Document and Entity Information
Document and Entity Information | 9 Months Ended |
Sep. 30, 2016 | |
Document And Entity Information | |
Entity Registrant Name | CARDAX, INC. |
Entity Central Index Key | 1,544,238 |
Document Type | S-1/A |
Document Period End Date | Sep. 30, 2016 |
Amendment Flag | true |
Amendment Description | AMENDMENT NO. 1 |
Current Fiscal Year End Date | --12-31 |
Entity Filer Category | Smaller Reporting Company |
Trading Symbol | CDXI |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
CURRENT ASSETS | |||
Cash | $ 240,898 | $ 323,410 | $ 35,696 |
Inventory | 25,275 | 958,575 | |
Deposits and other assets | 89,482 | 87,715 | 92,829 |
Prepaid expenses | 21,617 | 2,533 | 19,862 |
Total current assets | 377,272 | 413,658 | 1,106,962 |
PROPERTY AND EQUIPMENT, net | 9,263 | 13,923 | 20,611 |
INTANGIBLE ASSETS, net | 431,233 | 424,497 | 419,518 |
TOTAL ASSETS | 817,768 | 852,078 | 1,547,091 |
CURRENT LIABILITIES | |||
Accrued payroll and payroll related expenses | 3,511,589 | 3,468,610 | 3,555,961 |
Accounts payable and accrued expenses | 675,128 | 662,803 | 651,991 |
Fees payable to directors | 418,546 | 418,546 | 418,546 |
Employee settlement | 50,000 | 50,000 | 50,000 |
Other current liabilities | 85,004 | ||
Total current liabilities | 4,655,263 | 4,599,959 | 4,761,502 |
COMMITMENTS AND CONTINGENCIES | |||
Total liabilities | 4,655,263 | 4,599,959 | 4,761,502 |
STOCKHOLDERS' DEFICIT | |||
Preferred Stock - $0.001 par value; 50,000,000 shares authorized, 0 shares issued and outstanding as of September 30, 2016, December 31, 2015 and 2014, respectively | |||
Common stock - $0.001 par value; 400,000,000 shares authorized, 76,482,598, 69,087,955 and 63,885,930 shares issued and outstanding as of September 30, 2016, December 31, 2015 and 2014 respectively | 80,973 | 69,088 | 63,886 |
Additional paid-in-capital | 51,619,615 | 50,333,188 | 46,908,249 |
Deferred compensation | (294,264) | ||
Accumulated deficit | (55,538,083) | (54,150,157) | (49,892,282) |
Total stockholders' deficit | (3,837,495) | (3,747,881) | (3,214,411) |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ 817,768 | $ 852,078 | $ 1,547,091 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | |||
Preferred stock, par value | $ 0.001 | $ 0.001 | |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 | |
Preferred stock, shares issued | 0 | 0 | |
Preferred stock, shares outstanding | 0 | 0 | |
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 400,000,000 | 400,000,000 | 400,000,000 |
Common stock, shares issued | 80,972,876 | 69,087,955 | 63,885,930 |
Common stock, shares outstanding | 80,972,876 | 69,087,955 | 63,885,930 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Statement [Abstract] | ||||||
REVENUES | $ 11,160 | $ 11,160 | ||||
COSTS OF GOOD SOLD | 5,717 | 5,717 | ||||
GROSS PROFIT | 5,443 | 5,443 | ||||
OPERATING EXPENSES: | ||||||
General, and administrative expenses | 213,275 | 266,018 | 595,757 | 681,059 | 1,008,755 | 4,014,859 |
Inventory impairment | 958,575 | |||||
Research and development | 87,735 | 216,228 | 260,413 | 352,328 | 491,829 | 1,160,771 |
Sales and marketing | 63,375 | 63,375 | ||||
Depreciation and amortization | 6,619 | 4,373 | 22,055 | 19,373 | 23,758 | 38,972 |
Stock based compensation | 116,583 | 256,959 | 498,312 | 1,534,468 | 1,918,183 | 11,667,361 |
Total operating expenses | 487,587 | 743,578 | 1,439,912 | 2,587,228 | 4,401,100 | 16,881,963 |
Loss from operations | (482,144) | (743,578) | (1,434,469) | (2,587,228) | (4,401,100) | (16,881,963) |
OTHER INCOME (EXPENSES): | ||||||
Interest expense | (888) | (477) | (2,307) | (1,619) | (2,334) | (118,780) |
Interest income | 594 | 594 | 1,768 | 1,762 | 2,355 | 3,692 |
Other income | 47,082 | 48,204 | 48,204 | |||
Gain on sale of assets | 95,000 | 95,000 | 2,426 | |||
Total other income (expenses) | (294) | 117 | 46,543 | 143,347 | 143,225 | (112,662) |
Loss before the provision for income taxes | (482,438) | (743,461) | (1,387,926) | (2,443,881) | (4,257,875) | (16,994,625) |
PROVISION FOR INCOME TAXES | ||||||
NET LOSS | $ (482,438) | $ (743,461) | $ (1,387,926) | $ (2,443,881) | $ (4,257,875) | $ (16,994,625) |
NET LOSS PER SHARE | ||||||
Basic | $ (0.01) | $ (0.01) | $ (0.02) | $ (0.04) | $ (0.06) | $ (0.28) |
Diluted | $ (0.01) | $ (0.01) | $ (0.02) | $ (0.04) | $ (0.06) | $ (0.28) |
SHARES USED IN CALCULATION OF NET INCOME PER SHARE | ||||||
Basic | 79,581,511 | 67,955,379 | 73,949,386 | 66,000,101 | 66,873,761 | 60,225,524 |
Diluted | 79,581,511 | 67,955,379 | 73,949,386 | 66,000,101 | 66,873,761 | 60,225,524 |
Consolidated Statement of Chang
Consolidated Statement of Changes in Stockholders' Deficit - USD ($) | Common Stock [Member] | Series A Preferred Stock [Member] | Series B Preferred Stock [Member] | Additional Paid-In Capital [Member] | Deferred Compensation [Member] | Accumulated Deficit [Member] | Total | |
Balance at Dec. 31, 2013 | [1] | $ 33,229 | $ 40,118 | $ 20,237 | $ 19,867,961 | $ (32,897,657) | $ (12,936,112) | |
Balance, shares at Dec. 31, 2013 | [1] | 33,229,093 | 40,118,013 | 20,237,459 | ||||
Issuance of common stock | $ 6,277 | 3,916,823 | 3,923,100 | |||||
Issuance of common stock, shares | 6,276,960 | |||||||
Effect of reverse merger | $ 5,548 | $ (40,118) | $ (20,237) | 54,807 | ||||
Effect of reverse merger, shares | 5,548,404 | (40,118,013) | (20,237,459) | |||||
Stock option exercise | $ 5 | 693 | $ 698 | |||||
Stock option exercise, shares | 4,506 | (4,506) | ||||||
Conversion of 2013 notes payable | $ 14,447 | 9,014,813 | $ 9,029,260 | |||||
Conversion of 2013 notes payable, shares | 14,446,777 | |||||||
Conversion of 2014 notes payable | $ 3,353 | 2,092,554 | 2,095,907 | |||||
Conversion of 2014 notes payable, shares | 3,353,437 | |||||||
Common stock grants to consultant | $ 250 | 87,250 | 87,500 | |||||
Common stock grants to consultant, shares | 250,000 | |||||||
Common stock grants to independent directors | $ 777 | 705,457 | 706,234 | |||||
Common stock grants to independent directors, shares | 776,753 | |||||||
Stock based compensation - warrants | 5,250,540 | 5,250,540 | ||||||
Stock based compensation - options | 5,917,351 | 5,917,351 | ||||||
Deferred compensation | (294,264) | (294,264) | ||||||
Net loss | (16,994,625) | (16,994,625) | ||||||
Balance at Dec. 31, 2014 | $ 63,886 | 46,908,249 | (294,264) | (49,892,282) | (3,214,411) | |||
Balance, shares at Dec. 31, 2014 | 63,885,930 | |||||||
Effect of reverse merger | $ (1,402) | 1,402 | ||||||
Effect of reverse merger, shares | (1,402,426) | |||||||
Stock option exercise | $ 25 | 3,935 | $ 3,960 | |||||
Stock option exercise, shares | 25,556 | (41,851) | ||||||
Common stock grants to independent directors | $ 458 | 116,209 | $ 116,667 | |||||
Common stock grants to independent directors, shares | 458,170 | |||||||
Common stock grants to investor relations | $ 100 | 44,900 | 45,000 | |||||
Common stock grants to investor relations, shares | 100,000 | |||||||
Stock based compensation - warrants | 48,700 | 48,700 | ||||||
Stock based compensation - options | 1,409,592 | 1,409,592 | ||||||
Deferred compensation | 294,264 | 294,264 | ||||||
Restricted stock issuances | $ 6,021 | 1,800,201 | 1,806,222 | |||||
Restricted stock issuances, shares | 6,020,725 | |||||||
Net loss | (4,257,875) | (4,257,875) | ||||||
Balance at Dec. 31, 2015 | $ 69,088 | $ 50,333,188 | $ (54,150,157) | $ (3,747,881) | ||||
Balance, shares at Dec. 31, 2015 | 69,087,955 | |||||||
Stock option exercise, shares | ||||||||
Net loss | $ (1,387,926) | |||||||
Balance at Sep. 30, 2016 | $ (3,837,495) | |||||||
[1] | January 1, 2014 retroactively adjusted to reflect effects of the reverse acquisition transaction. |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | |
Cash flows from operating activities: | ||||
Net loss | $ (1,387,926) | $ (2,443,881) | $ (4,257,875) | $ (16,994,625) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||||
Depreciation and amortization | 22,055 | 19,373 | 23,758 | 38,972 |
Stock based compensation | 204,083 | 771,358 | 708,059 | 11,667,361 |
Gain on sale of assets | (95,000) | (95,000) | (2,426) | |
Amortization of debt discount | 4,592 | |||
Inventory impairment | 958,575 | |||
Changes in assets and liabilities: | ||||
Inventory | (25,275) | 28,099 | ||
Deposits and other assets | (1,767) | 5,102 | 5,114 | 1,391 |
Prepaid expenses | (19,084) | 12,389 | 17,329 | (5,482) |
Accrued payroll and payroll related expenses | 270,763 | 676,364 | 1,122,773 | (218,619) |
Accounts payable and accrued expenses | 78,770 | (16,626) | 10,808 | (50,328) |
Accrued interest | 222 | 222 | (101,553) | |
Fees payable to directors | (50,000) | |||
Other current liabilities | (12,613) | |||
Net cash used in operating activities | (858,381) | (1,070,699) | (1,506,237) | (5,695,231) |
Cash flows from investing activities: | ||||
Proceeds from sale of property and equipment | 10,000 | 10,000 | 87,430 | |
Increase in patents | (24,131) | (21,852) | (22,049) | (26,670) |
Purchases of property and equipment | (1,633) | |||
Net cash used in investing activities | (24,131) | (11,852) | (12,049) | 59,127 |
Cash flows from financing activities: | ||||
Proceeds from the issuance of common stock | 800,000 | 1,430,000 | 1,776,000 | 3,923,798 |
Proceeds from the issuances of notes payable | 30,000 | 30,000 | 2,076,000 | |
Repayment of principal on notes payable | (550,408) | |||
Net cash provided by financing activities | 800,000 | 1,460,000 | 1,806,000 | 5,449,390 |
NET (DECREASE) INCREASE IN CASH | (82,512) | 377,449 | 287,714 | (186,714) |
Cash at the beginning of the period | 323,410 | 35,696 | 35,696 | 222,410 |
Cash at the end of the period | 240,898 | 413,145 | 323,410 | 35,696 |
NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||||
Conversion of notes payable and accrued interest into common stock | 30,222 | 30,222 | 11,125,167 | |
Conversion of accrued payroll and payroll related expenses into stock options | 227,784 | 669,006 | 1,210,124 | |
Conversion of accounts payable into stock options | 66,445 | 301,063 | ||
Effect of merger with Cardax Pharmaceuticals, Inc. | 1,402 | |||
SUPPLEMENTAL DISCLOSURES: | ||||
Cash paid for interest | 2,249 | 2,112 | 188,382 | |
Cash paid for income taxes |
Company Background
Company Background | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Accounting Policies [Abstract] | ||
Company Background | NOTE 1 COMPANY BACKGROUND Cardax Pharmaceuticals, Inc. (Holdings) was incorporated in the State of Delaware on March 23, 2006. In May of 2006, Hawaii Biotech, Inc., contributed its anti-inflammatory, small molecule line of business into Holdings. Holdings issued (i) 9,447,100 shares of common stock of Holdings, (ii) 14,440,920 shares of Series A preferred stock of Holdings, (iii) 11,113,544 shares of Series B preferred stock of Holdings and (iv) 13,859,324 shares of Series C preferred stock of Holdings to Hawaii Biotech, Inc., in exchange for the assets and liabilities contributed to Holdings. The above shares were then distributed by Hawaii Biotech, Inc. to its shareholders. An additional 704,225 shares of Series C preferred stock were issued as part of the initial capitalization of Holdings. On January 30, 2007, all outstanding shares of Series A, B, and C preferred stock were converted into shares of Series A preferred stock. Holdings was formed for the purpose of developing a platform of proprietary, exceptionally safe, small molecule compounds for large unmet medical needs where oxidative stress and inflammation play important causative roles. Holdings platform has application in arthritis, metabolic syndrome, liver disease, and cardiovascular disease, as well as macular degeneration and prostate disease. Holdings current primary focus is on the development of astaxanthin technologies. Astaxanthin is a naturally occurring marine compound that has robust anti-oxidant and anti-inflammatory activity. In May of 2013, Holdings formed a 100% owned subsidiary company called Cardax Pharma, Inc. (Pharma). Pharma was formed to maintain Holdings operations going forward, leaving Holdings as an investment holding company. On November 29, 2013, Holdings entered into a definitive merger agreement (Merger Agreement) with Koffee Korner Inc., a Delaware corporation (Koffee Korner) (OTCQB:KOFF), and its wholly owned subsidiary (Koffee Sub), pursuant to which, among other matters and subject to the conditions set forth in such Merger Agreement, Koffee Sub would merge with and into Pharma. In connection with such merger agreement and related agreements, upon the consummation of such merger, Pharma would become a wholly owned subsidiary of Koffee Korner and Koffee Korner would issue shares of its common stock to Holdings. At the effective time of such merger, Holdings would own a majority of the shares of the then issued and outstanding shares of common stock of Koffee Korner. On February 7, 2014, Holdings completed its merger with Koffee Korner, which was renamed to Cardax, Inc. (the Company) (OTCQB:CDXI). Concurrent with the merger: (i) the Company received aggregate gross cash proceeds of $3,923,100 in exchange for the issuance and sale of an aggregate 6,276,960 of shares of the Companys common stock, together with five year warrants to purchase an aggregate of 6,276,960 shares of the Companys common stock at $0.625 per share, (ii) the notes issued on January 3, 2014, in the outstanding principal amount of $2,076,000 and all accrued interest thereon, automatically converted into 3,353,437 shares of the Companys common stock upon the reverse merger at $0.625 per share, together with five year warrants to purchase 3,321,600 shares of common stock at $0.625 per share, (iii) the notes issued in 2013, in the outstanding principal amount of $8,489,036 and all accrued interest thereon, automatically converted into 14,446,777 shares of the Companys common stock upon the reverse merger at $0.625 per share, together with five year warrants to purchase 14,446,777 shares of common stock at $0.625 per share, (iv) stock options to purchase 15,290,486 shares of Holdings common stock at $0.07 per share were cancelled and substituted with stock options to purchase 6,889,555 shares of the Companys common stock at $0.155 per share, (v) additional stock options to purchase 20,867,266 shares of the Companys common stock at $0.625 per share were issued, and (vi) the notes issued in 2008 and 2009, in the outstanding principal amounts of $55,000 and $500,000, respectively, and all accrued interest thereon, were repaid in full. The assets and liabilities of Koffee Korner were distributed in accordance with the terms of a spin-off agreement on the closing date. The share exchange transaction was treated as a reverse acquisition, with Holdings and Pharma as the acquirers and Koffee Korner and Koffee Sub as the acquired parties. Unless the context suggests otherwise, when the Company refers to business and financial information for periods prior to the consummation of the reverse acquisition, the Company is referring to the business and financial information of Holdings and Pharma. Under accounting principles generally accepted in the United States of America (U.S. GAAP) guidance Accounting Standards Codification (ASC) No. 805-40, Business Combinations Reverse Acquisitions On August 28, 2014, the Company entered into an Agreement and Plan of Merger (the Holdings Merger Agreement) with its principal stockholder, Holdings, pursuant to which Holdings would merge with and into the Company (the Holdings Merger). On September 18, 2015, the Company filed a Form S-4 with the SEC in contemplation of the Holdings Merger. There would not be any cash consideration exchanged in the Holdings Merger. Upon the closing of the Holdings Merger, the stockholders of Holdings would receive an aggregate number of shares and warrants to purchase shares of the Companys common stock equal to the aggregate number of shares of the Companys common stock that were held by Holdings on the date of the closing of the Holdings Merger. The Companys restricted shares of common stock held by Holdings would be cancelled upon the closing of the Holdings Merger. Accordingly, there would not be not any change to the Companys fully diluted capitalization due to the Holdings Merger. On November 24, 2015, the Holdings Merger Agreement was amended and restated (the Amended Holdings Merger Agreement). Under the terms of Amended Holdings Merger Agreement, the shares of common stock, par value $0.001 per share of Holdings and the shares of all other issued and outstanding capital stock of Holdings that by their terms were convertible or could otherwise be exchanged for shares of Holdings common stock, would be converted into and exchanged for the Companys shares of Common Stock in a ratio of approximately 2.2:1. In addition, the Company would grant Holdings option and warrant holders warrants to purchase the Companys warrants at the same stock conversion ratio. On November 24, 2015, the Company filed an amendment to the Form S-4 with the SEC and on December 29, 2015, the Form S-4 was declared effective by the SEC. On December 30, 2015, the Company completed its merger with Holdings, pursuant to the Amended Holdings Merger Agreement. At closing, Holdings merged with and into the Company, with the Company surviving the Holdings Merger. Pursuant to the Amended Holdings Merger Agreement, there was not any cash consideration exchanged in the Holdings Merger. Upon the closing of the Holdings Merger, the stockholders of Holdings received an aggregate number of shares and warrants to purchase shares of Company common stock equal to the aggregate number of shares of Company common stock that were held by Holdings on the date of the closing of the Holdings Merger. The Companys restricted shares of common stock held by Holdings were cancelled upon the closing of the Holdings Merger. Accordingly, there was not any change to the Companys fully diluted capitalization due to the Holdings Merger. Going concern matters The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the accompanying condensed consolidated financial statements, the Company incurred a net loss of $482,438 and $1,387,926 for the three and nine-months ended September 30, 2016, respectively, and a net loss of $743,461 and $2,443,881 for the three and nine-months ended 2015, respectively. The Company has incurred losses since inception resulting in an accumulated deficit of $55,538,083 as of September 30, 2016, and has had negative cash flows from operating activities since inception. The Company anticipates further losses in the development of its business. As a result of these and other factors, the Companys independent registered public accounting firm has determined there is substantial doubt about the Companys ability to continue as a going concern. In addition to the $985,000 raised in the calendar year through November 14, 2016, the Company plans to raise additional capital to carry out its business plan. The Companys ability to raise additional capital through future equity and debt securities issuances is unknown. Obtaining additional financing, the successful development of the Companys contemplated plan of operations, and its transition, ultimately, to profitable operations are necessary for the Company to continue operations. The ability to successfully resolve these factors raises substantial doubt about the Companys ability to continue as a going concern. The condensed consolidated financial statements of the Company do not include any adjustments that may result from the outcome of these uncertainties. On March 28, 2016, the Company furloughed all of its employees and independent contractors indefinitely and arranged with its Chief Executive Officer, David G. Watumull; its Chief Financial Officer, John B. Russell; and its Vice President, Operations, David M. Watumull, to continue their services for cash compensation equal to the minimum wage. On May 30, 2016, the compensation arrangement of our Vice President, Operations, David M. Watumull, was amended so that he would receive bi-weekly compensation equal to $3,269. On May 30, 2016, the compensation arrangement of our Vice President, Research, Timothy J. King, was amended so that he would receive bi-weekly compensation equal to $1,635. The Company continues to assess its commercial opportunities, which may include developing products or licensing its intellectual property, and may re-engage furloughed employees and contractors from time to time to the extent their services are required. In addition, each of the directors has agreed, effective April 1, 2016, to suspend any additional equity compensation, until otherwise agreed by the Company. In addition, the Company has deferred payment of other trade payables. On September 6, 2016, the compensation arrangements of certain officers were amended so that effective September 8, 2016, (i) our Chief Executive Officer, David G. Watumull would receive bi-weekly compensation equal to $4,327, (ii) our Chief Science Officer, Gilbert M. Rishton would receive bi-weekly compensation equal to $1,923, and (iii) our Vice President, Research, Timothy J. King would receive bi-weekly compensation equal to $3,269. On September 6, 2016, the compensation arrangement with JBR Business Solutions, LLC, under which John B. Russell serves as our Chief Financial Officer, was amended so that effective September 30, 2016, he would receive monthly compensation of $3,500. On September 6, 2016, the compensation arrangements of the independent directors of the Company were amended so that effective September 30, 2016, they would each receive quarterly equity compensation of $12,500 in arrears in the form of a grant of shares of our common stock or non-qualified stock options to purchase shares of the Companys common stock under the Cardax, Inc. 2014 Equity Compensation Plan based on the higher of the then current market price or $0.15 per share, with such compensation prorated for one of three months for the quarter ended September 30, 2016. | NOTE 1 COMPANY BACKGROUND Cardax Pharmaceuticals, Inc. (Holdings) was incorporated in the State of Delaware on March 23, 2006. In May of 2006, Hawaii Biotech, Inc., contributed its anti-inflammatory, small molecule line of business into Holdings. Holdings issued (i) 9,447,100 shares of common stock of Holdings, (ii) 14,440,920 shares of Series A preferred stock of Holdings, (iii) 11,113,544 shares of Series B preferred stock of Holdings and (iv) 13,859,324 shares of Series C preferred stock of Holdings to Hawaii Biotech, Inc., in exchange for the assets and liabilities contributed to Holdings. The above shares were then distributed by Hawaii Biotech, Inc. to its shareholders. An additional 704,225 shares of Series C preferred stock were issued as part of the initial capitalization of Holdings. On January 30, 2007, all outstanding shares of Series A, B, and C preferred stock were converted into shares of Series A preferred stock. Holdings was formed for the purpose of developing a platform of proprietary, exceptionally safe, small molecule compounds for large unmet medical needs where oxidative stress and inflammation play important causative roles. Holdings platform has application in arthritis, metabolic syndrome, liver disease, and cardiovascular disease, as well as macular degeneration and prostate disease. Holdings current primary focus is on the development of astaxanthin technologies. Astaxanthin is a naturally occurring marine compound that has robust anti-oxidant and anti-inflammatory activity. In May of 2013, Holdings formed a 100% owned subsidiary company called Cardax Pharma, Inc. (Pharma). Pharma was formed to maintain Holdings operations going forward, leaving Holdings as an investment holding company. On November 29, 2013, Holdings entered into a definitive merger agreement (Merger Agreement) with Koffee Korner Inc., a Delaware corporation (Koffee Korner) (OTCQB:KOFF), and its wholly owned subsidiary (Koffee Sub), pursuant to which, among