (265,914) |
Total other expense | (122,980) | (265,914) |
Net loss | $ (5,369,312) | $ (2,775,456) |
Basic and diluted loss per share | $ (1.49) | $ (0.98) |
Weighted-average common shares outstanding, basic and diluted | 3,608,472 | 2,842,446 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Deficit - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Total |
Balance beginning at Dec. 31, 2015 | $ 2,691 | $ 10,655,417 | $ (13,310,177) | $ (2,652,069) |
Balance beginning, shares at Dec. 31, 2015 | 2,690,641 | |||
Stock-based compensation | 262,474 | 262,474 | ||
Common stock issued for cash and warrants, net of offering costs | $ 139 | 1,498,592 | 1,498,731 | |
Common stock issued for cash and warrants, net of offering costs, shares | 138,369 | |||
Common stock issued upon conversion of debt and accrued interest | $ 156 | 813,321 | 813,477 | |
Common stock issued upon conversion of debt and accrued interest, shares | 156,438 | |||
Common stock issued to placement agent | $ 13 | (13) | ||
Common stock issued to placement agent, shares | 12,896 | |||
Common stock issued for services | $ 2 | 17,263 | 17,265 | |
Common stock issued for services, shares | 2,471 | |||
Net loss | (2,775,456) | (2,775,456) | ||
Balance ending at Dec. 31, 2016 | $ 3,001 | 13,247,054 | (16,085,633) | (2,835,578) |
Balance ending, shares at Dec. 31, 2016 | 3,000,815 | |||
Stock-based compensation | 808,307 | 808,307 | ||
Common stock issued for cash and warrants, net of offering costs | $ 545 | 5,866,571 | 5,867,116 | |
Common stock issued for cash and warrants, net of offering costs, shares | 544,300 | |||
Common stock issued upon conversion of debt and accrued interest | $ 255 | 1,415,536 | 1,415,791 | |
Common stock issued upon conversion of debt and accrued interest, shares | 254,834 | |||
Common stock issued to placement agent | $ 55 | (55) | ||
Common stock issued to placement agent, shares | 55,372 | |||
Common stock issued for services | $ 6 | $ 50,494 | $ 50,500 | |
Common stock issued for services, shares | 6,250 | |||
Rounding due to reverse stock split | 277 | |||
Net loss | $ (5,369,312) | $ (5,369,312) | ||
Balance ending at Dec. 31, 2017 | $ 3,862 | $ 21,387,907 | $ (21,454,945) | $ (63,176) |
Balance ending, shares at Dec. 31, 2017 | 3,861,598 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Cash flows from operating activities: | ||
Net loss | $ (5,369,312) | $ (2,775,456) |
Adjustments to reconcile net loss to net cash flows from operating activities: | ||
Depreciation and amortization | 37,212 | 33,186 |
Stock-based compensation | 858,807 | 279,739 |
Obsolete inventory | 10,193 | |
Loss on sale of property and equipment | 690 | |
Change in assets and liabilities: | ||
Inventory | 35,922 | (59,856) |
Prepaid expenses | (23,013) | 21,689 |
Accounts payable | (106,332) | 260,628 |
Accrued liabilities | (71,555) | 196,542 |
Net cash flows from operating activities | (4,637,581) | (2,033,335) |
Cash flows from investing activities: | ||
Payments for property and equipment | (27,195) | |
Proceeds from sale of property and equipment | 394 | |
Net cash flows from investing activities | (26,801) | |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock and warrants | 6,531,568 | 1,498,731 |
Payment for offering and deferred offering costs | (924,080) | |
Payments on notes payable | (285,389) | |
Proceeds from notes payable | 32,000 | |
Proceeds from related party notes payable | 35,000 | 210,000 |
Payments on related party payable | (85,000) | (130,000) |
Net cash flows from financing activities | 5,272,099 | 1,610,731 |
Net increase (decrease) in cash | 607,717 | (422,604) |
Cash at beginning of period | 28,922 | 451,526 |
Cash at end of period | 636,639 | 28,922 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 189,644 | 76,170 |
Cash paid for income taxes | ||
Supplemental disclosure of non-cash investing and financing activities: | ||
Conversion of convertible debt and interest | 1,355,791 | 813,477 |
Conversion of related party debt and interest | 60,000 | |
Deferred offering costs accrued | $ 43,773 |
Organization and Summary of Sig
Organization and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Organization and Summary of Significant Accounting Policies | Note 1 – Organization and Summary of Significant Accounting Policies Organization Principles of Consolidation Going Concern The ability of the Company to continue as a going concern is dependent on the Company successfully obtaining additional funding, developing products that can be sold profitably, and generating cash through operating activities. Management’s plans include issuing equity or debt securities to fund capital requirements and developing ongoing operations. See Note 14 for funds received in a convertible promissory note offering subsequent to the year ended December 31, 2017. However, there can be no assurance the Company will continue to be successful in raising sufficient funds to continue as a going concern. Use of Estimates Concentration of Credit Risk Fair Value of Financial Instruments Cash and Cash Equivalents Trade Receivables and Credit Policies Inventory Property and Equipment Intangible Assets Revenue Recognition Research and Development Employee Stock-based Compensation Non-Employee Stock-based Compensation Income Taxes The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon settlement. Basic and Diluted Loss Per Share and 2016, the following items were excluded from the computation of diluted net loss per common share as their effect is anti-dilutive: For the Years Ended December 31, 2017 2016 Warrants to purchase shares 1,184,998 430,923 Stock options 331,000 - Restricted common stock grants - 109 Convertible debentures - 274,856 Convertible notes 201,155 205,212 Foreign Currency Policy Related Parties Recent Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02: Leases ASU 2016-02 requires companies to generally recognize on the balance sheet operating and financing lease liabilities and corresponding right-of-use assets. ASU 2016-02 will be effective for the Company’s fiscal year beginning January 1, 2020 on a modified retrospective basis and earlier adoption is permitted. Management is currently evaluating the impact of the pending adoption of ASU 2016-02 on the Company’s consolidated financial statements and based on the Company’s one lease agreement, does not anticipate a material impact. In November 2016, the FASB issued an ASU amending the presentation of restricted cash within the statement of cash flows. The new guidance requires that restricted cash be included within cash and cash equivalents on the statement of cash flows. The ASU is effective retrospectively for reporting periods beginning after December 15, 2017, with early adoption permitted. The Company will adopt this ASU on January 1, 2018 which will have no impact on the Company’s financial statements. In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting. This Standard was issued to provide clarity and reduce both diversity in practice and cost complexity when applying the guidance regarding a change to the terms and conditions of a stock-based payment award. ASU 2017-09 also provides guidance about the types of changes to the terms or conditions of a share-based payment award that require an entity to apply modification accounting. The standard is effective for interim and annual reporting periods beginning after December 15, 2017, with early adoption permitted. The Company will adopt this ASU on January 1, 2018. Since this standard is to be applied prospectively, there will be no effect on prior financial statements and the Company does not currently have any option agreements where this standard would be applicable. In July 2017, the FASB issued ASU 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. Part I applies to entities that issue financial instruments such as warrants, convertible debt or convertible preferred stock that contain down round features. Part II simply replaces the indefinite deferral for certain mandatorily redeemable noncontrolling interests and mandatorily redeemable financial instruments of nonpublic entities contained within current account guidance with a scope exception and does not impact the accounting for these mandatorily redeemable instruments. This ASU is effective for the Company for annual reporting periods beginning after December 15, 2019, and interim periods within those annual periods. Early adoption is permitted. The Company has not had any instruments that meet the criteria for Part I, but could issue such instruments in the future; therefore, the Company is currently evaluating the impact that the adoption of the standard could have on its future consolidated financial statements. ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities was issued in August 2017. The amendments under ASU 2017-12, refine and expand hedge accounting requirements for both financial (e.g., interest rate) and commodity risks. Its provisions create more transparency around how economic results are presented, both on the face of the financial statements and in the footnotes. It also makes certain targeted improvements to simplify the application of hedge accounting guidance. The standard is effective for interim and annual reporting periods beginning after December 15, 2019, with early adoption permitted. The Company will adopt this ASU on January 1, 2020. The Company does not currently have any derivative or hedging instruments but may in the future. The Company is assessing the impact the adoption of this ASU could have on the consolidated financial statements. |
