Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Apr. 14, 2016 | Jun. 30, 2015 | |
Principal Net of Discount | |||
Entity Registrant Name | WOUND MANAGEMENT TECHNOLOGIES, INC. | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Amendment Flag | false | ||
Entity Central Index Key | 714,256 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | No | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY | ||
Entity Public Float | $ 9,652,252 | ||
Entity Common Stock, Shares Outstanding | 108,369,631 |
Statement - CONDENSED CONSOLIDA
Statement - CONDENSED CONSOLIDATED BALANCE SHEET - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
CURRENT ASSETS: | ||
Cash | $ 182,337 | $ 523,441 |
Accounts Receivable, net of allowance for bad debt of $20,388 and $18,462 | 251,546 | 278,261 |
Royalties Receivable | 201,000 | 0 |
Inventory, net of allowance for obsolescence of $150,135 and $46,007 | 409,778 | 402,530 |
Prepaid and Other Assets | 114,009 | 6,295 |
Total Current Assets | 1,158,670 | 1,210,527 |
LONG-TERM ASSETS: | ||
Property Plant and Equipment, net of accumulated depreciation of $31,477 and $22,477 | 41,762 | 45,428 |
Intangible Assets, net of accumulated depreciation of $318,944 and $267,913 | 191,366 | 242,397 |
Total Long-Term Assets | 233,128 | 287,825 |
TOTAL ASSETS | 1,391,798 | 1,498,352 |
CURRENT LIABILITIES: | ||
Accounts Payable | 222,351 | 210,266 |
Accounts Payable - Related Parties | 21,099 | 0 |
Accrued Royalties and Dividends | 323,062 | 324,286 |
Capital Lease Obligation | 4,504 | 4,504 |
Accrued Interest | 273,068 | 181,431 |
Derivative Liabilities | 310 | 1,708 |
Notes Payable | 444,700 | 392,920 |
Convertible Notes Payable | 170,000 | 0 |
Convertible Notes Payable - Related Party, net of unamortized discounts of $0 and $50,837 | 0 | 1,200,000 |
Total Current Liabilities | 1,459,094 | 2,315,115 |
LONG-TERM LIABILITIES | ||
Convertible Notes Payable - Related Parties | 1,200,000 | 0 |
Capital Lease Obligation | 3,973 | 8,633 |
Total Long-Term Liabilities | 1,203,973 | 8,633 |
TOTAL LIABILITIES | 2,663,067 | 2,323,748 |
STOCKHOLDERS' EQUITY (DEFICIT) | ||
Series A Preferred Stock, $10 par value, 5,000,000 shares authorized; none issued and outstanding | 0 | 0 |
Series B Convertible Preferred Stock, $10 par value, 7,500 shares authorized; none issued and outstanding | 0 | 0 |
Series C Convertible Preferred Stock, $10 par value, 100,000 shares authorized; 80,218 issued and outstanding as of December 31, 2015 and 70,411 issued and outstanding as of December 31, 2014 | 802,180 | 704,110 |
Series D Convertible Preferred Stock, $10 par value, 25,000 shares authorized; none issued and outstanding | 0 | 0 |
Series E Convertible Preferred Stock, $10 par value, 5,000 shares authorized; none issued and outstanding | 0 | 0 |
Common Stock: $.001 par value; 250,000,000 shares authorized; 107,274,816 issued and 107,270,727 outstanding as of December 31, 2015 and 92,902,320 issued and 92,898,231 outstanding as of December 31, 2014 | 107,274 | 105,447 |
Additional Paid-in Capital | 44,615,321 | 43,820,636 |
Treasury Stock | (12,039) | (12,039) |
Accumulated Deficit | (46,784,005) | (45,443,550) |
Total Stockholders' Deficit | (1,271,269) | (825,396) |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ 1,391,798 | $ 1,498,352 |
Statement - CONDENSED CONSOLID3
Statement - CONDENSED CONSOLIDATED BALANCE SHEET (Parenthetical) - $ / shares | Dec. 31, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Series A Preferred Stock Par Value | $ 10 | $ 10 |
Series A Preferred Stock shares authorized | 5,000,000 | 5,000,000 |
Series A Preferred Stock shares issued | 0 | 0 |
Series A Preferred Stock shares outstanding | 0 | 0 |
Series B Preferred Stock Par Value | $ 10 | $ 10 |
Series B Preferred Stock shares authorized | 75,000 | 75,000 |
Series B Preferred Stock shares issued | 0 | 0 |
Series B Preferred Stock shares outstanding | 0 | 0 |
Series C Preferred Stock Par Value | $ 10 | $ 10 |
Series C Preferred Stock shares authorized | 100,000 | 100,000 |
Series C Preferred Stock shares issued | 80,218 | 70,411 |
Series C Preferred Stock shares outstanding | 80,218 | 70,411 |
Series D Preferred Stock Par Value | $ 10 | $ 10 |
Series D Preferred Stock shares authorized | 25,000 | 25,000 |
Series D Preferred Stock shares issued | 0 | 0 |
Series D Preferred Stock shares outstanding | 0 | 0 |
Series E Preferred Stock Par Value | $ 10 | $ 10 |
Series E Preferred Stock shares authorized | 5,000 | 5,000 |
Series E Preferred Stock shares issued | 0 | 0 |
Series E Preferred Stock shares outstanding | 0 | 0 |
Common Stock, par value | $ 0.001 | $ 0.001 |
Common Stock, shares authorized | 250,000,000 | 250,000,000 |
Common Stock, shares issued | 107,274,816 | 92,902,320 |
Common Stock, shares outstanding | 107,270,727 | 92,898,231 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Revenues [Abstract] | ||
REVENUES | $ 3,372,188 | $ 2,632,643 |
COST OF GOODS SOLD | 891,970 | 803,631 |
GROSS PROFIT | 2,480,218 | 1,829,012 |
GENERAL AND ADMINISTRATIVE EXPENSES: | ||
General and Administrative Expenses | 3,385,168 | 3,835,095 |
Depreciation / Amortization | 60,031 | 56,446 |
LOSS FROM OPERATIONS | (964,981) | (2,062,529) |
OTHER INCOME (EXPENSES): | ||
Change in fair value of Derivative Liability | (295) | 78,145 |
Interest Income | 20 | 103 |
Loss on issuance of debt for warrants | (198,307) | |
Interest Expense | (176,892) | (293,896) |
NET LOSS | (1,340,455) | (2,278,177) |
Series C Preferred Stock Dividends | (268,772) | (233,792) |
NET LOSS AVAILABLE TO COMMON STOCKHOLDERS | $ (1,609,227) | $ (2,511,969) |
Basic and diluted loss per share of common stock | $ (0.02) | $ (0.03) |
Weighted average number of common shares outstanding | 106,695,782 | 87,943,837 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) - USD ($) | Preferred Stock C | Preferred Stock D | Common Stock | Additional paid in capital | Treasury Stock | Accumulated Deficit | Total Stockholders' Equity |
Beginning Balance, Shares at Dec. 31, 2013 | 38,232 | 15,000 | 85,664,558 | (4,089) | |||
Beginning Balance, Amount at Dec. 31, 2013 | $ 382,320 | $ 150,000 | $ 85,664 | $ 40,090,878 | $ (12,039) | $ (43,165,373) | $ (2,468,550) |
Issuance of Common stock for Debt, Shares | 1,087,762 | ||||||
Issuance of Common stock for Debt, Amount | $ 1,088 | 92,640 | 93,728 | ||||
Conversion of Series D Preferred Stock, Shares | (16,545) | 16,545,000 | |||||
Conversion of Series D Preferred Stock, Amount | $ (165,450) | $ 16,545 | 148,905 | 0 | |||
Issuance of Common stock for Services, Shares | 2,150,000 | ||||||
Issuance of Common stock for Services, Amount | $ 2,150 | 220,400 | 222,550 | ||||
Issuance of Preferred stock for Services, Shares | 1,656 | ||||||
Issuance of Preferred stock for Services, Amount | $ 16,560 | 150,480 | 167,040 | ||||
Issuance of Preferred stock for Subscription Agreements, Shares | 32,179 | ||||||
Issuance of Preferred stock for Subscription Agreements, Amount | $ 321,790 | 1,930,720 | 2,252,510 | ||||
Cash paid for return of Preferred stock, Shares | (111) | ||||||
Cash paid for return of Preferred stock, Amount | $ (1,110) | (8,880) | (9,990) | ||||
Resolution of derivative liabilities due to debt conversion | 132,417 | 132,417 | |||||
Resolution of warrant derivative liabilities due to removal of convertible debt | 918,580 | 918,580 | |||||
Amortization of Series D Preferred stock awards | 144,496 | 144,496 | |||||
Net Loss | (2,278,177) | (2,278,177) | |||||
Ending Balance, Shares at Dec. 31, 2014 | 70,411 | 0 | 105,447,320 | (4,089) | |||
Ending Balance, Amount at Dec. 31, 2014 | $ 704,110 | $ 0 | $ 105,447 | 43,820,636 | $ (12,039) | (45,443,550) | (825,396) |
Issuance of Common stock for Conversion of Series C Preferred Stock, Shares | (1,503) | 1,503,000 | |||||
Issuance of Common stock for Conversion of Series C Preferred Stock, Amount | $ (15,030) | $ 1,503 | 13,527 | 0 | |||
Issuance of Common stock for Services, Shares | 216,734 | ||||||
Issuance of Common stock for Services, Amount | $ 216 | 48,553 | 48,769 | ||||
Issuance of Common stock for Series C Dividend, Shares | 107,762 | ||||||
Issuance of Common stock for Series C Dividend, Amount | $ 108 | (108) | 0 | ||||
Issuance of Preferred stock for Cash, Shares | 11,310 | ||||||
Issuance of Preferred stock for Cash, Amount | $ 113,100 | 636,900 | 750,000 | ||||
Recognition of vesting stock | (4,187) | (4,187) | |||||
Forgiveness of related party convertible debt | 100,000 | 100,000 | |||||
Net Loss | (1,340,455) | (1,340,455) | |||||
Ending Balance, Shares at Dec. 31, 2015 | 80,218 | 0 | 107,274,816 | (4,089) | |||
Ending Balance, Amount at Dec. 31, 2015 | $ 802,180 | $ 0 | $ 107,274 | $ 44,615,321 | $ (12,039) | $ (46,784,005) | $ (1,271,269) |
Statement - CONDENSED CONSOLID6
Statement - CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Cash Flows from Operating Activities: | ||
Net Loss | $ (1,340,455) | $ (2,278,177) |
Adjustments to reconcile net loss to net cash used in Operating activities: | ||
Depreciation and amortization | 60,031 | 56,446 |
Amortization of discounts and deferred financing costs | 0 | 141,869 |
Bad debt expense | 6,461 | 20,273 |
Inventory obsolescence | 133,747 | 83,420 |
Series D preferred stock issued for services | 0 | 311,536 |
Common stock issued for services | 44,582 | 222,550 |
Loss on issuance of debt for warrants | 198,307 | |
Gain on fair market value of derivative liabilities | 295 | (78,145) |
Changes in assets and liabilities: | ||
(Increase) decrease in accounts receivable | 20,256 | (76,985) |
(Increase) decrease in royalties receivable | (201,000) | 0 |
(Increase) decrease in inventory | (140,995) | (178,448) |
(Increase) decrease in employee advances | 0 | 3,620 |
(Increase) decrease in prepaids and other assets | (107,714) | 69,908 |
Increase (decrease) in accrued royalties and dividends | 0 | (50,714) |
Increase (decrease) in accounts payable | 33,183 | 18,100 |
Increase (decrease) in accrued liabilities | (1,224) | (260) |
Increase (decrease) in accrued interest payable | 91,637 | 48,322 |
Net cash flows used in operating activities | (1,202,889) | (1,686,685) |
Cash flows from investing activities: | ||
Payments made on capital lease obligation | 0 | (375) |
Purchase of property and equipment | (5,334) | (8,072) |
Net cash flows used in investing activities | (5,334) | (8,447) |
Cash flows from financing activities: | ||
Borrowings on debt | 96,000 | 0 |
Payments on debt | (74,220) | (23,600) |
Borrowings on convertible debt with related parties | 1,200,000 | 0 |
Payments on convertible debt | (1,100,000) | (44,900) |
Payments made on capital lease obligation | (4,660) | 0 |
Cash proceeds from sale of series C preferred stock | 750,000 | 2,252,510 |
Cash paid for return of Series D preferred stock | 0 | (9,990) |
Net cash flows provided by financing activities | 867,120 | 2,174,020 |
Net increase (decrease) in cash | (341,103) | 478,888 |
Cash and cash equivalents, beginning of period | 523,441 | 44,553 |
Cash and cash equivalents, end of period | 182,338 | 523,441 |
Cash paid during the period for: | ||
Interest | 85,255 | 103,705 |
Income Taxes | 0 | 0 |
Supplemental non-cash investing and financing activities: | ||
Common stock issued for conversion of debt and interest | 0 | 93,728 |
Common stock issued for conversion of series D preferred stock | 0 | 40,000 |
Common stock issued for conversion of series C preferred stock | 15,030 | 0 |
Common stock issued for conversion of series C preferred stock dividend | 108 | 0 |
Issuance of vested stock | 333 | 0 |
Issuance of convertible debt for warrants | 200,000 | 0 |
Forgiveness of related party convertible debt | $ 100,000 | 0 |
Resolution of warrant derivative liabilities due to removal of convertible debt | 918,580 | |
Resolution of derivative liabilities due to debt conversions | 132,417 | |
Debt discounts due to derivative liabilities | 90,000 | |
Reclass of related party debt to unrelated party debt | 115,620 | |
Reclass of related party interest payable to unrelated party interest payable | 47,061 | |
Capital lease obligation | $ 13,512 |
1. NATURE OF OPERATIONS
1. NATURE OF OPERATIONS | 12 Months Ended |
Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NATURE OF OPERATIONS | Wound Management Technologies, Inc. was incorporated in the State of Texas in December 2001 as MB Software, Inc. In May 2008, MB Software, Inc. changed its name to Wound Management Technologies, Inc. The Company distributes collagen-based wound care products to healthcare providers such as physicians, clinics and hospitals. |
2. SUMMARY OF SIGNIFICANT ACCOU