other matters and subject to the conditions set forth in such Merger Agreement, Koffee Sub would merge with and into Pharma. In connection with such merger agreement and related agreements, upon the consummation of such merger, Pharma would become a wholly owned subsidiary of Koffee Korner and Koffee Korner would issue shares of its common stock to Holdings. At the effective time of such merger, Holdings would own a majority of the shares of the then issued and outstanding shares of common stock of Koffee Korner. On February 7, 2014, Holdings completed its merger with Koffee Korner, which was renamed to Cardax, Inc. (the Company) (OTCQB:CDXI). Concurrent with the merger: (i) the Company received aggregate gross cash proceeds of $3,923,100 in exchange for the issuance and sale of an aggregate 6,276,960 of shares of the Companys common stock, together with five year warrants to purchase an aggregate of 6,276,960 shares of the Companys common stock at $0.625 per share, (ii) the notes issued on January 3, 2014, in the outstanding principal amount of $2,076,000 and all accrued interest thereon, automatically converted into 3,353,437 shares of the Companys common stock upon the reverse merger at $0.625 per share, together with five year warrants to purchase 3,321,600 shares of common stock at $0.625 per share, (iii) the notes issued in 2013, in the outstanding principal amount of $8,489,036 and all accrued interest thereon, automatically converted into 14,446,777 shares of the Companys common stock upon the reverse merger at $0.625 per share, together with five year warrants to purchase 14,446,777 shares of common stock at $0.625 per share, (iv) stock options to purchase 15,290,486 shares of Holdings common stock at $0.07 per share were cancelled and substituted with stock options to purchase 6,889,555 shares of the Companys common stock at $0.155 per share, (v) additional stock options to purchase 20,867,266 shares of the Companys common stock at $0.625 per share were issued, and (vi) the notes issued in 2008 and 2009, in the outstanding principal amounts of $55,000 and $500,000, respectively, and all accrued interest thereon, were repaid in full. The assets and liabilities of Koffee Korner were distributed in accordance with the terms of a spin-off agreement on the closing date. The share exchange transaction was treated as a reverse acquisition, with Holdings and Pharma as the acquirers and Koffee Korner and Koffee Sub as the acquired parties. Unless the context suggests otherwise, when the Company refers to business and financial information for periods prior to the consummation of the reverse acquisition, the Company is referring to the business and financial information of Holdings and Pharma. Under accounting principles generally accepted in the United States of America (U.S. GAAP) guidance Accounting Standards Codification (ASC) No. 805-40, Business Combinations Reverse Acquisitions On August 28, 2014, the Company entered into an Agreement and Plan of Merger (the Holdings Merger Agreement) with its principal stockholder, Holdings, pursuant to which Holdings would merge with and into the Company (the Holdings Merger). On September 18, 2015, the Company filed a Form S-4 with the SEC in contemplation of the Holdings Merger. There would not be any cash consideration exchanged in the Holdings Merger. Upon the closing of the Holdings Merger, the stockholders of Holdings would receive an aggregate number of shares and warrants to purchase shares of the Companys common stock equal to the aggregate number of shares of the Companys common stock that were held by Holdings on the date of the closing of the Holdings Merger. The Companys restricted shares of common stock held by Holdings would be cancelled upon the closing of the Holdings Merger. Accordingly, there would not be not any change to the Companys fully diluted capitalization due to the Holdings Merger. On November 24, 2015, the Holdings Merger Agreement was amended and restated (the Amended Holdings Merger Agreement). Under the terms of Amended Holdings Merger Agreement, the shares of common stock, par value $0.001 per share of Holdings and the shares of all other issued and outstanding capital stock of Holdings that by their terms were convertible or could otherwise be exchanged for shares of Holdings common stock, would be converted into and exchanged for the Companys shares of Common Stock in a ratio of approximately 2.2:1. In addition, the Company would grant Holdings option and warrant holders warrants to purchase the Companys warrants at the same stock conversion ratio. On November 24, 2015, the Company filed an amendment to the Form S-4 with the SEC and on December 29, 2015, the Form S-4 was declared effective by the SEC. On December 30, 2015, the Company completed its merger with Holdings, pursuant to the Amended Holdings Merger Agreement. At closing, Holdings merged with and into the Company, with the Company surviving the Holdings Merger. Pursuant to the Amended Holdings Merger Agreement, there was not any cash consideration exchanged in the Holdings Merger. Upon the closing of the Holdings Merger, the stockholders of Holdings received an aggregate number of shares and warrants to purchase shares of Company common stock equal to the aggregate number of shares of Company common stock that were held by Holdings on the date of the closing of the Holdings Merger. The Companys restricted shares of common stock held by Holdings were cancelled upon the closing of the Holdings Merger. Accordingly, there was not any change to the Companys fully diluted capitalization due to the Holdings Merger. Going concern matters The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the accompanying consolidated financial statements, the Company incurred a net loss of $4,257,875 and $16,994,625 for the years ended December 31, 2015 and 2014, respectively. The Company has incurred losses since inception resulting in an accumulated deficit of $54,150,157 as of December 31, 2015, and has had negative cash flows from operating activities since inception. The Company anticipates further losses in the development of its business. As a result of these and other factors, the Companys independent registered public accounting firm has determined there is substantial doubt about the Companys ability to continue as a going concern. On March 28, 2016, the Company furloughed all of its employees and independent contractors indefinitely and arranged with its Chief Executive Officer, David G. Watumull; its Chief Financial Officer, John B. Russell; and its Vice President, Operations, David M. Watumull, to continue their services for cash compensation equal to the minimum wage. The Company continues to assess its commercial opportunities, which may include licensing its intellectual property or developing products with others, and may re-engage furloughed employees and contractors from time to time to the extent their services are required at cash compensation equal to the hourly minimum wage. In addition, each of the directors has agreed, effective April 1, 2016, to suspend any additional equity compensation, until otherwise agreed by the Company. In addition to the $1,806,000 raised during the year ended December 31, 2015, the Company plans to raise additional capital to carry out its business plan. The Companys ability to raise additional capital through future equity and debt securities issuances is unknown. Obtaining additional financing, the successful development of the Companys contemplated plan of operations, and its transition, ultimately, to profitable operations are necessary for the Company to continue operations. The ability to successfully resolve these factors raises substantial doubt about the Companys ability to continue as a going concern. The consolidated financial statements of the Company do not include any adjustments that may result from the outcome of these uncertainties. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Accounting Policies [Abstract] | ||
Summary of Significant Accounting Policies | NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) for interim financial information and the rules and regulations of the Securities and Exchange Commission (the SEC) for interim financial information. In the opinion of the Companys management, the accompanying condensed consolidated financial statements reflect all adjustments, consisting of normal, recurring adjustments, considered necessary for a fair presentation of the results for the interim periods ended September 30, 2016 and 2015. Although management believes that the disclosures in these unaudited condensed consolidated financial statements are adequate to make the information presented not misleading, certain information and footnote disclosures normally included in financial statements that have been prepared in accordance U.S. GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC. The condensed consolidated financial statements include the accounts of Cardax, Inc., and its wholly owned subsidiary, Cardax Pharma, Inc., and its predecessor, Cardax Pharmaceuticals, Inc., which was merged with and into Cardax, Inc., on December 30, 2015. All significant intercompany balances and transactions have been eliminated in consolidation. Use of estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in our condensed consolidated financial statements and the accompanying notes. Estimates in these condensed consolidated financial statements include asset valuations, estimates of future cash flows from and the economic useful lives of long-lived assets, valuations of stock compensation, certain accrued liabilities, income taxes and tax valuation allowances, and fair value estimates. Despite managements intention to establish accurate estimates and reasonable assumptions, actual results could differ materially from these estimates and assumptions. Inventory Inventory is stated at the lower of cost or market. Cost is determined using the average cost method. Market is defined as sales price less cost to dispose and a normal profit margin. Inventory costs include materials and third party costs. The Company provides a reserve against inventory for known or expected inventory obsolescence. The reserve is determined by specific review of inventory items for product age and quality that may affect salability. Revenue recognition The Company recognizes revenue when the transfer of title and risk of loss occurs. For shipments with terms of FOB Shipping Point, revenue is recognized upon shipment. For shipments with terms of FOB Destination, revenue is recognized upon delivery. Sales returns and allowances are recorded as a reduction to sales in the period in which sales are recorded. The Company records shipping charges and sales tax gross in revenues and cost of goods sold. Reclassifications The Company has made certain reclassifications to conform its prior periods data to the current presentation. These reclassifications had no effect on the reported results of operations or cash flows. Recent accounting pronouncements In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers In July 2015, the FASB issued ASU No. 2015-11, Inventory: Simplifying the Measurement of Inventory In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date In February 2016, the FASB issued ASU No. 2016-02, Leases In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation | NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation The consolidated financial statements have been prepared in accordance with U.S. GAAP and include the accounts of Cardax, Inc., and its wholly owned subsidiary, Cardax Pharma, Inc., and its predecessor, Cardax Pharmaceuticals, Inc., which was merged with and into Cardax, Inc., on December 30, 2015. All significant intercompany balances and transactions have been eliminated in consolidation. Use of estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in our consolidated financial statements and the accompanying notes. Estimates in these consolidated financial statements include asset valuations, estimates of future cash flows from and the economic useful lives of long-lived assets, valuations of stock compensation, certain accrued liabilities, income taxes and tax valuation allowances, and fair value estimates. Despite managements intention to establish accurate estimates and reasonable assumptions, actual results could differ materially from these estimates and assumptions. Cash The Company considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents. The Company held no cash equivalents at December 31, 2015 and 2014. The Company maintains cash deposit accounts at one financial institution. Accounts at this institution are insured by the Federal Deposit Insurance Corporation up to $250,000. The Companys cash balance at times may exceed these limits. As of December 31, 2015, the Company had $85,140 in excess of federally insured limits on deposit. As of December 31, 2014, the Company did not have any amounts in excess of federally insured limits on deposit. Inventory Inventory is stated at the lower of cost or market. Cost is determined using the average cost method. Market is defined as sales price less cost to dispose and a normal profit margin. Inventory costs include materials and third party costs. The Company provides a reserve against inventory for known or expected inventory obsolescence. The reserve is determined by specific review of inventory items for product age and quality that may affect salability. Property and equipment, net Property and equipment are recorded at cost, less depreciation. Equipment under capital lease obligations and leasehold improvements are amortized on the straight-line method over the shorter period of the lease term or the estimated useful life of the equipment. Such amortization is included in depreciation and amortization in the consolidated financial statements. Depreciation is calculated using the straight-line method over the estimated useful lives of the respective assets are as follows. Furniture and office equipment 7 years Research and development equipment 3 to 7 years Information technology equipment 5 years Software 3 years Major additions and improvements are capitalized, and routine expenditures for repairs and maintenance are charged to expense as incurred. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is charged to income for the period. Impairment of long-lived assets In accordance with ASC 360 No., Property, Plant, and Equipment When the sum of the undiscounted future net cash flows expected to result from the use and the eventual disposition is less than the carrying amounts, an impairment loss would be measured based on the discounted cash flows compared to the carrying amounts. There was no impairment charge recorded for the years ended December 31, 2015 and 2014. Fair value measurements U.S. GAAP establishes a framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below: Level 1: Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Company has the ability to access. Level 2: Inputs to the valuation methodology include: ● Quoted prices for similar assets or liabilities in active markets; ● Quoted prices for identical or similar assets or liabilities in inactive markets; ● Inputs other than quoted prices that are observable for the asset or liability; and ● Inputs that are derived principally from or corroborated by observable market data by correlation or other means. If the asset or liability has a specified (contractual) term, the Level 2 input must be observable for substantially the full term of the asset or liability. Level 3: Inputs to the valuation methodology are unobservable and significant to the fair value measurement. The assets or liabilitys fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs. As of December 31, 2015 and 2014, there were no recurring fair value measurements of assets and liabilities subsequent to initial recognition. Stock based compensation The Company accounts for stock based compensation costs under the provisions of ASC No. 718, CompensationStock Compensation Basic and diluted net income (loss) per share Basic earnings per common share is calculated by dividing net loss for the year by the weighted average number of common shares outstanding during the year. Diluted earnings per common share is calculated by dividing net loss for the year by the sum of the weighted average number of common shares outstanding during the year plus the number of potentially dilutive common shares (dilutive securities) that were outstanding during the year. Dilutive securities include options granted pursuant to the Companys stock option plans, and warrants issued to non-employees. Potentially dilutive securities are excluded from the computation of earnings per share in periods in which a net loss is reported, as their effect would be antidilutive. Income taxes The Company accounts for income taxes under an asset and liability approach. Deferred income taxes reflect the impact of temporary differences between assets and liabilities recognized for financial reporting purposes and the amounts recognized for income tax reporting purposes, net operating loss carry-forwards, and other tax credits measured by applying currently enacted tax laws. A valuation allowance is provided when necessary to reduce deferred tax assets to an amount that is more likely than not to be realized. The Company determines whether a tax position is more likely than not to be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The Company uses a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained upon tax authority examination, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon ultimate settlement. The Company files income tax returns in the United States (U.S.) Federal and the States of Hawaii and California jurisdictions. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. The Company did not recognize any tax liabilities for income taxes associated with unrecognized tax benefits as of December 31, 2015 and 2014. It is the Companys policy is to include interest and penalties related to unrecognized tax benefits, if any, within the provision for taxes in the statements of operations. Advertising Advertising costs are expensed as incurred and are included as an element of general and administrative costs in the accompanying statements of operations. There were no advertising expenses for the years ended December 31, 2015 and 2014. Research and development Research and development costs are expensed as incurred and consists primarily of salaries and wages of scientists and related personnel engaged in research and development activities, scientific consultations, manufacturing of product candidates, third-party research, laboratory supplies, rents associated with operating leased laboratory equipment, and scientific advisory boards. The focus of these costs is on the development of Astaxanthin technologies. Reclassifications The Company has made certain reclassifications to conform its prior periods data to the current presentation. These reclassifications had no effect on the reported results of operations or cash flows. Recent accounting pronouncements In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-02, Leases In November 2015, the FASB issued ASU No. 2015-17, Income taxes. In July 2015, the FASB issued ASU No. 2015-11, InventorySimplifying the Measurement of Inventory. In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial StatementsGoing Concern. Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the consolidated financial statements filed with this annual report. |
Inventory
Inventory | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Inventory Disclosure [Abstract] | ||
Inventory | NOTE 3 INVENTORY Inventory consists of the following as of: September 30, 2016 December 31, 2015 Finished goods $ 25,275 $ - Total inventories $ 25,275 $ - On January 5, 2016, the Company was informed by one of its production partners that there were certain technical issues which, together with other business and regulatory issues, materially impede the formulation of one of its potential products as a commercially viable product for the consumer health market. The Company, therefore, decided to suspend development of this product line. In evaluating this triggering event and the diminished utility of the materials used in the production of this potential commercial product, the Company considered the impact of FASB ASC No. 330, Accounting for Inventory As of September 30, 2016, inventory in the amount of $25,275 consisted of products available for sale and was unrelated to the inventory impaired as of December 31, 2015. | NOTE 3 INVENTORY Inventory consists of the following as of: December 31, 2015 December 31, 2014 Processed materials $ - $ 958,575 Total inventories $ - $ 958,575 On January 5, 2016, the Company was informed by one of its production partners that there were certain technical issues which, together with other business and regulatory issues, materially impede the formulation of one of its potential products as a commercially viable product for the consumer health market. The Company, therefore, decided to suspend development of this product line. In evaluating this triggering event and the diminished utility of the materials used in the production of this potential commercial product, the Company considered the impact of FASB ASC No. 330, Accounting for Inventory At December 31, 2014, inventory in the amount of $924,452 was stored at one of the Companys suppliers located in Germany, with the balance of the inventory maintained in the United States. During the year ended December 31, 2014, the Company utilized $28,099 in Astaxanthin as part of commercial product research and development. |
Property and Equipment, Net
Property and Equipment, Net | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | ||
Property and Equipment, Net | NOTE 4 PROPERTY AND EQUIPMENT, net Property and equipment, net, consists of the following as of: September 30, 2016 December 31, 2015 Information technology equipment $ 31,892 $ 31,892 Less accumulated depreciation (22,629 ) (17,969 ) Total property and equipment, net $ 9,263 $ 13,923 Depreciation expense was $1,508 and $4,660 for the three and nine-months ended September 30, 2016, respectively, and $1,670 and $5,008 for the three and nine-months ended September 30, 2015, respectively. | NOTE 4 PROPERTY AND EQUIPMENT, net Property and equipment, net, consists of the following as of: December 31, 2015 December 31, 2014 Information technology equipment $ 31,892 $ 31,892 Furniture and office equipment - 10,161 31,892 42,053 Less accumulated depreciation (17,969 ) (21,442 ) Total property and equipment, net $ 13,923 $ 20,611 Depreciation expense was $6,688 and $7,063 for the years ended December 31, 2015 and 2014, respectively. During the years ended December 31, 2015 and 2014, the Company wrote off $10,161 and $992,797, respectively, of fully depreciated property and equipment. There was no effect on the statement of operations for the years ended December 31, 2015 and 2014, respectively. On December 16, 2014, the Company entered into an agreement to sell laboratory equipment with a net book value of $0 for $95,000. One payment of $85,000 was received on December 26, 2014 with the balance being received on January 7, 2015. Final sale took place upon delivery of the equipment in February 2015. |
Intangible Assets, Net