Inventory
Inventory | 12 Months Ended |
Dec. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Inventory | Note 2 – Inventory Inventory principally consists of the cost of materials purchased and assembled during the years ended December 31, 2017 and 2016. The cost of inventory also includes the costs of direct labor for the assembly and certain indirect costs incurred in connection with purchasing of parts and the assembly of products. Inventory consists of the following: 2017 2016 Raw materials $ 66,417 $ 69,264 Work in progress 12,465 31,185 Finished goods 176,755 191,110 Total inventory 255,637 291,559 Less carrying value of inventory not deemed to be a current asset 255,637 291,559 Inventory, included in current assets $ - $ - During the year ended December 31, 2016 the Company recorded a write-off of inventory totaling $10,193, consisting of older packaging materials. This amount was reported as a part of cost of revenues in the accompanying statements of operations. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Note 3 – Property and Equipment Property and equipment consists of the following at December 31, 2017 and 2016: Life 2017 2016 Computer equipment 3 years $ 38,134 $ 19,787 Office equipment 3 to 5 years 19,151 13,852 Tooling 5 years 92,228 92,228 149,513 125,867 Less accumulated depreciation (68,135 ) (42,950 ) Property and equipment, net $ 81,378 $ 82,917 Depreciation expense for the years ended December 31, 2017 and 2016 was $27,650 and $23,624, respectively. |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Note 4 – Intangible Assets In December 2015, the Company purchased patents for a probe as well as enhanced surface and tips for obtaining bioelectrical signals for $175,300. These patents will be amortized over 220 months (18.3 years), at a rate of $797 per month, or $9,562 per year. During the years ended December 31, 2017 and 2016 the Company recognized amortization expense of $9,562 each year. At December 31, 2017, there was accumulated amortization of $19,124. |
Accrued Liabilities
Accrued Liabilities | 12 Months Ended |
Dec. 31, 2017 | |
Payables and Accruals [Abstract] | |
Accrued Liabilities | Note 5 – Accrued Liabilities Accrued liabilities consists of the following at December 31, 2017 and 2016: 2017 2016 Accrued interest $ - $ 234,405 Accrued royalties 17,873 17,873 Accrued payroll and payroll taxes 7,529 12,420 Total accrued liabilities $ 25,402 $ 264,698 There was related party accrued interest of $35,519 at December 31, 2016. |
Notes Payable
Notes Payable | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Notes Payable | Note 6 –Notes Payable Notes payable is summarized as follows: December 31, 2017 2016 Convertible debentures; unsecured; interest at 8.00% per annum; settled during 2017 $ - $ 1,257,050 Convertible notes payable; unsecured; interest at 8.00% per annum; due November 2020 1,206,931 1,206,931 Note payable secured by all the assets of the Company; interest at 15.0% per annum; settled during 2017 - 189,389 Unsecured note payable; interest at 10.00% per annum; due on demand - 32,000 Total notes payable 1,206,931 2,685,370 Less: current portion - 32,000 Notes payable, net of current portion $ 1,206,931 $ 2,653,370 Convertible Notes Payable In 2015, the Company issued two convertible promissory notes (the “convertible notes”) in the aggregate principal amount of $1,206,931 to two investment entities controlled by a single family. The convertible notes are unsecured and accrue interest at the rate of 8% per annum, with interest payable on the last day of each calendar quarter. The principal amount under the convertible notes is due on the five-year anniversary of the issue date. The convertible notes are convertible at any time prior to maturity at the option of the holders at a conversion rate of $6.00 per share. If the Company’s common stock commences trading and closes at a price of $28.00 per share for five consecutive trading days, the principal amount under the convertible notes automatically converts into common stock at the rate of $6.00 per share. Convertible Debentures In 2015, the Company issued $2,000,000 in convertible debentures. The convertible debentures were unsecured and bear interest at the rate of 8% per annum. Principal and accrued interest are due on the maturity date, which was May 1, 2018. The holder of the convertible debentures was entitled, at its option, to convert all or any portion of the outstanding principal of the convertible debentures into shares of the Company’s common stock at a conversion price of $5.20 per share. Interest accruing from the date of issuance to the conversion date was paid on conversion or maturity date. During the year ended December 31, 2017 the Company repaid $164,000 in principal along with $25,700 in related accrued interest. Also, during the year ended December 31, 2017, convertible debentures holders converted $1,093,050 in principal along with $162,741 in related interest into 241,500 shares of common stock. During the year ended December 31, 2016, $742,950 of principal and accrued interest of $70,527 were converted into 156,438 shares of common stock. As of December 31, 2017, there were no amounts outstanding under the convertible debentures. As further described in Note 8 to these consolidated financial statements, the Company entered into placement agent agreements that provide for compensation to the respective placement agent in connection with an offering of common stock. Additionally, the placement agent agreements provide for potential compensation to the placement agent in connection with the future conversion of the convertible debentures into shares of common stock of the Company. Upon the conversion of the convertible debentures, the Company was required to issue the placement agent warrants to acquire shares of the Company’s common stock at an exercise price of $5.20 per share. The placement agent was to be issued a warrant to purchase one share of common stock for each $6.48 of principal converted into common stock, with the maximum number of warrants issuable under the placement agreement limited to 330,433 shares of the Company’s common stock. The term of the warrants is for a period of 36 months from the date of issuance. During the year ended December 31, 2017 and 2016, 215,772 and 114,623 warrants were issued to the then-current placement agent, respectively. Note Payable to a Relative of an Executive Officer On December 31, 2016 the Company was obligated under the terms of a master note to an individual related to an executive officer of the Company in the amount of $189,389. No payments of principal and interest were made during 2016. The note was secured by all the assets of the Company, bore interest at 15% and required the Board of Directors (“Board”) to retain the current management as long as the note is outstanding. The balance of accrued interest at December 31, 2016 was $29,498. During the year ended December 31, 2017, $89,389 of principal was repaid along with interest of $39,071. In addition, the noteholder elected to convert the remaining $100,000 of principal for 8,334 shares of common stock as well as 8,334 warrants to purchase stock at a price of $12 per unit. Other Notes Payable On August 16, 2016, the Company issued an unsecured bridge note to an individual for $32,000 with an interest rate of 8%. During the year ended December 31, 2017, the Company repaid the note along with $1,185 of related accrued interest. Related-Party Notes Payable During the year ended December 31, 2016 the Company issued notes payable to a member of the Board and a former Board member totaling $210,000. These notes bore interest between 8% and 10%, were unsecured and due on demand. During the year ended December 31, 2016, $105,000 of these notes were repaid back along with interest of $3,089. On December 31, 2016, there was $105,000 outstanding under these notes. During the year ended December 31, 2017, the remaining $105,000 was settled along with interest of $5,000 as follows. The Company repaid $50,000 in cash, and the individual elected to convert the remaining $60,000 into 5,000 shares of common stock, and 5,000 warrants to purchase stock, at a price of $12 per share. Also, during the year ended December 31, 2017, the same Board member made a short-term advance of $35,000 that did not bear interest. This amount was repaid during the year ended December 31, 2017. During December 2015, the Company entered into a Patent Assignment Agreement for the acquisition of certain patent application rights. Prior to the execution of the Patent Assignment Agreement, a member of the Company’s Board advanced $50,000 on behalf of the Company to the seller under the Patent Assignment Agreement. The advance did not bear interest, was unsecured, and did not offer conversion terms at any time. In December 2015, the Company repaid $25,000, and repaid the remaining $25,000 during 2016. |
Preferred Stock