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Basis of Presentation The terms the Company, we, us and WMT are used in this report to refer to Wound Management Technologies, Inc. The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles. Principles of Consolidation The accompanying consolidated financial statements include the accounts of WMT and its wholly-owned subsidiaries: Wound Care Innovations, LLC a Nevada limited liability company (WCI); Resorbable Orthopedic Products, LLC, a Texas limited liability company (Resorbable); and Innovate OR, Inc. InnovateOR formerly referred to as BioPharma Management Technologies, Inc., a Texas corporation (BioPharma). All intercompany accounts and transactions have been eliminated. Use of Estimates in Financial Statement Preparation The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements, and the amounts of revenues and expenses during the reporting period. On a regular basis, management evaluates these estimates and assumptions. Actual results could differ from those estimates. Cash, Cash Equivalents and Marketable Securities The Company considers all highly liquid debt investments purchased with an original maturity of three months or less to be cash equivalents. Marketable securities include investments with maturities greater than three months but less than one year. For certain of the Companys financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and other accrued liabilities, and amounts due to related parties, the carrying amounts approximate fair value due to their short maturities. Loss Per Share The Company computes loss per share in accordance with Accounting Standards Codification ASC Topic No. 260, Earnings per Share, which requires the Company to present basic and dilutive loss per share when the effect is dilutive. Basic loss per share is computed by dividing loss available to common stockholders by the weighted average number of common shares available. Diluted loss per share is computed similar to basic loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. Revenue Recognition In accordance with the guidance in ASC Topic No. 605, Revenue Recognition, the Company recognizes revenue when (a) persuasive evidence of an arrangement exists, (b) delivery has occurred or services have been rendered, (c) the fee is fixed or determinable, and (d) collectability is reasonable assured. Revenue is recognized upon delivery. Revenue is recorded on the gross basis, which includes handling and shipping, because the Company has risks and rewards as a principal in the transaction based on the following: (a) the Company maintains inventory of the product, (b) the Company is responsible for order fulfillment, and (c) the Company establishes the price for the product. The Company recognizes royalty revenue in the period the royalty bearing products are sold. The Company recognizes revenue based on bill and hold arrangements when the seller has transferred to the buyer the significant risks and rewards of ownership of the goods; the seller does not retain effective control over the goods or continuing managerial involvement to the degree usually associated with ownership; the amount of revenue can be measured reliably; it is probable that the economic benefits of the sale will flow to the seller; any costs incurred or to be incurred related to the sale can be measured reliably; it is probable that delivery will be made; the goods are on hand, identified, and ready for delivery; the buyer specifically acknowledges the deferred delivery instructions; and the usual payment terms apply. During the years ended December 31, 2015 and 2014, aggregate revenue recognized under bill and hold transactions was $275,000 and $0, respectively. Allowance for Doubtful Accounts The Company establishes an allowance for doubtful accounts to ensure accounts receivable are not overstated due to uncollectibility. Bad debt reserves are maintained based on a variety of factors, including the length of time receivables are past due and a detailed review of certain individual customer accounts. If circumstances related to customers change, estimates of the recoverability of receivables would be further adjusted. The Company recorded bad debt expense of $6,461 and $20,273 in 2015 and 2014, respectively. The allowance for doubtful accounts at December 31, 2015 was $20,388 and the amount at December 31, 2014 was $18,462. Inventories Inventories are stated at the lower of cost or net realizable value, with cost computed on a first-in, first-out basis. Inventories consist of powders, gels and the related packaging supplies. The Company recorded inventory obsolescence expense of $133,747 in 2015 and $83,420 in 2014. The allowance for obsolete and slow moving inventory had a balance of $150,135 and $46,007 at December 31, 2015 and December 31, 2014, respectively. Property and Equipment Property and equipment is recorded at cost. Depreciation is computed utilizing the straight-line method over the estimated economic life of the asset, which ranges from five to ten years. As of December 31, 2014, fixed assets consisted of $67,905 including furniture and fixtures, computer equipment, phone equipment and the Company websites. As of December 31, 2015, fixed assets consisted of $73,239 including furniture and fixtures, computer equipment, phone equipment and the Company websites. The depreciation expense recorded in 2015 was $8,999 and the depreciation expense recorded in 2014 was $5,415. The balance of accumulated depreciation was $31,477 and $22,477 at December 31, 2015 and December 31, 2014, respectively. Intangible Assets Intangible assets as of December 31, 2015 and 2014 consisted of a patent acquired in 2009 with a historical cost of $510,310. The intangible asset is being amortized over its estimated useful life of 10 years using the straight line method. Amortization expense recognized was $51,031 during 2015 and 2014. Impairment of Long-Lived Assets Long-lived assets and certain identifiable intangibles to be held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company continuously evaluates the recoverability of its long-lived assets based on estimated future cash flows and the estimated liquidation value of such long-lived assets, and provides for impairment if such undiscounted cash flows are insufficient to recover the carrying amount of the long-lived assets. If impairment exists, an adjustment is made to write the asset down to its fair value, and a loss is recorded as the difference between the carrying value and fair value. Fair values are determined based on quoted market values, undiscounted cash flows or internal and external appraisals, as applicable. Assets to be disposed of are carried at the lower of carrying value or estimated net realizable value. There was no impairment recorded during the years ended December 31, 2015 and 2014. Fair Value Measurements As defined in Accounting Standards Codification (ASC) Topic No. 820, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. ASC 820 establishes a fair value hierarchy that prioritizes the inputs 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 measurement) and the lowest priority to unobservable inputs (level 3 measurement). This fair value measurement framework applies at both initial and subsequent measurement. The three levels of the fair value hierarchy defined by ASC Topic No. 820 are as follows: Level 1 Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives, marketable securities and listed equities. Level 2 Pricing inputs are other than quoted prices in active markets included in level 1, which are either directly or indirectly observable as of the reported date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Instruments in this category generally include non-exchange-traded derivatives such as commodity swaps, interest rate swaps, options and collars. Level 3 Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in managements best estimate of fair value. At December 31, 2014, the Companys financial instruments consist of the derivative liabilities related to stock purchase warrants and the conversion features of certain outstanding notes payable. The derivative liabilities related to stock purchase warrants were valued using the Black-Scholes Option Pricing Model and the derivative liabilities related to the conversion features in the outstanding convertible notes were valued using the Black-Scholes Option Pricing Model assuming maximum value. These are level 3 inputs. At December 31, 2015, the Companys financial instruments consist of the derivative liabilities related to stock purchase warrants which were valued using the Black-Scholes Option Pricing Model, a level 3 input. Our intangible assets have also been valued using the fair value accounting treatment and a description of the methodology used, including the valuation category, is described below in Note 6 Intangible Assets. The following table sets forth by level within the fair value hierarchy the Companys financial assets and liabilities that were accounted for at fair value as of December 31, 2015 and 2014. Recurring Fair Value Measure Level 1 Level 2 Level 3 Total Liabilities Derivative Liabilities as of December 31, 2015 $ - $ - $ 310 $ 310 Derivative Liabilities as of December 31, 2014 $ - $ - $ 1,708 $ 1,708 Derivatives The Company entered into derivative financial instruments to manage its funding of current operations. Derivatives are initially recognized at fair value at the date a derivative contract is entered into and are subsequently re-measured to their fair value at the end of each reporting period. The resulting gain or loss is recognized in profit or loss immediately. Income Taxes Income taxes are accounted for under the asset and liability method, whereby deferred income taxes are recorded for temporary differences between financial statement carrying amounts and the tax basis of assets and liabilities. Deferred tax assets and liabilities reflect the tax rates expected to be in effect for the years in which the differences are expected to reverse. A valuation allowance is provided if it is more likely than not that some or all, of the deferred tax asset will not be realized. Beneficial Conversion Feature of Convertible Notes Payable The convertible feature of certain notes payable provides for a rate of conversion that is below the market value of the Companys common stock. Such a feature is normally characterized as a "Beneficial Conversion Feature" ("BCF"). In accordance with ASC Topic No. 470-20-25-4, the intrinsic value of the embedded beneficial conversion feature present in a convertible instrument shall be recognized separately at issuance by allocating a portion of the debt equal to the intrinsic value of that feature to additional paid in capital. When applicable, the Company records the estimated fair value of the BCF in the consolidated financial statements as a discount from the face amount of the notes. Such discounts are accreted to interest expense over the term of the notes using the effective interest method. Advertising Expense In accordance with ASC Topic No. 720-35-25-1, the Company recognizes advertising expenses the first time the advertising takes place. Such costs are expensed immediately if such advertising is not expected to occur. Share-Based Compensation The Company accounts for stock-based compensation to employees in accordance with FASB ASC 718. Stock-based compensation to employees is measured at the grant date, based on the fair value of the award, and is recognized as expense over the requisite employee service period. The Company accounts for stock-based compensation to other than employees in accordance with FASB ASC 505-50. Equity instruments issued to other than employees are valued at the earlier of a commitment date or upon completion of the services, based on the fair value of the equity instruments and is recognized as expense over the service period. The Company estimates the fair value of stock-based payments using the Black-Scholes option-pricing model for common stock options and warrants and the closing price of the Companys common stock for common share issuances. Reclassifications Certain prior period amounts have been reclassified to conform to current period presentation. Recently Issued Accounting Pronouncements There were various accounting standards and interpretations issued during 2015 and 2014, none of which are expected to have a material impact on the Companys financial position, operations or cash flows. |
3. GOING CONCERN
3. GOING CONCERN | 12 Months Ended |
Dec. 31, 2015 | |
Going Concern | |
GOING CONCERN | The Company has continuously incurred losses from operations, has a working capital deficit, and has a significant accumulated deficit. The appropriateness of using the going concern basis is dependent upon the Company's ability to obtain additional financing or equity capital and, ultimately, to achieve profitable operations. These conditions raise substantial doubt about its ability to continue as a going concern. In this regard, management is proposing to raise any necessary additional funds through loans or through additional sales of its common stock. There is no assurance that the Company will be successful in raising additional capital to support the financial needs of the Company or that the Company will ever produce profitable operations. The financial statements do not include any adjustments that might result from the outcome of these uncertainties. |
4. OTHER SIGNIFICANT TRANSACTIO
4. OTHER SIGNIFICANT TRANSACTIONS | 12 Months Ended |
Dec. 31, 2015 | |
Other Significant Transactions | |