Intangible Assets, Net | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Intangible Assets, Net | NOTE 5 INTANGIBLE ASSETS, net Intangible assets, net, consists of the following as of: September 30, 2016 December 31, 2015 Patents $ 432,985 $ 432,820 Less accumulated amortization (234,737 ) (217,342 ) 198,248 215,478 Patents pending 232,985 209,019 Total intangible assets, net $ 431,233 $ 424,497 Patents are amortized straight-line over a period of fifteen years. Amortization expense was $5,111 and $17,395, for the three and nine-months ended September 30, 2016, respectively, and $2,703 and $14,365, for the three and nine-months ended September 30, 2015, respectively. The Company has capitalized costs for several patents that are still pending. In those instances, the Company has not recorded any amortization. The Company will commence amortization when these patents are approved. The Company owns 21 issued patents, including 14 in the United States and 7 others in China, India, Japan, and Hong Kong. These patents will expire during the years of 2023 to 2028, subject to any patent term extensions of the individual patent. The Company has 5 foreign patent applications pending in Europe, Canada, and Brazil. | NOTE 5 INTANGIBLE ASSETS, net Intangible assets, net, consists of the following as of: December 31, 2015 December 31, 2014 Patents $ 432,820 $ 393,370 Less accumulated amortization (217,342 ) (200,272 ) 215,478 193,098 Patents pending 209,019 226,420 Total intangible assets, net $ 424,497 $ 419,518 Patents are amortized straight-line over a period of fifteen years. Amortization expense was $17,070 and $31,909, for the years ended December 31, 2015 and 2014, respectively. The Company has capitalized costs for several patents that are still pending. In those instances, the Company has not recorded any amortization. The Company will commence amortization when these patents are approved. The Company owns 21 issued patents, including 14 in the United States and 7 others in China, India, Japan, and Hong Kong. These patents will expire during the years of 2023 to 2028, subject to any patent term extensions of the individual patent. The Company has 5 foreign patent applications pending in Europe, Canada, and Brazil. |
Note Payable
Note Payable | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
Note Payable | NOTE 6 NOTE PAYABLE On January 28, 2015, the Company received a short-term loan of $30,000. The loan accrued interest at the rate of 3% per annum. Principal and interest were due on April 28, 2015. Interest accrued and expensed on this short-term loan was $222 for the year ended December 31, 2015. This note and accrued interest were converted on April 28, 2015 into securities of the Company at $0.30 per unit. Each unit consisted of one share of restricted common stock (100,739 shares), two Class D warrants, each to purchase one share of restricted common stock at $0.10 per share, which expire March 31, 2020, and one Class E warrant to purchase three-fourths of one share of restricted common stock at $0.1667 per share, which expires March 31, 2020. Most favored nation rights are available to the purchaser of such units as described in the Subscription Agreement. |
Stockholder's Deficit
Stockholder's Deficit | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Equity [Abstract] | ||
Stockholder's Deficit | NOTE 6 STOCKHOLDERS DEFICIT Authorized shares Holdings On March 23, 2006, Holdings was authorized to issue 10,000 shares of common stock with a par value of $0.001 per share. On May 5, 2006, the Articles of Incorporation were amended and restated. As part of this amendment, the number of authorized shares increased to 219,582,802 of which 127,000,000 were designated as common stock and the remaining 92,582,802 was designated as preferred stock. The 92,582,802 of preferred stock was allocated 14,440,920 to Series A, 11,113,544 Series B, 42,028,338 to Series C with 25,000,000 undesignated. Par value for all classes of stock was $0.001. On January 30, 2007, the Articles of Incorporation were amended and restated. As part of this amendment, the number of authorized shares increased to 245,673,568 of which 150,000,000 were designated as common stock and the remaining 95,673,568 was designated as preferred stock. The 95,673,568 of preferred stock was allocated 40,118,013 to Series A and 55,555,555 to Series B. As part of this amendment all outstanding shares of Series A, B, and C preferred stock on the date of amendment were converted into shares of Series A preferred stock. Par value for all classes of stock was $0.001. Dividends - Holdings Subject to the rights of any series of Preferred Stock that may from time to time come into existence, the holders of Series A and Series B preferred stock were entitled to receive, when, as and if declared by the Board of Directors, out of funds legally available therefor, dividends at the rate of 8.5% of the original Series A Series and B issue prices, per annum, on each outstanding share of Series A and Series B preferred stock on a pari passu basis, payable in preference and priority to any payment of any dividend on common stock of the Company for such year. The right to such dividends on Preferred Stock were not cumulative, and no rights were to be accrued to the holders of Preferred Stock by reason of the fact that the Company may have failed to declare or pay dividends on Preferred Stock in any previous fiscal year of the Company, whether or not earnings of the Company where sufficient to pay such dividends. No dividend was to be paid on common stock in any year, other than dividends payable solely in common stock, until all dividends for such year had been declared and paid on preferred stock. No dividends were accrued or paid during the three and nine-months ended September 30, 2016 or year ended December 31, 2015. Liquidation preference - Holdings The holders of Series A and Series B preferred stock were entitled to receive, prior and in preference to any distribution of any of the assets or surplus funds of the Company to the holders of common stock by reason of their ownership of such stock, the amount of $0.33, the original Series A issue price, and $0.45, the original Series B issue price, (in each case adjusted for any stock dividends, combinations or splits with respect to such shares) for each share of Series A and Series B preferred stock, respectively, then held by them, and, in addition, an amount equal to all declared but unpaid dividends on Series A and Series B preferred stock, respectively, held by them. If the assets and funds thus distributed among the holders of Series A and Series B preferred stock were insufficient to permit the payment to such holders of full aforesaid preferential amounts, then, subject to the rights of series of preferred stock that may from time to time come into existence, the entire assets and funds of the Company legally available for distribution were to be distributed ratably among the holders of Series A and Series B preferred stock in the respective proportions which the aggregate preferential amount of all shares of Series A and Series B preferred stock then held by each such holder bears to the aggregate preferential amount of all shares of Series A and Series B preferred stock outstanding as of the date of the distribution upon the occurrence of such liquidation event. After payment had been made to the holders of preferred stock of the full amounts to which they were to be entitled as aforesaid, the holders of Series A preferred stock, Series B preferred stock and common stock were to participate on a pro rata basis based on the number of Common Stock equivalent shares held by a holder in the distribution of all remaining assets of the Company legally available for distribution, with the outstanding shares of Series A and Series B preferred stock treated as though they had been converted into the appropriate number of shares of Common Stock. Conversion rights Holdings Each share of Series A and Series B preferred stock were to be convertible, at the option of the holder thereof, at any time after the date of issuance of such share at the office of the Company or any transfer agent for such series of Series A or Series B preferred stock into such number of fully paid and non-assessable shares of common stock as is determined by dividing $0.33 in the case of Series A preferred stock and $0.45 in the case of Series B preferred stock, by the applicable Conversion Price, in effect on the date the certificate is surrendered for conversion. The price at which shares of Common Stock were to be deliverable upon conversion of Series A or Series B preferred stock were initially at $0.33 per share with respect to shares of Series A preferred stock and $0.45 per share with respect to shares of Series B preferred stock. Voting rights Holdings The holder of each share of common stock issued and outstanding were to have one vote and the holder of each share of preferred stock were to be entitled to the number of votes equal to the number of shares of common stock into which such share of preferred stock would be converted. Reverse acquisition accounting On February 7, 2014, Koffee Sub and Pharma completed a reverse acquisition transaction (the "Acquisition"). Concurrent with this transaction: (i) the Company received aggregate gross cash proceeds of $3,923,100 in exchange for the issuance and sale of an aggregate 6,276,960 of shares of the Companys common stock, together with five year warrants to purchase an aggregate of 6,276,960 shares of the Companys common stock at $0.625 per share, (ii) the notes issued on January 3, 2014, in the outstanding principal amount of $2,076,000 and all accrued interest thereon, automatically converted into 3,353,437 shares of the Companys common stock upon the reverse merger at $0.625 per share, together with five year warrants to purchase 3,321,600 shares of common stock at $0.625 per share, (iii) the notes issued in 2013, in the outstanding principal amount of $8,489,036 and all accrued interest thereon, automatically converted into 14,446,777 shares of the Companys common stock upon the reverse merger at $0.625 per share, together with five year warrants to purchase 14,446,777 shares of common stock at $0.625 per share, (iv) stock options to purchase 15,290,486 shares of Holdings common stock at $0.07 per share were cancelled and substituted with stock options to purchase 6,889,555 shares of the Companys common stock at $0.155 per share, (v) additional stock options to purchase 20,867,266 shares of the Companys common stock at $0.625 per share were issued, and (vi) the notes issued in 2008 and 2009, in the outstanding principal amounts of $55,000 and $500,000, respectively, and all accrued interest thereon, were repaid in full. The assets and liabilities of Koffee Korner were distributed in accordance with the terms of a spin-off agreement on the closing date. The share exchange transaction was treated as a reverse acquisition, with Holdings and Pharma as the acquirers and Koffee Korner and Koffee Sub as the acquired parties. Unless the context suggests otherwise, when the Company refers to business and financial information for periods prior to the consummation of the reverse acquisition, the Company is referring to the business and financial information of Holdings and Pharma. Under U.S. GAAP guidance ASC 805-40, Business Combinations Reverse Acquisitions Preferred and common stock post reverse acquisition After completion of the reverse merger on February 7, 2014, the Company Amended and Restated its Articles of Incorporation. Under these amendments, the Company is authorized to issue a total of four-hundred million shares of common stock and fifty million shares of preferred stock. Each common stock holder is entitled to one vote. Common stock holders have no conversion rights or liquidation preferences. None of the preferred stock was issued or outstanding at September 30, 2016 and December 31, 2015. Under the terms of the Companys Amended and Restated Articles of Incorporation, the Board of Directors are authorized to determine or alter the rights, preferences, privileges, and restrictions of the Companys authorized but unissued shares of preferred stock. Holdings Merger On August 28, 2014, the Company entered into an Agreement and Plan of Merger (the Holdings Merger Agreement) with its principal stockholder, Holdings, pursuant to which Holdings would merge with and into the Company (the Holdings Merger). On November 24, 2015, the Holdings Merger Agreement was amended and restated (the Amended Holdings Merger Agreement). Under the terms of the Amended Holdings Merger Agreement, the shares of common stock, par value $0.001 per share of Holdings and the shares of all other issued and outstanding capital stock of Holdings that by their terms were convertible or could otherwise be exchanged for shares of Holdings common stock, would be converted into and exchanged for the Companys shares of Common Stock in a ratio of approximately 2.2:1. In addition, the Company would grant Holdings option and warrant holders warrants to purchase the Companys warrants at the same stock conversion ratio. On December 30, 2015, the Company completed its merger with Holdings, pursuant to the Amended Holdings Merger Agreement. At closing, Holdings merged with and into the Company, with the Company surviving the Holdings Merger. Pursuant to the Amended Holdings Merger Agreement, there was not any cash consideration exchanged in the Holdings Merger. Upon the closing of the Holdings Merger, the stockholders of Holdings received 31,597,574 shares and 1,402,426 warrants to purchase shares of common stock, which in aggregate was 33,000,000 shares. The Companys 33,000,000 restricted shares of common stock held by Holdings were cancelled upon the closing of the Holdings Merger. Accordingly, there was not any change to the Companys fully diluted capitalization due to the Holdings Merger. Self-directed stock issuance During the year ended December 31, 2015, the Company sold securities in a self-directed offering in the aggregate amount of $1,806,222 at $0.30 per unit, which included the conversion of the $30,000 note payable and $222 in accrued interest. Each unit consisted of one share of restricted common stock (6,020,725 shares), two Class D warrants, each to purchase one share of restricted common stock at $0.10 per share, which expire March 31, 2020, and one Class E warrant to purchase three-fourths of one share of restricted common stock at $0.1667 per share, which expires March 31, 2020. Warrants issued to date in this offering totaled 16,557,004. Most favored nation rights are available to the purchasers of such units as described in the Subscription Agreement. During the three and nine-months ended September 30, 2016, the Company sold securities in a self-directed offering in the aggregate amount of $237,000 and $800,000, respectively, at $0.08 per unit. Each unit consisted of 1 share of restricted common stock (10,000,000 shares), a five-year warrant to purchase 1 share of restricted common stock (10,000,000 warrant shares) at $0.08 per share, a five-year warrant to purchase 1 share of restricted common stock (10,000,000 warrant shares) at $0.12 per share, and a five-year warrant to purchase 1 share of restricted common stock (10,000,000 warrant shares) at $0.16 per share. Equity purchase agreement On July 13, 2016, the Company entered into an equity purchase agreement (the EPA) and a registration rights agreement with an investor. Pursuant to the terms of the EPA, the Company has the right, but not the obligation, to sell shares of its common stock to the investor on the terms specified in the EPA. On the date of the EPA, the Company issued 1,500,000 shares to the investor. The total fair value of this stock on the date of grant was $106,500. These shares were fully vested upon issuance. Note conversion On January 28, 2015, the Company received a short-term loan of $30,000. The loan accrued interest at the rate of 3% per annum. Principal and interest were due on April 28, 2015. Interest accrued and expensed on this short-term loan was $222 for the year ended December 31, 2015. This note and accrued interest were converted on April 28, 2015, into securities of the Company at $0.30 per unit. Each unit consisted of one share of restricted common stock (100,739 shares), two Class D warrants, each to purchase one share of restricted common stock at $0.10 per share, which expire March 31, 2020, and one Class E warrant to purchase three-fourths of one share of restricted common stock at $0.1667 per share, which expires March 31, 2020. Most favored nation rights are available to the purchaser of such units as described in the Subscription Agreement. | NOTE 7 STOCKHOLDERS DEFICIT Authorized shares - Holdings On March 23, 2006, Holdings was authorized to issue 10,000 shares of common stock with a par value of $0.001 per share. On May 5, 2006, the Articles of Incorporation were amended and restated. As part of this amendment, the number of authorized shares increased to 219,582,802 of which 127,000,000 were designated as common stock and the remaining 92,582,802 was designated as preferred stock. The 92,582,802 of preferred stock was allocated 14,440,920 to Series A, 11,113,544 Series B, 42,028,338 to Series C with 25,000,000 undesignated. Par value for all classes of stock was $0.001. On January 30, 2007, the Articles of Incorporation were amended and restated. As part of this amendment, the number of authorized shares increased to 245,673,568 of which 150,000,000 were designated as common stock and the remaining 95,673,568 was designated as preferred stock. The 95,673,568 of preferred stock was allocated 40,118,013 to Series A and 55,555,555 to Series B. As part of this amendment all outstanding shares of Series A, B, and C preferred stock on the date of amendment were converted into shares of Series A preferred stock. Par value for all classes of stock was $0.001. Dividends - Holdings Subject to the rights of any series of Preferred Stock that may from time to time come into existence, the holders of Series A and Series B preferred stock were entitled to receive, when, as and if declared by the Board of Directors, out of funds legally available therefor, dividends at the rate of 8.5% of the original Series A Series and B issue prices, per annum, on each outstanding share of Series A and Series B preferred stock on a pari passu basis, payable in preference and priority to any payment of any dividend on common stock of the Company for such year. The right to such dividends on Preferred Stock were not cumulative, and no rights were to be accrued to the holders of Preferred Stock by reason of the fact that the Company may have failed to declare or pay dividends on Preferred Stock in any previous fiscal year of the Company, whether or not earnings of the Company where sufficient to pay such dividends. No dividend was to be paid on common stock in any year, other than dividends payable solely in common stock, until all dividends for such year had been declared and paid on preferred stock. No dividends were accrued or paid during 2015 and 2014. Liquidation preference - Holdings The holders of Series A and Series B preferred stock were entitled to receive, prior and in preference to any distribution of any of the assets or surplus funds of the Company to the holders of common stock by reason of their ownership of such stock, the amount of $0.33, the original Series A issue price, and $0.45, the original Series B issue price, (in each case adjusted for any stock dividends, combinations or splits with respect to such shares) for each share of Series A and Series B preferred stock, respectively, then held by them, and, in addition, an amount equal to all declared but unpaid dividends on Series A and Series B preferred stock, respectively, held by them. If the assets and funds thus distributed among the holders of Series A and Series B preferred stock were insufficient to permit the payment to such holders of full aforesaid preferential amounts, then, subject to the rights of series of preferred stock that may from time to time come into existence, the entire assets and funds of the Company legally available for distribution were to be distributed ratably among the holders of Series A and Series B preferred stock in the respective proportions which the aggregate preferential amount of all shares of Series A and Series B preferred stock then held by each such holder bears to the aggregate preferential amount of all shares of Series A and Series B preferred stock outstanding as of the date of the distribution upon the occurrence of such liquidation event. After payment had been made to the holders of preferred stock of the full amounts to which they were to be entitled as aforesaid, the holders of Series A preferred stock, Series B preferred stock and common stock were to participate on a pro rata basis based on the number of Common Stock equivalent shares held by a holder in the distribution of all remaining assets of the Company legally available for distribution, with the outstanding shares of Series A and Series B preferred stock treated as though they had been converted into the appropriate number of shares of Common Stock. Conversion rights - Holdings Each share of Series A and Series B preferred stock were to be convertible, at the option of the holder thereof, at any time after the date of issuance of such share at the office of the Company or any transfer agent for such series of Series A or Series B preferred stock into such number of fully paid and non-assessable shares of common stock as is determined by dividing $0.33 in the case of Series A preferred stock and $0.45 in the case of Series B preferred stock, by the applicable Conversion Price, in effect on the date the certificate is surrendered for conversion. The price at which shares of Common Stock were to be deliverable upon conversion of Series A or Series B preferred stock were initially at $0.33 per share with respect to shares of Series A preferred stock and $0.45 per share with respect to shares of Series B preferred stock. Voting rights - Holdings The holder of each share of common stock issued and outstanding were to have one vote and the holder of each share of preferred stock were to be entitled to the number of votes equal to the number of shares of common stock into which such share of preferred stock would be converted. Reverse acquisition accounting On February 7, 2014, Koffee Sub and Pharma completed a reverse acquisition transaction (the Acquisition). Concurrent with this transaction: (i) the Company received aggregate gross cash proceeds of $3,923,100 in exchange for the issuance and sale of an aggregate 6,276,960 of shares of the Companys common stock, together with five year warrants to purchase an aggregate of 6,276,960 shares of the Companys common stock at $0.625 per share, (ii) the notes issued on January 3, 2014, in the outstanding principal amount of $2,076,000 and all accrued interest thereon, automatically converted into 3,353,437 shares of the Companys common stock upon the reverse merger at $0.625 per share, together with five year warrants to purchase 3,321,600 shares of common stock at $0.625 per share, (iii) the notes issued in 2013, in the outstanding principal amount of $8,489,036 and all accrued interest thereon, automatically converted into 14,446,777 shares of the Companys common stock upon the reverse merger at $0.625 per share, together with five year warrants to purchase 14,446,777 shares of common stock at $0.625 per share, (iv) stock options to purchase 15,290,486 shares of Holdings common stock at $0.07 per share were cancelled and substituted with stock options to purchase 6,889,555 shares of the Companys common stock at $0.155 per share, (v) additional stock options to purchase 20,867,266 shares of the Companys common stock at $0.625 per share were issued, and (vi) the notes issued in 2008 and 2009, in the outstanding principal amounts of $55,000 and $500,000, respectively, and all accrued interest thereon, were repaid in full. The assets and liabilities of Koffee Korner were distributed in accordance with the terms of a spin-off agreement on the closing date. The share exchange transaction was treated as a reverse acquisition, with Holdings and Pharma as the acquirers and Koffee Korner and Koffee Sub as the acquired parties. Unless