Preferred Stock | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Preferred Stock | Note 7 – Preferred Stock The stockholders of the Company have authorized 10,000,000 shares of preferred stock, par value $0.001 per share. The preferred stock may be issued in one or more series. The Board has the right to fix the number of shares of each series (within the total number of authorized shares of the preferred stock available for designation as a part of such series), and designate, in whole or part, the preferences, limitations and relative rights of each series of preferred stock. As of December 31, 2017, and 2016, the Board has not designated any series of preferred stock and there are no shares of preferred stock issued or outstanding. |
Common Stock
Common Stock | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Common Stock | Note 8 – Common Stock Increase in Authorized Shares In July, 2017, following the receipt of Board authorization and stockholder approval, the Company filed an Amended and Restated Certificate of Incorporation which, among other things, increased the authorized number of shares of common stock from 40,000,000 shares to 120,000,000. The increase in authorized shares has been reflected on the Company’s consolidated balance sheets. Reverse Stock Split In October 2017, the Company’s Board approved an amendment to the Company’s Fourth Amended and Restated Certificate of Incorporation to effectuate a 1-for-8 reclassification, or reverse stock split, of the Company’s common stock, effective as of October 25, 2017. All share and per share amounts in the consolidated financial statements and notes thereto have been retroactively adjusted for all periods presented to give effect to the reverse stock split. Public Offering of Common Stock of the Company On August 4, 2017, the Company filed a Registration Statement on Form S-1 (as modified from time to time, the “Registration Statement”), to which it has since filed numerous amendments. This Registration Statement relates to a potential public offering of the Company’s common stock. There is no assurance that any shares will be offered and sold pursuant to such Registration Statement. During the year ended December 31, 2017, the Company has incurred cash offering costs totaling $303,401 which will be offset against the proceeds received if such offering is completed. If the Company does not complete the offering, the deferred offering costs will be charged to expense. Private Placement of Common Stock of the Company The Company signed a Private Placement Memorandum dated December 28, 2015 to offer a maximum of 437,500 shares of its common stock at a price of $12 per share. On July 7, 2016, the Board authorized changing the offering to be units of one share of common stock and one warrant, sold for a price of $12 per unit. The warrant had an exercise price of $12 per share. This change was applied retroactively to all purchasers under the Private Placement Memorandum. The units were offered on a “best efforts” basis. During the year ended December 31, 2017, the Company received subscriptions for 544,300 units and received proceeds of $6,531,568 and paid $664,452 in offering costs. During the year ended December 31, 2016, 138,369 units were subscribed, and the Company received gross proceeds of $1,660,433 and paid offering costs of $161,702. The Company engaged two successor placement agents during different time periods in connection with the offering, which placement agents were entitled to a cash commission of ten percent of the issuance price of the common stock sold in the offering, and one share of common stock of the Company for each ten shares of the Company’s common stock sold in the offering. Pursuant to these agreements, the Company incurred commission fees to the placement agents of $664,452 together with the issuance of 55,372 shares of common stock for the year ended December 31, 2017, and incurred commission fees to the placement agents of $161,702 together with the issuance of 12,896 shares of common stock for the year ended December 31, 2016. During the year ended December 31, 2017, the adjusted maximum offering amount was subscribed for and the offering was closed. Common Stock Issued for Conversion of Convertible Debentures and Notes Payable During the year ended December 31, 2017, $1,093,050 of convertible debentures and $162,741 of accrued interest was converted at $5.20 per share into 241,500 shares of common stock. During the year ended December 31, 2016, $742,950 of convertible debentures and $70,527 of accrued interest was converted at $5.20 per share into 156,438 shares of common stock. During 2017, as partial settlement of a note payable to a relative of an executive officer, $100,000 was converted at $12 per share into 8,334 shares of common stock and warrants. Also, in partial settlement of a related party note, $55,000 of principal and $5,000 of interest was converted at $12 per share into 5,000 shares of common stock and warrants. Common Stock Issued for Services During the year ended December 31, 2017, the Company issued 6,250 shares of common stock with a total value of $50,500 to a Board member and a consultant for services rendered. The consultants and director could not provide a reliable value on the services rendered and agreed the value of the common shares was more reliable. As the Company did not have an active trading market for its common shares, the shares’ fair value was based on the allocated value of the common stock being issued in the Private Placement mentioned above. During the year ended December 31, 2016, the Company issued 2,471 shares of common stock with a total value of $17,265 to consultants for services rendered. The consultants could not provide a reliable value on the services rendered and agreed the value of the common shares was more reliable. The Company did not have an active trading market for its common stock and the stock was valued at the most recent sale of common stock for cash. During 2016, the Company had a private placement ongoing and the common shares fair value was based on the allocated value of the common stock being issued in the Private Placement mentioned above resulting in a relative fair value of the common stock of $6.96 on the date of issuance. Periodically, the Company has issued restricted common stock grants to directors, officers and consultants as compensation for future services. The grant day fair value of the shares issued is amortized to expense over the requisite service period. During the year ended December 31, 2017 and 2016, the Company recognized $433 and $126,400 in stock compensation expense. A summary of the status of the Company’s restricted common stock grants as of December 31, 2016 and changes during the year then ended, is presented below: Restricted Common Stock Grants Weighted Average Common Stock Price Balance at December 31, 2015 31,709 $ 4.00 Awarded - - Vested (31,600 ) 4.00 Balance at December 31, 2016 109 $ 4.00 Awarded - - Vested (109 ) 4.00 Balance at December 31, 2017 - $ 4.00 As of December 31, 2017, all restricted shares had vested and all the related expense had been recognized. Total stock-based compensation expense from all sources for the year ended December 31, 2017 and 2016, including stock-based compensation for the options, warrants and related amortization discussed in Note 9 and Note 10 below, have been included in the consolidated statements of operations as follows: For the Years Ended December 31, 2017 2016 Research and development expense $ 196,211 $ 166,625 Selling, general and administrative expense 662,596 113,114 Total share-based compensation $ 858,807 $ 279,739 |
Common Stock Options
Common Stock Options | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Common Stock Options | Note 9 – Common Stock Options Equity Incentive Plan In April 2017, the Board, contingent on shareholder approval, approved the ProLung, Inc. Stock Incentive Plan (the “Plan”). The shareholders approved the Plan in July 2017. The Plan authorizes the Board compensation Committee to grant incentive stock options, non-incentive stock options, stock bonuses, restricted stock, and performance-based awards to directors, officers and employees and non-employee agents, consultants, advisers and independent contractors of the Company or any parent or subsidiary of the Company. The total number of initial shares of Common Stock authorized for issuance under the Plan is 500,000 shares. The authorized shares will automatically increase on January 1 of each year, for ten consecutive years, commencing on January 1, 2018, by the lesser of (i) 40,000 shares of Common Stock (i.e., 8% of the shares of the shares originally authorized to be issued), or (ii) such number of shares of common stock (if any) the Board may earlier designate in writing. If the automatic increases are not limited by the Board, there will be 900,000 shares of common stock authorized under the Plan in January 1, 2027. Issuance of Stock Options under the Plan Board and Key Employee Option Grants In August 2017, the Board’s compensation committee approved the issuance of 52,500 options to directors of the Company at exercise prices ranging from $8 to $10 per option. One half of the options vest immediately with the remaining half vesting quarterly through August 