OTHER SIGNIFICANT TRANSACTIONS | Shipping and Consulting Agreement On September 20, 2013, the Company entered into a Shipping and Consulting Agreement with WellDyne Health, LLC (WellDyne). Under the agreement, WellDyne agreed to provide certain storage, shipping, and consulting services, and was granted the right to conduct online resale of certain of the Companys products to U.S. consumers. The agreement has an initial term of 3 years. Effective June 1, 2015, the Company and WellDyne entered into an amendment to the Agreement, pursuant to which the Agreement was amended to, among other things: (a) eliminate certain administrative services being performed by WellDyne under the Agreement, (b) revise the terms of the administrative fee payable to WellDyne under the Agreement, and (c) provide for termination of the Agreement, effective as of September 19 th of a given year, by written notice by either party delivered before June 15 th of such year. On June 4, 2015, the Company delivered written notice to WellDyne, terminating the Agreement pursuant to Section Five thereof, such termination to be effective as of September 19, 2015. Brookhaven Medical, Inc. Agreement On October 11, 2013, the Company, together with certain of its subsidiaries, entered into a term loan agreement (the Loan Agreement) with Brookhaven Medical, Inc. (BMI), pursuant to which BMI made a loan to the Company in the amount of $1,000,000 under a Senior Secured Convertible Promissory Note (the First BMI Note). In connection with the Loan Agreement, the Company and BMI also entered into a letter of intent contemplating (i) an additional loan to the Company (the Additional Loan) of up to $2,000,000 by BMI (or an outside lender), and (ii) entrance into an agreement and plan of merger (the Merger Agreement) pursuant to which the Company would merge with a subsidiary of BMI, subject to various conditions precedent. The First BMI Note carries an interest rate of 8% per annum, and all unpaid principal and accrued but unpaid interest under the First BMI Note is due and payable on the later of (i) October 10, 2014, or (ii) the first anniversary of the date of the Merger Agreement. The First BMI Note may be prepaid in whole or in part upon ten days written notice, and all unpaid principal and accrued interest under the Note may be converted, at the option of BMI, into shares of the Companys Series C Convertible Preferred Stock (Series C Preferred Stock) at a conversion price of $70.00 per share. The Companys obligations under the First BMI Note are secured by all the assets of the Company and its subsidiaries. On October 15, 2013, BMI agreed to make the Additional Loan pursuant to a Secured Convertible Drawdown Promissory Note (the Second BMI Note), which allows the Company to drawdown, as needed, an aggregate of $2,000,000, subject to an agreed upon drawdown schedule or as otherwise approved by BMI. In connection with the Second BMI Note, the Company, its subsidiaries, and BMI entered into an additional loan agreement as well as an additional security agreement. The Second BMI Note carries an interest rate of 8% per annum, and (subject to various default provisions) all unpaid principal and accrued but unpaid interest under the Second BMI Note is due and payable on the later of (i) October 15, 2014, or (ii) the first anniversary of the date of the Merger Agreement. The Second BMI Note may be prepaid in whole or in part upon ten days written notice, and all unpaid principal and accrued interest under the Second BMI Note may be converted, at the option of BMI, into shares of the Companys Series C Convertible Preferred Stock at a conversion price of $70.00 per share at any time prior to the Maturity Date. In December of 2013, the Company and Brookhaven Medical, Inc. announced their mutual decision not to proceed with the proposed merger but to pursue other business relationships between the two companies. On October 15, 2014, the Company and Brookhaven Medical, Inc. executed an amendment extending the due date of the notes to April 15, 2015. The Company evaluated the modification under ASC 470 and determined that it does not qualify as an extinguishment of debt. On June 15, 2015, Wound Management Technologies, Inc. (the Company), together with certain of its subsidiaries, entered into a term loan agreement (the Loan Agreement) with The James W. Stuckert Revocable Trust (SRT) and The S. Oden Howell Revocable Trust (HRT), pursuant to which SRT made a loan to the Company in the amount of $600,000 and HRT made a loan to the Company in the amount of $600,000 under Senior Secured Convertible Promissory Notes (the Notes). Both SRT and HRT are controlled by affiliates of the Company. The proceeds of the Notes were used to pay off all outstanding unpaid principal and accrued but unpaid interest under the Senior Secured Convertible Promissory Note issued to Brookhaven Medical, Inc. pursuant to a loan agreement dated October 11, 2013 (as described in the Companys Current Report on Form 8-K filed October 16, 2013, the Brookhaven Note). The Notes each carry an interest rate of 10% per annum, and (subject to various default provisions) all unpaid principal and accrued but unpaid interest under the Notes is due and payable on June 15, 2018.The Notes may be prepaid in whole or in part upon ten days written notice, and all unpaid principal and accrued interest under the Notes may be converted, at the option of SRT and HRT, into shares of the Companys Series C Convertible Preferred Stock at a conversion price of $70.00 per share at any time prior to maturity.). |
5. NOTES PAYABLE
5. NOTES PAYABLE | 12 Months Ended |
Dec. 31, 2015 | |
NotePayableAbstract | |
NOTES PAYABLE | Convertible Notes Payable Related Parties Funds are advanced to the Company from various related parties. Other shareholders fund the Company as necessary to meet working capital requirements and expenses. The following is a summary of outstanding convertible notes due to related parties, including accrued interest separately recorded, as of December 31, 2015: Related party Nature of relationship Terms of the agreement Principal amount Accrued Interest S. Oden Howell Revocable Trust (HRT) Mr. S. Oden Howell, Jr. became a member of the Board of Directors in June of 2015 The note is unsecured, bears interest at 10% per annum, matures June 18, 2018 and is convertible into shares of the Companys Series C Convertible Preferred Stock at a conversion price of $70.00 per share at any time prior to maturity. $ 600,000 $ 32,877 James W. Stuckert Revocable Trust (SRT) Mr. James Stuckert became a member of the Board of Directors in September of 2015 The note is unsecured, bears interest at 10% per annum, matures June 18, 2018 and is convertible into shares of the Companys Series C Convertible Preferred Stock at a conversion price of $70.00 per share at any time prior to maturity. 600,000 32,877 Total $ 1,200,000 $ 65,754 The following is a summary of outstanding convertible notes due to related parties, including accrued interest separately recorded, as of December 31, 2014: Related party Nature of relationship Terms of the agreement Principal Amount Accrued Interest Brookhaven Medical, Inc. (BMI) Convertible Note #1 Former Director of the Company is CEO of BMI Note in the principal amount of $1,000,000 which accrues interest at 8% per annum. The note is due June 15, 2015. The note may be converted, at the option of BMI, into shares of the Companys Series C Preferred Stock at a conversion price of $70.00 per share. Secured by assets of the Company. $ 1,000,000 $ 16,877 Brookhaven Medical, Inc. (BMI) Convertible Note #2 Former Director of the Company is CEO of BMI Note payable which accrues interest at 8% per annum and allows the Company to drawdown, as needed, an aggregate of $2,000,000, subject to an agreed upon schedule. The note is due June 15, 2015. The note may be converted, at the option of BMI, into shares of the Companys Series C Preferred Stock at a conversion price of $70.00 per share. Secured by assets of the Company. 200,000 3,375 Total $ 1,200,000 $ 20,252 On June 15, 2015 the Company used proceeds from the above mentioned notes (with The James W. Stuckert Revocable Trust (SRT) and The S. Oden Howell Revocable Trust (HRT) ) to pay off the negotiated outstanding unpaid principal to $1,100,000, accrued but unpaid interest and recognized $100,000 forgiveness of related party convertible debt under the Senior Secured Convertible Promissory Note issued to Brookhaven Medical, Inc. pursuant to a loan agreement dated October 11, 2013. The gain was accounted for as a capital transaction in 2015. Notes Payable The following is a summary of amounts due to unrelated parties, including accrued interest separately recorded, as of December 31, 2015: Note Payable Terms of the agreement Principal Amount Discount Principal Net of Discount Accrued Interest March 4, 2011 Note Payable $223,500 note payable; (i) interest accrues at 13% per annum; (ii) maturity date of September 4, 2011; (iii) $20,000 fee due at maturity date with a $1,000 per day fee for each day the principal and interest is late. This note is currently the subject of litigation (see Note 12 "Legal Proceedings) $ 223,500 - $ 223,500 $ 117,915 Third Quarter 2012 Secured Subordinated Promissory Notes Seventeen notes in the original aggregate principal amount of $1,055,000; (i) 5% interest due on maturity date; (ii) maturity date of October 12, 2012; (iii) after the maturity date interest shall accrue at 18% per annum and the company shall pay to the note holders on a pro rata basis, an amount equal to twenty percent of the sales proceeds received by the Company and its subsidiary, WCI, from the sale of surgical powders, until such time as the note amounts have been paid in full. As of March 31, 2015 three of these notes remain due. 110,000 - 110,000 67,558 September 28, 2012 Promissory Note $51,300 note payable (i) interest accrues at 10% per annum; (ii) original maturity date of December 31, 2012; (iii) default interest rate of 15% per annum. As of March 31, 2014 $11,300 of this note remains due. 11,300 - 11,300 14.748 Quest Capital Investors, LLC Furniture purchase agreement in the original amount of $11,700 with $300 payments due each month. Secured by fixed assets of the Company. 3,900 - 3,900 - May 28, 2015 Promissory Note $96,000 note payable (i) interest accrues at 10% per annum; (II) original maturity date of May 28, 2016: 96,000 - 96,000 2,420 June 26, 2015 Convertible Promissory Note Note payable which accrues interest at 5% per annum. The note is due September 26, 2016. The note may be converted, into common shares of the Company at the option of the Company at a rate equal to 90% of the volume weighted average price of the companys common stock for the 5 trading days preceding the date of conversion. 170,000 - 170,000 4,674 Total $ 614,700 - $ 614,700 $ 207,315 On June 26, 2015, the Company entered into an Exchange Agreement with Tonaquint, Inc., a Utah corporation (Tonaquint), under which Tonaquint was issued a convertible promissory note (the Note) in exchange for the surrender of common stock warrants originally issued by the Company to Tonaquint pursuant to a Securities Purchase Agreement dated June 21, 2011. The Note is in the original principal amount of $200,000, carries a 5% rate of interest, and matures on September 26, 2016. The Note provides for an initial cash installment payment of $10,000, with subsequent monthly cash installment payments beginning in December of 2015. Each such monthly installment payment may be made, at the Company's option, in shares of common stock. Subject to certain conditions, the number of shares issuable in lieu of cash installment payments is determined based on a conversion price equal to 90% of the five-day volume weighted average trading price of the Company's common stock. The surrendered warrants were accounted for as derivatives with a fair value of $1,693 on the date of the exchange. This resulted in a loss on the issuance of debt for warrants of $198,307 during the year ended December 31, 2015. The Company paid a total of $30,000 in cash under this note during the year ended December 31, 2015. During the year ended December 31, 2015, the Company paid a total of $3,600 to Quest Capital as part of the furniture purchase agreement in the original amount of $11,700. During the year ended December 31, 2015, the Company paid a total of $40,620 towards the MAH Holding note described below (MAH Holding is controlled by a former major stockholder of the Company). The following is a summary of amounts due to unrelated parties, including accrued interest separately recorded, as of December 31, 2014: Note Payable Terms of the agreement Principal Amount Discount Principal Net of Discount Accrued Interest March 4, 2011 Note Payable $223,500 note payable; (i) interest accrues at 13% per annum; (ii) maturity date of September 4, 2011; (iii) $20,000 fee due at maturity date with a $1,000 per day fee for each day the principal and interest is late. This note is currently the subject of litigation (see Note 12 "Legal Proceedings) $ 223,500 - $ 223,500 $ 88,456 MAH Holding, LLC Unsecured note with interest accrued at 10% per annum, due on demand. This note is currently the subject of litigation (see Note 12 "Legal Proceedings) 40,620 - 40,620 14,861 Third Quarter 2012 Secured Subordinated Promissory Notes Seventeen notes in the original aggregate principal amount of $1,055,000; (i) 5% interest due on maturity date; (ii) maturity date of October 12, 2012; (iii) after the maturity date interest shall accrue at 18% per annum and the company shall pay to the note holders on a pro rata basis, an amount equal to twenty percent of the sales proceeds received by the Company and its subsidiary, WCI, from the sale of surgical powders, until such time as the note amounts have been paid in full. As of March 31, 2014 three of these notes remain due, of which two are with unrelated parties in the aggregate principal amount of $110,000. 110,000 - 110,000 47,483 September 28, 2012 Promissory Note $51,300 note payable (i) interest accrues at 10% per annum; (ii) maturity date of December 31, 2012; (iii) default interest rate of 15% per annum. As of March 31, 2014 $11,300 of this note is was past due. 11,300 - 11,300 10,379 Quest Capital Investors, LLC Furniture purchase agreement in the original amount of $11,700 with $300 payments due each month. Secured by fixed assets of the Company. 7,500 - 7,500 - Total $ 392,920 - $ 392,920 $ 161,179 In January of 2014, the Company paid $20,000 in principal on the September 28, 2012 Promissory Note in the original amount of $51,300 and the final $5,000 in principal and $5,000 in accrued interest due on the Second Quarter 2012 Convertible Note in the original amount of $25,000. In January of 2014, the Company converted $90,000 of principal and $3,728 of accrued interest payable related to the two July 16, 2013 promissory notes into 1,087,762 shares of common stock. In March of 2014, the Company paid the final $39,900 in principal and $1,995 in accrued interest due on the May 30, 2012 Convertible note. During the year ended December 31, 2014, the Company paid a total of $3,600 to Quest Capital as part of the furniture purchase agreement in the original amount of $11,700. During the year ended December 31, 2014, aggregate amortization of debt discounts and deferred financing costs was $140,837 and $1,032, respectively. |