the context suggests otherwise, when the Company refers to business and financial information for periods prior to the consummation of the reverse acquisition, the Company is referring to the business and financial information of Holdings and Pharma. Under U.S. GAAP guidance ASC 805-40, Business Combinations Reverse Acquisitions Common stock post reverse acquisition After completion of the reverse merger on February 7, 2014, the Company Amended and Restated its Articles of Incorporation. Under these amendments, the Company is authorized to issue a total of four-hundred million shares of common stock and fifty million shares of preferred stock. Each common stock holder is entitled to one vote. Common stock holders have no conversion rights or liquidation preferences. None of the preferred stock was issued or outstanding at December 31, 2015. Under the terms of the Companys Amended and Restated Articles of Incorporation, the Board of Directors are authorized to determine or alter the rights, preferences, privileges, and restrictions of the Companys authorized but unissued shares of preferred stock. Holdings Merger On August 28, 2014, the Company entered into an Agreement and Plan of Merger (the Holdings Merger Agreement) with its principal stockholder, Holdings, pursuant to which Holdings would merge with and into the Company (the Holdings Merger). On November 24, 2015, the Holdings Merger Agreement was amended and restated (the Amended Holdings Merger Agreement). Under the terms of the Amended Holdings Merger Agreement, the shares of common stock, par value $0.001 per share of Holdings and the shares of all other issued and outstanding capital stock of Holdings that by their terms were convertible or could otherwise be exchanged for shares of Holdings common stock, would be converted into and exchanged for the Companys shares of Common Stock in a ratio of approximately 2.2:1. In addition, the Company would grant Holdings option and warrant holders warrants to purchase the Companys warrants at the same stock conversion ratio. On December 30, 2015, the Company completed its merger with Holdings, pursuant to the Amended Holdings Merger Agreement. At closing, Holdings merged with and into the Company, with the Company surviving the Holdings Merger. Pursuant to the Amended Holdings Merger Agreement, there was not any cash consideration exchanged in the Holdings Merger. Upon the closing of the Holdings Merger, the stockholders of Holdings received 31,597,574 shares and 1,402,426 warrants to purchase shares of common stock, which in aggregate was 33,000,000 shares. The Companys 33,000,000 restricted shares of common stock held by Holdings were cancelled upon the closing of the Holdings Merger. Accordingly, there was not any change to the Companys fully diluted capitalization due to the Holdings Merger. Self-directed stock issuance During the year ended December 31, 2015, the Company sold securities in a self-directed offering in the aggregate amount of $1,806,222 at $0.30 per unit, which included the conversion of the $30,000 note payable and $222 in accrued interest. Each unit consisted of one share of restricted common stock (6,020,725 shares), two Class D warrants, each to purchase one share of restricted common stock at $0.10 per share, which expire March 31, 2020, and one Class E warrant to purchase three-fourths of one share of restricted common stock at $0.1667 per share, which expires March 31, 2020. Warrants issued to date in this offering totaled 16,557,004. Most favored nation rights are available to the purchasers of such units as described in the Subscription Agreement. |
Stock Grants
Stock Grants | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Notes to Financial Statements | ||
Stock Grants | NOTE 7 STOCK GRANTS Director stock grants In 2014, the Company granted its independent directors an aggregate of 776,753 shares of restricted common stock in the Company. The total fair value of this stock on the date of grant was $706,234. These shares were subject to a risk of forfeiture and vested quarterly in arrears commencing on June 1, 2014 and were fully vested at the end of one full year. In 2015, the Company granted its independent directors an aggregate of 458,170 shares of restricted common stock in the Company. The total fair value of this stock on the date of grant was $116,667. These shares were fully vested upon issuance. On March 31, 2016, the Company granted an independent director 357,143 shares of restricted common stock in the Company. The total fair value of this stock on the date of grant was $25,000. These shares were fully vested upon issuance. On September 30, 2016, the Company granted an independent director 27,778 shares of restricted common stock in the Company. The total fair value of this stock on the date of grant was $4,166. These shares were fully vested upon issuance. The Company recognizes the expense related to grants ratably over the requisite service period. Total stock compensation expense recognized as a result of these grants was $4,166 and $29,166 for the three and nine-months ended September 30, 2016, respectively, and $50,000 and $360,931 for the three and nine-months ended September 30, 2015, respectively. | NOTE 8 STOCK GRANTS Director stock grants In 2014, the Company granted its independent directors an aggregate of 776,753 shares of restricted common stock in the Company. The total fair value of this stock on the date of grant was $706,234. These shares were subject to a risk of forfeiture and vested quarterly in arrears commencing on June 1, 2014 and were fully vested at the end of one full year. In 2015, the Company granted its independent directors an aggregate of 458,170 shares of restricted common stock in the Company. The total fair value of this stock on the date of grant was $116,667. These shares were fully vested upon issuance. The Company recognizes the expense related to these grants ratably over the requisite service period. Total stock compensation expense recognized as a result of these grants was $410,931 and $411,970 for the years ended December 31, 2015 and 2014, respectively. Consultant stock issuance During the years ended December 31, 2015 and 2014, the Company granted a consultant 100,000 and 250,000 shares of restricted common stock in the Company, respectively. Total expense recognized was $45,000 and $87,500 during the years ended December 31, 2015 and 2014, respectively, based on the total fair value of this stock on the date of grant. |
Stock Option Plans
Stock Option Plans | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Stock Option Plans | NOTE 8 STOCK OPTION PLANS On May 15, 2006, the Company adopted the 2006 Stock Incentive Plan. Under this plan, the Company may issue shares of restricted stock, incentive stock options, or non-statutory stock options to employees, directors, and consultants. The aggregate number of shares which may be issued under this plan was 16,521,704, which was increased by 1,456,786 to 17,978,490 as part of the Series B Offering in 2007. This plan was terminated on February 7, 2014. On February 7, 2014, the Company adopted the 2014 Equity Compensation Plan. Under this plan, the Company may issue options to purchase shares of common stock to employees, directors, advisors, and consultants. The aggregate number of shares that may be issued under this plan is 30,420,148. On April 16, 2015, the majority stockholder of the Company approved an increase in the Companys 2014 Equity Compensation Plan by 15 million shares. Under the terms of the 2014 Equity Compensation Plan and the 2006 Stock Incentive Plan (collectively, the Plans), incentive stock options may be granted to employees at a price per share not less than 100% of the fair market value at date of grant. If the incentive stock option is granted to a 10% stockholder, then the purchase or exercise price per share shall not be less than 110% of the fair market value per share of common stock on the grant date. Non-statutory stock options and restricted stock may be granted to employees, directors, advisors, and consultants at a price per share, not less than 100% of the fair market value at date of grant. Options granted are exercisable, unless specified differently in the grant documents, over a default term of ten years from the date of grant and generally vest over a period of four years. A summary of stock option activity is as follows: Options Weighted average exercise price Weighted average remaining contractual term in years Aggregate intrinsic value Outstanding January 1, 2015 27,752,315 $ 0.51 8.02 $ 1,963,523 Exercisable January 1, 2015 26,156,553 $ 0.50 7.95 $ 1,962,239 Canceled - Granted 6,456,890 Exercised (41,851 ) Forfeited - Outstanding December 31, 2015 34,167,354 $ 0.47 6.57 $ 974,066 Exercisable December 31, 2015 34,167,354 $ 0.47 6.57 $ 974,066 Canceled - Granted 6,073,247 Exercised - - Forfeited (3,501,965 ) Outstanding September 30, 2016 36,738,636 $ 0.41 6.19 $ 89,682 Exercisable September 30, 2016 36,663,636 $ 0.41 6.20 $ 89,307 The aggregate intrinsic value in the table above is before applicable income taxes and represents the excess amount over the exercise price option recipients would have received if all options had been exercised on September 30, 2016, based on a valuation of the Companys stock for that day. A summary of the Companys non-vested options for the nine-months ended September 30, 2016 and year ended December 31, 2015, are presented below: Non-vested at January 1, 2015 1,595,762 Granted 6,456,890 Vested (8,010,801 ) Exercised (41,851 ) Forfeited - Non-vested at December 31, 2015 - Granted 6,073,247 Vested (5,998,247 ) Exercised - Forfeited - Non-vested at September 30, 2016 75,000 As of September 30, 2016, total unrecognized stock-based compensation expense related to unvested stock options was $5,250, which is expected to be expensed over the next three-quarters. Under ASC No. 718, the Company estimates the fair value of stock options granted on each grant date using the Black-Scholes option valuation model and recognizes an expense ratably over the requisite service period. The range of fair value assumptions related to options outstanding were as follows: September 30, 2016 December 31, 2015 Dividend yield 0.0 % 0.0 % Risk-free rate 0.12% - 1.47 % 0.12% - 1.47 % Expected volatility 112% - 225 % 112% - 170 % Expected term 1.1- 5.5 years 1.1- 5.5 years The expected volatility was calculated based on the historical volatilities of publicly traded peer companies, determined by the Company, and the historical volatility of the Company. The risk free interest rate used was based on the U.S. Treasury constant maturity rate in effect at the time of grant for the expected term of the stock options to be valued. The expected dividend yield was zero, as the Company does not anticipate paying a dividend within the relevant timeframe. Due to a lack of historical information needed to estimate the Companys expected term, it was estimated using the simplified method allowed under ASC No. 718. In calculating the number of options issued in lieu of pay during the nine-months ended September 30, 2016, the Company used assumptions comparable to December 31, 2015, with a 20-day weighted average stock price. As part of the requirements of ASC No. 718, the Company is required to estimate potential forfeitures of stock grants and adjust stock based compensation expense accordingly. The estimate of forfeitures will be adjusted over the requisite service period to the extent that actual forfeitures differ, or are expected to differ, from such estimates. Changes in estimated forfeitures will be recognized in the period of change and will also impact the amount of stock based compensation expenses to be recognized in future periods. The Company recognized $5,917 and $362,646 in stock based compensation expense related to options during the three and nine-months ended September 30, 2016, respectively, and $206,959 and $1,169,538 in stock based compensation expense related to options during the three and nine-months ended September 30, 2015, respectively. Of these amounts, $0 and $227,784 were related to 0 and 3,796,385 options issued to employees in lieu of salaries accrued for services during the three and nine-months ended September 30, 2016, respectively, and $138,462 and $669,007 were related to 477,456 and 3,738,958 options issued to employees in lieu of salaries accrued for services during the three and nine-months ended September 30, 2015, respectively. $0 and $66,445 were related to 0 and 1,107,417 options issued to consultants in lieu of fees accrued for services during the three and nine-months ended September 30, 2016, respectively, and $30,997 and $170,678 were related to 106,887 and 945,263 options issued to consultants in lieu of fees accrued for services during the three and nine-months ended September 30, 2015, respectively. $1,750 was related to 25,000 vested options issued to a consultant as compensation for services during the three and nine-months ended September 30, 2016, and $0 was related to 0 options issued to consultants as compensation for services during the three and nine-months ended September 30, 2015. $4,167 and $66,667 were related to 27,778 and 1,069,445 options issued to directors as compensation for services during the three and nine-months ended September 30, 2016, respectively, and $37,500 and $130,385 were related to 129,310 and 681,508 options issued to a director as compensation for services during the three and nine-months ended September 30, 2015, respectively. Option exercise On October 26, 2015, the Company issued 25,556 shares of common stock in the Company to a consultant in connection with the cashless exercise of a stock option for 41,851 shares of common stock at $0.155 per share with 16,295 shares of common stock withheld with an aggregate fair market value equal to the aggregate exercise price. | NOTE 9 STOCK OPTION PLANS On May 15, 2006, the Company adopted the 2006 Stock Incentive Plan. Under this plan, the Company may issue shares of restricted stock, incentive stock options, or non-statutory stock options to employees, directors, and consultants. The aggregate number of shares which may be issued under this plan was 16,521,704, which was increased by 1,456,786 to 17,978,490 as part of the Series B Offering in 2007. This plan was terminated on February 7, 2014. On February 7, 2014, the Company adopted the 2014 Equity Compensation Plan. Under this plan, the Company may issue options to purchase shares of common stock to employees, directors, advisors, and consultants. The aggregate number of shares that may be issued under this plan is 30,420,148. On April 16, 2015, the majority stockholder of the Company approved an increase in the Companys 2014 Equity Compensation Plan by 15 million shares. Under the terms of the 2014 Equity Compensation Plan and the 2006 Stock Incentive Plan (collectively, the Plans), incentive stock options may be granted to employees at a price per share not less than 100% of the fair market value at date of grant. If the incentive stock option is granted to a 10% stockholder, then the purchase or exercise price per share shall not be less than 110% of the fair market value per share of common stock on the grant date. Non-statutory stock options and restricted stock may be granted to employees, directors, advisors, and consultants at a price per share, not less than 100% of the fair market value at date of grant. Options granted are exercisable, unless specified differently in the grant documents, over a default term of ten years from the date of grant and generally vest over a period of four years. A summary of stock option activity is as follows: Options Weighted average exercise price Weighted average remaining contractual term in years Aggregate intrinsic value Outstanding January 1, 2014 15,290,486 $ 0.07 3.89 $ 305,810 Exercisable January 1, 2014 15,290,486 $ 0.07 3.89 $ 305,810 Canceled (15,290,486 ) Granted 27,756,821 Exercised (4,506 ) Forfeited - Outstanding December 31, 2014 27,752,315 $ 0.51 8.02 $ 1,963,523 Exercisable December 31, 2014 26,156,553 $ 0.50 7.95 $ 1,962,239 Canceled - Granted 6,456,890 Exercised (41,851 ) Forfeited - Outstanding December 31, 2015 34,167,354 $ 0.47 6.57 $ 974,066 Exercisable December 31, 2015 34,167,354 $ 0.47 6.57 $ 974,066 The aggregate intrinsic value in the table above is before applicable income taxes and represents the excess amount over the exercise price option recipients would have received if all options had been exercised on December 31, 2015, based on a valuation of the Companys stock for that day. A summary of the Companys non-vested options for the year ended December 31, 2015 and year ended December 31, 2014, are presented below: Non-vested at January 1, 2014 - Granted 27,756,821 Vested (26,156,553 ) Exercised (4,506 ) Forfeited - Non-vested at December 31, 2014 1,595,762 Granted 6,456,890 Vested (8,010,801 ) Exercised (41,851 ) Forfeited - Non-vested at December 31, 2015 - Under ASC No. 718, the Company estimates the fair value of stock options granted on each grant date using the Black-Scholes option valuation model and recognizes an expense ratably over the requisite service period. The range of fair value assumptions related to options outstanding as of December 31, 2015 and 2014, were as follows: December 31, 2015 December 31, 2014 Dividend yield 0.0 % 0.0 % Risk-free rate 0.12% - 1.47 % 0.12% - 1.47 % Expected volatility 112% - 170 % 112% - 170 % Expected term 1.1 - 5.5 years 1.1 - 5.5 years The expected volatility was calculated based on the historical volatilities of publicly traded peer companies, determined by the Company. The risk free interest rate used was based on the U.S. Treasury constant maturity rate in effect at the time of grant for the expected term of the stock options to be valued. The expected dividend yield was zero, as the Company does not anticipate paying a dividend within the relevant time frame. Due to a lack of historical information needed to estimate the Companys expected term, it was estimated using the simplified method allowed under ASC No. 718. In calculating the number of options issued during the year ended December 31, 2015, the Company used assumptions comparable to December 31, 2014, with a 20-day weighted average stock price. As part of the requirements of ASC No. 718, the Company is required to estimate potential forfeitures of stock grants and adjust stock based compensation expense accordingly. The estimate of forfeitures will be adjusted over the requisite service period to the extent that actual forfeitures differ, or are expected to differ, from such estimates. Changes in estimated forfeitures will be recognized in the period of change and will also impact the amount of stock based compensation expenses to be recognized in future periods. The Company recognized $1,413,552 and $5,917,351 in stock based compensation expense related to options during the years ended December 31, 2015 and 2014, respectively. Of these amounts, $1,210,124 and $0 were related to 6,456,890 options issued to employees, directors, and consultants in lieu of salaries, wages, and fees accrued for services during the years ended December 31, 2015 and 2014, respectively. Option exercise On October 26, 2015, the Company issued 25,556 shares of common stock in the Company to a consultant in connection with the cashless exercise of a stock option for 41,851 shares of common stock at $0.155 per share with 16,295 shares of common stock withheld with an aggregate fair market value equal to the aggregate exercise price. |
Warrants
Warrants | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Warrants | ||
Warrants | NOTE 9 WARRANTS The following is a summary of the Companys warrant activity: Warrants Weighted average exercise price Weighted average remaining contractual term in years Aggregate intrinsic value Outstanding January 1, 2015 28,435,782 $ 0.64 4.07 $ - Exercisable January 1, 2015 28,435,782 $ 0.64 4.07 $ - Canceled - Granted 18,009,430 Exercised - Forfeited - Outstanding December 31, 2015 46,445,212 $ 0.46 3.48 $ 2,517,337 Exercisable December 31, 2015 46,445,212 $ 0.46 3.48 $ 2,517,337 Canceled - Granted 30,000,000 Exercised - Forfeited (602,563 ) Outstanding September 30, 2016 75,842,649 $ 0.33 3.52 $ - Exercisable September 30, 2016 75,842,649 $ 0.33 3.52 $ - Under ASC No. 718, the Company estimates the fair value of warrants granted on each grant date using the Black-Scholes option valuation model. The fair value of warrants issued with debt is recorded as a debt discount and amortized over the life of the debt. The range of fair value assumptions related to warrants outstanding were as follows: September 30, 2016 December 31, 2015 Dividend yield 0.0 % 0.0 % Risk-free rate 0.12% - 0.86 % 0.12% - 0.66 % Expected volatility 102% - 159 % 112% - 159 % Expected term 1.0- 2.5 years 1.0- 2.5 years The expected volatility was calculated based on the historical volatilities of publicly traded peer companies, determined by the Company. The risk free interest rate used was based on the U.S. Treasury constant maturity rate in effect at the time of grant for the expected term of the warrants to be valued. The expected dividend yield was zero, as the Company does not anticipate paying a dividend within the relevant timeframe. The expected warrant term is the life of the warrant. The Company recognized no stock based compensation expense related to warrants for the three and nine-months ended September 30, 2016 and 2015. Warrant expiration During the three and nine-months ended September 30, 2016, warrants to purchase an aggregate of 60,866 and 602,563 shares, respectively, of restricted common stock expired. | NOTE 10 WARRANTS The following is a summary of the Companys warrant activity: Warrants Weighted average exercise price Weighted average remaining contractual term in years Aggregate intrinsic value Outstanding January 1, 2014 3,395,833 $ 0.45 5.28 $ - Exercisable January 1, 2014 3,395,833 $ 0.45 5.28 $ - Canceled (3,395,833 ) Granted 28,435,782 Exercised - Forfeited - Outstanding December 31, 2014 28,435,782 $ 0.64 4.07 $ - Exercisable December 31, 2014 28,435,782 $ 0.64 4.07 $ - Canceled - Granted 18,009,430 Exercised - Forfeited - Outstanding December 31, 2015 46,445,212 $ 0.46 3.48 $ 2,517,337 Exercisable December 31, 2015 46,445,212 $ 0.46 3.48 $ 2,517,337 Under ASC No. 718, the Company estimates the fair value of warrants granted on each grant date using the Black-Scholes option valuation model. The fair value of warrants issued with debt is recorded as a debt discount and amortized over the life of the debt. The range of fair value assumptions related to warrants outstanding as of December 31, 2015 and 2014, were as follows: December 31, 2015 December 31, 2014 Dividend yield 0.0 % 0.0 % Risk-free rate 0.12% - 0.86 % 0.12% - 0.66 % Expected volatility 102% - 159 % 112% - 159 % Expected term 1.0 - 2.5 years 1.0 - 2.5 years The expected volatility was calculated based on the historical volatilities of publicly traded peer companies, determined by the Company. The risk free interest rate used was based on the U.S. Treasury constant maturity rate in effect at the time of grant for the expected term of the warrants to be valued. The expected dividend yield was zero, as the Company does not anticipate paying a dividend within the relevant time frame. The expected warrant term is the life of the warrant. The Company recognized $48,700 and $5,250,540 in stock based compensation expense related to warrants for the years ended December 31, 2015 and 2014, respectively. |
Related Party Transactions
Related Party Transactions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Related Party Transactions [Abstract] | ||