2018. In November 2017, the Board’s compensation committee approved the issuance of 203,500 options to certain key employees and a consultant. These options have an exercise price of $8 and vest quarterly through September 2019. The fair value of these options was $6.06 per option or $1,550,712, and will be expensed over the relative vesting period. The fair value was computed using the Black Scholes method using the following weighted-average assumptions: Expected life 5.43 Years Exercise price $ 8.07 Expected volatility 118 % Expected dividends None Risk-free interest rate 2.00 % The Company recorded an expense of $601,056 for the year ended December 31, 2017. The $949,656 remaining unrecognized expense will be recognized through September 30, 2019 and a weighted average term of 0.64 years. CEO Stock Option Incentive In an amendment to the employment agreement of the CEO executed March 29, 2017, the Company granted the CEO stock option incentives related to FDA approval. The stock option shall expire 10-years after the grant date and shall vest with respect to a number of options of Common Stock upon the receipt of FDA Approval (as defined below), with such number of options to be as follows: ● 112,500 options if FDA Approval is obtained after January 1, 2018 and on or before July 1, 2018; ● 75,000 options if FDA Approval is obtained after July 1, 2018 and on or before January 1, 2019; ● 37,500 options if FDA Approval is obtained after January 1, 2019 and on or before January 1, 2020. On August 9, 2017, the Compensation Committee of the Board granted the stock option described above at an exercise price of $8.00 per option. The Company considers these options to be performance based with August 9, 2017 the grant date. Solely for accounting purposes, the Company estimated the conditions for vesting will be met between July and December 2018. Based on this estimate, management also believes the most probable number of options to be issued will be 75,000. The Company valued these 75,000 options as of August 9, 2017, using the Black-Scholes Pricing Model using the following assumptions: Expected life 5.70 Years Exercise price $ 8.00 Expected volatility 116 % Expected dividends None Risk-free interest rate 1.84 % The resulting expense of $472,000 will be amortized over the estimated service period which will be the grant date through December 31, 2018. For the year ended December 31, 2017, $133,532 of expense has been recorded with the remaining $338,468 being recognized over the next six months. As of December 31, 2017, there are currently 131,500 options available for issuance under the Plan. As noted above, we have issued performance-based options to our CEO, whereby we could issue up to 112,500 options; which are included in the above options available for issuance under the Plan. A summary of option activity for the years ended December 31, 2017 and 2016 is presented below: Shares Under Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life Aggregate Intrinsic Value of Vested Options Outstanding at December 31, 2016 - $ - - $ - Issued 331,000 8.05 Exercised - - Expired - - Outstanding at December 31, 2017 331,000 $ 8.05 10.00 years $ - Vested at December 31, 2017 64,813 $ 8.27 9.74 years $ - |
Common Stock Warrants
Common Stock Warrants | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Common Stock Warrants | Note 10 – Common Stock Warrants The Company has issued warrants to purchase its common stock for payment of consulting services, in connection with the extension of a note payable, as incentives to investors, and for cash. The fair value of warrants issued for consulting services is recognized as consulting expense at the date the warrants become exercisable. The Company values non-vested warrants utilizing the Black-Scholes Method and records compensation over the requisite service period which is usually the vesting period. The fair value of the warrants that vested during the year ended December 31, 2017, was $6.32 per warrant. The weighted-average assumptions used for the warrants that were issued during the year ended December 31, 2017, were risk-free interest rate of 1.84%, expected volatility of 122%, expected life of 4.5 years, and expected dividend yield of zero. The fair value of the warrants that vested during the year ended December 31, 2016 was $6.08 per warrant. The weighted-average assumptions used for the warrants that vested during the year ended December 31, 2016, were risk-free interest rate of 1.33%, expected volatility of 124%, expected life of 4.5 years, and expected dividend yield of zero. The Company recognized $69,927 and $136,074 as share-based compensation related to the vesting of warrants for the year ended December 31, 2017 and 2016, respectively. The consultant terminated this agreement effective July 1, 2017 and forfeited the remaining 20,625 warrants under the contract. In September 2017, the Company issued 1,250 warrants to a consultant for investor relation services rendered. The warrants have an exercise price of $12 per warrant, vest immediately and expire in September 2020. The fair value of these warrants was $3,359 or $2.69 per warrant and was immediately recognized as an expense. The fair value was computed using the Black Scholes method using the following assumptions. Expected life 1.52 Years Exercise price $ 12.00 Expected volatility 107 % Expected dividends None Risk-free interest rate 1.33 % A summary of warrant activity for the years ended December 31, 2017 and 2016 is presented below: Shares Under Warrants Weighted Average Exercise Price Weighted Average Remaining Contractual Life Aggregate Intrinsic Value of Vested Warrants Outstanding at December 31, 2015 177,901 $ 4.32 7.3 years $ 213,364 Issued 253,022 10.08 Exercised - - Expired - - Rounding 15 - Outstanding at December 31, 2016 430,938 $ 7.04 4.2 years $ 546,333 Issued 774,656 10.11 Exercised - - Expired/Forfeited (20,625 ) 4.00 Rounding 29 Outstanding at December 31, 2017 1,184,998 $ 9.16 1.9 years $ 1,160,404 The intrinsic value at December 31, 2017 is calculated at $7.28 per share less the exercise price, based on the management’s latest estimate of the fair value of the shares of common stock, which is the latest price the Company issued shares of common stock for cash. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 11 – Commitments and Contingencies Lease Agreement The Company leases office space under an agreement that expires in July 2018, with an option to renew with a 3% annual rent escalation. Monthly rental payments as of December 31, 2017 are $4,140 per month and will total $30,000 for 2018 under the current agreement. Lease expense charged to operations for the years ended December 31, 2017 and 2016 was $48,871 and $49,469, respectively. License Agreement The Company has a license agreement with a party related through a shareholder and former member of the Board. Under the agreement, the Company has the right to the exclusive use of certain patents pending and related technology in its medical devices and other products for an indefinite term. The Company agreed to make royalty payments based on a percentage of the aggregate worldwide net sales (as defined in the agreement) of its medical device and other products that utilize the technology. At December 31, 2017 and 2016, accrued royalties under this license agreement was $17,873. The Company asserts the amount payable is to be offset against costs the Company has incurred to maintain and keep the patents current. The costs to maintain the patents exceeds the amount accrued for royalty payments; however, no receivable amount is recorded in the accompanying financial statements. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 12 – Income Taxes The Company provides for income taxes using an asset and liability-based approach. Deferred income tax assets and liabilities are recorded to reflect the future tax consequences of temporary differences between the financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The Tax Cuts and Jobs Act was enacted on December 22, 2017 which reduced the U.S. corporate statutory tax rate from 35% to 21%. The Company changed its effective federal rate to 21% as the expected rate for our deferred tax items. Our effective state rate is unchanged at 5%. The significant components of net deferred tax assets (liabilities) were as follows at December 31, 2017 and 2016: 2017 2016 Net operating losses $ 4,316,700 $ 4,841,700 Research and development credit carryforward 145,700 129,500 Related-party accruals - 2,300 Depreciation and amortization (11,100 ) 15,500 Valuation allowance (4,451,300 ) (4,989,000 ) Net Deferred Tax Asset $ - $ - As of December 31, 2017, the Company had no unrecognized tax benefits that, if recognized, would affect the Company’s effective income tax rate over the next 12 months. A reconciliation of the expected income tax benefit at the U.S. Federal income tax rate to the income tax benefit actually recognized for the years ended December 31, 2017 and 2016 is set forth below: 2017 2016 Net loss $ (1,396,000 ) $ (1,082,400 ) Non-deductible expenses and other 217,700 110,300 Effect due to decrease in tax rates 1,716,000 - Change in valuation allowance (537,700 ) 972,100 Benefit from income taxes $ - $ - As of December 31, 2017, the Company has a net operating loss carry-forward for U.S. federal income tax purposes of approximately $16.6 million. This carry-forward is available to offset future taxable income, if any, and will expire, if not used, from 2018 through 2037. The utilization of the net operating loss carry-forward is dependent upon the tax laws in effect at the time the net operating loss carry-forward can be utilized and may be limited by changes in ownership control of the Company. The Company’s U.S. federal and Utah income tax returns, constituting the returns of the major taxing jurisdictions, are subject to examination by the taxing authorities for all open years as prescribed by applicable statute. No income tax waivers have been executed that would extend the period subject to examination beyond the period prescribed by statute. The Company is no longer subject to U.S. federal tax examinations for tax years before and including December 31, 2013. The Company is no longer subject to Utah state tax examinations for tax years before and including December 31, 2011. During the years ended December 31, 2017 and 2016, the Company did not incur interest and penalties. |