6. INTANGIBLE ASSETS
6. INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | Patent On September 29, 2009, the Company entered into an Asset Purchase Agreement (the Agreement), whereby the Company acquired a patent from in exchange for 500,000 shares of the Companys common stock and the assumption of a legal fee payable in the amount of $47,595 which is related to the patent. Based on the guidance in ASC Topic No. 350-30, the patent was recorded as an intangible asset of $462,715, or approximately $.93 per share plus $47,595 for the assumed liability. The intangible asset is being amortized over an estimated ten year useful life. The activity for the intangible accounts is summarized below: 2015 2014 Patent $ 510,310 $ 510,310 Accumulated amortization (318,944 ) (267,913 ) Patent, net of accumulated amortization 191,366 242,397 Total intangibles, net of accumulated amortization $ 191,366 $ 242,397 The amount amortized for the year ended December 31, 2015 and 2014 was $51,031 and $51,031, respectively. |
7. CUSTOMERS AND SUPPLIERS
7. CUSTOMERS AND SUPPLIERS | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
CUSTOMERS AND SUPPLIERS | WCI had two significant customers which accounted for approximately 28% and 14% of the Companys sales in 2015 and had two significant customers which accounted for approximately 27% and 10% of the Companys sales in 2014. The loss of the sales generated by these customers would have a significant effect on the operations of the Company. The Company purchases all inventory from one vendor. If this vendor became unable to provide materials in a timely manner and the Company was unable to find alternative vendors, the Company's business, operating results and financial condition would be materially adversely affected. |
8. COMMITMENTS AND CONTINGENCIE
8. COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | Royalty Agreements Effective November 28, 2007, WCI entered into separate exclusive license agreements with Applied Nutritionals, LLC (Applied) and its founder George Petito, pursuant to which WCI obtained the exclusive world-wide license to make products incorporating intellectual property covered by a patent related to CellerateRX products. In consideration for the licenses, WCI agreed to pay to Applied the following royalties, beginning January 3, 2008: (a) an upfront royalty of $100,000; (b) a royalty of fifteen percent (15%) of gross sales occurring during the first year of the license; (c) an additional upfront royalty of $400,000, which was paid October, 2009; plus (d) a royalty of three percent (3%) of gross sales for all sales occurring after the payment of the $400,000 upfront royalty. In addition, WCI must maintain a minimum aggregate annual royalty payment of $375,000 for 2009 and thereafter if the royalty payments made do not meet or exceed that amount. The total unpaid royalties as of December 31, 2015 and 2014 is $323,062 and $324,286, respectively. On March 30, 2016 the Company made payment in the amount of $323,062 to Applied Nutritionals. On September 29, 2009, the Company entered into an Asset Purchase Agreement (the Asset Purchase Agreement), by and among the Company, RSI-ACQ, LLC, a wholly-owned subsidiary of the Company (RSI), Resorbable Orthopedic Products, LLC (Resorbable) and Resorbables members, pursuant to which, RSI acquired substantially all of Resorbables assets, in exchange for (i) 500,000 shares of the Companys common stock, and (ii) a royalty equal to eight percent (8%) of the net revenues generated from products sold by the Company or any of its affiliates, which products are developed from or otherwise utilize any of the patented technology acquired from Resorbable. The royalty is paid to Dr. Barry Constantine whom is an employee and hold the position of Director of R&D. Inventory Contract In October of 2015, WCI entered into a contract with the manufacturer of the CellerateRX product to purchase $217,512 of product. Payment in the amount of $108,014 was made in October of 2015 with the remaining balance of $109,498 paid in 2016 and before receipt of product. This amount was recorded as an asset in the Prepaid and Other Assets account at December 31, 2015 based on the contractual obligation of the parties. The Company did not have any contractual obligations to purchase product as of December 31, 2014. Office Leases The Companys corporate office is located at 16633 Dallas Parkway, Suite 250, Addison, TX 75001. The lease was entered into in November of 2013. The lease expires on April 30, 2017 and requires base rent payments of $5,737 per month for months 1-17, $5,866 for months 18-29, and $5,995 for months 30-41. The Company also leased real property which it uses for its marketing staff in Denver, Colorado. The lease was a 12 month lease expiring on November 30, 2014 and required base rent payment of $300 per month. As of December 2014, the lease was month-to-month with a required base rent of $300 per month. As of February 28, 2015 the lease was ended. Payables to Related Parties As of December 31, 2015 and 2014, the Company had outstanding payable to related parties totaling $21,099 and $0, respectively. The payables are unsecured, bear no interest and due on demand. |
9. STOCKHOLDERS EQUITY
9. STOCKHOLDERS EQUITY | 12 Months Ended |
Dec. 31, 2015 | |
Equity [Abstract] | |
STOCKHOLDERS EQUITY | Preferred Stock There are currently 5,000,000 shares of Series A Preferred Stock authorized, with no shares of Series A Preferred Stock issued or outstanding as of December 31, 2015 and 2014. Effective June 24, 2010, the Company filed a Certificate of Designations, Number, Voting Power, Preferences and Rights of Series B Convertible Redeemable Preferred Stock (the Certificate) with the Texas Secretary of State, designating 7,500 shares of Series B Preferred Stock, par value $10.00 per share (the Series B On October 11, 2013, the Company filed a Certificate of Designations, Number, Voting Power, Preferences and Rights of Series C Convertible Preferred Stock (the Certificate of Designations), under which it designated 100,000 shares of Series C Preferred Stock, par value $10.00. The Series C Preferred Stock is entitled to accruing dividends (payable, at the Companys options, in either cash or stock) of 5% per annum until October 10, 2016, and 3% per annum until October 10, 2018. The Series C Preferred Stock is senior to the Companys common stock and any other currently issued series of the Companys preferred stock upon liquidation, and is entitled to a liquidation preference per share equal to the original issuance price of such shares of Series C Preferred Stock together with the amount of all accrued but unpaid dividends thereon. Each of the Series C Shares is convertible at the option of the holder into 1,000 shares of common stock as provided in the Certificate. Additionally, each holder of Series C Preferred Stock shall be entitled to vote on all matters submitted for a vote of the holders of Common Stock a number of votes equal to the number of full shares of Common Stock into which such holders Series C shares could then be converted. As of December 31, 2015 and December 31, 2014 there were 80,218 and 70,411 shares of Series C Preferred Stock issued and outstanding, respectively. On November 13, 2013, the Company filed a Certificate of Designations, Number, Voting Power, Preferences and Rights of Series D Convertible Preferred Stock (the Certificate of Designations), under which it designated 25,000 shares of Series D Preferred Stock. Shares of Series D Preferred Stock are not entitled to any preference with respect to dividend or upon liquidation, and will automatically convert (at a ratio of 1,000-to-1) into shares of the Companys common stock, par value $0.001 upon approval of the Companys stockholders (and filing of) and amendment to the Companys Certificate of Incorporation increasing the number of authorized shares of Common Stock from 100,000,000 to 250,000,000. As of December 31, 2015 and December 31, 2014 there were 0 shares of Series D Preferred Stock issued and outstanding. On September 3, 2014, the company increased its authorized common stock to 250,000,000 shares. As a result, all outstanding Series D preferred shares were converted to common stock. On May 30, 2014, the Company filed a Certificate of Designations, Number, Voting Power, Preferences and Rights of Series E Convertible Preferred Stock (The Certificate of Designations), under which it designated 5,000 shares of Series E Preferred Stock. Shares of Series E Preferred Stock are not entitled to any preference with respect to dividends or upon liquidation, and will automatically convert (at a ratio of 1,000 shares of Common Stock for every one share of Series E Preferred Stock) into shares of the Companys common stock, $0.001 par value upon approval of the Companys stockholders (and filing of) and amendment to the Companys Certificate of Incorporation increasing the number of authorized shares of Common Stock from 100,000,000 to 250,000,000. As of December 31, 2015 there were no shares of Series E Preferred Stock issued and outstanding. During the year ended December 31, 2014, the Company issued an aggregate of 32,179 shares of Series C preferred stock for cash proceeds of $2,252,510. During the year ended December 31, 2015, the company issued 11,310 shares of Series C preferred stock for cash proceeds of $750,000. The Series C preferred stock earned dividends of $268,772 and $233,792 for the years ended December 31, 2015 and December 31, 2014, respectively. As of the date of this filing, no Series C preferred stock dividends have been declared or paid. During the year ended December 31, 2013, the Company granted an aggregate of 15,000 shares of Series D preferred stock to employees and nonemployees for services. 13,000 of the shares were granted to employees and vest immediately upon grant, 1,000 of the shares were granted to an employee and vest in equal tranches over three years through October 1, 2016 and 1,000 of the shares were granted to a nonemployee and vest in equal tranches over three years through September 15, 2016. The aggregate fair value of the awards was determined to be $1,046,669 of which $925,787 was previously recognized, $79,318 was recognized during the year ended December 31, 2014, $6,628 less net forfeitures of $19,173 was recognized during the year ended December 31, 2015, and. $15,764 will be recognized over the remaining vesting periods. In February of 2014, the Company issued 350 shares of Series D preferred stock to a nonemployee for services rendered. The shares vest immediately and were recorded at their fair value of $42,000 In July of 2014, the Company issued 750 shares of Series D preferred stock valued at $75,000 to a nonemployee for services rendered. The shares vest immediately and were recorded at their fair value of $75,000. In September, 2014 the Company granted 556 shares of Series D preferred stock valued at $50,040 to a contractor according to the terms of his service agreement. In December, 2014, the contractor returned 111 shares of Series D preferred stock in exchange for cash amount of $9,990. During the year ended December 31, 2014, the Company granted an aggregate of 1,000 shares of Series D preferred stock to two employees according to the terms of their employment agreements. The shares vest in equal annual amounts over three years and the aggregate fair value of the awards was determined to be $120,000. During the year ended December 31, 2015 and 2014, $25,193 and $65,178 was expensed, respectively, and $9,671 remains to be expensed over the remaining vesting period. On September 3, 2014, the Company increased its authorized common stock to 250,000,000 shares. Accordingly, the 16,545 outstanding shares of Series D preferred stock were automatically converted into 16,545,000 common shares. The Company evaluated the Series C and Series D preferred stock under FASB ASC 815 and determined that they do not qualify as derivative liabilities. The Company then evaluated the Series C and Series D preferred stock for beneficial conversion features under FASB ASC 470-30 and determined that none existed. On May 28, 2015, the Company issued 4,166 shares of Series C preferred stock in exchange for cash amount of $250,000. On