Related Party Transactions | NOTE 10 RELATED PARTY TRANSACTIONS Executive chairman agreement As part of an executive chairman agreement, a director provided services to the Company. This agreement was amended on April 1, 2015. Under the terms of this amendment, the director received $37,500 in equity instruments issued quarterly in arrears as compensation. Effective April 1, 2016, the director agreed to suspend any additional equity compensation, until otherwise agreed by the Company. Effective August 12, 2016, the Company accepted the request for a leave of absence and resignation by the director as Executive Chairman and member of the Board of Directors. The Company incurred $0 and $37,500 in stock based compensation to this director during the three and nine-months ended September 30, 2016, respectively. The Company incurred $37,500 and $130,385 in stock based compensation to this director during the three and nine-months ended September 30, 2015, respectively, and $0 and $9,230 in consulting fees to the director during the three and nine-months ended September 30, 2015. Amounts payable to this director was $293,546 as of September 30, 2016 and December 31, 2015. | NOTE 11 RELATED PARTY TRANSACTIONS Executive chairman agreement As part of an executive chairman agreement, a director provided services to the Company. The Company incurred $240,000, in consulting fees to this director for the year ended December 31, 2014. This agreement was amended on April 1, 2015. Under the terms of this amendment, this director receives $37,500 in equity instruments issued quarterly in arrears as compensation. During the year ended December 31, 2015, the director incurred $177,115 in consulting fees of which $9,231 was settled in cash with $167,884 being settled in options to purchase 851,963 shares of Company stock. Amounts payable to this director was $293,546 as of December 31, 2015 and 2014. |
Income Taxes
Income Taxes | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | ||
Income Taxes | NOTE 11 INCOME TAXES The Company accounts for income taxes using the asset and liability method. Under this method, deferred income tax assets and liabilities are determined based upon the difference between the financial statement carrying amounts and the tax basis of assets and liabilities and are measured using the enacted tax rate expected to apply to taxable income in the years in which the differences are expected to be reversed. The effective tax rate for the three and nine-months ended September 30, 2016 and 2015, differs from the statutory rate of 34% as a result of the state taxes (net of Federal benefit) and permanent differences. The Companys valuation allowance was primarily related to the operating losses. The valuation allowance is determined in accordance with the provisions of ASC No. 740, Income Taxes The Company is subject to taxation in the United States and two state jurisdictions. The preparation of tax returns requires management to interpret the applicable tax laws and regulations in effect in such jurisdictions, which could affect the amount of tax paid by the Company. Management, in consultation with its tax advisors, files its tax returns based on interpretations that are believed to be reasonable under the circumstances. The income tax returns, however, are subject to routine reviews by the various taxing authorities. As part of these reviews, a taxing authority may disagree with respect to the tax positions taken by management (uncertain tax positions) and therefore may require the Company to pay additional taxes. Management evaluates the requirement for additional tax accruals, including interest and penalties, which the Company could incur as a result of the ultimate resolution of its uncertain tax positions. Management reviews and updates the accrual for uncertain tax positions as more definitive information becomes available from taxing authorities, completion of tax audits, expiration of statute of limitations, or upon occurrence of other events. As of September 30, 2016 and December 31, 2015, there was no liability for income tax associated with unrecognized tax benefits. The Company recognizes accrued interest related to unrecognized tax benefits as well as any related penalties in interest income or expense in its consolidated statements of operations, which is consistent with the recognition of these items in prior reporting periods. The federal and state income tax returns of the Company are subject to examination by the IRS and state taxing authorities, generally for three years after they were filed. The Company received a refundable tax credit of $0 and $47,802 from the state of Hawaii during the three and nine-months ended September 30, 2016, respectively. This amount is recorded as other income in the condensed, consolidated statement of operations. | NOTE 12 INCOME TAXES The Company accounts for income taxes using the asset and liability method. Under this method, deferred income tax assets and liabilities are determined based upon the difference between the financial statement carrying amounts and the tax basis of assets and liabilities and are measured using the enacted tax rate expected to apply to taxable income in the years in which the differences are expected to be reversed. The income tax provision (benefit) is composed of the following at December 31: 2015 2014 Federal State Total Federal State Total Current $ - $ - $ - $ - $ - $ - Deferred - - - - - - $ - $ - The following table presents a reconciliation of the statutory Federal rate and the Companys effective tax rate for the years ended December 31: 2015 2014 Tax provision (benefit) at Federal statutory rate (34.00 )% (34.00 )% Accrued compensation (0.70 )% (0.54 )% Accrued interest expense (0.00 )% (1.31 )% Stock based compensation 15.32 % 23.34 % Depreciation and amortization 0.22 % (0.08 )% Other 0.06 % 0.10 % Change in valuation allowance 19.10 % 12.49 % Effective tax rate 0.00 % 0.00 % The effective tax rate for the years ended December 31, 2015 and 2014, differs from the statutory rate of 34% as a result of the state taxes (net of Federal benefit) and permanent differences. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The following table presents significant components of the Companys deferred tax assets and liabilities for the years ended December 31: 2015 2014 Deferred tax assets: Net operating loss carryforwards $ 11,532,857 $ 11,265,332 Stock based compensation 733,206 4,459,732 Accrued compensation 1,485,827 1,525,089 Credit carryforwards 106,856 124,525 Amortization - 1,755 Gross deferred tax assets 13,858,746 17,376,433 Less valuation allowance (13,768,801 ) (17,321,688 ) Net deferred tax assets 89,945 54,745 Deferred tax liabilities: Depreciation (89,945 ) (54,745 ) Gain on sale of assets - - Gross deferred tax liabilities (89,945 ) (54,745 ) Net deferred tax assets $ - $ - As of December 31, 2015, the Company had Federal net operating loss carryforward of $30,171,769. The net operating loss carryforward expires at various dates beginning in 2026 if not utilized. In addition, the Company had net operating losses for Hawaii income tax purposes of $25,550,778 as of December 31, 2015, which expire at various dates beginning in 2026 if not utilized. These amounts differ from the Companys accumulated deficit due to permanent and temporary tax differences. The Companys valuation allowance was primarily related to the operating losses. The valuation allowance is determined in accordance with the provisions of ASC No. 740, Income Taxes The Company is subject to taxation in the United States and two state jurisdictions. The preparation of tax returns requires management to interpret the applicable tax laws and regulations in effect in such jurisdictions, which could affect the amount of tax paid by the Company. Management, in consultation with its tax advisors, files its tax returns based on interpretations that are believed to be reasonable under the circumstances. The income tax returns, however, are subject to routine reviews by the various taxing authorities. As part of these reviews, a taxing authority may disagree with respect to the tax positions taken by management (uncertain tax positions) and therefore may require the Company to pay additional taxes. Management evaluates the requirement for additional tax accruals, including interest and penalties, which the Company could incur as a result of the ultimate resolution of its uncertain tax positions. Management reviews and updates the accrual for uncertain tax positions as more definitive information becomes available from taxing authorities, completion of tax audits, expiration of statute of limitations, or upon occurrence of other events. As of December 31, 2015, there was no liability for income tax associated with unrecognized tax benefits. The Company recognizes accrued interest related to unrecognized tax benefits as well as any related penalties in interest income or expense in its consolidated statements of operations, which is consistent with the recognition of these items in prior reporting periods. The federal and state income tax returns of the Company are subject to examination by the IRS and state taxing authorities, generally for three years after they were filed. |
Basic and Diluted Net Income (L
Basic and Diluted Net Income (Loss) Per Share | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Earnings Per Share [Abstract] | ||
Basic and Diluted Net Income (Loss) Per Share | NOTE 12 BASIC AND DILUTED NET INCOME (LOSS) PER SHARE The following table sets forth the computation of the Companys basic and diluted net income (loss) per share for the three and nine-months ended: Three-months ended September 30, 2016 Net Loss (Numerator) Shares (Denominator) Per share amount Basic loss per share $ (482,438 ) 79,581,511 $ (0.01 ) Effect of dilutive securitiesCommon stock options and warrants - - - Diluted loss per share $ (482,438 ) 79,581,511 $ (0.01 ) Three-months ended September 30, 2015 Net Loss (Numerator) Shares (Denominator) Per share amount Basic loss per share $ (743,461 ) 67,955,379 $ (0.01 ) Effect of dilutive securitiesCommon stock options and warrants - - - Diluted loss per share $ (743,461 ) 67,955,379 $ (0.01 ) Nine-months ended September 30, 2016 Net Loss (Numerator) Shares (Denominator) Per share amount Basic loss per share $ (1,387,926 ) 73,949,386 $ (0.02 ) Effect of dilutive securitiesCommon stock options and warrants - - - Diluted loss per share $ (1,387,926 ) 73,949,386 $ (0.02 ) Nine-months ended September 30, 2015 Net Loss (Numerator) Shares (Denominator) Per share amount Basic loss per share $ (2,443,881 ) 66,000,101 $ (0.04 ) Effect of dilutive securitiesCommon stock options and warrants - - - Diluted loss per share $ (2,443,881 ) 66,000,101 $ (0.04 ) The following outstanding shares of common stock equivalents were excluded from the computation of diluted net loss per share for the periods presented because including them would have been antidilutive for the periods ended: September 30, 2016 September 30, 2015 Common stock options 36,738,636 33,118,044 Common stock warrants 75,842,649 41,871,124 Total common stock equivalents 112,581,285 74,989,168 | NOTE 13 BASIC AND DILUTED NET INCOME (LOSS) PER SHARE The following table sets forth the computation of the Companys basic and diluted net income (loss) per share for the nine-months ended: Year ended December 31, 2015 Net Loss (Numerator) Shares (Denominator) Per share amount Basic loss per share $ (4,257,875 ) 66,873,761 $ (0.06 ) Effect of dilutive securitiesCommon stock options and warrants - - - Diluted loss per share $ (4,257,875 ) 66,873,761 $ (0.06 ) Year ended December 31, 2014 Net Loss (Numerator) Shares (Denominator) Per share amount Basic loss per share $ (16,994,625 ) 60,225,524 $ (0.28 ) Effect of dilutive securitiesCommon stock options and warrants - - - Diluted loss per share $ (16,994,625 ) 60,225,524 $ (0.28 ) The following outstanding shares of common stock equivalents were excluded from the computation of diluted net loss per share for the years presented because including them would have been antidilutive for the years ended: December 31, 2015 December 31, 2014 Common stock options 34,167,354 26,156,553 Common stock warrants 46,445,212 28,435,782 Total common stock equivalents 80,612,566 54,592,335 |
Concentration
Concentration | 12 Months Ended |
Dec. 31, 2015 | |
Risks and Uncertainties [Abstract] | |
Concentration | NOTE 14 CONCENTRATION The Company purchased all of its inventory from one vendor in Germany. Although, there were no purchases from this vendor during the two years ended December 31, 2015 and 2014, outstanding payables to this vendor were $86,255 as of December 31, 2015, and 2014. |
Leases
Leases | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Leases [Abstract] | ||
Leases | NOTE 13 LEASES Hawaii Research Center The Company entered into a lease for laboratory and office space on May 9, 2006. This lease was amended on September 7, 2011, and October 30, 2012. This lease expired on October 31, 2014, after which the terms converted to month-to-month. The Company vacated the space in February 2015. Total rent expense under this agreement as amended was $0 and $3,437 for the three and nine-months ended September 30, 2016, and $0 and $12,112, for the three and nine-months ended September 30, 2015, respectively. The $3,437 of rent expense for the nine-months ended September 30, 2016 was related to common area maintenance reconciliation. Manoa Innovation Center The Company entered into an automatically renewable month-to-month lease for office space on August 13, 2010. Under the terms of this lease, the Company must provide a written notice 45 days prior to vacating the premises. Total rent expense under this agreement as amended was $7,929 and $23,784, for the three and nine-months ended September 30, 2016, respectively, and $7,931 and $23,759, for the three and nine-months ended September 30 2015, respectively. | NOTE 15 LEASES Hawaii Research Center The Company entered into a lease for laboratory and office space on May 9, 2006. This lease was amended on September 7, 2011, and October 30, 2012. This lease expired on October 31, 2014, after which the terms converted to month-to-month. The Company vacated the space in February 2015. Total rent expense under this agreement as amended was $12,718 and $56,856 for the years ended December 31, 2015 and 2014, respectively. Manoa Innovation Center The Company entered into an automatically renewable month-to-month lease for office space on August 13, 2010. Under the terms of this lease, the Company must provide a written notice 45 days prior to vacating the premises. Total rent expense under this agreement as amended was $31,479 and $28,169, for the years ended December 31, 2015 and 2014, respectively. |
Commitments
Commitments | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Commitments | NOTE 14 COMMITMENTS Patent payable As part of the formation of the Company, a patent license was transferred to the Company. The original license began in 2006. Under the terms of the license the Company agreed to pay $10,000 per year through 2015 and royalties of 2% on any revenues resulting from the license. There were no revenues generated by this license during the three and nine-months ended September 30, 2016 and 2015. The remaining obligation of $20,000 as of September 30, 2016 and December 31, 2015, is recorded as a part of accounts payable on the condensed consolidated balance sheets. The license expired in February 2016. Employee settlement As of September 30, 2016 and December 31, 2015, the Company owed a former employee a severance settlement payable in the amount of $50,000 for accrued vacation benefits. As part of the severance settlement, a stock option previously granted to the former employee was fully vested and extended. BASF agreement and license In November 2006, the Company entered into a joint development and supply agreement with BASF SE (BASF). Under the agreement, the Company granted BASF an exclusive world-wide license to the Company's rights related to the development and commercialization of Astaxanthin consumer health products; the Company retains all rights related to Astaxanthin pharmaceutical products. The Company is to receive specified royalties based on future net sales of such Astaxanthin consumer health products. No royalties were realized from this agreement during the three and nine-months ended September 30, 2016 and 2015. Capsugel agreement On August 18, 2014, the Company entered into a collaboration agreement with Capsugel US, LLC (Capsugel) for the joint commercial development of Astaxanthin products (Capsugel Astaxanthin Products) for the consumer health market that contain nature-identical synthetic Astaxanthin and use Capsugels proprietary formulation technology. The agreement provides for the parties to jointly administer activities under a product development plan that will include identifying at least one mutually acceptable third party marketer who will further develop, market and distribute Capsugel Astaxanthin Products. Capsugel will share revenues with the Company based on net sales of products that are developed under the collaboration. No revenues were realized from this agreement during the three and nine-months ended September 30, 2016 and 2015. In January 2016, the Company suspended development of a Capsugel Astaxanthin Product, ASTX-1F, based on certain technical issues which, together with other business and regulatory issues, materially impeded the formulation of ASTX-1F as a commercially viable product for the consumer health market. | NOTE 16 COMMITMENTS Patent payable As part of the formation of the Company, a patent license was transferred to the Company. The original license began in 2006. Under the terms of the license the Company agreed to pay $10,000 per year through 2015 and royalties of 2% on any revenues resulting from the license. There were no revenues generated by this license during the years ended December 31, 2015 and 2014. The remaining obligation of $20,000 as of December 31, 2015 and December 31, 2014, is recorded as a part of accounts payable on the consolidated balance sheets. Employee settlement As of December 31, 2015 and 2014, the Company owed a former employee a severance settlement payable in the amount of $50,000 for accrued vacation benefits. As part of the severance settlement, a stock option previously granted to the former employee was fully vested and extended. BASF agreement and license In November 2006, the Company entered into a joint development and supply agreement with BASF SE (BASF). Under the agreement, the Company granted BASF an exclusive world-wide license to the Companys rights related to the development and commercialization of Astaxanthin consumer health products; the Company retains all rights related to Astaxanthin pharmaceutical products. The Company is to receive specified royalties based on future net sales of such Astaxanthin consumer health products. No royalties were realized from this agreement during the years ended December 31, 2015 and 2014. The license does not prohibit the Company from purchasing Astaxanthin consumer health products from BASF for consumer health applications, similar to any third-party wholesale customer. Capsugel agreement On August 18, 2014, the Company entered into a collaboration agreement with Capsugel US, LLC (Capsugel) for the joint commercial development of Astaxanthin products (Capsugel Astaxanthin Products) for the consumer health market that contain nature-identical synthetic Astaxanthin and use Capsugels proprietary formulation technology. The agreement provides for the parties to jointly administer activities under a product development plan that will include identifying at least one mutually acceptable third party marketer who will further develop, market and distribute Capsugel Astaxanthin Products. Capsugel will share revenues with the Company based on net sales of products that are developed under the collaboration. No revenues were realized from this agreement during the years ended December 31, 2015 and 2014. In January 2016, the Company suspended development of a Capsugel Astaxanthin Product, ASTX-1F, based on certain technical issues which, together with other business and regulatory issues, materially impeded the formulation of ASTX-1F as a commercially viable product for the consumer health market. |
Subsequent Events
Subsequent Events | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Subsequent Events [Abstract] | ||
Subsequent Events | NOTE 15 SUBSEQUENT EVENTS The Company evaluated its September 30, 2016, condensed consolidated financial statements for subsequent events through November 14, 2016, the date the condensed consolidated financial statements were available to be issued and noted the following non-recognized events for disclosure. Stock issuance In October and November 2016 (through November 14, 2016), the Company sold securities in a self-directed offering in the aggregate amount of $185,000 at $0.08 per unit. Each unit consisted of 1 share of restricted common stock (2,312,500 shares), a five-year warrant to purchase 1 share of restricted common stock (2,312,500 warrant shares) at $0.08 per share, a five-year warrant to purchase 1 share of restricted common stock (2,312,500 warrant shares) at $0.12 per share, and a five-year warrant to purchase 1 share of restricted common stock (2,312,500 warrant shares) at $0.16 per share. | NOTE 17 SUBSEQUENT EVENTS The Company evaluated its December 31, 2015, consolidated financial statements for subsequent events through March 28, 2016, the date the consolidated financial statements were available to be issued and noted the following non-recognized events for disclosure. On March 28, 2016, the Company furloughed all of its employees and independent contractors indefinitely and arranged with its Chief Executive Officer, David G. Watumull; its Chief Financial Officer, John B. Russell; and its Vice President, Operations, David M. Watumull, to continue their services for cash compensation equal to the minimum wage. The Company continues to assess its commercial opportunities, which may include licensing its intellectual property or developing products with others, and may re-engage furloughed employees and contractors from time to time to the extent their services are required at cash compensation equal to the hourly minimum wage. In addition, each of the directors has agreed, effective April 1, 2016, to suspend any additional equity compensation, until otherwise agreed by the Company. |
Summary of Significant Accoun24
Summary of Significant Accounting Policies (Policies) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Accounting Policies [Abstract] | ||
Basis of Presentation | Basis of presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) for interim financial information and the rules and regulations of the Securities and Exchange Commission (the SEC) for interim financial information. In the opinion of the Companys management, the accompanying condensed consolidated financial statements reflect all adjustments, consisting of normal, recurring adjustments, considered necessary for a fair presentation of the results for the interim periods ended September 30, 2016 and 2015. Although management believes that the disclosures in these unaudited condensed consolidated financial statements are adequate to make the information presented not misleading, certain information and footnote disclosures normally included in financial statements that have been prepared in accordance U.S. GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC. The condensed consolidated financial statements include the accounts of Cardax, Inc., and its wholly owned subsidiary, Cardax Pharma, Inc., and its predecessor, Cardax Pharmaceuticals, Inc., which was merged with and into Cardax, Inc., on December 30, 2015. All significant intercompany balances and transactions have been eliminated in consolidation. | Basis of presentation The consolidated financial statements have been prepared in accordance with U.S. GAAP and include the accounts of Cardax, Inc., and its wholly owned subsidiary, Cardax Pharma, Inc., and its predecessor, Cardax Pharmaceuticals, Inc., which was merged with and into Cardax, Inc., on December 30, 2015. All significant intercompany balances and transactions have been eliminated in consolidation. |