Other Related Party Transaction
Other Related Party Transactions | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
Other Related Party Transactions | Note 13 – Other Related Party Transactions Effective February 1, 2017, the Company entered into a consulting agreement with a member of the Board. Under the agreement, the individual agreed to provide advisory services related to our clinical assets, capital markets, public company related issues and other matters as agreed. The agreement had an original term of twelve months with compensation of $120,000. In November 2017, the term was modified to nine months and the compensation adjusted to $90,000. There was also the issuance of 3,750 shares issued to the related party which was valued at $30,000. This agreement has currently expired. During the year ended December 31, 2016, the Company had consulting agreements in place with two of the members of its Board. These directors provide marketing and medical advisory services. One of the agreements was terminated during the year ended December 31, 2016. The remaining consulting agreement may be terminated by either the Company or by the consultant at any time and for any reason. During the year ended December 31, 2016, these directors were paid a total of $161,000 under these agreements. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 14 – Subsequent Events Convertible Debt Issuance In March 2018, the Company began issuing 8% convertible promissory notes. The convertible promissory notes are unsecured. Principal and accrued interest are due on the maturity date, which is two years from the date of issuance. The holder of the convertible promissory note is entitled, at its option, to convert all or any portion of the outstanding principal into shares of the Company’s common stock at a conversion price of $6.30 per share. Interest accruing from the date of issuance to the conversion date shall be paid on the maturity date. If the Company completes a public offering of its common stock, the convertible promissory notes and accrued interest automatically convert into common stock at the lower of i) 90% of the public offering price or ii) $6.30 per share. Through April 16, 2018, the Company has issued $2,972,750 in convertible promissory notes. The Company evaluated all subsequent events that occurred after the balance sheet date through April 16, 2018, the date its financial statements were available to be issued, and concluded there were no additional events and transactions occurring during this period that required recognition or disclosure in the financial statements. |
Organization and Summary of S21
Organization and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Organization | Organization |
Principles of Consolidation | Principles of Consolidation |
Going Concern | Going Concern The ability of the Company to continue as a going concern is dependent on the Company successfully obtaining additional funding, developing products that can be sold profitably, and generating cash through operating activities. Management’s plans include issuing equity or debt securities to fund capital requirements and developing ongoing operations. See Note 14 for funds received in a convertible promissory note offering subsequent to the year ended December 31, 2017. However, there can be no assurance the Company will continue to be successful in raising sufficient funds to continue as a going concern. |
Use of Estimates | Use of Estimates |
Concentration of Credit Risk | Concentration of Credit Risk |
Fair Value of Financial Instruments | Fair Value of Financial Instruments |
Cash and Cash Equivalents | Cash and Cash Equivalents |
Trade Receivables and Credit Policies | Trade Receivables and Credit Policies |
Inventory | Inventory |
Property and Equipment | Property and Equipment |
Intangible Assets | Intangible Assets |
Revenue Recognition | Revenue Recognition |
Research and Development | Research and Development |
Employee Stock-based Compensation | Employee Stock-based Compensation |
Non-Employee Stock-based Compensation | Non-Employee Stock-based Compensation |
Income Taxes | Income Taxes The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon settlement. |
Basic and Diluted Loss Per Share | Basic and Diluted Loss Per Share and 2016, the following items were excluded from the computation of diluted net loss per common share as their effect is anti-dilutive: For the Years Ended December 31, 2017 2016 Warrants to purchase shares 1,184,998 430,923 Stock options 331,000 - Restricted common stock grants - 109 Convertible debentures - 274,856 Convertible notes 201,155 205,212 |
Foreign Currency Policy | Foreign Currency Policy – |
Related Parties | Related Parties |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Revenue from Contracts with Customers (Topic 606) In February 2016, the FASB issued ASU No. 2016-02: Leases In November 2016, the FASB issued an ASU amending the presentation of restricted cash within the statement of cash flows. The new guidance requires that restricted cash be included within cash and cash equivalents on the statement of cash flows. The ASU is effective retrospectively for reporting periods beginning after December 15, 2017, with early adoption permitted. The Company will adopt this ASU on January 1, 2018 which will have no impact on the Company’s financial statements. In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting. In July 2017, the FASB issued ASU 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 ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities was issued in August 2017. The amendments under ASU 2017-12, refine and expand hedge accounting requirements for both financial (e.g., interest rate) and commodity risks. Its provisions create more transparency around how economic results are presented, both on the face of the financial statements and in the footnotes. It also makes certain targeted improvements to simplify the application of hedge accounting guidance. The standard is effective for interim and annual reporting periods beginning after December 15, 2019, with early adoption permitted. The Company will adopt this ASU on January 1, 2020. The Company does not currently have any derivative or hedging instruments but may in the future. The Company is assessing the impact the adoption of this ASU could have on the consolidated financial statements. |
Organization and Summary of S22
Organization and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | As of and 2016, the following items were excluded from the computation of diluted net loss per common share as their effect is anti-dilutive: For the Years Ended December 31, 2017 2016 Warrants to purchase shares 1,184,998 430,923 Stock options 331,000 - Restricted common stock grants - 109 Convertible debentures - 274,856 Convertible notes 201,155 205,212 |
Inventory (Tables)
Inventory (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventory consists of the following: 2017 2016 Raw materials $ 66,417 $ 69,264 Work in progress 12,465 31,185 Finished goods 176,755 191,110 Total inventory 255,637 291,559 Less carrying value of inventory not deemed to be a current asset 255,637 291,559 Inventory, included in current assets $ - $ - |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consists of the following at December 31, 2017 and 2016: Life 2017 2016 Computer equipment 3 years $ 38,134 $ 19,787 Office equipment 3 to 5 years 19,151 13,852 Tooling 5 years 92,228 92,228 149,513 125,867 Less accumulated depreciation (68,135 ) (42,950 ) Property and equipment, net $ 81,378 $ 82,917 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Liabilities | Accrued liabilities consists of the following at December 31, 2017 and 2016: 2017 2016 Accrued interest $ - $ 234,405 Accrued royalties 17,873 17,873 Accrued payroll and payroll taxes 7,529 12,420 Total accrued liabilities $ 25,402 $ 264,698 |
Notes Payable (Tables)