September, 14, 2015, the Company issued 3,572 shares of Series C preferred stock in exchange for cash amount of $250,000. On December, 14, 2015, the Company issued 3,572 shares of Series C preferred stock in exchange for cash amount of $250,000. Common Stock On September 3, 2014, the Company held its annual meeting of stockholders. The stockholders approved an amendment to the Companys Articles of Incorporation to increase the authorized shares of common stock of the Company from 100,000,000 to 250,000,000. In January of 2014, the Company issued 1,087,762 common shares for the conversion of notes payable and accrued interest in the amounts of $90,000 and $3,728, respectively. During the year ended December 31, 2014, the Company issued 500,000 shares of common stock valued at $60,000 to company directors and 1,650,000 shares of common stock for services valued at $162,550. On March 5, 2015, the Company issued 100,000 shares of common stock which vested immediately valued at $5,970 according to the terms of a service agreement. Under the award, the nonemployee was also granted an aggregate of 800,000 additional shares which vest in tranches of 300,000, 250,000 and 250,000 upon the achievement of certain revenue targets. No expense was recognized for these additional shares during the year ended December 31, 2015. On March 10, 2015, the Company issued 374,264 shares of common stock in conversion of 357 shares of Series C Preferred stock and $1,036 of related dividends. On May 19, 2015, the Company issued 100,000 shares of common stock which vested immediately valued at $10,000 according to the terms of a service agreement. On May 19, 2015, the Company issued 250,000 shares of common stock which vested immediately valued at $23,000 according to the terms of an employment agreement. On June 19, 2015, the Company issued 642,330 shares of common stock in conversion of 600 shares of Series C Preferred stock and $2,963 of related Series C dividends. On July 15, 2015, the Company issued 100,000 shares of common stock which vested 60 days after their grant date of May 15, 2015 valued at $9,800 according to the terms of a service agreement. On December 31, 2015, the Company issued 594,168 shares of common stock in conversion of 546 shares of Series C Preferred stock and $3,372 of related Series C dividends. During the year ended December 31, 2015, an aggregate of 333,334 common shares were issued upon the vesting of previously granted stock awards and the Company recorded a net reversal of $4,187 of stock-based compensation related to the amortization of stock awards to employees and nonemployees net of reversal of the unvested portion of forfeited awards. During the year ended December 31, 2015, an aggregate of 666,600 shares of fully vested common stock under previously issued under stock awards and was returned and cancelled. The share cancellation was recognized at par value. Warrants At December 31, 2015, there were 9,736,844 warrants outstanding with a weighted average exercise price of $0.19. A summary of the status of the warrants granted at December 31, 2015 and 2014 and changes during the years then ended is presented below: For the Year Ended December 31, 2014 Shares Weighted Average Exercise Price Outstanding at beginning of period 15,670,143 $ 0.37 Granted - - Exercised - - Forfeited - - Expired (4,733,299 0.68 Outstanding at end of period 10,936,844 $ 0.23 For the Year Ended December 31, 2015 Shares Weighted Average Exercise Price Outstanding at beginning of period 10,936,844 $ 0.23 Granted - - Exercised - - Forfeited (800,000 ) 0.75 Expired (400,000 ) 0.49 Outstanding at end of period 9,736,844 $ 0.19 The following table summarizes the outstanding warrants as of December 31, 2015: As of December 31, 2015 As of December 31, 2015 Warrants Outstanding Warrants Exercisable Range of Exercise Prices Number Outstanding Weighted-Average Remaining Contract Life Weighted- Average Exercise Price Number Exercisable Weighted-Average Exercise Price $ 0.06 4,500,000 2.8 $ 0.06 4,500,000 $ 0.06 0.08 550,000 2.2 0.08 550,000 0.08 0.09 625,000 2.3 0.09 625,000 0.09 0.15 1,571,300 1.6 0.15 1,571,300 0.15 0.44 1,515,544 0.6 0.44 1,515,544 0.44 0.60 975,000 0.7 0.60 975,000 0.60 $ 0.06-0.60 9,736,844 2.0 $ 0.23 9,736,844 $ 0.19 The following table summarizes the outstanding warrants as of December 31, 2014: As of December 31, 2014 As of December 31, 2014 Warrants Outstanding Warrants Exercisable Range of Exercise Prices Number Outstanding Weighted-Average Remaining Contract Life Weighted- Average Exercise Price Number Exercisable Weighted-Average Exercise Price $ 0.06 4,500,000 3.8 $ 0.06 4,500,000 $ 0.06 0.08 550,000 3.2 0.08 550,000 0.08 0.09 625,000 3.3 0.09 625,000 0.09 0.15 1,571,300 2.6 0.15 1,571,300 0.15 0.25 120,000 0.8 0.25 120,000 0.25 0.40 3,000,000 0.6 0.40 300,000 0.40 0.44 1,515,544 1.6 0.44 1,515,544 0.44 0.50 370,000 1.3 0.50 370,000 0.50 0.60 975,000 1.7 0.60 975,000 0.60 0.75 120,000 0.8 0.75 120,000 0.75 1.00 290,000 1.4 1.00 290,000 1.00 $ 0.06-1.00 10,936,844 2.8 $ 0.23 10,936,844 $ 0.23 Stock Options A summary of the status of the stock options granted for the years ended December 31, 2015 and 2014, and changes during the period then ended is presented below: For the Year Ended December 31, 2015 Options Weighted Average Exercise Price Outstanding at beginning of period 943,500 $ 0.15 Granted 150,000 (a) Exercised - - Forfeited - - Expired - - Outstanding at end of period 1,093,500 $ 0.15 (a) On January 1, 2015, the company granted three tranches of options, 25,000, 25,000, and 100,000 which vest upon meeting specific performance measures agreed upon. The measures include achieving three specific sales targets per month for 3 consecutive months. The exercise price and expiration date of each tranche will be set upon achieving the targets. As of the date of this filing the performance measures have not been met. As a result the exercise price is undetermined and these options are excluded from the calculation of weighted average remaining life. For the Year Ended December 31, 2014 Options Weighted Average Exercise Price Outstanding at beginning of period 943,500 $ 0.15 Granted - - Exercised - - Forfeited - - Expired - - Outstanding at end of period 943,500 $ 0.15 The following table summarizes the outstanding options as of December 31, 2015: As of December 31, 2015 As of December 31, 2015 Stock Options Outstanding Stock Options Exercisable Exercise Price Number Outstanding Weighted-Average Remaining Contract Life Weighted- Average Exercise Price Number Exercisable Weighted-Average Exercise Price $ 0.15 953,500 1.63 0.15 943,500 $ 0.15 (a) 150,000 - - - - $ 0.15 1.093,500 1.63 0.15 943,500 $ 0.15 The following table summarizes the outstanding options as of December 31, 2014: As of December 31, 2014 As of December 31, 2014 Stock Options Outstanding Stock Options Exercisable Exercise Price Number Outstanding Weighted-Average Remaining Contract Life Weighted- Average Exercise Price Number Exercisable Weighted-Average Exercise Price $ 0.15 943,500 2.63 0.15 943,500 $ 0.15 (a) On January 1, 2015, the company granted three tranches of options, 25,000, 25,000, and 100,000 which vest upon meeting specific performance measures agreed upon. The measures include achieving three specific sales targets per month for 3 consecutive months. The exercise price and expiration date of each tranche will be set upon achieving the targets. As of the date of this filing the performance measures have not been met. As a result the exercise price is undetermined and these options are excluded from the calculation of weighted average remaining life. |
10. DERIVATIVE LIABILITIES
10. DERIVATIVE LIABILITIES | 12 Months Ended |
Dec. 31, 2015 | |
DerivativeInstrumentsAndHedgingActivitiesAbstract | |
DERIVATIVE LIABILITIES | During 2015 and 2014, the Company had outstanding common stock warrants that contained anti-dilution provisions including provisions for the adjustment of the exercise price if the Company issues common stock or common stock equivalents at a price less than the exercise price. In addition, the Company also had outstanding convertible notes payable to various lenders that were convertible at discounts ranging from 30% to 50% of the fair market value of the Companys common stock. As of December 31, 2015, the Company did not have a sufficient number of common shares authorized to fulfill the possible exercise of all outstanding warrants and the conversion of all outstanding convertible notes payable. As a result, the Company determined that the warrants and the embedded beneficial conversion features of the debt instruments do not qualify for equity classification. Accordingly, the warrants and conversion options are treated as derivative liabilities and are carried at fair value. During 2014, the convertible notes were repaid or converted to stock. As of December 31, 2015, some of the outstanding common stock warrants with the anti-dilution provision remained outstanding. The Company estimates the fair value of the derivative warrant liabilities by using the Black-Scholes Option Pricing Model and the derivative liabilities related to the conversion features in the outstanding convertible notes using the Black-Scholes Option Pricing Model assuming maximum value, a Level 3 input, with the following assumptions used: Year 2015 2014 Dividend yield: 0% 0% Expected 133.81 to 167.50% 103.35% to 155.36% Risk .13% to 1.07% .13% to 1.07% Expected 0.00 to 1.57 0.82 to 2.57 The following table sets forth the changes in the fair value of derivative liabilities for the years ended December 31, 2015 and 2014: Balance, December 31, 2013 $ (1,040,850 ) Convertible debt derivatives recognized as derivative loss (22,500 ) Convertible debt derivatives recognized as debt discount (90,000 ) 132,417 Resolution of convertible debt derivatives upon debt payoff 59,311 Resolution of warrant derivatives no longer qualifying as derivative liabilities 918,580 Gain on change in fair value of derivative liabilities 41,334 Balance, December 31, 2014 (1,708 ) Derivative warrants exchanged for debt 1,693 (295 ) Balance, December 31, 2015 $ (310 ) The aggregate gain (loss) on derivative liabilities for the years ended December 31, 2015 and December 31, 2014 was $295 and $78,145, respectively. |
11. INCOME TAXES
11. INCOME TAXES | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | The Company accounts for income taxes in accordance with ASC Topic No. 740, Income Taxes. This standard requires the Company to provide a net deferred tax asset or liability equal to the expected future tax benefit or expense of temporary reporting differences between book and tax accounting and any available operating loss or tax credit carry forwards. A 100% valuation allowance has been provided for all deferred tax assets, as the ability of the Company to generate sufficient taxable income in the future is uncertain. The unexpired net operating loss carry forward at December 31, 2015 is approximately $34,600,000 with various expiration dates between 2018 and 2035 if not utilized. All tax years starting with 2012 are open for examination. Non-current deferred tax asset: 2015 2014 34% of net operating loss carry forwards $ 11,776,321 $ 10,968,027 Valuation allowance (11,776,321 ) (10,968,027 ) Net non-current deferred tax asset - - Reconciliations of the expected federal income tax benefit based on the statutory income tax rate of 34% to the actual benefit for the years ended December 31, 2015 and 2014 are listed below. 2015 2014 Expected federal income tax benefit $ 450,287 $ 774,580 Change in valuation allowance (808,294 ) (1,019,040 ) Goodwill amortization 142,386 142,386 Derivative gain and loss on debt issued for warrants (67,524 ) 26,569 Amortization of beneficial conversion discount - (47,008 ) Other 298,303 300,706 Stock-based compensation (15,158 ) (178,193 ) Income tax expense (benefit) $ - $ - The Company has no tax positions at December 31, 2015 and 2014 for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility. The Company recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. During the years ended December 31, 2015 and 2014, the Company recognized no interest and penalties. |
12. LEGAL PROCEEDINGS
12. LEGAL PROCEEDINGS | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
LEGAL PROCEEDINGS | Ken Link v. Wound Management Technologies, Inc., et al. Wound Management Technologies, Inc. v. Fox Lake Animal Hospital, PSP: Wound Management Technologies, Inc. v. Bohdan Rudawski: Beeleve, LLC. v. Wound Management Technologies, Inc. |
13. CAPITAL LEASE OBLIGATION
13. CAPITAL LEASE OBLIGATION | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
CAPITAL LEASE OBLIGATION | In December 2014, the Company entered into a Capital Lease agreement for the purchase of a phone system. The agreement required a down payment of $2,105 and 36 monthly payments of $375. The Company recorded an asset of $13,512 and a capital lease obligation of $13,512. Aggregate payments under the capital lease were $4,504 and $375 during 20154 and 2014, respectively. At December 31, 2015, a total lease liability of $8,633 remained. Of that amount, $4,504 will be due in 2016. |
14. SUBSEQUENT EVENTS
14. SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2015 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | In accordance with applicable accounting standards for the disclosure of events that occur after the balance sheet date but before the financial statements are issued, all significant events or transactions that occurred after December 31, 2015 are outlined below: On January 29, 2016,the Company issued 1,098,904 common shares in exchange for the conversion of 1,000 Series C preferred stock and dividends earned. On February 9, 2016, the Company issued 2,142 shares of Series C preferred stock in exchange for cash amount of $150,000. On March 30, 2016, the Company issued 2,143 shares of Series C preferred stock in exchange for cash amount of $150,000. On April 6, 2016, the Company issued 2,143 shares of Series C preferred stock in exchange for cash amount of $150,000. On March 21, 2016 the Company and Bioventurs LLC /BioStructures, LLC Amended the original Agreement dated November 8, 2011. On November 24, 2015 Bioventus, LLC acquired BioStructures, LLC and became a wholly owned subsidiary of Bioventus, LLC. The original agreement executed a development and license agreement with BioStructures, LLC. The agreement licensed certain bone wax rights to BioStructures, LLC to develop products in the field of bone remodeling, based on Resorbables patent number 7,074,425 (see Note 9 Intangible Assets) for use in the human skeletal system. The license agreement with BioStructures, LLC excludes the fields of (1) a resorbable hemostat (resorbable bone wax), (2) a resorbable orthopedic hemostat (bone wax) and antimicrobial dressing, and (3) veterinary orthopedic applications. The agreement entitles the Company to additional fees upon the regulatory clearance of the products, fees for a commercial license for each regulatory cleared product, and a guaranteed minimum royalty with a 1.5% royalty for years 2016 and 2017 and 2% royalty on related product sales over the life of the patent, which expires in 2023. |
2. SUMMARY OF SIGNIFICANT ACC21
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION | The terms the Company, we, us and WMT are used in this report to refer to Wound Management Technologies, Inc. The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles. |
PRINCIPLES OF CONSOLIDATION | The accompanying consolidated financial statements include the accounts of WMT and its wholly-owned subsidiaries: Wound Care Innovations, LLC a Nevada limited liability company (WCI); Resorbable Orthopedic Products, LLC, a Texas limited liability company (Resorbable); and Innovate OR, Inc. InnovateOR formerly referred to as BioPharma Management Technologies, Inc., a Texas corporation (BioPharma). All intercompany accounts and transactions have been eliminated. |
USE OF ESTIMATES IN FINANCIAL STATEMENT PREPARATION | The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements, and the amounts of revenues and expenses during the reporting period. On a regular basis, management evaluates these estimates and assumptions. Actual results could differ from those estimates. |
CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES | The Company considers all highly liquid debt investments purchased with an original maturity of three months or less to be cash equivalents. Marketable securities include investments with maturities greater than three months but less than one year. For certain of the Companys financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and other accrued liabilities, and amounts due to related parties, the carrying amounts approximate fair value due to their short maturities. |
LOSS PER SHARE | The Company computes loss per share in accordance with Accounting Standards Codification ASC Topic No. 260, Earnings per Share, which requires the Company to present basic and dilutive loss per share when the effect is dilutive. Basic loss per share is computed by dividing loss available to common stockholders by the weighted average number of common shares available. Diluted loss per share is computed similar to basic loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. |
REVENUE RECOGNITION | In accordance with the guidance in ASC Topic No. 605, Revenue Recognition, the Company recognizes revenue when (a) persuasive evidence of an arrangement exists, (b) delivery has occurred or services have been rendered, (c) the fee is fixed or determinable, and (d) collectability is reasonable assured. Revenue is recognized upon delivery. Revenue is recorded on the gross basis, which includes handling and shipping, because the Company has risks and rewards as a principal in the transaction based on the following: (a) the Company maintains inventory of the product, (b) the Company is responsible for order fulfillment, and (c) the Company establishes the price for the product. The Company recognizes royalty revenue in the period the royalty bearing products are sold. The Company recognizes revenue based on bill and hold arrangements when the seller has transferred to the buyer the significant risks and rewards of ownership of the goods; the seller does not retain effective control over the goods or continuing managerial involvement to the degree usually associated with ownership; the amount of revenue can be measured reliably; it is probable that the economic benefits of the sale will flow to the seller; any costs incurred or to be incurred related to the sale can be measured reliably; it is probable that delivery will be made; the goods are on hand, identified, and ready for delivery; the buyer specifically acknowledges the deferred delivery instructions; and the usual payment terms apply. During the years ended December 31, 2015 and 2014, aggregate revenue recognized under bill and hold transactions was $275,000 and $0, respectively. |
ALLOWANCE FOR DOUBTFUL ACCOUNTS | The Company establishes an allowance for doubtful accounts to ensure accounts receivable are not overstated due to uncollectibility. Bad debt reserves are maintained based on a variety of factors, including the length of time receivables are past due and a detailed review of certain individual customer accounts. If circumstances related to customers change, estimates of the recoverability of receivables would be further adjusted. The Company recorded bad debt expense of $6,461 and $20,273 in 2015 and 2014, respectively. The allowance for doubtful accounts at December 31, 2015 was $20,388 and the amount at December 31, 2014 was $18,462. |
INVENTORIES | Inventories are stated at the lower of cost or net realizable value, with cost computed on a first-in, first-out basis. Inventories consist of powders, gels and the related packaging supplies. The Company recorded inventory obsolescence expense of $133,747 in 2015 and $83,420 in 2014. The allowance for obsolete and slow moving inventory had a balance of $150,135 and $46,007 at December 31, 2015 and December 31, 2014, respectively. |
PROPERTY AND EQUIPMENT | Property and equipment is recorded at cost. Depreciation is computed utilizing the straight-line method over the estimated economic life of the asset, which ranges from five to ten years. As of December 31, 2014, fixed assets consisted of $67,905 including furniture and fixtures, computer equipment, phone equipment and the Company websites. As of December 31, 2015, fixed assets consisted of $73,239 including furniture and fixtures, computer equipment, phone equipment and the Company websites. The depreciation expense recorded in 2015 was $8,999 and the depreciation expense recorded in 2014 was $5,415. The balance of accumulated depreciation was $31,477 and $22,477 at December 31, 2015 and December 31, 2014, respectively. |
INTANGIBLE ASSETS | Intangible assets as of December 31, 2015 and 2014 consisted of a patent acquired in 2009 with a historical cost of $510,310. The intangible asset is being amortized over its estimated useful life of 10 years using the straight line method. Amortization expense recognized was $51,031 during 2015 and 2014. |
IMPARIMENT OF LONG LIVED ASSETS | Long-lived assets and certain identifiable intangibles to be held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company continuously evaluates the recoverability of its long-lived assets based on estimated future cash flows and the estimated liquidation value of such long-lived assets, and provides for impairment if such undiscounted cash flows are insufficient to recover the carrying amount of the long-lived assets. If impairment exists, an adjustment is made to write the asset down to its fair value, and a loss is recorded as the difference between the carrying value and fair value. Fair values are determined based on quoted market values, undiscounted cash flows or internal and external appraisals, as applicable. Assets to be disposed of are carried at the lower of carrying value or estimated net realizable value. There was no impairment recorded during the years ended December 31, 2015 and 2014. |
FAIR VALUE MEASUREMENTS | As defined in Accounting Standards Codification (ASC) Topic No. 820, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. ASC 820 establishes a fair value hierarchy that prioritizes the inputs 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 measurement) and the lowest priority to unobservable inputs (level 3 measurement). This fair value measurement framework applies at both initial and subsequent measurement. The three levels of the fair value hierarchy defined by ASC Topic No. 820 are as follows: Level 1 Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives, marketable securities and listed equities. Level 2 Pricing inputs are other than quoted prices in active markets included in level 1, which are either directly or indirectly observable as of the reported date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Instruments in this category generally include non-exchange-traded derivatives such as commodity swaps, interest rate swaps, options and collars. Level 3 Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in managements best estimate of fair value. At December 31, 2014, the Companys financial instruments consist of the derivative liabilities related to stock purchase warrants and the conversion features of certain outstanding notes payable. The derivative liabilities related to stock purchase warrants were valued using the Black-Scholes Option Pricing Model and the derivative liabilities related to the conversion features in the outstanding convertible notes were valued using the Black-Scholes Option Pricing Model assuming maximum value. These are level 3 inputs. At December 31, 2015, the Companys financial instruments consist of the derivative liabilities related to stock purchase warrants which were valued using the Black-Scholes Option Pricing Model, a level 3 input. Our intangible assets have also been valued using the fair value accounting treatment and a description of the methodology used, including the valuation category, is described below in Note 6 Intangible Assets. The following table sets forth by level within the fair value hierarchy the Companys financial assets and liabilities that were accounted for at fair value as of December 31, 2015 and 2014. Recurring Fair Value Measure Level 1 Level 2 Level 3 Total Liabilities Derivative Liabilities as of December 31, 2015 $ - $ - $ 310 $ 310 Derivative Liabilities as of December 31, 2014 $ - $ - $ 1,708 $ 1,708 |
DERIVATIVES | The Company entered into derivative financial instruments to manage its funding of current operations. Derivatives are initially recognized at fair value at the date a derivative contract is entered into and are subsequently re-measured to their fair value at the end of each reporting period. The resulting gain or loss is recognized in profit or loss immediately. |
INCOME TAXES | Income taxes are accounted for under the asset and liability method, whereby deferred income taxes are recorded for temporary differences between financial statement carrying amounts and the tax basis of assets and liabilities. Deferred tax assets and liabilities reflect the tax rates expected to be in effect for the years in which the differences are expected to reverse. A valuation allowance is provided if it is more likely than not that some or all, of the deferred tax asset will not be realized. |
BENEFICIAL CONVERSION FEATURE OF CONVERTIBLE NOTES PAYABLE | The convertible feature of certain notes payable provides for a rate of conversion that is below the market value of the Companys common stock. Such a feature is normally characterized as a "Beneficial Conversion Feature" ("BCF"). In accordance with ASC Topic No. 470-20-25-4, the intrinsic value of the embedded beneficial conversion feature present in a convertible instrument shall be recognized separately at issuance by allocating a portion of the debt equal to the intrinsic value of that feature to additional paid in capital. When applicable, the Company records the estimated fair value of the BCF in the consolidated financial statements as a discount from the face amount of the notes. Such discounts are accreted to interest expense over the term of the notes using the effective interest method. |
ADVERTISING EXPENSE | In accordance with ASC Topic No. 720-35-25-1, the Company recognizes advertising expenses the first time the advertising takes place. Such costs are expensed immediately if such advertising is not expected to occur. |