Use of Estimates | Use of estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in our condensed consolidated financial statements and the accompanying notes. Estimates in these condensed consolidated financial statements include asset valuations, estimates of future cash flows from and the economic useful lives of long-lived assets, valuations of stock compensation, certain accrued liabilities, income taxes and tax valuation allowances, and fair value estimates. Despite managements intention to establish accurate estimates and reasonable assumptions, actual results could differ materially from these estimates and assumptions. | Use of estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in our consolidated financial statements and the accompanying notes. Estimates in these consolidated financial statements include asset valuations, estimates of future cash flows from and the economic useful lives of long-lived assets, valuations of stock compensation, certain accrued liabilities, income taxes and tax valuation allowances, and fair value estimates. Despite managements intention to establish accurate estimates and reasonable assumptions, actual results could differ materially from these estimates and assumptions. |
Inventory | Inventory Inventory is stated at the lower of cost or market. Cost is determined using the average cost method. Market is defined as sales price less cost to dispose and a normal profit margin. Inventory costs include materials and third party costs. The Company provides a reserve against inventory for known or expected inventory obsolescence. The reserve is determined by specific review of inventory items for product age and quality that may affect salability. | Inventory Inventory is stated at the lower of cost or market. Cost is determined using the average cost method. Market is defined as sales price less cost to dispose and a normal profit margin. Inventory costs include materials and third party costs. The Company provides a reserve against inventory for known or expected inventory obsolescence. The reserve is determined by specific review of inventory items for product age and quality that may affect salability. |
Revenue recognition | Revenue recognition The Company recognizes revenue when the transfer of title and risk of loss occurs. For shipments with terms of FOB Shipping Point, revenue is recognized upon shipment. For shipments with terms of FOB Destination, revenue is recognized upon delivery. Sales returns and allowances are recorded as a reduction to sales in the period in which sales are recorded. The Company records shipping charges and sales tax gross in revenues and cost of goods sold. | |
Reclassifications | Reclassifications The Company has made certain reclassifications to conform its prior periods data to the current presentation. These reclassifications had no effect on the reported results of operations or cash flows. | Reclassifications The Company has made certain reclassifications to conform its prior periods data to the current presentation. These reclassifications had no effect on the reported results of operations or cash flows. |
Recent Accounting Pronouncements | Recent accounting pronouncements In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers In July 2015, the FASB issued ASU No. 2015-11, Inventory: Simplifying the Measurement of Inventory In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date In February 2016, the FASB issued ASU No. 2016-02, Leases In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation | Recent accounting pronouncements In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-02, Leases In November 2015, the FASB issued ASU No. 2015-17, Income taxes. In July 2015, the FASB issued ASU No. 2015-11, InventorySimplifying the Measurement of Inventory. In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial StatementsGoing Concern. Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the consolidated financial statements filed with this annual report. |
Cash | Cash The Company considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents. The Company held no cash equivalents at December 31, 2015 and 2014. The Company maintains cash deposit accounts at one financial institution. Accounts at this institution are insured by the Federal Deposit Insurance Corporation up to $250,000. The Companys cash balance at times may exceed these limits. As of December 31, 2015, the Company had $85,140 in excess of federally insured limits on deposit. As of December 31, 2014, the Company did not have any amounts in excess of federally insured limits on deposit. | |
Property and Equipment, Net | Property and equipment, net Property and equipment are recorded at cost, less depreciation. Equipment under capital lease obligations and leasehold improvements are amortized on the straight-line method over the shorter period of the lease term or the estimated useful life of the equipment. Such amortization is included in depreciation and amortization in the consolidated financial statements. Depreciation is calculated using the straight-line method over the estimated useful lives of the respective assets are as follows. Furniture and office equipment 7 years Research and development equipment 3 to 7 years Information technology equipment 5 years Software 3 years Major additions and improvements are capitalized, and routine expenditures for repairs and maintenance are charged to expense as incurred. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is charged to income for the period. | |
Impairment of Long-lived Assets | Impairment of long-lived assets In accordance with ASC 360 No., Property, Plant, and Equipment When the sum of the undiscounted future net cash flows expected to result from the use and the eventual disposition is less than the carrying amounts, an impairment loss would be measured based on the discounted cash flows compared to the carrying amounts. There was no impairment charge recorded for the years ended December 31, 2015 and 2014. | |
Fair Value Measurements | Fair value measurements U.S. GAAP establishes a framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below: Level 1: Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Company has the ability to access. Level 2: Inputs to the valuation methodology include: ● Quoted prices for similar assets or liabilities in active markets; ● Quoted prices for identical or similar assets or liabilities in inactive markets; ● Inputs other than quoted prices that are observable for the asset or liability; and ● Inputs that are derived principally from or corroborated by observable market data by correlation or other means. If the asset or liability has a specified (contractual) term, the Level 2 input must be observable for substantially the full term of the asset or liability. Level 3: Inputs to the valuation methodology are unobservable and significant to the fair value measurement. The assets or liabilitys fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs. As of December 31, 2015 and 2014, there were no recurring fair value measurements of assets and liabilities subsequent to initial recognition. | |
Stock Based Compensation | Stock based compensation The Company accounts for stock based compensation costs under the provisions of ASC No. 718, CompensationStock Compensation | |
Basic and Diluted Net Income (Loss) Per Share | Basic and diluted net income (loss) per share Basic earnings per common share is calculated by dividing net loss for the year by the weighted average number of common shares outstanding during the year. Diluted earnings per common share is calculated by dividing net loss for the year by the sum of the weighted average number of common shares outstanding during the year plus the number of potentially dilutive common shares (dilutive securities) that were outstanding during the year. Dilutive securities include options granted pursuant to the Companys stock option plans, and warrants issued to non-employees. Potentially dilutive securities are excluded from the computation of earnings per share in periods in which a net loss is reported, as their effect would be antidilutive. | |
Income Taxes | Income taxes The Company accounts for income taxes under an asset and liability approach. Deferred income taxes reflect the impact of temporary differences between assets and liabilities recognized for financial reporting purposes and the amounts recognized for income tax reporting purposes, net operating loss carry-forwards, and other tax credits measured by applying currently enacted tax laws. A valuation allowance is provided when necessary to reduce deferred tax assets to an amount that is more likely than not to be realized. The Company determines whether a tax position is more likely than not to be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The Company uses a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained upon tax authority examination, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon ultimate settlement. The Company files income tax returns in the United States (U.S.) Federal and the States of Hawaii and California jurisdictions. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. The Company did not recognize any tax liabilities for income taxes associated with unrecognized tax benefits as of December 31, 2015 and 2014. It is the Companys policy is to include interest and penalties related to unrecognized tax benefits, if any, within the provision for taxes in the statements of operations. | |
Advertising | Advertising Advertising costs are expensed as incurred and are included as an element of general and administrative costs in the accompanying statements of operations. There were no advertising expenses for the years ended December 31, 2015 and 2014. | |
Research and Development | Research and development Research and development costs are expensed as incurred and consists primarily of salaries and wages of scientists and related personnel engaged in research and development activities, scientific consultations, manufacturing of product candidates, third-party research, laboratory supplies, rents associated with operating leased laboratory equipment, and scientific advisory boards. The focus of these costs is on the development of Astaxanthin technologies. |
Summary of Significant Accoun25
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Schedule of Depreciation of Estimated Useful Lives | Depreciation is calculated using the straight-line method over the estimated useful lives of the respective assets are as follows. Furniture and office equipment 7 years Research and development equipment 3 to 7 years Information technology equipment 5 years Software 3 years |
Inventory (Tables)
Inventory (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Inventory Disclosure [Abstract] | ||
Components of Inventory | Inventory consists of the following as of: September 30, 2016 December 31, 2015 Finished goods $ 25,275 $ - Total inventories $ 25,275 $ - | Inventory consists of the following as of: December 31, 2015 December 31, 2014 Processed materials $ - $ 958,575 Total inventories $ - $ 958,575 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | ||
Schedule of Property and Equipment, Net | Property and equipment, net, consists of the following as of: September 30, 2016 December 31, 2015 Information technology equipment $ 31,892 $ 31,892 Less accumulated depreciation (22,629 ) (17,969 ) Total property and equipment, net $ 9,263 $ 13,923 | Property and equipment, net, consists of the following as of: December 31, 2015 December 31, 2014 Information technology equipment $ 31,892 $ 31,892 Furniture and office equipment - 10,161 31,892 42,053 Less accumulated depreciation (17,969 ) (21,442 ) Total property and equipment, net $ 13,923 $ 20,611 |
Intangible Assets, Net (Tables)
Intangible Assets, Net (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Schedule of Intangible Assets, Net | Intangible assets, net, consists of the following as of: September 30, 2016 December 31, 2015 Patents $ 432,985 $ 432,820 Less accumulated amortization (234,737 ) (217,342 ) 198,248 215,478 Patents pending 232,985 209,019 Total intangible assets, net $ 431,233 $ 424,497 | Intangible assets, net, consists of the following as of: December 31, 2015 December 31, 2014 Patents $ 432,820 $ 393,370 Less accumulated amortization (217,342 ) (200,272 ) 215,478 193,098 Patents pending 209,019 226,420 Total intangible assets, net $ 424,497 $ 419,518 |
Stock Option Plans (Tables)
Stock Option Plans (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Schedule of Stock Option Activity | A summary of stock option activity is as follows: Options Weighted average exercise price Weighted average remaining contractual term in years Aggregate intrinsic value Outstanding January 1, 2015 27,752,315 $ 0.51 8.02 $ 1,963,523 Exercisable January 1, 2015 26,156,553 $ 0.50 7.95 $ 1,962,239 Canceled - Granted 6,456,890 Exercised (41,851 ) Forfeited - Outstanding December 31, 2015 34,167,354 $ 0.47 6.57 $ 974,066 Exercisable December 31, 2015 34,167,354 $ 0.47 6.57 $ 974,066 Canceled - Granted 6,073,247 Exercised - - Forfeited (3,501,965 ) Outstanding September 30, 2016 36,738,636 $ 0.41 6.19 $ 89,682 Exercisable September 30, 2016 36,663,636 $ 0.41 6.20 $ 89,307 | A summary of stock option activity is as follows: Options Weighted average exercise price Weighted average remaining contractual term in years Aggregate intrinsic value Outstanding January 1, 2014 15,290,486 $ 0.07 3.89 $ 305,810 Exercisable January 1, 2014 15,290,486 $ 0.07 3.89 $ 305,810 Canceled (15,290,486 ) Granted 27,756,821 Exercised (4,506 ) Forfeited - Outstanding December 31, 2014 27,752,315 $ 0.51 8.02 $ 1,963,523 Exercisable December 31, 2014 26,156,553 $ 0.50 7.95 $ 1,962,239 Canceled - Granted 6,456,890 Exercised (41,851 ) Forfeited - Outstanding December 31, 2015 34,167,354 $ 0.47 6.57 $ 974,066 Exercisable December 31, 2015 34,167,354 $ 0.47 6.57 $ 974,066 |
Schedule of Non-vested Shares Granted Under Stock Option Plan | A summary of the Companys non-vested options for the nine-months ended September 30, 2016 and year ended December 31, 2015, are presented below: Non-vested at January 1, 2015 1,595,762 Granted 6,456,890 Vested (8,010,801 ) Exercised (41,851 ) Forfeited - Non-vested at December 31, 2015 - Granted 6,073,247 Vested (5,998,247 ) Exercised - Forfeited - Non-vested at September 30, 2016 75,000 | A summary of the Companys non-vested options for the year ended December 31, 2015 and year ended December 31, 2014, are presented below: Non-vested at January 1, 2014 - Granted 27,756,821 Vested (26,156,553 ) Exercised (4,506 ) Forfeited - Non-vested at December 31, 2014 1,595,762 Granted 6,456,890 Vested (8,010,801 ) Exercised (41,851 ) Forfeited - Non-vested at December 31, 2015 - |
Schedule of Fair Value Assumptions | The range of fair value assumptions related to options outstanding were as follows: September 30, 2016 December 31, 2015 Dividend yield 0.0 % 0.0 % Risk-free rate 0.12% - 1.47 % 0.12% - 1.47 % Expected volatility 112% - 225 % 112% - 170 % Expected term 1.1- 5.5 years 1.1- 5.5 years | The range of fair value assumptions related to options outstanding as of December 31, 2015 and 2014, were as follows: December 31, 2015 December 31, 2014 Dividend yield 0.0 % 0.0 % Risk-free rate 0.12% - 1.47 % 0.12% - 1.47 % Expected volatility 112% - 170 % 112% - 170 % Expected term 1.1 - 5.5 years 1.1 - 5.5 years |
Warrants (Tables)
Warrants (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Warrants | ||
Schedule of Stock Warrants Activity | The following is a summary of the Companys warrant activity: Warrants Weighted average exercise price Weighted average remaining contractual term in years Aggregate intrinsic value Outstanding January 1, 2015 28,435,782 $ 0.64 4.07 $ - Exercisable January 1, 2015 28,435,782 $ 0.64 4.07 $ - Canceled - Granted 18,009,430 Exercised - Forfeited - Outstanding December 31, 2015 46,445,212 $ 0.46 3.48 $ 2,517,337 Exercisable December 31, 2015 46,445,212 $ 0.46 3.48 $ 2,517,337 Canceled - Granted 30,000,000 Exercised - Forfeited (602,563 ) Outstanding September 30, 2016 75,842,649 $ 0.33 3.52 $ - Exercisable September 30, 2016 75,842,649 $ 0.33 3.52 $ - | The following is a summary of the Companys warrant activity: Warrants Weighted average exercise price Weighted average remaining contractual term in years Aggregate intrinsic value Outstanding January 1, 2014 3,395,833 $ 0.45 5.28 $ - Exercisable January 1, 2014 3,395,833 $ 0.45 5.28 $ - Canceled (3,395,833 ) Granted 28,435,782 Exercised - Forfeited - Outstanding December 31, 2014 28,435,782 $ 0.64 4.07 $ - Exercisable December 31, 2014 28,435,782 $ 0.64 4.07 $ - Canceled - Granted 18,009,430 Exercised - Forfeited - Outstanding December 31, 2015 46,445,212 $ 0.46 3.48 $ 2,517,337 Exercisable December 31, 2015 46,445,212 $ 0.46 3.48 $ 2,517,337 |
Schedule of Fair Value Assumptions Related to Warrants Outstanding | The range of fair value assumptions related to warrants outstanding were as follows: September 30, 2016 December 31, 2015 Dividend yield 0.0 % 0.0 % Risk-free rate 0.12% - 0.86 % 0.12% - 0.66 % Expected volatility 102% - 159 % 112% - 159 % Expected term 1.0- 2.5 years 1.0- 2.5 years | The range of fair value assumptions related to warrants outstanding as of December 31, 2015 and 2014, were as follows: December 31, 2015 December 31, 2014 Dividend yield 0.0 % 0.0 % Risk-free rate 0.12% - 0.86 % 0.12% - 0.66 % Expected volatility 102% - 159 % 112% - 159 % Expected term 1.0 - 2.5 years 1.0 - 2.5 years |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Tax Provision (Benefit) | The income tax provision (benefit) is composed of the following at December 31: 2015 2014 Federal State Total Federal State Total Current $ - $ - $ - $ - $ - $ - Deferred - - - - - - $ - $ - |
Schedule of Effective Income Taxes Rate | The following table presents a reconciliation of the statutory Federal rate and the Companys effective tax rate for the years ended December 31: 2015 2014 Tax provision (benefit) at Federal statutory rate (34.00 )% (34.00 )% Accrued compensation (0.70 )% (0.54 )% Accrued interest expense (0.00 )% (1.31 )% Stock based compensation 15.32 % 23.34 % Depreciation and amortization 0.22 % (0.08 )% Other 0.06 % 0.10 % Change in valuation allowance 19.10 % 12.49 % Effective tax rate 0.00 % 0.00 % |
Schedule of Deferred Income Tax Assets and Liabilities | The following table presents significant components of the Companys deferred tax assets and liabilities for the years ended December 31: 2015 2014 Deferred tax assets: Net operating loss carryforwards $ 11,532,857 $ 11,265,332 Stock based compensation 733,206 4,459,732 Accrued compensation 1,485,827 1,525,089 Credit carryforwards 106,856 124,525 Amortization - 1,755 Gross deferred tax assets 13,858,746 17,376,433 Less valuation allowance (13,768,801 ) (17,321,688 ) Net deferred tax assets 89,945 54,745 Deferred tax liabilities: Depreciation (89,945 ) (54,745 ) Gain on sale of assets - - Gross deferred tax liabilities (89,945 ) (54,745 ) Net deferred tax assets $ - $ - |
Basic and Diluted Net Income 32
Basic and Diluted Net Income (Loss) Per Share (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Earnings Per Share [Abstract] | ||
Schedule of Basic and Diluted Net Income (Loss) | The following table sets forth the computation of the Companys basic and diluted net income (loss) per share for the three and nine-months ended: Three-months ended September 30, 2016 Net Loss (Numerator) Shares (Denominator) Per share amount Basic loss per share $ (482,438 ) 79,581,511 $ (0.01 ) Effect of dilutive securitiesCommon stock options and warrants - - - Diluted loss per share $ (482,438 ) 79,581,511 $ (0.01 ) Three-months ended September 30, 2015 Net Loss (Numerator) Shares (Denominator) Per share amount Basic loss per share $ (743,461 ) 67,955,379 $ (0.01 ) Effect of dilutive securitiesCommon stock options and warrants - - - Diluted loss per share $ (743,461 ) 67,955,379 $ (0.01 ) Nine-months ended September 30, 2016 Net Loss (Numerator) Shares (Denominator) Per share amount Basic loss per share $ (1,387,926 ) 73,949,386 $ (0.02 ) Effect of dilutive securitiesCommon stock options and warrants - - - Diluted loss per share $ (1,387,926 ) 73,949,386 $ (0.02 ) Nine-months ended September 30, 2015 Net Loss (Numerator) Shares (Denominator) Per share amount Basic loss per share $ (2,443,881 ) 66,000,101 $ (0.04 ) Effect of dilutive securitiesCommon stock options and warrants - - - Diluted loss per share $ (2,443,881 ) 66,000,101 $ (0.04 ) | The following table sets forth the computation of the Companys basic and diluted net income (loss) per share for the nine-months ended: Year ended December 31, 2015 Net Loss (Numerator) Shares (Denominator) Per share amount Basic loss per share $ (4,257,875 ) 66,873,761 $ (0.06 ) Effect of dilutive securitiesCommon stock options and warrants - - - Diluted loss per share $ (4,257,875 ) 66,873,761 $ (0.06 ) Year ended December 31, 2014 Net Loss (Numerator) Shares (Denominator) Per share amount Basic loss per share $ (16,994,625 ) 60,225,524 $ (0.28 ) Effect of dilutive securitiesCommon stock options and warrants - - - Diluted loss per share $ (16,994,625 ) 60,225,524 $ (0.28 ) |
Schedule of Computation of Diluted Net Income (Loss) Per Share | The following outstanding shares of common stock equivalents were excluded from the computation of diluted net loss per share for the periods presented because including them would have been antidilutive for the periods ended: September 30, 2016 September 30, 2015 Common stock options 36,738,636 33,118,044 Common stock warrants 75,842,649 41,871,124 Total common stock equivalents 112,581,285 74,989,168 | The following outstanding shares of common stock equivalents were excluded from the computation of diluted net loss per share for the years presented because including them would have been antidilutive for the years ended: December 31, 2015 December 31, 2014 Common stock options 34,167,354 26,156,553 Common stock warrants 46,445,212 28,435,782 Total common stock equivalents 80,612,566 54,592,335 |
Company Background (Details Nar
Company Background (Details Narrative) - USD ($) | Sep. 06, 2016 | May 30, 2016 | Nov. 24, 2015 | Feb. 07, 2014 | Jan. 03, 2014 | May 31, 2006 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Apr. 28, 2015 | May 31, 2013 | Dec. 31, 2009 | Dec. 31, 2008 | Mar. 24, 2006 | Mar. 23, 2006 |
Issuance of common stock, shares | 9,447,100 | ||||||||||||||||||
Issuance of preferred stock | 6,276,960 | ||||||||||||||||||
Ownership interest | 100.00% | ||||||||||||||||||
Proceeds from sale of common stock | $ 3,923,100 | ||||||||||||||||||
Number of common stock shares sold | 6,276,960 | ||||||||||||||||||
Warrants term | 5 years | 5 years | 5 years | ||||||||||||||||
Warrants to purchase of common stock shares | 6,276,960 | 3,321,600 | 14,446,777 | ||||||||||||||||
Warrant exercise price per share | $ 0.625 | $ 0.625 | $ 0.625 | ||||||||||||||||
Outstanding principal amount of notes payable | $ 2,076,000 | $ 8,489,036 | |||||||||||||||||
Shares of Common Stock issued upon conversion of notes payable | 3,353,437 | 3,353,437 | 14,446,777 | ||||||||||||||||
Warrants converted into common stock upon reverse merger | $ 0.625 | $ 0.625 | $ 0.625 | $ 0.30 | |||||||||||||||
Warrants issued upon conversion of notes payable (issued Jan. 03, 2014) | 3,321,600 | 14,446,777 | |||||||||||||||||
Stock options cancelled | 15,290,486 | ||||||||||||||||||
Exercise price of cancelled option | $ 0.07 | ||||||||||||||||||
Stock options issued in substitution of cancelled options | 6,889,555 | ||||||||||||||||||