Notes Payable (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Notes Payable | Notes payable is summarized as follows: December 31, 2017 2016 Convertible debentures; unsecured; interest at 8.00% per annum; settled during 2017 $ - $ 1,257,050 Convertible notes payable; unsecured; interest at 8.00% per annum; due November 2020 1,206,931 1,206,931 Note payable secured by all the assets of the Company; interest at 15.0% per annum; settled during 2017 - 189,389 Unsecured note payable; interest at 10.00% per annum; due on demand - 32,000 Total notes payable 1,206,931 2,685,370 Less: current portion - 32,000 Notes payable, net of current portion $ 1,206,931 $ 2,653,370 |
Common Stock (Tables)
Common Stock (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Schedule of Restricted Common Stock Vested | A summary of the status of the Company’s restricted common stock grants as of December 31, 2016 and changes during the year then ended, is presented below: Restricted Common Stock Grants Weighted Average Common Stock Price Balance at December 31, 2015 31,709 $ 4.00 Awarded - - Vested (31,600 ) 4.00 Balance at December 31, 2016 109 $ 4.00 Awarded - - Vested (109 ) 4.00 Balance at December 31, 2017 - $ 4.00 |
Schedule of Compensation Cost for Share-based Payment Arrangements, Allocation of Share-based Compensation Costs by Plan | Total stock-based compensation expense from all sources for the year ended December 31, 2017 and 2016, including stock-based compensation for the options, warrants and related amortization discussed in Note 9 and Note 10 below, have been included in the consolidated statements of operations as follows: For the Years Ended December 31, 2017 2016 Research and development expense $ 196,211 $ 166,625 Selling, general and administrative expense 662,596 113,114 Total share-based compensation $ 858,807 $ 279,739 |
Common Stock Options (Tables)
Common Stock Options (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Summary of Option Activity | A summary of option activity for the years ended December 31, 2017 and 2016 is presented below: Shares Under Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life Aggregate Intrinsic Value of Vested Options Outstanding at December 31, 2016 - $ - - $ - Issued 331,000 8.05 Exercised - - Expired - - Outstanding at December 31, 2017 331,000 $ 8.05 10.00 years $ - Vested at December 31, 2017 64,813 $ 8.27 9.74 years $ - |
Board and Key Employee Option Grants [Member] | |
Schedule of Fair Value of Options Grants Using Black Scholes Method | The fair value was computed using the Black Scholes method using the following weighted-average assumptions: Expected life 5.43 Years Exercise price $ 8.07 Expected volatility 118 % Expected dividends None Risk-free interest rate 2.00 % |
CEO Stock Option Incentive [Member] | |
Schedule of Fair Value of Options Grants Using Black Scholes Method | Expected life 5.70 Years Exercise price $ 8.00 Expected volatility 116 % Expected dividends None Risk-free interest rate 1.84 % |
Common Stock Warrants (Tables)
Common Stock Warrants (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Fair Value of Warrants Using Black Scholes Method | The fair value was computed using the Black Scholes method using the following assumptions. Expected life 1.52 Years Exercise price $ 12.00 Expected volatility 107 % Expected dividends None Risk-free interest rate 1.33 % |
Schedule of Warrant Activity | A summary of warrant activity for the years ended December 31, 2017 and 2016 is presented below: Shares Under Warrants Weighted Average Exercise Price Weighted Average Remaining Contractual Life Aggregate Intrinsic Value of Vested Warrants Outstanding at December 31, 2015 177,901 $ 4.32 7.3 years $ 213,364 Issued 253,022 10.08 Exercised - - Expired - - Rounding 15 - Outstanding at December 31, 2016 430,938 $ 7.04 4.2 years $ 546,333 Issued 774,656 10.11 Exercised - - Expired/Forfeited (20,625 ) 4.00 Rounding 29 Outstanding at December 31, 2017 1,184,998 $ 9.16 1.9 years $ 1,160,404 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Net Deferred Tax Assets (Liabilities) | The significant components of net deferred tax assets (liabilities) were as follows at December 31, 2017 and 2016: 2017 2016 Net operating losses $ 4,316,700 $ 4,841,700 Research and development credit carryforward 145,700 129,500 Related-party accruals - 2,300 Depreciation and amortization (11,100 ) 15,500 Valuation allowance (4,451,300 ) (4,989,000 ) Net Deferred Tax Asset $ - $ - |
Schedule of Effective Reconciliation of Income Tax Expense Benefit | A reconciliation of the expected income tax benefit at the U.S. Federal income tax rate to the income tax benefit actually recognized for the years ended December 31, 2017 and 2016 is set forth below: 2017 2016 Net loss $ (1,396,000 ) $ (1,082,400 ) Non-deductible expenses and other 217,700 110,300 Effect due to decrease in tax rates 1,716,000 - Change in valuation allowance (537,700 ) 972,100 Benefit from income taxes $ - $ - |
Organization and Summary of S31
Organization and Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Cash equivalents | ||
Estimated useful life for intangible assets | 18 years | |
Tax benefits recognized, description | The tax benefits recognized in the financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon settlement. | |
Foreign currency transactions | ||
Maximum [Member] | ||
Estimated useful life for property and equipment | 3 years | |
Minimum [Member] | ||
Estimated useful life for property and equipment | 5 years |
Organization and Summary of S32
Organization and Summary of Significant Accounting Policies - Schedule of Antidilutive Securities Excluded from Computation of Earnings per Share (Details) - shares | 3 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Warrant to Purchase Shares [Member] | ||
Antidilutive securities excluded from computation of earnings per share | 1,184,998 | 430,923 |
Stock Options [Member] | ||
Antidilutive securities excluded from computation of earnings per share | 331,000 | |
Restricted Common Stock Grants [Member] | ||
Antidilutive securities excluded from computation of earnings per share | 109 | |
Convertible Debentures [Member] | ||
Antidilutive securities excluded from computation of earnings per share | 274,856 | |
Convertible Notes [Member] | ||
Antidilutive securities excluded from computation of earnings per share | 201,155 | 205,212 |
Inventory (Details Narrative)
Inventory (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Inventory Disclosure [Abstract] | ||
Obsolete inventory | $ 10,193 |
Inventory - Schedule of Invento
Inventory - Schedule of Inventory (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 66,417 | $ 69,264 |
Work in progress | 12,465 | 31,185 |
Finished goods | 176,755 | 191,110 |
Total inventory | 255,637 | 291,559 |
Less carrying value of inventory not deemed to be a current assets | 255,637 | 291,559 |
Inventory, included in current assets |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 27,650 | $ 23,624 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Property and equipment gross | $ 149,513 | $ 125,867 |
Less accumulated depreciation | (68,135) | (42,950) |
Property and equipment, net | $ 81,378 | 82,917 |
Minimum [Member] | ||
Property and equipment life | 5 years | |
Maximum [Member] | ||
Property and equipment life | 3 years | |
Computer Equipment [Member] | ||
Property and equipment life | 3 years | |
Property and equipment gross | $ 38,134 | 19,787 |
Office Equipment [Member] | ||
Property and equipment gross | $ 19,151 | 13,852 |
Office Equipment [Member] | Minimum [Member] | ||
Property and equipment life | 3 years | |
Office Equipment [Member] | Maximum [Member] | ||
Property and equipment life | 5 years | |
Tooling [Member] | ||
Property and equipment life | 5 years | |
Property and equipment gross | $ 92,228 | $ 92,228 |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Number of patents purchased | $ 175,300 | ||
Patents, remaining amortization period | 220 months | ||
Amortization of patents per month | $ 797 | ||
Amortization of patents per year | 9,562 | ||
Amortization expense | 9,562 | $ 9,562 | |
Accumulated amortization | $ 19,124 |
Accrued Liabilities (Details Na
Accrued Liabilities (Details Narrative) | Dec. 31, 2016USD ($) |
Payables and Accruals [Abstract] | |
Related party accrued interest | $ 35,519 |
Accrued Liabilities - Schedule
Accrued Liabilities - Schedule of Accrued Liabilities (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Payables and Accruals [Abstract] | ||
Accrued interest | $ 234,405 | |
Accrued royalties | 17,873 | 17,873 |
Accrued payroll and payroll taxes | 7,529 | 12,420 |
Total accrued liabilities | $ 25,402 | $ 264,698 |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) - USD ($) | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Aug. 16, 2016 | |
Warrant exercise price per share | $ 12 | |||
Note payable | $ 1,206,931 | $ 2,685,370 | ||
Accrued interest payable | 29,498 | |||
Proceeds from issuance of related party debt | 35,000 | 210,000 | ||
Related-party notes payable | $ 105,000 | |||
Shor term advances | $ 35,000 | |||
Placement Agent Agreement [Member] | ||||
Debt conversion price per share | $ 6.48 | |||
Warrant exercise price per share | $ 5.20 | |||
Placement Agent Agreement [Member] | Warrants [Member] | ||||
Number of warrant issued shares of common stock | 215,772 | 114,623 | ||
Placement Agent Agreement [Member] | Maximum [Member] | ||||
Number of warrant issued shares of common stock | 330,433 | |||