SHARE-BASED COMPENSATION | The Company accounts for stock-based compensation to employees in accordance with FASB ASC 718. Stock-based compensation to employees is measured at the grant date, based on the fair value of the award, and is recognized as expense over the requisite employee service period. The Company accounts for stock-based compensation to other than employees in accordance with FASB ASC 505-50. Equity instruments issued to other than employees are valued at the earlier of a commitment date or upon completion of the services, based on the fair value of the equity instruments and is recognized as expense over the service period. The Company estimates the fair value of stock-based payments using the Black-Scholes option-pricing model for common stock options and warrants and the closing price of the Companys common stock for common share issuances. |
RECLASSIFICATIONS | Certain prior period amounts have been reclassified to conform to current period presentation. |
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | There were various accounting standards and interpretations issued during 2015 and 2014, none of which are expected to have a material impact on the Companys financial position, operations or cash flows. |
2. SUMMARY OF SIGNIFICANT ACC22
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Summary Of Significant Accounting Policies Tables | |
Schedule of fair value measurement on recurring basis | Recurring Fair Value Measure Level 1 Level 2 Level 3 Total Liabilities Derivative Liabilities as of December 31, 2015 $ - $ - $ 310 $ 310 Derivative Liabilities as of December 31, 2014 $ - $ - $ 1,708 $ 1,708 |
5. NOTES PAYABLE (Tables)
5. NOTES PAYABLE (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Notes Payable Tables | |
Schedule of notes payable - related parties | The following is a summary of outstanding convertible notes due to related parties, including accrued interest separately recorded, as of December 31, 2015: Related party Nature of relationship Terms of the agreement Principal amount Accrued Interest S. Oden Howell Revocable Trust (HRT) Mr. S. Oden Howell, Jr. became a member of the Board of Directors in June of 2015 The note is unsecured, bears interest at 10% per annum, matures June 18, 2018 and is convertible into shares of the Companys Series C Convertible Preferred Stock at a conversion price of $70.00 per share at any time prior to maturity. $ 600,000 $ 32,877 James W. Stuckert Revocable Trust (SRT) Mr. James Stuckert became a member of the Board of Directors in September of 2015 The note is unsecured, bears interest at 10% per annum, matures June 18, 2018 and is convertible into shares of the Companys Series C Convertible Preferred Stock at a conversion price of $70.00 per share at any time prior to maturity. 600,000 32,877 Total $ 1,200,000 $ 65,754 The following is a summary of outstanding convertible notes due to related parties, including accrued interest separately recorded, as of December 31, 2014: Related party Nature of relationship Terms of the agreement Principal Amount Accrued Interest Brookhaven Medical, Inc. (BMI) Convertible Note #1 Former Director of the Company is CEO of BMI Note in the principal amount of $1,000,000 which accrues interest at 8% per annum. The note is due June 15, 2015. The note may be converted, at the option of BMI, into shares of the Companys Series C Preferred Stock at a conversion price of $70.00 per share. Secured by assets of the Company. $ 1,000,000 $ 16,877 Brookhaven Medical, Inc. (BMI) Convertible Note #2 Former Director of the Company is CEO of BMI Note payable which accrues interest at 8% per annum and allows the Company to drawdown, as needed, an aggregate of $2,000,000, subject to an agreed upon schedule. The note is due June 15, 2015. The note may be converted, at the option of BMI, into shares of the Companys Series C Preferred Stock at a conversion price of $70.00 per share. Secured by assets of the Company. 200,000 3,375 Total $ 1,200,000 $ 20,252 |
Schedule of notes payable | The following is a summary of amounts due to unrelated parties, including accrued interest separately recorded, as of December 31, 2015: Note Payable Terms of the agreement Principal Amount Discount Principal Net of Discount Accrued Interest March 4, 2011 Note Payable $223,500 note payable; (i) interest accrues at 13% per annum; (ii) maturity date of September 4, 2011; (iii) $20,000 fee due at maturity date with a $1,000 per day fee for each day the principal and interest is late. This note is currently the subject of litigation (see Note 12 "Legal Proceedings) $ 223,500 - $ 223,500 $ 117,915 Third Quarter 2012 Secured Subordinated Promissory Notes Seventeen notes in the original aggregate principal amount of $1,055,000; (i) 5% interest due on maturity date; (ii) maturity date of October 12, 2012; (iii) after the maturity date interest shall accrue at 18% per annum and the company shall pay to the note holders on a pro rata basis, an amount equal to twenty percent of the sales proceeds received by the Company and its subsidiary, WCI, from the sale of surgical powders, until such time as the note amounts have been paid in full. As of March 31, 2015 three of these notes remain due. 110,000 - 110,000 67,558 September 28, 2012 Promissory Note $51,300 note payable (i) interest accrues at 10% per annum; (ii) original maturity date of December 31, 2012; (iii) default interest rate of 15% per annum. As of March 31, 2014 $11,300 of this note remains due. 11,300 - 11,300 14.748 Quest Capital Investors, LLC Furniture purchase agreement in the original amount of $11,700 with $300 payments due each month. Secured by fixed assets of the Company. 3,900 - 3,900 - May 28, 2015 Promissory Note $96,000 note payable (i) interest accrues at 10% per annum; (II) original maturity date of May 28, 2016: 96,000 - 96,000 2,420 June 26, 2015 Convertible Promissory Note Note payable which accrues interest at 5% per annum. The note is due September 26, 2016. The note may be converted, into common shares of the Company at the option of the Company at a rate equal to 90% of the volume weighted average price of the companys common stock for the 5 trading days preceding the date of conversion. 170,000 - 170,000 4,674 Total $ 614,700 - $ 614,700 $ 207,315 The following is a summary of amounts due to unrelated parties, including accrued interest separately recorded, as of December 31, 2014: Note Payable Terms of the agreement Principal Amount Discount Principal Net of Discount Accrued Interest March 4, 2011 Note Payable $223,500 note payable; (i) interest accrues at 13% per annum; (ii) maturity date of September 4, 2011; (iii) $20,000 fee due at maturity date with a $1,000 per day fee for each day the principal and interest is late. This note is currently the subject of litigation (see Note 12 "Legal Proceedings) $ 223,500 - $ 223,500 $ 88,456 MAH Holding, LLC Unsecured note with interest accrued at 10% per annum, due on demand. This note is currently the subject of litigation (see Note 12 "Legal Proceedings) 40,620 - 40,620 14,861 Third Quarter 2012 Secured Subordinated Promissory Notes Seventeen notes in the original aggregate principal amount of $1,055,000; (i) 5% interest due on maturity date; (ii) maturity date of October 12, 2012; (iii) after the maturity date interest shall accrue at 18% per annum and the company shall pay to the note holders on a pro rata basis, an amount equal to twenty percent of the sales proceeds received by the Company and its subsidiary, WCI, from the sale of surgical powders, until such time as the note amounts have been paid in full. As of March 31, 2014 three of these notes remain due, of which two are with unrelated parties in the aggregate principal amount of $110,000. 110,000 - 110,000 47,483 September 28, 2012 Promissory Note $51,300 note payable (i) interest accrues at 10% per annum; (ii) maturity date of December 31, 2012; (iii) default interest rate of 15% per annum. As of March 31, 2014 $11,300 of this note is was past due. 11,300 - 11,300 10,379 Quest Capital Investors, LLC Furniture purchase agreement in the original amount of $11,700 with $300 payments due each month. Secured by fixed assets of the Company. 7,500 - 7,500 - Total $ 392,920 - $ 392,920 $ 161,179 |
6. INTANGIBLE ASSETS (Tables)
6. INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Intangible Assets Tables | |
Schedule of intangible assets | 2015 2014 Patent $ 510,310 $ 510,310 Accumulated amortization (318,944 ) (267,913 ) Patent, net of accumulated amortization 191,366 242,397 Total intangibles, net of accumulated amortization $ 191,366 $ 242,397 |
9. STOCKHOLDERS EQUITY (Tables)
9. STOCKHOLDERS EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Stockholders Equity Tables | |
A Summary Of The Status Of The Warrants Granted | For the Year Ended December 31, 2014 Shares Weighted Average Exercise Price Outstanding at beginning of period 15,670,143 $ 0.37 Granted - - Exercised - - Forfeited - - Expired (4,733,299 0.68 Outstanding at end of period 10,936,844 $ 0.23 For the Year Ended December 31, 2015 Shares Weighted Average Exercise Price Outstanding at beginning of period 10,936,844 $ 0.23 Granted - - Exercised - - Forfeited (800,000 ) 0.75 Expired (400,000 ) 0.49 Outstanding at end of period 9,736,844 $ 0.19 |
Schedule of warrants by warrant price range | The following table summarizes the outstanding warrants as of December 31, 2015: As of December 31, 2015 As of December 31, 2015 Warrants Outstanding Warrants Exercisable Range of Exercise Prices Number Outstanding Weighted-Average Remaining Contract Life Weighted- Average Exercise Price Number Exercisable Weighted-Average Exercise Price $ 0.06 4,500,000 2.8 $ 0.06 4,500,000 $ 0.06 0.08 550,000 2.2 0.08 550,000 0.08 0.09 625,000 2.3 0.09 625,000 0.09 0.15 1,571,300 1.6 0.15 1,571,300 0.15 0.44 1,515,544 0.6 0.44 1,515,544 0.44 0.60 975,000 0.7 0.60 975,000 0.60 $ 0.06-0.60 9,736,844 2.0 $ 0.23 9,736,844 $ 0.19 The following table summarizes the outstanding warrants as of December 31, 2014: As of December 31, 2014 As of December 31, 2014 Warrants Outstanding Warrants Exercisable Range of Exercise Prices Number Outstanding Weighted-Average Remaining Contract Life Weighted- Average Exercise Price Number Exercisable Weighted-Average Exercise Price $ 0.06 4,500,000 3.8 $ 0.06 4,500,000 $ 0.06 0.08 550,000 3.2 0.08 550,000 0.08 0.09 625,000 3.3 0.09 625,000 0.09 0.15 1,571,300 2.6 0.15 1,571,300 0.15 0.25 120,000 0.8 0.25 120,000 0.25 0.40 3,000,000 0.6 0.40 300,000 0.40 0.44 1,515,544 1.6 0.44 1,515,544 0.44 0.50 370,000 1.3 0.50 370,000 0.50 0.60 975,000 1.7 0.60 975,000 0.60 0.75 120,000 0.8 0.75 120,000 0.75 1.00 290,000 1.4 1.00 290,000 1.00 $ 0.06-1.00 10,936,844 2.8 $ 0.23 10,936,844 $ 0.23 |
Schedule of option activity | For the Year Ended December 31, 2015 Options Weighted Average Exercise Price Outstanding at beginning of period 943,500 $ 0.15 Granted 150,000 (a) Exercised - - Forfeited - - Expired - - Outstanding at end of period 1,093,500 $ 0.15 (a) On January 1, 2015, the company granted three tranches of options, 25,000, 25,000, and 100,000 which vest upon meeting specific performance measures agreed upon. The measures include achieving three specific sales targets per month for 3 consecutive months. The exercise price and expiration date of each tranche will be set upon achieving the targets. As of the date of this filing the performance measures have not been met. As a result the exercise price is undetermined and these options are excluded from the calculation of weighted average remaining life. For the Year Ended December 31, 2014 Options Weighted Average Exercise Price Outstanding at beginning of period 943,500 $ 0.15 Granted - - Exercised - - Forfeited - - Expired - - Outstanding at end of period 943,500 $ 0.15 |
Schedule of options by option price range | The following table summarizes the outstanding options as of December 31, 2015: As of December 31, 2015 As of December 31, 2015 Stock Options Outstanding Stock Options Exercisable Exercise Price Number Outstanding Weighted-Average Remaining Contract Life Weighted- Average Exercise Price Number Exercisable Weighted-Average Exercise Price $ 0.15 953,500 1.63 0.15 943,500 $ 0.15 (a) 150,000 - - - - $ 0.15 1.093,500 1.63 0.15 943,500 $ 0.15 The following table summarizes the outstanding options as of December 31, 2014: As of December 31, 2014 As of December 31, 2014 Stock Options Outstanding Stock Options Exercisable Exercise Price Number Outstanding Weighted-Average Remaining Contract Life Weighted- Average Exercise Price Number Exercisable Weighted-Average Exercise Price $ 0.15 943,500 2.63 0.15 943,500 $ 0.15 |
10. DERIVATIVE LIABILITIES (Tab
10. DERIVATIVE LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Derivative Liabilities Tables | |
Fair value of the derivative warrant liabilities by using the Black-Scholes Option Pricing Model | Year 2015 2014 Dividend yield: 0% 0% Expected 133.81 to 167.50% 103.35% to 155.36% Risk .13% to 1.07% .13% to 1.07% Expected 0.00 to 1.57 0.82 to 2.57 |
Changes in fair value of derivative liabilities | Balance, December 31, 2013 $ (1,040,850 ) Convertible debt derivatives recognized as derivative loss (22,500 ) Convertible debt derivatives recognized as debt discount (90,000 ) 132,417 Resolution of convertible debt derivatives upon debt payoff 59,311 Resolution of warrant derivatives no longer qualifying as derivative liabilities 918,580 Gain on change in fair value of derivative liabilities 41,334 Balance, December 31, 2014 (1,708 ) Derivative warrants exchanged for debt 1,693 (295 ) Balance, December 31, 2015 $ (310 ) |
11. INCOME TAXES (Tables)
11. INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Taxes Tables | |