Stock options issued in substitution of cancelled options, price per share | $ 0.155 | ||||||||||||||||||
Additional stock options issued purchase number of common stock | 20,867,266 | ||||||||||||||||||
Additional stock options issued purchase number of common stock, price per share | $ 0.625 | ||||||||||||||||||
Outstanding principal notes repaid in full | $ 500,000 | $ 55,000 | |||||||||||||||||
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||||
Company's shares of common stock in ratio approximately | 2.2:1 | ||||||||||||||||||
Net losses | $ 482,438 | $ 743,461 | $ 1,387,926 | $ 2,443,881 | $ 4,257,875 | $ 16,994,625 | |||||||||||||
Accumulated deficit | 55,538,083 | 55,538,083 | 54,150,157 | $ 49,892,282 | |||||||||||||||
Additional capital through future equity and debt securities issuances | $ 1,806,000 | ||||||||||||||||||
Compensation arrangement monthly compensation | $ 116,583 | $ 256,959 | $ 22,055 | $ 1,534,468 | |||||||||||||||
Current market price per share | $ 0.155 | ||||||||||||||||||
2014 Equity Compensation Plan [Member] | |||||||||||||||||||
Current market price per share | $ 0.15 | $ 0.15 | |||||||||||||||||
Independent Directors [Member] | |||||||||||||||||||
Compensation arrangement quarterly equity compensation | $ 12,500 | ||||||||||||||||||
David M. Watumull [Member] | |||||||||||||||||||
Compensation arrangement bi-weekly compensation expense | $ 3,269 | ||||||||||||||||||
David M. Watumull [Member] | Chief Executive Officer [Member] | |||||||||||||||||||
Compensation arrangement bi-weekly compensation expense | $ 4,327 | ||||||||||||||||||
Timothy J. King [Member] | |||||||||||||||||||
Compensation arrangement bi-weekly compensation expense | $ 1,635 | ||||||||||||||||||
Timothy J. King [Member] | Vice President [Member] | |||||||||||||||||||
Compensation arrangement bi-weekly compensation expense | 3,269 | ||||||||||||||||||
Gilbert M. Rishton [Member ] | Chief Science Officer [Member] | |||||||||||||||||||
Compensation arrangement bi-weekly compensation expense | 1,923 | ||||||||||||||||||
JBR Business Solutions, LLC [Member] | Chief Financial Officer [Member] | |||||||||||||||||||
Compensation arrangement monthly compensation | $ 3,500 | ||||||||||||||||||
November 14, 2016 [Member] | |||||||||||||||||||
Additional capital through future equity and debt securities issuances | $ 985,000 | $ 985,000 | |||||||||||||||||
Series C Preferred Stock [Member] | |||||||||||||||||||
Issuance of preferred stock | 13,859,324 | ||||||||||||||||||
Series A Preferred Stock [Member] | |||||||||||||||||||
Issuance of preferred stock | 14,440,920 | ||||||||||||||||||
Series B Preferred Stock [Member] | |||||||||||||||||||
Issuance of preferred stock | 11,113,544 | ||||||||||||||||||
Series C Preferred Stock [Member] | |||||||||||||||||||
Issuance of preferred stock issued additional | 704,225 |
Company Background (Details N34
Company Background (Details Narrative) (10-K) - USD ($) | Feb. 07, 2014 | Jan. 03, 2014 | May 31, 2006 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Nov. 24, 2015 | May 31, 2013 | Dec. 31, 2009 | Dec. 31, 2008 | Mar. 24, 2006 | Mar. 23, 2006 |
Issuance of common stock, shares | 9,447,100 | |||||||||||||||
Issuance of preferred stock | 6,276,960 | |||||||||||||||
Ownership interest | 100.00% | |||||||||||||||
Proceeds from sale of common stock | $ 3,923,100 | |||||||||||||||
Number of common stock shares sold | 6,276,960 | |||||||||||||||
Warrants term | 5 years | 5 years | 5 years | |||||||||||||
Warrants to purchase of common stock shares | 6,276,960 | 3,321,600 | 14,446,777 | |||||||||||||
Warrant exercise price per share | $ 0.625 | $ 0.625 | $ 0.625 | |||||||||||||
Outstanding principal amount of notes payable | $ 2,076,000 | $ 8,489,036 | ||||||||||||||
Shares of Common Stock issued upon conversion of notes payable | 3,353,437 | 3,353,437 | 14,446,777 | |||||||||||||
Warrants issued upon conversion of notes payable (issued Jan. 03, 2014) | 3,321,600 | 14,446,777 | ||||||||||||||
Stock options cancelled | 15,290,486 | |||||||||||||||
Exercise price of cancelled option | $ 0.07 | |||||||||||||||
Stock options issued in substitution of cancelled options | 6,889,555 | |||||||||||||||
Stock options issued in substitution of cancelled options, price per share | $ 0.155 | |||||||||||||||
Additional stock options issued purchase number of common stock | 20,867,266 | |||||||||||||||
Additional stock options issued purchase number of common stock, price per share | $ 0.625 | |||||||||||||||
Outstanding principal notes repaid in full | $ 500,000 | $ 55,000 | ||||||||||||||
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||
Net losses | $ 482,438 | $ 743,461 | $ 1,387,926 | $ 2,443,881 | $ 4,257,875 | $ 16,994,625 | ||||||||||
Accumulated deficit | $ 55,538,083 | $ 55,538,083 | 54,150,157 | $ 49,892,282 | ||||||||||||
Additional capital through future equity and debt securities issuances | $ 1,806,000 | |||||||||||||||
Series C Preferred Stock [Member] | ||||||||||||||||
Issuance of preferred stock | 13,859,324 | |||||||||||||||
Series A Preferred Stock [Member] | ||||||||||||||||
Issuance of preferred stock | 14,440,920 | |||||||||||||||
Series B Preferred Stock [Member] | ||||||||||||||||
Issuance of preferred stock | 11,113,544 | |||||||||||||||
Series C Preferred Stock [Member] | ||||||||||||||||
Issuance of preferred stock issued additional | 704,225 |
Summary of Significant Accoun35
Summary of Significant Accounting Policies (Details Narrative) (10-K) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | |
Accounting Policies [Abstract] | ||||||
Cash equivalents | $ 0 | $ 0 | ||||
Federal deposit insurance | 250,000 | |||||
Excess of federally insured limits on deposit | 85,140 | |||||
Impairment charges | ||||||
Minimum percentage of income tax benefit | 50.00% | |||||
Interest and penalties related to unrecognized tax benefits | ||||||
Unrecognized tax benefit | ||||||
Advertising expenses |
Summary of Significant Accoun36
Summary of Significant Accounting Policies - Schedule of Depreciation of Estimated Useful Lives (Details) | 12 Months Ended |
Dec. 31, 2015 | |
Furniture and Office Equipment [Member] | |
Estimated useful lives | 7 years |
Research and Development Equipment [Member] | Minimum [Member] | |
Estimated useful lives | 3 years |
Research and Development Equipment [Member] | Maximum [Member] | |
Estimated useful lives | 7 years |
Information Technology Equipment [Member] | |
Estimated useful lives | 5 years |
Software [Member] | |
Estimated useful lives | 3 years |
Inventory (Details Narrative)
Inventory (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | |
Inventory impairment | $ 958,575 | |||||
Inventory | 25,275 | 25,275 | 958,575 | |||
Research and development | $ 87,735 | $ 216,228 | $ 260,413 | $ 352,328 | $ 491,829 | 1,160,771 |
Commercial Product Research and Development [Member] | ||||||
Research and development | 28,099 | |||||
Germany [Member] | ||||||
Inventory | $ 924,452 |
Inventory - Components of Inven
Inventory - Components of Inventory (Details) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Inventory Disclosure [Abstract] | |||
Finished goods | $ 25,275 | ||
Processed materials | $ 958,575 | ||
Total inventories | $ 25,275 | $ 958,575 |
Property and Equipment, Net (De
Property and Equipment, Net (Details Narrative) - USD ($) | Dec. 16, 2014 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 |
Depreciation expense | $ 1,508 | $ 1,670 | $ 4,660 | $ 5,008 | $ 6,688 | $ 7,063 | |
Written off of property and equipment | 10,161 | 992,797 | |||||
Property and equipment effect on the statement of operations | |||||||
Gain on sale of assets | 95,000 | 95,000 | 2,426 | ||||
Payment to receive upon sell agreement | $ 1,633 | ||||||
Laboratory Equipment [Member] | |||||||
Net book value of assets | $ 0 | ||||||
Gain on sale of assets | 95,000 | ||||||
Payment to receive upon sell agreement | $ 85,000 |
Property and Equipment, Net - S
Property and Equipment, Net - Schedule of Property and Equipment, Net (Details) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Property and equipment, gross | $ 31,892 | $ 31,892 | $ 42,053 |
Less accumulated depreciation | (22,629) | (17,969) | (21,442) |
Total property and equipment, net | 9,263 | 13,923 | 20,611 |
Information Technology Equipment [Member] | |||
Property and equipment, gross | $ 31,892 | 31,892 | 31,892 |
Furniture and Office Equipment [Member] | |||
Property and equipment, gross | $ 10,161 |
Intangible Assets, Net (Details
Intangible Assets, Net (Details Narrative) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($)Units | Sep. 30, 2015USD ($) | Dec. 31, 2015USD ($)Units | Dec. 31, 2014USD ($) | |
Patent, amortization period | 15 years | 15 years | ||||
Amortization expense | $ | $ 5,111 | $ 2,703 | $ 17,395 | $ 14,365 | $ 17,070 | $ 31,909 |
Patents, Units | 21 | 21 | ||||
Patents expiration date | patents will expire during the years of 2023 to 2028. | patents will expire during the years of 2023 to 2028. | ||||
United States [Member] | ||||||
Patents, Units | 14 | 14 | ||||
China, India, Japan And Hong Kong [Member] | ||||||
Patents, Units | 7 | 7 | ||||
Europe, Canada, and Brazil [Member] | ||||||
Number of patent application pending | 5 | 5 |
Intangible Assets, Net (Detai42
Intangible Assets, Net (Details Narrative) (10-K) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($)Units | Sep. 30, 2015USD ($) | Dec. 31, 2015USD ($)Units | Dec. 31, 2014USD ($) | |
Patent, amortization period | 15 years | 15 years | ||||
Amortization expense | $ | $ 5,111 | $ 2,703 | $ 17,395 | $ 14,365 | $ 17,070 | $ 31,909 |
Patents, Units | 21 | 21 | ||||
Patents expiration date | patents will expire during the years of 2023 to 2028. | patents will expire during the years of 2023 to 2028. | ||||
United States [Member] | ||||||
Patents, Units | 14 | 14 | ||||
China, India, Japan And Hong Kong [Member] | ||||||
Patents, Units | 7 | 7 | ||||
Europe, Canada, and Brazil [Member] | ||||||
Number of patent application pending | 5 | 5 |
Intangible Assets, Net - Schedu
Intangible Assets, Net - Schedule of Intangible Assets, Net (Details) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Patents | $ 432,985 | $ 432,820 | $ 393,370 |
Less accumulated amortization | (234,737) | (217,342) | (200,272) |
Patents, Total | 198,248 | 215,478 | 193,098 |
Patents pending | 232,985 | 209,019 | 226,420 |
Total intangible assets, net | $ 431,233 | $ 424,497 | $ 419,518 |
Note Payable (Details Narrative
Note Payable (Details Narrative) (10-K) - USD ($) | 12 Months Ended | |||||
Dec. 31, 2015 | Apr. 28, 2015 | Jan. 28, 2015 | Feb. 07, 2014 | Jan. 03, 2014 | Dec. 31, 2013 | |
Short term loan | $ 30,000 | |||||
Loan interest rate percentage | 3.00% | |||||
Debt maturity date | Apr. 28, 2015 | |||||
Interest expense on notes payable | $ 222 | |||||
Conversion of securities, price per unit | $ 0.30 | $ 0.625 | $ 0.625 | $ 0.625 | ||
Two Class D Warrant [Member] | ||||||
Restricted common stock units description | Each unit consisted of one share of restricted common stock (100,739 shares), two Class D warrants, each to purchase one share of restricted common stock at $0.10 per share, which expire March 31, 2020, and one Class E warrant to purchase three-fourths of one share of restricted common stock at $0.1667 per share, which expires March 31, 2020. | |||||
Number of restricted common stock units | 100,739 | |||||
Warrants to purchase restricted common stock, price per share | $ 0.10 | |||||
Warrant expiration date | Mar. 31, 2020 | |||||
One Class E Warrant [Member] | ||||||
Warrants to purchase restricted common stock, price per share | $ 0.1667 | |||||
Warrant expiration date | Mar. 31, 2020 |
Stockholders' Deficit (Details
Stockholders' Deficit (Details Narrative) - USD ($) | Jul. 13, 2016 | Dec. 30, 2015 | Nov. 24, 2015 | Apr. 28, 2015 | Jan. 28, 2015 | Nov. 24, 2014 | Feb. 07, 2014 | Jan. 03, 2014 | May 31, 2006 | Sep. 30, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Aug. 28, 2014 | Dec. 31, 2009 | Dec. 31, 2008 | Jan. 30, 2007 | May 05, 2006 | Mar. 24, 2006 | Mar. 23, 2006 |
Common stock shares, authorized | 400,000,000 | 400,000,000 | 400,000,000 | 400,000,000 | 150,000,000 | 127,000,000 | 10,000 | 10,000 | ||||||||||||||
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||||||||
Excess of shares authorized | 245,673,568 | 219,582,802 | ||||||||||||||||||||
Issuance of preferred stock | 0 | 0 | 0 | 95,673,568 | 92,582,802 | |||||||||||||||||
Preferred stock shares authorized | 50,000,000 | 50,000,000 | 50,000,000 | 95,673,568 | 92,582,802 | |||||||||||||||||
Preferred stock, undesignated | 25,000,000 | |||||||||||||||||||||
Class of stock par value | $ 0.001 | $ 0.001 | ||||||||||||||||||||
Percentage of dividend rate preferred stock series | 8.50% | 8.50% | ||||||||||||||||||||
Proceeds from sale of common stock | $ 3,923,100 | |||||||||||||||||||||
Number of common stock shares sold | 6,276,960 | |||||||||||||||||||||
Warrants term | 5 years | 5 years | 5 years | |||||||||||||||||||
Warrants to purchase of common stock shares | 6,276,960 | 3,321,600 | 14,446,777 | |||||||||||||||||||
Warrant exercise price per share | $ 0.625 | $ 0.625 | $ 0.625 | |||||||||||||||||||
Outstanding principal amount of notes payable | $ 2,076,000 | $ 8,489,036 | ||||||||||||||||||||
Shares of Common Stock issued upon conversion of notes payable | 3,353,437 | 3,353,437 | 14,446,777 | |||||||||||||||||||
Warrants converted into common stock upon reverse merger | $ 0.30 | $ 0.625 | $ 0.625 | $ 0.625 | ||||||||||||||||||
Conversion of stock option into common stock retired | 15,290,486 | |||||||||||||||||||||
Common stock per share | $ 0.07 | |||||||||||||||||||||
Converstion of stock options into shares issued | 6,889,555 | |||||||||||||||||||||
Issuance of stock per share | $ 0.155 | |||||||||||||||||||||
Additional stock options issued | 20,867,266 | |||||||||||||||||||||
Additional stock options issued, price per share | $ 0.625 | |||||||||||||||||||||
Outstanding principal notes repaid in full | $ 500,000 | $ 55,000 | ||||||||||||||||||||
Company's shares of common stock in ratio approximately | 2.2:1 | |||||||||||||||||||||
Sold securities in a self-directed offering, aggregate amount | $ 800,000 | $ 1,430,000 | $ 1,776,000 | $ 3,923,798 | ||||||||||||||||||
Number of common stock shares issued during the period | 9,447,100 | |||||||||||||||||||||
Percentage of accrued interest | 3.00% | |||||||||||||||||||||
Debt maturity date | Apr. 28, 2015 | |||||||||||||||||||||
Restricted Stock One [Member] | ||||||||||||||||||||||
Warrants term | 5 years | |||||||||||||||||||||
Warrants to purchase of common stock shares | 10,000,000 | |||||||||||||||||||||
Restricted common stock price per share | $ 0.08 | |||||||||||||||||||||
Restricted Stock Two [Member] | ||||||||||||||||||||||
Warrants term | 5 years | |||||||||||||||||||||
Warrants to purchase of common stock shares | 10,000,000 | |||||||||||||||||||||
Restricted common stock price per share | $ 0.12 | |||||||||||||||||||||
Restricted Stock Three [Member] | ||||||||||||||||||||||
Warrants term | 5 years | |||||||||||||||||||||
Warrants to purchase of common stock shares | 10,000,000 | |||||||||||||||||||||
Restricted common stock price per share | $ 0.16 | |||||||||||||||||||||
Holdings Merger Agreement [Member] | ||||||||||||||||||||||
Common stock, par value | $ 0.001 | $ 0.001 | ||||||||||||||||||||
Company's shares of common stock in ratio approximately | 2.2:1 | |||||||||||||||||||||
Number of shares received stockholders | 31,597,574 | |||||||||||||||||||||
Number of shares cancelled upon the closing holdings merger | 33,000,000 | |||||||||||||||||||||
Equity Purchase Agreement [Member] | Investor [Member] | ||||||||||||||||||||||
Number of common stock shares issued during the period | 1,500,000 | |||||||||||||||||||||
Fair value of stock options grant | $ 106,500 | |||||||||||||||||||||
Series A Preferred Stock [Member] | ||||||||||||||||||||||
Ownership stock price per share | 0.33 | $ 0.33 | ||||||||||||||||||||
Non-assessable preferred stock price per share | 0.33 | 0.33 | ||||||||||||||||||||
Common Stock deliverable upon conversion | 0.33 | 0.33 | ||||||||||||||||||||
Series B Preferred Stock [Member] | ||||||||||||||||||||||
Ownership stock price per share | 0.45 | 0.45 | ||||||||||||||||||||
Non-assessable preferred stock price per share | 0.45 | 0.45 | ||||||||||||||||||||
Common Stock deliverable upon conversion | 0.45 | $ 0.45 | ||||||||||||||||||||
Warrant [Member] | Holdings Merger Agreement [Member] | ||||||||||||||||||||||
Warrants to purchase of common stock shares | 1,402,426 | |||||||||||||||||||||
Number of shares purchased during period | 33,000,000 | |||||||||||||||||||||
Self Directed Stock Issuance [Member] | ||||||||||||||||||||||
Issuance of stock per share | $ 0.08 | $ 0.08 | $ 0.30 | |||||||||||||||||||
Sold securities in a self-directed offering, aggregate amount | $ 237,000 | $ 800,000 | $ 1,806,222 | |||||||||||||||||||
Conversion of note payable | 30,000 | |||||||||||||||||||||
Accrued interest | $ 222 | |||||||||||||||||||||
Conversion stock, description | Each unit consisted of 1 share of restricted common stock (7,037,500 shares), a five-year warrant to purchase 1 share of restricted common stock (7,037,500 warrant shares) at $0.08 per share, a five-year warrant to purchase 1 share of restricted common stock (7,037,500 warrant shares) at $0.12 per share, and a five-year warrant to purchase 1 share of restricted common stock (7,037,500 warrant shares) at $0.16 per share. | Each unit consisted of one share of restricted common stock (6,020,725 shares), two Class D warrants, each to purchase one share of restricted common stock at $0.10 per share, which expire March 31, 2020, and one Class E warrant to purchase three-fourths of one share of restricted common stock at $0.1667 per share, which expires March 31, 2020. | ||||||||||||||||||||
Number of shares restricted common stock | 10,000,000 | 6,020,725 | ||||||||||||||||||||
Number of warrants issued to date in offering | 16,557,004 | |||||||||||||||||||||
Note Conversion [Member] | ||||||||||||||||||||||
Issuance of stock per share | $ 0.30 | |||||||||||||||||||||
Accrued interest | $ 222 | |||||||||||||||||||||
Conversion stock, description | Each unit consisted of one share of restricted common stock (100,739 shares), two Class D warrants, each to purchase one share of restricted common stock at $0.10 per share, which expire March 31, 2020, and one Class E warrant to purchase three-fourths of one share of restricted common stock at $0.1667 per share, which expires March 31, 2020. | |||||||||||||||||||||
Number of shares restricted common stock | 100,739 | |||||||||||||||||||||
Short-term loan | $ 30,000 | |||||||||||||||||||||
Percentage of accrued interest | 3.00% | |||||||||||||||||||||
Debt maturity date | Apr. 28, 2015 | |||||||||||||||||||||
Series A Preferred Stock [Member] | ||||||||||||||||||||||
Issuance of preferred stock | 14,440,920 | |||||||||||||||||||||
Preferred stock shares authorized | 40,118,013 | 14,440,920 | ||||||||||||||||||||
Series B Preferred Stock [Member] | ||||||||||||||||||||||
Issuance of preferred stock | 11,113,544 | |||||||||||||||||||||
Preferred stock shares authorized | 55,555,555 | 11,113,544 | ||||||||||||||||||||
Series C Preferred Stock [Member] | ||||||||||||||||||||||
Issuance of preferred stock | 42,028,338 | |||||||||||||||||||||
Preferred stock shares authorized | 42,028,338 | |||||||||||||||||||||
Class D Warrants [Member] | Self Directed Stock Issuance [Member] | ||||||||||||||||||||||
Restricted common stock price per share | $ 0.10 | |||||||||||||||||||||
Expire date | Mar. 31, 2020 | |||||||||||||||||||||
Class D Warrants [Member] | Note Conversion [Member] | ||||||||||||||||||||||
Restricted common stock price per share | $ 0.10 | |||||||||||||||||||||
Expire date | Mar. 31, 2020 | |||||||||||||||||||||
Class E Warrants [Member] | Self Directed Stock Issuance [Member] | ||||||||||||||||||||||
Restricted common stock price per share | $ 0.1667 | |||||||||||||||||||||
Expire date | Mar. 31, 2020 | |||||||||||||||||||||
Class E Warrants [Member] | Note Conversion [Member] | ||||||||||||||||||||||
Restricted common stock price per share | $ 0.1667 | |||||||||||||||||||||
Expire date | Mar. 31, 2020 |
Stockholders' Deficit (Detail46
Stockholders' Deficit (Details Narrative) (10-K) - USD ($) | Dec. 30, 2015 | Aug. 28, 2014 | Feb. 07, 2014 | Jan. 03, 2014 | May 31, 2006 | Sep. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Nov. 24, 2015 | Apr. 28, 2015 | Dec. 31, 2009 | Dec. 31, 2008 | Jan. 30, 2007 | May 05, 2006 | Mar. 24, 2006 | Mar. 23, 2006 |
Common stock shares, authorized | 400,000,000 | 400,000,000 | 400,000,000 | 150,000,000 | 127,000,000 | 10,000 | 10,000 | ||||||||||
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||||
Excess of shares authorized | 245,673,568 | 219,582,802 | |||||||||||||||
Issuance of preferred stock | 0 | 0 | 95,673,568 | 92,582,802 | |||||||||||||
Preferred stock shares authorized | 50,000,000 | 50,000,000 | 95,673,568 | 92,582,802 | |||||||||||||
Preferred stock, undesignated | 25,000,000 | ||||||||||||||||
Class of stock par value | $ 0.001 | $ 0.001 | |||||||||||||||
Percentage of dividend rate preferred stock series | 8.50% | 8.50% | |||||||||||||||
Proceeds from issuance of common stock and warrants | $ 3,923,100 | ||||||||||||||||
Issuance of common shares for cash, Shares | 6,276,960 | ||||||||||||||||
Warrants issued | 6,276,960 | 3,321,600 | |||||||||||||||
Warrants term | 5 years | 5 years | 5 years | ||||||||||||||
Warrant exercise price per share | $ 0.625 | $ 0.625 | $ 0.625 | ||||||||||||||
Outstanding principal amount of notes payable | $ 2,076,000 | $ 8,489,036 | |||||||||||||||
Shares of Common Stock issued upon conversion of notes payable | 3,353,437 | 3,353,437 | 14,446,777 | ||||||||||||||
Warrants converted into common stock upon reverse merger | $ 0.625 | $ 0.625 | $ 0.625 | $ 0.30 | |||||||||||||
Conversion of stock option into common stock retired | 15,290,486 | ||||||||||||||||
Common stock per share | $ 0.07 | ||||||||||||||||
Converstion of stock options into shares issued | 6,889,555 | ||||||||||||||||
Issuance of stock per share | $ 0.155 | ||||||||||||||||
Additional stock options issued | 20,867,266 | ||||||||||||||||
Additional stock options issued, price per share | $ 0.625 | ||||||||||||||||
Outstanding principal notes repaid in full | $ 500,000 | $ 55,000 | |||||||||||||||
Holdings Merger Agreement [Member] | |||||||||||||||||
Common stock, par value | $ 0.001 | $ 0.001 | |||||||||||||||
Company's shares of common stock in ratio approximately | 2.2:1 | ||||||||||||||||
Number of shares received stockholders | 31,597,574 | ||||||||||||||||
Number of shares cancelled upon the closing holdings merger | 33,000,000 | ||||||||||||||||
Preferred Stock Series A [Member] | |||||||||||||||||
Ownership stock price per share | $ 0.33 | 0.33 | |||||||||||||||
Non-assessable preferred stock price per share | 0.33 | 0.33 | |||||||||||||||
Common Stock deliverable upon conversion | 0.33 | 0.33 | |||||||||||||||
Preferred Stock Series B [Member] | |||||||||||||||||
Ownership stock price per share | 0.45 | 0.45 | |||||||||||||||
Non-assessable preferred stock price per share | 0.45 | 0.45 | |||||||||||||||
Common Stock deliverable upon conversion | 0.45 | $ 0.45 | |||||||||||||||
Warrant [Member] | Holdings Merger Agreement [Member] | |||||||||||||||||
Warrants issued to purchase shaers of common stock | 1,402,426 | ||||||||||||||||
Number of shares purchased during period | 33,000,000 | ||||||||||||||||
Self Directed Stock Issuance [Member] | |||||||||||||||||
Issuance of stock per share | $ 0.08 | $ 0.30 | |||||||||||||||
Sold securities in a self-directed offering, aggregate amount | $ 1,806,222 | ||||||||||||||||
Conversion of note payable | 30,000 | ||||||||||||||||
Accrued interest | $ 222 | ||||||||||||||||