Warrant term | 36 months | |||
Patent Assignment Agreement [Member] | ||||
Repayment of debentures | $ 25,000 | $ 25,000 | ||
Advance due | 50,000 | |||
Convertible Debentures [Member] | ||||
Debt principal amount | $ 742,950 | |||
Debt instrument interest rate | 8.00% | 8.00% | ||
Debt conversion price per share | $ 5.20 | $ 5.20 | ||
Repayment of debentures | $ 164,000 | |||
Debt instrument interest amount | 25,700 | $ 70,527 | ||
Debt conversion of convertible debt | 1,093,050 | $ 742,950 | ||
Debt conversion interest amount | $ 162,741 | |||
Debt conversion of convertible shares issued | 241,500 | 156,438 | ||
Accrued interest payable | $ 162,741 | $ 70,527 | ||
Convertible Notes [Member] | ||||
Debt principal amount | $ 1,206,931 | |||
Debt instrument interest rate | 8.00% | |||
Debt conversion price per share | $ 6 | |||
Common stock trading and closes price per share | $ 28 | |||
Convertible Debentures [Member] | ||||
Debt principal amount | $ 2,000,000 | |||
Debt instrument interest rate | 8.00% | |||
Debt conversion price per share | $ 5.20 | |||
Debt instrument, maturity date | May 1, 2018 | |||
Note payable | $ 1,257,050 | |||
Note Payable to a Relative of an Executive Officer [Member] | ||||
Debt principal amount | 89,389 | |||
Debt instrument interest rate | 15.00% | |||
Debt conversion of convertible debt | $ 100,000 | |||
Debt conversion of convertible shares issued | 8,334 | |||
Warrant exercise price per share | $ 12 | |||
Number of warrant issued shares of common stock | 8,334 | |||
Note payable | $ 189,389 | |||
Accrued interest payable | $ 39,071 | |||
Other Notes Payable [Member] | ||||
Debt principal amount | $ 32,000 | |||
Debt instrument interest rate | 8.00% | |||
Accrued interest payable | 1,185 | |||
Related-Party Notes Payable [Member] | ||||
Debt principal amount | 105,000 | |||
Repayment of debentures | 50,000 | 105,000 | ||
Debt instrument interest amount | 5,000 | |||
Debt conversion of convertible debt | $ 60,000 | |||
Debt conversion of convertible shares issued | 5,000 | |||
Warrant exercise price per share | $ 12 | |||
Number of warrant issued shares of common stock | 5,000 | |||
Accrued interest payable | 3,089 | |||
Proceeds from issuance of related party debt | $ 210,000 | |||
Related-party [Member] | Maximum [Member] | ||||
Debt instrument interest rate | 10.00% | |||
Related-party [Member] | Minimum [Member] | ||||
Debt instrument interest rate | 8.00% |
Notes Payable - Schedule of Not
Notes Payable - Schedule of Notes Payable (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Total notes payable | $ 1,206,931 | $ 2,685,370 |
Less: current portion | 32,000 | |
Notes payable, net of current portion | 1,206,931 | 2,653,370 |
Convertible Debentures [Member] | ||
Total notes payable | 1,257,050 | |
Convertible Notes Payable [Member] | ||
Total notes payable | 1,206,931 | 1,206,931 |
Secured Notes Payable [Member] | ||
Total notes payable | 189,389 | |
Unsecured Note Payable [Member] | ||
Total notes payable | $ 32,000 |
Notes Payable - Schedule of N42
Notes Payable - Schedule of Notes Payable (Details) (Parenthetical) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Convertible Debentures [Member] | ||
Debt interest percentage | 8.00% | 8.00% |
Debt instrument term description | during 2,017 | during 2,017 |
Convertible Note Payable [Member] | ||
Debt interest percentage | 8.00% | 8.00% |
Debt instrument term description | due November 6, 2020 | due November 6, 2020 |
Secured Note Payable [Member] | ||
Debt interest percentage | 15.00% | 15.00% |
Debt instrument term description | during 2,017 | during 2,017 |
Unsecured Note Payable [Member] | ||
Debt interest percentage | 10.00% | 10.00% |
Debt instrument term description | due on demand | due on demand |
Preferred Stock (Details Narrat
Preferred Stock (Details Narrative) - $ / shares | Dec. 31, 2017 | Dec. 31, 2016 |
Equity [Abstract] | ||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred Stock, shares issued | ||
Preferred Stock, shares outstanding |
Common Stock (Details Narrative
Common Stock (Details Narrative) - USD ($) | Dec. 28, 2015 | Oct. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2017 | Jul. 31, 2017 | Jul. 07, 2016 |
Reverse stock split | 1-for-8 reclassification, or reverse stock split | ||||||
Deferred offering costs | $ 303,401 | ||||||
Exercise price of warrants | $ 12 | ||||||
Proceeds from issuance of common stock | $ 6,531,568 | $ 1,498,731 | |||||
Common stock shares issued | 3,861,848 | 3,000,815 | |||||
Accrued interest | $ 29,498 | ||||||
Number of common stock shares issued for services, value | $ 50,500 | $ 17,265 | |||||
Board Member and Consultant [Member] | |||||||
Number of common stock shares issued for services | 6,250 | ||||||
Number of common stock shares issued for services, value | $ 50,500 | ||||||
Consultants [Member] | |||||||
Exercise price of warrants | $ 12 | ||||||
Number of common stock shares issued for services | 2,471 | ||||||
Number of common stock shares issued for services, value | $ 17,265 | ||||||
Directors, Officers and Consultants [Member] | |||||||
Amortization of deferred compensation | 433 | 126,400 | |||||
Convertible Debentures [Member] | |||||||
Debt conversion of convertible debt | 1,093,050 | 742,950 | |||||
Accrued interest | $ 162,741 | $ 70,527 | |||||
Debt conversion price per share | $ 5.20 | $ 5.20 | |||||
Debt conversion of convertible shares issued | 241,500 | 156,438 | |||||
Convertible Debentures [Member] | Related-party [Member] | |||||||
Debt conversion of convertible debt | $ 55,000 | ||||||
Accrued interest | $ 5,000 | ||||||
Debt conversion price per share | $ 12 | ||||||
Debt conversion of convertible shares issued | 5,000 | ||||||
Convertible Debentures [Member] | Executive Officer [Member] | |||||||
Debt conversion of convertible debt | $ 100,000 | ||||||
Debt conversion price per share | $ 12 | ||||||
Debt conversion of convertible shares issued | 8,334 | ||||||
Common Stock [Member] | |||||||
Number of common stock shares issued for services | 6,250 | 2,471 | |||||
Number of common stock shares issued for services, value | $ 6 | $ 2 | |||||
Private Placement [Member] | Common Stock [Member] | |||||||
Deferred offering costs | $ 664,452 | $ 161,702 | |||||
Number of units subscribed | 544,300 | 138,369 | |||||
Proceeds from issuance of common stock | $ 6,531,568 | $ 1,660,433 | |||||
Two Separate Placement Agents [Member] | |||||||
Commission fees | $ 664,452 | $ 161,702 | |||||
Common stock shares issued | 55,372 | 12,896 | |||||
Minimum [Member] | |||||||
Excess stock, shares authorized | 40,000,000 | ||||||
Minimum [Member] | Private Placement [Member] | |||||||
Common stock price per share | $ 12 | ||||||
Maximum [Member] | |||||||
Excess stock, shares authorized | 120,000,000 | ||||||
Maximum [Member] | Private Placement [Member] | |||||||
Number of common stock units offered | 437,500 | ||||||
Common stock price per share | $ 12 |
Common Stock - Schedule of Rest
Common Stock - Schedule of Restricted Common Stock Vested (Details) - $ / shares | Aug. 09, 2017 | Dec. 31, 2017 | Dec. 31, 2016 |
Restricted Common Stock Grants Awarded | 75,000 | 331,000 | |
Weighted Average Common Stock Price Awarded | $ 2.34 | ||
Weighted Average Common Stock Price Vested | $ 6.32 | $ 6.08 | |
Restricted Common Stock [Member] | |||
Restricted Common Stock Grants Beginning Balance | 109 | 31,709 | |
Restricted Common Stock Grants Awarded | |||
Restricted Common Stock Grants Vested | (109) | (31,600) | |
Restricted Common Stock Grants Ending Balance | 109 | ||
Weighted Average Common Stock Price Beginning Balance | $ 4 | $ 4 | |
Weighted Average Common Stock Price Awarded | |||
Weighted Average Common Stock Price Vested | 4 | 4 | |
Weighted Average Common Stock Price Ending Balance | $ 4 | $ 4 |
Common Stock - Schedule of Comp
Common Stock - Schedule of Compensation Cost for Share-based Payment Arrangements, Allocation of Share-based Compensation Costs by Plan (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Total share-based compensation | $ 858,807 | $ 279,739 |
Research and Development Expense [Member] | ||
Total share-based compensation | 196,211 | 166,626 |
Selling, General and Administrative Expenses [Member] | ||
Total share-based compensation | $ 662,596 | $ 113,114 |
Common Stock Options (Details N
Common Stock Options (Details Narrative) - USD ($) | Aug. 09, 2017 | Mar. 29, 2017 | Nov. 30, 2017 | Aug. 31, 2017 | Apr. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 |
Common stock shares authorized | 120,000,000 | 120,000,000 | |||||
Common stock shares issued | 3,861,848 | 3,000,815 | |||||
Number of option granted | 75,000 | 331,000 | |||||
Option exercise price per share | $ 8 | $ 8.05 | |||||
Vested price per share | $ 2.34 | ||||||
Fair value of vested | $ 64,813 | ||||||
Stock option expenses | 601,056 | ||||||
Amortization related cost | 133,532 | ||||||
Key Employees [Member] | |||||||
Compensation committee issuance | $ 203,500 | ||||||
Consultant [Member] | |||||||
Compensation committee issuance | $ 203,500 | ||||||
Employment Agreement [Member] | |||||||
Stock option expire year | 10 years | ||||||
Directors [Member] | |||||||
Number of option granted | 52,500 | ||||||
Vested price per share | $ 6.06 | ||||||
Fair value of vested | $ 1,550,712 | ||||||
Directors [Member] | Minimum [Member] | |||||||
Option exercise price per share | $ 8 | ||||||
Directors [Member] | Maximum [Member] | |||||||
Option exercise price per share | $ 10 | ||||||
Key Employees and Consultant [Member] | |||||||
Option exercise price per share | $ 8 | ||||||
Vested period, description | vest quarterly through September 2019 | ||||||
Through September 2019 [Member] | |||||||
Unrecognized expense | $ 949,656 | ||||||
Stock option expire year | 7 months 21 days | ||||||
On or Before July 1, 2018 [Member] | Employment Agreement [Member] | U.S. Food and Drug Administration [Member] | |||||||
Number of option granted | 112,500 | ||||||
On or Before January 1, 2019 [Member] | Employment Agreement [Member] | U.S. Food and Drug Administration [Member] | |||||||
Number of option granted | 75,000 | ||||||
On or Before January 1, 2020 [Member] | Employment Agreement [Member] | U.S. Food and Drug Administration [Member] | |||||||
Number of option granted | 37,500 | ||||||
Through December 31, 2018 [Member] | |||||||
Amortization related cost | $ 472,000 | ||||||
Over the Next Six Months [Member] | |||||||
Amortization related cost | $ 338,468 | ||||||
Stock Incentive Plan [Member] | |||||||
Common stock shares authorized | 500,000 | ||||||
Common stock shares issued | 40,000 | ||||||
Common stock shares issued percentage | 8.00% | ||||||
Stock Option Incentive Plan [Member] | |||||||
Number of stock options available for grant | 131,500 | ||||||
Stock Option Incentive Plan [Member] | Chief Executive Officer [Member] | Maximum [Member] | |||||||
Number of stock options available for grant | 112,500 | ||||||
Stock Option Incentive Plan [Member] | January 1, 2027 [Member] | |||||||
Common stock shares authorized | 900,000 |
Common Stock Options - Schedule
Common Stock Options - Schedule of Fair Value of Options Grants Using Black Scholes Method (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Expected life | 4 years 6 months | 4 years 6 months |
Expected volatility | 122.00% | 124.00% |
Expected dividends | 0.00% | 0.00% |
Risk-free interest rate | 1.84% | 1.33% |
Board and Key Employee Option Grants [Member] | ||
Expected life | 5 years 5 months 5 days | |
Exercise price | $ 8.07 | |
Expected volatility | 118.00% | |
Expected dividends | 0.00% | |
Risk-free interest rate | 2.00% | |
CEO Stock Option Incentive [Member] | ||
Expected life | 5 years 8 months 12 days | |
Exercise price | $ 8 | |
Expected volatility | 116.00% | |
Expected dividends | 0.00% | |
Risk-free interest rate | 1.84% |
Common Stock Options - Summary
Common Stock Options - Summary of Option Activity (Details) - USD ($) | Aug. 09, 2017 | Dec. 31, 2017 |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Shares Under Option, Outstanding Beginning Balance | ||
Shares Under Option, Issued | 75,000 | 331,000 |
Shares Under Option, Exercised | ||
Shares Under Option, Expired | ||
Shares Under Option, Outstanding Ending Balance | 331,000 | |
Shares Under Option, Vested | 64,813 | |
Weighted Average Exercise Price, Outstanding Beginning Balance | ||
Weighted Average Exercise Price, Issued | $ 8 | 8.05 |
Weighted Average Exercise Price, Exercised | ||
Weighted Average Exercise Price, Expired | ||
Weighted Average Exercise Price, Outstanding Ending Balance | 8.05 | |
Weighted Average Exercise Price, Vested | $ 8.27 | |
Weighted Average Remaining Contractual Life, Outstanding Beginning | 0 years | |
Weighted Average Remaining Contractual Life, Outstanding Ending | 10 years | |
Weighted Average Remaining Contractual Life, Vested | 9 years 8 months 26 days | |
Aggregate Intrinsic Value Vested Options, Outstanding Beginning Balance | ||
Aggregate Intrinsic Value Vested Options, Outstanding Ending Balance | ||
Aggregate Intrinsic Value Vested Options, Vested |
Common Stock Warrants (Details
Common Stock Warrants (Details Narrative) - USD ($) | Jul. 01, 2017 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 |
Fair value of warrant vested price per share | $ 6.32 | $ 6.08 | ||
Risk-free interest rate | 1.84% | 1.33% | ||
Expected volatility | 122.00% | 124.00% | ||
Expected life | 4 years 6 months | 4 years 6 months | ||
Expected dividend yield | 0.00% | 0.00% | ||
Share based compensation | $ 858,807 | $ 279,739 | ||
Number of warrants forfeited | 20,625 | |||
Exercise price of warrants | $ 12 | |||
Fair value of warrants | $ 3,359 | |||
Intrinsic value | $ 7.28 | |||
Consultants [Member] | ||||
Warrants issued | 1,250 | |||
Exercise price of warrants | $ 12 | |||
Warrants expiration date | Sep. 30, 2020 | |||
Warrants [Member] | ||||
Risk-free interest rate | 1.33% | |||
Expected volatility | 107.00% | |||
Expected life | 1 year 6 months 7 days | |||
Expected dividend yield | 0.00% | |||
Share based compensation | $ 69,927 | $ 136,074 |
Common Stock Warrants - Schedul
Common Stock Warrants - Schedule of Fair Value of Warrants Using Black Scholes Method (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Expected life | 4 years 6 months | 4 years 6 months |
Expected volatility | 122.00% | 124.00% |
Expected dividends | 0.00% | 0.00% |
Risk-free interest rate | 1.84% | 1.33% |
Warrants [Member] | ||
Expected life | 1 year 6 months 7 days | |
Exercise price | $ 12 | |
Expected volatility | 107.00% | |
Expected dividends | 0.00% | |
Risk-free interest rate | 1.33% |
Common Stock Warrants - Sched52
Common Stock Warrants - Schedule of Warrant Activity (Details) - Warrants [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Shares Under Warrants Outstanding, Beginning Balance | 430,938 | 177,901 |
Shares Under Warrants, Issued | 774,685 | 253,022 |
Shares Under Warrants, Exercised | ||
Shares Under Warrants, Expired/Forfeited | ||
Shares Under Warrants, Rounding | (20,625) | 15 |
Shares Under Warrants Outstanding, Ending Balance | 1,205,623 | 430,938 |
Weighted-Average Exercise Price, Outstanding Beginning Balance | $ 7.04 | $ 4.32 |
Weighted-Average Exercise Price, Issued | 10.11 | 10.08 |
Weighted-Average Exercise Price, Exercised | ||
Weighted-Average Exercise Price, Expired/Forfeited | 4 | |
Weighted-Average Exercise Price, Rounding | ||
Weighted-Average Exercise Price, Outstanding Ending Balance | $ 9.16 | $ 7.04 |
Weighted-Average Remaining Contractual Life, Outstanding Beginning Balance | 4 years 2 months 12 days | 7 years 3 months 19 days |
Weighted-Average Remaining Contractual Life, Outstanding Ending Balance | 1 year 10 months 25 days | 4 years 2 months 12 days |
Aggregate Intrinsic Value Shares Outstanding Beginning | $ 546,333 | $ 213,364 |
Aggregate Intrinsic Value Shares Outstanding Ending | $ 160,404 | $ 546,333 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Lease expense | $ 48,871 | $ 49,469 |
Lease Agreement [Member] | ||
Lease agreement term, description | The Company leases office space under an agreement that expires in July 2018, with an option to renew with a 3% annual rent escalation | |
Percentage of increase in lease rental payment | 3.00% | |
Monthly rental payments | $ 4,140 | |
Accrued royalties | 17,873 | $ 17,873 |
Lease Agreement [Member] | 2018 [Member] | ||
Monthly rental payments | $ 30,000 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | Dec. 22, 2017 | Dec. 31, 2017 |
U.S corporate tax rate | 35.00% | |
Reduction in U.S tax rate | 21.00% | |
Change in effective deferred tax rate | 21.00% | |
Unchanged effective tax rate | 5.00% | |
Domestic Tax Authority [Member] | ||
Net operating loss carry-forward | $ 16,600,000 | |
Operating loss carryforward expiration | from 2018 through 2037 |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Net Deferred Tax Assets (Liabilities) (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Income Tax Disclosure [Abstract] | ||
Net operating losses | $ 4,316,700 | $ 4,841,700 |
Research and development credit carryforward | 145,700 | 129,500 |
Related-party accruals | 2,300 | |
Depreciation and amortization | (11,100) | 15,500 |
Valuation allowance | (4,451,300) | (4,989,000) |
Net deferred tax asset |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Reconciliation of Income Tax Expense Benefit (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | ||
Net loss | $ (1,396,000) | $ (1,082,400) |
Non-deductible expenses and other | 217,700 | 110,300 |
Effect due to decrease in tax rates | 1,716,000 | |
Change in valuation allowance | (537,700) | 972,100 |
Benefit from Income Taxes |
Other Related Party Transacti57
Other Related Party Transactions (Details Narrative) - USD ($) | Feb. 02, 2017 | Nov. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 |
Compensation | $ 120,000 | $ 90,000 | ||
Number of shares issued during period, value | $ 50,500 | $ 17,265 | ||
Related Party [Member] | ||||
Number of shares issued during period | 3,750 | |||
Number of shares issued during period, value | $ 30,000 | |||
Directors [Member] | Consulting Agreement [Member] | ||||
Other related party transaction amount | $ 161,000 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - Subsequent Event [Member] - Convertible Promissory Notes [Member] | Mar. 31, 2018USD ($)$ / shares |
Convertible promissory note interest rate | 8.00% |
Debt conversion price | $ 6.30 |
Public offering price, percentage | 90.00% |
Common stock, per share | $ 6.30 |
Debt instrument face amount | $ | $ 2,972,750 |