Conversion stock, description | Each unit consisted of 1 share of restricted common stock (7,037,500 shares), a five-year warrant to purchase 1 share of restricted common stock (7,037,500 warrant shares) at $0.08 per share, a five-year warrant to purchase 1 share of restricted common stock (7,037,500 warrant shares) at $0.12 per share, and a five-year warrant to purchase 1 share of restricted common stock (7,037,500 warrant shares) at $0.16 per share. | Each unit consisted of one share of restricted common stock (6,020,725 shares), two Class D warrants, each to purchase one share of restricted common stock at $0.10 per share, which expire March 31, 2020, and one Class E warrant to purchase three-fourths of one share of restricted common stock at $0.1667 per share, which expires March 31, 2020. | |||||||||||||||
Number of shares restricted common stock | 10,000,000 | 6,020,725 | |||||||||||||||
Number of warrants issued to date in offering | 16,557,004 | ||||||||||||||||
Preferred Stock Series A [Member] | |||||||||||||||||
Issuance of preferred stock | 14,440,920 | ||||||||||||||||
Preferred stock shares authorized | 40,118,013 | 14,440,920 | |||||||||||||||
Issuance of common shares for cash, Shares | 14,440,920 | ||||||||||||||||
Preferred Stock Series B [Member] | |||||||||||||||||
Issuance of preferred stock | 11,113,544 | ||||||||||||||||
Preferred stock shares authorized | 55,555,555 | 11,113,544 | |||||||||||||||
Issuance of common shares for cash, Shares | 11,113,544 | ||||||||||||||||
Series C Preferred Stock [Member] | |||||||||||||||||
Issuance of preferred stock | 42,028,338 | ||||||||||||||||
Preferred stock shares authorized | 42,028,338 | ||||||||||||||||
Class D Warrants [Member] | Self Directed Stock Issuance [Member] | |||||||||||||||||
Restricted common sotck price per share | $ 0.10 | ||||||||||||||||
Expire date | Mar. 31, 2020 | ||||||||||||||||
Class E Warrants [Member] | Self Directed Stock Issuance [Member] | |||||||||||||||||
Restricted common sotck price per share | $ 0.1667 | ||||||||||||||||
Expire date | Mar. 31, 2020 |
Stock Grants (Details Narrative
Stock Grants (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2016 | Mar. 31, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | |
Restricted common stock, value | $ 1,806,222 | ||||||
Stock compensation expense | $ 204,083 | $ 771,358 | $ 708,059 | $ 11,667,361 | |||
Director [Member] | |||||||
Restricted common stock, shares | 27,778 | 357,143 | 458,170 | 776,753 | |||
Restricted common stock, value | $ 4,166 | $ 25,000 | $ 116,667 | $ 706,234 | |||
Stock compensation expense | $ 4,166 | $ 50,000 | $ 29,166 | $ 360,931 | $ 410,931 | $ 411,970 |
Stock Grants (Details Narrati48
Stock Grants (Details Narrative) (10-K) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2016 | Mar. 31, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | |
Restricted common stock, value | $ 1,806,222 | ||||||
Stock compensation expense | $ 204,083 | $ 771,358 | $ 708,059 | $ 11,667,361 | |||
Director [Member] | |||||||
Restricted common stock, shares | 27,778 | 357,143 | 458,170 | 776,753 | |||
Restricted common stock, value | $ 4,166 | $ 25,000 | $ 116,667 | $ 706,234 | |||
Stock compensation expense | $ 4,166 | $ 50,000 | $ 29,166 | $ 360,931 | $ 410,931 | $ 411,970 | |
Consultant [Member] | |||||||
Restricted common stock, shares | 100,000 | 250,000 | |||||
Stock compensation expense | $ 45,000 | $ 87,500 |
Stock Option Plans (Details Nar
Stock Option Plans (Details Narrative) - USD ($) | Oct. 26, 2015 | Apr. 16, 2015 | Feb. 07, 2014 | May 15, 2006 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 |
Aggregate number of shares issuable under this plan | 851,963 | |||||||||
Stock based compensation expense | $ 5,917 | $ 206,959 | $ 362,646 | $ 1,169,538 | $ 1,413,552 | $ 5,917,351 | ||||
Compensation expense, in lieu of salaries | $ 0 | $ 0 | $ 227,784 | $ 3,796,385 | ||||||
Options issued, in lieu of salaries | 138,462 | 477,456 | 669,007 | 3,738,958 | ||||||
Compensation expense, in lieu of fees | $ 0 | $ 30,997 | $ 66,445 | $ 170,678 | ||||||
Options issued, in lieu of fees | 0 | 106,887 | 1,107,417 | 945,263 | ||||||
Common stock per share | $ 0.07 | |||||||||
Consultants [Member] | ||||||||||
Number of shares issued to consultant | 25,556 | |||||||||
Cashless exercise of a stock option, shares | 41,851 | |||||||||
Common stock per share | $ 0.155 | |||||||||
Number of common stock withheld with aggregate exercise price | 16,295 | |||||||||
Director [Member] | ||||||||||
Compensation expense, in lieu of fees | $ 4,167 | $ 37,500 | $ 27,778 | $ 129,310 | ||||||
Options issued, in lieu of fees | 66,667 | 130,385 | 1,069,445 | 681,508 | ||||||
Consultant [Member] | ||||||||||
Compensation expense, in lieu of fees | $ 1,750 | $ 4,167 | $ 0 | $ 27,778 | ||||||
Options issued, in lieu of fees | 25,000 | 66,667 | 0 | 1,069,445 | ||||||
2006 Stock Incentive Plan [Member] | ||||||||||
Aggregate number of shares issuable under this plan | 16,521,704 | |||||||||
Percentage granted to employees at a price per share | 100.00% | |||||||||
Percentage of stock option granted to stockholders | 10.00% | |||||||||
Percentage exercise price per share | 110.00% | |||||||||
Percentage restricted stock to related parties price per share | 100.00% | |||||||||
2006 Stock Incentive Plan [Member] | Minimum [Member] | ||||||||||
Aggregate number of shares issuable under this plan | 1,456,786 | |||||||||
2006 Stock Incentive Plan [Member] | Maximum [Member] | ||||||||||
Aggregate number of shares issuable under this plan | 17,978,490 | |||||||||
2014 Equity Compensation Plan [Member] | ||||||||||
Aggregate number of shares issuable under this plan | 15,000,000 | 30,420,148 | ||||||||
2014 Equity Compensation Plan and 2006 Stock Incentive Plan [Member] | ||||||||||
Percentage granted to employees at a price per share | 100.00% | |||||||||
Percentage of stock option granted to stockholders | 10.00% | |||||||||
Percentage exercise price per share | 110.00% | |||||||||
Percentage restricted stock to related parties price per share | 100.00% |
Stock Option Plans (Details N50
Stock Option Plans (Details Narrative) (10-K) - USD ($) | Oct. 26, 2015 | Apr. 16, 2015 | Feb. 07, 2014 | May 15, 2006 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 |
Aggregate number of shares issuable under this plan | 851,963 | |||||||||
Stock based compensation expense | $ 5,917 | $ 206,959 | $ 362,646 | $ 1,169,538 | $ 1,413,552 | $ 5,917,351 | ||||
Recognized stock based compensation expense related to options | $ 1,210,124 | $ 0 | ||||||||
Options, issued during period | 6,073,247 | 6,456,890 | 27,756,821 | |||||||
Common stock per share | $ 0.07 | |||||||||
Employees [Member] | ||||||||||
Options, issued during period | 6,456,890 | |||||||||
Director [Member] | ||||||||||
Options, issued during period | 6,456,890 | |||||||||
Consultants [Member] | ||||||||||
Options, issued during period | 6,456,890 | |||||||||
Number of shares issued to consultant | 25,556 | |||||||||
Cashless exercise of a stock option, shares | 41,851 | |||||||||
Common stock per share | $ 0.155 | |||||||||
Number of common stock withheld with aggregate exercise price | 16,295 | |||||||||
2006 Stock Incentive Plan [Member] | ||||||||||
Aggregate number of shares issuable under this plan | 16,521,704 | |||||||||
Percentage granted to employees at a price per share | 100.00% | |||||||||
Percentage of stock option granted to stockholders | 10.00% | |||||||||
Percentage exercise price per share | 110.00% | |||||||||
Percentage restricted stock to related parties price per share | 100.00% | |||||||||
2006 Stock Incentive Plan [Member] | Minimum [Member] | ||||||||||
Aggregate number of shares issuable under this plan | 1,456,786 | |||||||||
2006 Stock Incentive Plan [Member] | Maximum [Member] | ||||||||||
Aggregate number of shares issuable under this plan | 17,978,490 | |||||||||
2014 Equity Compensation Plan [Member] | ||||||||||
Aggregate number of shares issuable under this plan | 15,000,000 | 30,420,148 | ||||||||
Maximum number of shares approved stock option plan | 15,000,000 |
Stock Option Plans - Schedule o
Stock Option Plans - Schedule of Stock Option Activity (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Options Outstanding, Beginning balance | 34,167,354 | 27,752,315 | 15,290,486 |
Options Exercisable, Beginning balance | 34,167,354 | 26,156,553 | 15,290,486 |
Options, Canceled | (15,290,486) | ||
Options, Granted | 6,073,247 | 6,456,890 | 27,756,821 |
Options, Exercised | (41,851) | (4,506) | |
Options, Forfeited | (3,501,965) | ||
Options Outstanding, Ending balance | 36,738,636 | 34,167,354 | 27,752,315 |
Options Exercisable, Ending balance | 36,663,636 | 34,167,354 | 26,156,553 |
Weighted Average Exercise Price, Outstanding, Beginning balance | $ 0.47 | $ 0.51 | $ 0.07 |
Weighted Average Exercise Price, Exercisable, Beginning balance | 0.47 | 0.50 | 0.07 |
Weighted Average Exercise Price, Canceled | |||
Weighted Average Exercise Price, Granted | |||
Weighted Average Exercise Price, Exercised | |||
Weighted Average Exercise Price, Forfeited | |||
Weighted Average Exercise Price, Outstanding, Ending balance | 0.41 | 0.47 | 0.51 |
Weighted Average Exercise Price, Exercisable, Ending balance | $ 0.41 | $ 0.47 | $ 0.50 |
Weighted Average Remaining Contractual Terms (Years), Outstanding Beginning | 6 years 6 months 26 days | 8 years 7 days | 3 years 10 months 21 days |
Weighted Average Remaining Contractual Terms (Years), Outstanding Ending | 6 years 5 months 12 days | 6 years 6 months 26 days | 8 years 7 days |
Weighted Average Remaining Contractual Terms (Years), Exercisable, Beginning | 6 years 6 months 26 days | 7 years 11 months 12 days | 3 years 10 months 21 days |
Weighted Average Remaining Contractual Terms (Years), Exercisable, Ending | 6 years 5 months 12 days | 6 years 6 months 26 days | 7 years 11 months 12 days |
Aggregate Intrinsic Value, Outstanding Beginning balance | $ 974,066 | $ 1,963,523 | $ 305,810 |
Aggregate Intrinsic Value, Outstanding Ending balance | 89,682 | 974,066 | 1,963,523 |
Aggregate Intrinsic Value, Exercisable Beginning balance | 974,066 | 1,962,239 | 305,810 |
Aggregate Intrinsic Value, Exercisable Ending balance | $ 89,307 | $ 974,066 | $ 1,962,239 |
Stock Option Plans - Schedule52
Stock Option Plans - Schedule of Non-vested Shares Granted Under Stock Option Plan (Details) - shares | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Non-vested, Options Outstanding, Beginning balance | 1,595,762 | ||
Non-vested, Options Granted | 6,073,247 | 6,456,890 | 27,756,821 |
Non-vested, Options Vested | (5,945,469) | (8,010,801) | (26,156,553) |
Non-vested, Options Exercised | (41,851) | (4,506) | |
Non-vested, Options Forfeited | |||
Non-vested, Options Outstanding, Ending balance | 75,000 | 1,595,762 |
Stock Option Plans - Schedule53
Stock Option Plans - Schedule of Fair Value Assumptions (Details) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Dividend yield | 0.00% | 0.00% | 0.00% |
Minimum [Member] | |||
Risk-free rate | 0.12% | 0.12% | 0.12% |
Expected volatility | 112.00% | 112.00% | 112.00% |
Expected term | 1 year 1 month 6 days | 1 year 1 month 6 days | 1 year |
Maximum [Member] | |||
Risk-free rate | 1.47% | 1.47% | 0.66% |
Expected volatility | 225.00% | 170.00% | 159.00% |
Expected term | 5 years 6 months | 5 years 6 months | 2 years 6 months |
Warrants (Details Narrative)
Warrants (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | |
Stock compensation expense | $ 204,083 | $ 771,358 | $ 708,059 | $ 11,667,361 | |
Warrant [Member] | |||||
Warrants to purchase an aggregate number of shares | 60,866 | 602,563 | |||
Stock compensation expense | $ 48,700 | $ 5,250,540 |
Warrants - Schedule of Stock Wa
Warrants - Schedule of Stock Warrants Activity (Details) - Warrant [Member] - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Warrants, Outstanding, Beginning Balance | 46,445,212 | 3,395,833 | |
Warrants, Exercisable, Beginning Balance | 46,445,212 | 28,435,782 | 3,395,833 |
Warrants, Canceled | (3,395,833) | ||
Warrants, Granted | 30,000,000 | 18,009,430 | 28,435,782 |
Warrants, Exercised | |||
Warrants, Forfeited | (602,563) | ||
Warrants, Outstanding, Ending Balance | 75,842,649 | 46,445,212 | |
Warrants, Exercisable, Ending Balance | 75,842,649 | 46,445,212 | 28,435,782 |
Weighted Average Exercise Price, Outstanding, Beginning Balance | $ 0.46 | $ 0.64 | $ 0.45 |
Weighted Average Exercise Price, Exercisable, Beginning Balance | 0.46 | 0.64 | 0.45 |
Weighted Average Exercise Price, Canceled | |||
Weighted Average Exercise Price, Granted | |||
Weighted Average Exercise Price, Exercised | |||
Weighted Average Exercise Price, Forfeited | |||
Weighted Average Exercise Price, Outstanding, Ending Balance | 0.33 | 0.46 | 0.64 |
Weighted Average Exercise Price, Exercisable, Ending Balance | $ 0.33 | $ 0.46 | $ 0.64 |
Weighted Average Remaining Contractual Terms (Years), Outstanding Beginning Balance | 3 years 5 months 23 days | 4 years 26 days | 5 years 3 months 11 days |
Weighted Average Remaining Contractual Terms (Years), Exercisable Beginning Balance | 3 years 5 months 23 days | 4 years 26 days | 5 years 3 months 11 days |
Weighted Average Remaining Contractual Terms (Years), Outstanding Ending Balance | 3 years 6 months 7 days | 3 years 5 months 23 days | 4 years 26 days |
Weighted Average Remaining Contractual Terms (Years), Exercisable Ending Balance | 3 years 6 months 7 days | 3 years 5 months 23 days | 4 years 26 days |
Aggregate Intrinsic Value, Outstanding Beginning Balance | $ 2,517,337 | ||
Aggregate Intrinsic Value, Exercisable Beginning Balance | 2,517,337 | $ 2,517,337 | |
Aggregate Intrinsic Value, Outstanding Ending Balance | 2,517,337 | ||
Aggregate Intrinsic Value, Exercisable Ending Balance | $ 2,517,337 | $ 2,517,337 |
Warrants - Schedule of Fair Val
Warrants - Schedule of Fair Value Assumptions Related to Warrants Outstanding (Details) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Dividend yield | 0.00% | 0.00% | 0.00% |
Minimum [Member] | |||
Risk-free rate | 0.12% | 0.12% | 0.12% |
Expected volatility | 112.00% | 112.00% | 112.00% |
Expected term | 1 year 1 month 6 days | 1 year 1 month 6 days | 1 year |
Maximum [Member] | |||
Risk-free rate | 1.47% | 1.47% | 0.66% |
Expected volatility | 225.00% | 170.00% | 159.00% |
Expected term | 5 years 6 months | 5 years 6 months | 2 years 6 months |
Warrant [Member] | |||
Dividend yield | 0.00% | 0.00% | 0.00% |
Warrant [Member] | Minimum [Member] | |||
Risk-free rate | 0.12% | 0.12% | 0.12% |
Expected volatility | 102.00% | 112.00% | 112.00% |
Expected term | 1 year | 1 year | 1 year |
Warrant [Member] | Maximum [Member] | |||
Risk-free rate | 0.86% | 0.66% | 0.66% |
Expected volatility | 159.00% | 159.00% | 159.00% |
Expected term | 2 years 6 months | 2 years 6 months | 2 years 6 months |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | |
Settled in option value | $ 167,884 | |||||
Stock compensation expense | $ 116,583 | $ 256,959 | $ 498,312 | $ 1,534,468 | 1,918,183 | $ 11,667,361 |
Amounts payable | 293,546 | 293,546 | 293,546 | |||
Director [Member] | ||||||
Settled in option value | 37,500 | |||||
Stock compensation expense | $ 0 | 37,500 | $ 37,500 | 130,385 | ||
Consulting fees to director | $ 0 | $ 9,230 | 240,000 | |||
Amounts payable | $ 293,546 | $ 293,546 |
Related Party Transactions (D58
Related Party Transactions (Details Narrative) (10-K) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Dec. 31, 2015 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | |
Settled in cash | $ 9,231 | $ 9,231 | ||||
Settled in option value | $ 167,884 | |||||
Option to purchase shares | 851,963 | |||||
Amounts payable | 293,546 | $ 293,546 | $ 293,546 | |||
Executive Chairman Agreement [Member] | Director [Member] | ||||||
Consulting fees to director | 37,500 | 177,115 | ||||
Director [Member] | ||||||
Consulting fees to director | $ 0 | $ 9,230 | $ 240,000 | |||
Settled in option value | $ 37,500 | |||||
Amounts payable | $ 293,546 | $ 293,546 | $ 293,546 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | ||||||
Effective tax statutory rate | 34.00% | 34.00% | 34.00% | 34.00% | (34.00%) | (34.00%) |
Refundable tax credit | $ 0 | $ 47,802 |
Income Taxes (Details Narrati60
Income Taxes (Details Narrative) (10-K) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | |
Effective tax statutory rate | (34.00%) | (34.00%) | (34.00%) | (34.00%) | 34.00% | 34.00% |
Hawaii Income Tax Purposes [Member] | ||||||
Operating loss carry forwards | $ 25,550,778 | |||||
Operating loss carry forwards expiration year | 2,026 | |||||
Federal [Member] | ||||||
Operating loss carry forwards | $ 30,171,769 | |||||
Operating loss carry forwards expiration year | 2,026 |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income Tax Provision (Benefit) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | ||
Current Federal | ||
Current State | ||
Total Current | ||
Deferred Federal | ||
Deferred State | ||
Total Deferred |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Taxes Rate (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | ||||||
Tax provision (benefit) at Federal statutory rate | 34.00% | 34.00% | 34.00% | 34.00% | (34.00%) | (34.00%) |
Accrued compensation | (0.70%) | (0.54%) | ||||
Accrued interest expense | 0.00% | (1.31%) | ||||
Stock based compensation | 15.32% | 23.34% | ||||
Depreciation and amortization | 0.22% | (0.08%) | ||||
Other | 0.06% | (0.10%) | ||||
Change in valuation allowance | 19.10% | 12.49% | ||||
Effective tax rate | 0.00% | 0.00% |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Income Tax Assets and Liabilities (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforwards | $ 11,532,857 | $ 11,265,332 |
Stock based compensation | 733,206 | 4,459,732 |
Accrued compensation | 1,485,827 | 1,525,089 |
Credit carryforwards | 106,856 | 124,525 |
Amortization | 1,755 | |
Gross deferred tax assets | 13,858,746 | 17,376,433 |
Less valuation allowance | (13,768,801) | (17,321,688) |
Net deferred tax assets | 89,945 | 54,745 |
Depreciation | (89,945) | (54,745) |
Gain on sale of assets | ||
Gross deferred tax liabilities | (89,945) | (54,745) |
Net deferred tax assets |
Basic and diluted Net Income 64
Basic and diluted Net Income (Loss) Per Share - Schedule of Basic and Diluted Net Income (Loss) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | |
Earnings Per Share [Abstract] | ||||||
Net loss (numerator) basic loss per share, basic | $ (482,438) | $ (743,461) | $ (1,387,926) | $ (2,443,881) | $ (4,257,875) | $ (16,994,625) |
Net loss (numerator) effect of dilutive securities-common stock options and warrants | ||||||
Net loss (numerator) diluted loss per share, diluted | $ (482,438) | $ (743,461) | $ (1,387,926) | $ (2,443,881) | $ (4,257,875) | $ (16,994,625) |
Shares (denominator) basic loss per shares , basic | 79,581,511 | 67,955,379 | 73,949,386 | 66,000,101 | 66,873,761 | 60,225,524 |
Shares (denominator) effect of dilutive securities-common stock options and warrants | ||||||
Shares (denominator) diluted loss per shares, diluted | 79,581,511 | 67,955,379 | 73,949,386 | 66,000,101 | 66,873,761 | 60,225,524 |
Per share amount basic loss per share, basic | $ (0.01) | $ (0.01) | $ (0.02) | $ (0.04) | $ (0.06) | $ (0.28) |
Per share amount effect of dilutive securities-common stock options and warrants | ||||||
Per share amount diluted loss per share, diluted | $ (0.01) | $ (0.01) | $ (0.02) | $ (0.04) | $ (0.06) | $ (0.28) |
Basic and Diluted Net Income 65
Basic and Diluted Net Income (Loss) Per Share - Schedule of Computation of Diluted Net Income Loss Per Share (Details) - shares | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | |
Total common stock equivalents | 112,581,285 | 74,989,168 | 80,612,566 | 54,592,335 |
Common Stock Warrants [Member] | ||||
Total common stock equivalents | 75,842,649 | 41,871,124 | 46,445,212 | 28,435,782 |
Common Stock Options [Member] | ||||
Total common stock equivalents | 36,738,636 | 33,118,044 | 34,167,354 | 26,156,553 |
Concentration (Details Narrativ
Concentration (Details Narrative) (10-K) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Vendor [Member] | ||
Outstanding payables | $ 86,255 | $ 86,255 |
Leases (Details Narrative)
Leases (Details Narrative) - Lease Settlement Agreement [Member] - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | |
Hawaii Research Center [Member] | ||||||
Lease expiration date | Oct. 31, 2014 | Oct. 31, 2014 | ||||
Operating lease rent expense | $ 0 | $ 0 | $ 3,437 | $ 12,112 | $ 12,718 | $ 56,856 |
Rent expences | 3,437 | |||||
Manoa Innovation Center [Member] | ||||||
Operating lease rent expense | $ 7,927 | $ 7,931 | $ 23,784 | $ 23,759 | $ 31,479 | $ 28,169 |
Leases (Details Narrative) (10-
Leases (Details Narrative) (10-K) - Lease Settlement Agreement [Member] - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | |
Hawaii Research Center [Member] | ||||||
Lease expiration date | Oct. 31, 2014 | Oct. 31, 2014 | ||||
Operating lease rent expense | $ 0 | $ 0 | $ 3,437 | $ 12,112 | $ 12,718 | $ 56,856 |
Manoa Innovation Center [Member] | ||||||
Operating lease rent expense | $ 7,927 | $ 7,931 | $ 23,784 | $ 23,759 | $ 31,479 | $ 28,169 |
Commitments (Details Narrative)
Commitments (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | |
Payment for license cost | $ 10,000 | $ 10,000 | ||||
Percentage of royalties revenue | 2.00% | 2.00% | ||||
License revenue | ||||||
License payable | 20,000 | 20,000 | 20,000 | 20,000 | ||
Employee settlement | 50,000 | 50,000 | 50,000 | 50,000 | ||
Revenues | 11,160 | 11,160 | ||||
BASF Agreement And License [Member] | ||||||
Royalties | ||||||
Capsugel Agreement [Member] | ||||||
Revenues |
Commitments (Details Narrativ70
Commitments (Details Narrative) (10-K) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | |
Payment for license cost | $ 10,000 | $ 10,000 | ||||
Percentage of royalties revenue | 2.00% | 2.00% | ||||
License revenue | ||||||
License payable | 20,000 | 20,000 | 20,000 | 20,000 | ||
Employee settlement | 50,000 | 50,000 | 50,000 | 50,000 | ||
Revenues | 11,160 | 11,160 | ||||
BASF Agreement And License [Member] | ||||||
Royalty revenue | ||||||
Capsugel Agreement [Member] | ||||||
Revenues |
Subsequent Events (Details Nara
Subsequent Events (Details Narative) - USD ($) | Feb. 07, 2014 | Jan. 03, 2014 | Nov. 14, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Sale of securities in self-directed offering | $ 800,000 | $ 1,430,000 | $ 1,776,000 | $ 3,923,798 | ||||
Sale of securities, price per unit | $ 0.155 | |||||||
Warrants to purchase of common stock shares | 6,276,960 | 3,321,600 | 14,446,777 | |||||
Warrants price per share | $ 0.625 | $ 0.625 | $ 0.625 | |||||
Subsequent Event [Member] | ||||||||
Sale of securities in self-directed offering | $ 185,000 | |||||||
Sale of securities, price per unit | $ 0.08 | |||||||
Number of restricted common stock shares issued | 2,312,500 | |||||||
Conversion stock, description | Each unit consisted of 1 share of restricted common stock (2,312,500 shares), a five-year warrant to purchase 1 share of restricted common stock (2,312,500 warrant shares) at $0.08 per share, a five-year warrant to purchase 1 share of restricted common stock (2,312,500 warrant shares) at $0.12 per share, and a five-year warrant to purchase 1 share of restricted common stock (2,312,500 warrant shares) at $0.16 per share. | |||||||
Subsequent Event [Member] | Restricted Stock One [Member] | ||||||||
Warrants to purchase of common stock shares | 2,312,500 | |||||||
Warrant expiration term | 5 years | |||||||
Warrants price per share | $ 0.08 | |||||||
Subsequent Event [Member] | Restricted Stock Two [Member] | ||||||||
Warrants to purchase of common stock shares | 2,312,500 | |||||||
Warrant expiration term | 5 years | |||||||
Warrants price per share | $ 0.12 | |||||||
Subsequent Event [Member] | Restricted Stock Three [Member] | ||||||||
Warrants to purchase of common stock shares | 2,312,500 | |||||||
Warrant expiration term | 5 years | |||||||
Warrants price per share | $ 0.16 |