Schedule of deferred tax assets | 2015 2014 34% of net operating loss carry forwards $ 11,776,321 $ 10,968,027 Valuation allowance (11,776,321 ) (10,968,027 ) Net non-current deferred tax asset - - |
Schedule of federal statutory rate | 2015 2014 Expected federal income tax benefit $ 450,287 $ 774,580 Change in valuation allowance (808,294 ) (1,019,040 ) Goodwill amortization 142,386 142,386 Derivative gain and loss on debt issued for warrants (67,524 ) 26,569 Amortization of beneficial conversion discount - (47,008 ) Other 298,303 300,706 Stock-based compensation (15,158 ) (178,193 ) Income tax expense (benefit) $ - $ - |
6. Disclosure - 2. SUMMARY OF S
6. Disclosure - 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Derivative Liability | $ 310 | $ 1,708 |
Level 1 | ||
Derivative Liability | 0 | 0 |
Level 2 | ||
Derivative Liability | 0 | 0 |
Level 3 | ||
Derivative Liability | $ 310 | $ 1,708 |
5. NOTES PAYABLE (Details)
5. NOTES PAYABLE (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Notes payable related party | $ 1,200,000 | $ 1,200,000 |
Accrued interest related party | $ 65,754 | $ 20,252 |
S. Oden Howell Revocable Trust | ||
Nature of relationship | Mr. S. Oden Howell, Jr. became a member of the Board of Directors in June of 2015 | |
Terms of the agreement | The note is unsecured, bears interest at 10% per annum, matures June 18, 2018 and is convertible into shares of the Company’s Series C Convertible Preferred Stock at a conversion price of $70.00 per share at any time prior to maturity. | |
Notes payable related party | $ 600,000 | |
Accrued interest related party | $ 32,877 | |
James W. Stuckert Revocable Trust | ||
Nature of relationship | Mr. James Stuckert became a member of the Board of Directors in September of 2015 | |
Terms of the agreement | The note is unsecured, bears interest at 10% per annum, matures June 18, 2018 and is convertible into shares of the Companys Series C Convertible Preferred Stock at a conversion price of $70.00 per share at any time prior to maturity. | |
Notes payable related party | $ 600,000 | |
Accrued interest related party | $ 32,877 | |
BMI | ||
Nature of relationship | Former Director of the Company is CEO of BMI | |
Terms of the agreement | Note in the principal amount of $1,000,000 which accrues interest at 8% per annum.  The note is due June 15, 2015.  The note may be converted, at the option of BMI, into shares of the Company’s Series C Preferred Stock at a conversion price of $70.00 per share.  Secured by assets of the Company. | |
Notes payable related party | $ 1,000,000 | |
Accrued interest related party | $ 16,877 | |
BMI (#2) | ||
Nature of relationship | Former Director of the Company is CEO of BMI | |
Terms of the agreement | Note payable which accrues interest at 8% per annum and allows the Company to drawdown, as needed, an aggregate of $2,000,000, subject to an agreed upon schedule. The note is due June 15, 2015. The note may be converted, at the option of BMI, into shares of the Companys Series C Preferred Stock at a conversion price of $70.00 per share. Secured by assets of the Company. | |
Notes payable related party | $ 200,000 | |
Accrued interest related party | $ 3,375 |
5. NOTES PAYABLE (Details 1)
5. NOTES PAYABLE (Details 1) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Principal Amount | $ 614,700 | $ 392,920 |
Discount | 0 | 0 |
Principal Net of Discount | 614,700 | 392,920 |
Accrued Interest | 207,315 | 161,179 |
March 2011 Note Payable | ||
Principal Amount | 223,500 | 223,500 |
Discount | 0 | 0 |
Principal Net of Discount | 223,500 | 223,500 |
Accrued Interest | 117,915 | 88,456 |
Third Quarter 2012 Secured Subordinated Promissory Notes | ||
Principal Amount | 110,000 | 110,000 |
Discount | 0 | 0 |
Principal Net of Discount | 110,000 | 110,000 |
Accrued Interest | 67,558 | 47,483 |
September 28, 2012 Promissory Note | ||
Principal Amount | 11,300 | 11,300 |
Discount | 0 | 0 |
Principal Net of Discount | 11,300 | 11,300 |
Accrued Interest | 14,748 | 10,379 |
Quest Capital Investors, LLC | ||
Principal Amount | 3,900 | 7,500 |
Discount | 0 | 0 |
Principal Net of Discount | 3,900 | 7,500 |
Accrued Interest | 0 | 0 |
May 28, 2015 Promissory Note | ||
Principal Amount | 96,000 | |
Discount | 0 | |
Principal Net of Discount | 96,000 | |
Accrued Interest | 2,420 | |
June 26, 2015 Convertible Promissory Note | ||
Principal Amount | 170,000 | |
Discount | 0 | |
Principal Net of Discount | 170,000 | |
Accrued Interest | $ 4,674 | |
MAH Holding, LLC | ||
Principal Amount | 40,620 | |
Discount | 0 | |
Principal Net of Discount | 40,620 | |
Accrued Interest | $ 14,861 |
6. INTANGIBLE ASSETS (Details)
6. INTANGIBLE ASSETS (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Intangible Assets Details | ||
Patent | $ 510,310 | $ 510,310 |
Accumulated amortization | (318,944) | (267,913) |
Patent, net of accumulated amortization | 191,366 | 242,397 |
Total intangibles, net of accumulated amortization | $ 191,366 | $ 242,397 |
9. STOCKHOLDERS' EQUITY (Detail
9. STOCKHOLDERS' EQUITY (Details) - Warrants - $ / shares | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Number of Warrants | ||
Outstanding beginning balance, Shares | 10,936,844 | 15,670,143 |
Granted | 0 | 0 |
Exercised | 0 | 0 |
Forfeited | (800,000) | 0 |
Expired | (400,000) | (4,733,299) |
Outstanding ending balance | 9,736,844 | 10,936,844 |
Weighted average exercise price | ||
Outstanding beginning balance, Weighted average exercise price | $ 0.23 | $ 0.37 |
Granted, Weighted average exercise price | 0 | 0 |
Exercised, Weighted average exercise price | 0 | 0 |
Forfeited, Weighted average exercise price | .75 | 0 |
Expired, Weighted average exercise price | .49 | 0.68 |
Outstanding ending balance, Weighted average exercise price | $ .19 | $ 0.23 |
9. STOCKHOLDERS' EQUITY (Deta33
9. STOCKHOLDERS' EQUITY (Details 1) - $ / shares | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
0.06 | ||
Outstanding ending balance | 4,500,000 | 4,500,000 |
Weighted Average Remaining Contract Life | 2 years 9 months 18 days | 3 years 9 months 18 days |
Outstanding ending balance, Weighted average exercise price | $ 0.06 | $ 0.06 |
Number Exercisable | 4,500,000 | 4,500,000 |
Exercisable Weighted Average Exercise Price | $ 0.06 | $ 0.06 |
0.08 | ||
Outstanding ending balance | 550,000 | 550,000 |
Weighted Average Remaining Contract Life | 2 years 2 months 12 days | 3 years 2 months 12 days |
Outstanding ending balance, Weighted average exercise price | $ 0.08 | $ 0.08 |
Number Exercisable | 550,000 | 550,000 |
Exercisable Weighted Average Exercise Price | $ 0.08 | $ 0.08 |
0.09 | ||
Outstanding ending balance | 625,000 | 625,000 |
Weighted Average Remaining Contract Life | 2 years 3 months 18 days | 3 years 3 months 18 days |
Outstanding ending balance, Weighted average exercise price | $ 0.09 | $ 0.09 |
Number Exercisable | 625,000 | 625,000 |
Exercisable Weighted Average Exercise Price | $ 0.09 | $ 0.09 |
0.15 | ||
Outstanding ending balance | 1,571,300 | 1,571,300 |
Weighted Average Remaining Contract Life | 1 year 7 months 6 days | 2 years 7 months 6 days |
Outstanding ending balance, Weighted average exercise price | $ 0.15 | $ 0.15 |
Number Exercisable | 1,571,300 | 1,571,300 |
Exercisable Weighted Average Exercise Price | $ 0.15 | $ 0.15 |
0.44 | ||
Outstanding ending balance | 1,515,544 | 1,515,544 |
Weighted Average Remaining Contract Life | 7 months 6 days | 1 year 7 months 6 days |
Outstanding ending balance, Weighted average exercise price | $ 0.44 | $ 0.44 |
Number Exercisable | 1,515,544 | 1,515,544 |
Exercisable Weighted Average Exercise Price | $ 0.44 | $ 0.44 |
0.60 | ||
Outstanding ending balance | 975,000 | 975,000 |
Weighted Average Remaining Contract Life | 8 months 12 days | 1 year 8 months 12 days |
Outstanding ending balance, Weighted average exercise price | $ 0.6 | $ 0.6 |
Number Exercisable | 975,000 | 975,000 |
Exercisable Weighted Average Exercise Price | $ 0.6 | $ 0.6 |
0.06-0.60 | ||
Outstanding ending balance | 9,736,844 | |
Weighted Average Remaining Contract Life | 2 years | |
Outstanding ending balance, Weighted average exercise price | $ 0.23 | |
Number Exercisable | 9,736,844 | |
Exercisable Weighted Average Exercise Price | $ 0.19 | |
0.25 | ||
Outstanding ending balance | 120,000 | |
Weighted Average Remaining Contract Life | 9 months 18 days | |
Outstanding ending balance, Weighted average exercise price | $ 0.25 | |
Number Exercisable | 120,000 | |
Exercisable Weighted Average Exercise Price | $ 0.25 | |
0.40 | ||
Outstanding ending balance | 3,000,000 | |
Weighted Average Remaining Contract Life | 7 months 6 days | |
Outstanding ending balance, Weighted average exercise price | $ 0.4 | |
Number Exercisable | 3,000,000 | |
Exercisable Weighted Average Exercise Price | $ 0.4 | |
0.50 | ||
Outstanding ending balance | 370,000 | |
Weighted Average Remaining Contract Life | 1 year 3 months 18 days | |
Outstanding ending balance, Weighted average exercise price | $ 0.5 | |
Number Exercisable | 370,000 | |
Exercisable Weighted Average Exercise Price | $ 0.5 | |
0.75 | ||
Outstanding ending balance | 120,000 | |
Weighted Average Remaining Contract Life | 9 months 18 days | |
Outstanding ending balance, Weighted average exercise price | $ 0.75 | |
Number Exercisable | 120,000 | |
Exercisable Weighted Average Exercise Price | $ 0.75 | |
1 | ||
Outstanding ending balance | 290,000 | |
Weighted Average Remaining Contract Life | 1 year 4 months 24 days | |
Outstanding ending balance, Weighted average exercise price | $ 1 | |
Number Exercisable | 290,000 | |
Exercisable Weighted Average Exercise Price | $ 1 | |
0.06-1.00 | ||
Outstanding ending balance | 10,936,844 | |
Weighted Average Remaining Contract Life | 2 years 9 months 18 days | |
Outstanding ending balance, Weighted average exercise price | $ 0.23 | |
Number Exercisable | 10,936,844 | |
Exercisable Weighted Average Exercise Price | $ 0.23 |
9. STOCKHOLDERS' EQUITY (Deta34
9. STOCKHOLDERS' EQUITY (Details 2) - Stock Options - $ / shares | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | ||
Outstanding beginning balance, Shares | 943,500 | 943,500 | |
Number of Options Granted | [1] | 150,000 | 0 |
Number of Options Exercised | 0 | 0 | |
Number of Options Forfeited | 0 | 0 | |
Number of Options Expired | 0 | 0 | |
Outstanding ending balance | 1,093,500 | 943,500 | |
Outstanding beginning balance, Weighted average exercise price | $ 0.15 | $ 0.15 | |
Weighted Average Exercise Price Granted | 0 | 0 | |
Weighted Average Exercise Price Exercised | 0 | 0 | |
Weighted Average Exercise Price Forfeited | 0 | 0 | |
Weighted Average Exercise Price Expired | 0 | 0 | |
Outstanding ending balance, Weighted average exercise price | $ .15 | $ 0.15 | |
[1] | On January 1, 2015, the company granted three tranches of options, 25,000, 25,000, and 100,000 which vest upon meeting specific performance measures agreed upon. The measures include achieving three specific sales targets per month for 3 consecutive months. The exercise price and expiration date of each tranche will be set upon achieving the targets. As of the date of this filing the performance measures have not been met. As a result the exercise price is undetermined and these options are excluded from the calculation of weighted average remaining life. |
9. STOCKHOLDERS' EQUITY (Deta35
9. STOCKHOLDERS' EQUITY (Details 3) - Stock Options - $ / shares | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | ||
Outstanding ending balance, Weighted average exercise price | $ .15 | $ 0.15 | |
Outstanding beginning balance, Shares | 943,500 | 943,500 | |
Number of Options Granted | [1] | 150,000 | 0 |
Outstanding ending balance | 1,093,500 | 943,500 | |
Weighted-Average Remaining Contract Life | 1 year 7 months 17 days | 2 years 7 months 17 days | |
Number Exercisable | 943,500 | 943,500 | |
Stock Options Exercisable Weighted-Average Exercise Price | $ .15 | $ 0.15 | |
[1] | On January 1, 2015, the company granted three tranches of options, 25,000, 25,000, and 100,000 which vest upon meeting specific performance measures agreed upon. The measures include achieving three specific sales targets per month for 3 consecutive months. The exercise price and expiration date of each tranche will be set upon achieving the targets. As of the date of this filing the performance measures have not been met. As a result the exercise price is undetermined and these options are excluded from the calculation of weighted average remaining life. |
10. DERIVATIVE LIABILITIES (Det
10. DERIVATIVE LIABILITIES (Details) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Equity [Abstract] | ||
Expected dividend yield | 0.00% | 0.00% |
Expected volatility, min | 133.81% | 103.35% |
Expected volatility, max | 167.50% | 155.36% |
Risk-free interest rate, min | 0.13% | 0.13% |
Risk-free interest rate, max | 1.07% | 1.07% |
Expected option life in years, min | 0 years | 9 months 25 days |
Expected option life in years, max | 1 year 6 months 25 days | 2 years 6 months 25 days |
10. DERIVATIVE LIABILITIES (D37
10. DERIVATIVE LIABILITIES (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Derivative Liabilities Details 1 | ||
Beginning Balance | $ (1,708) | $ (1,040,850) |
Convertible debt derivatives recognized as derivative loss | (22,500) | |
Convertible debt derivatives recognized as debt discount | (90,000) | |
Resolution of convertible debt derivatives upon conversions | 132,417 | |
Resolution of convertible debt derivatives upon debt payoff | 59,311 | |
Resolution of warrant derivatives no longer qualifying as derivative liabilities | 918,580 | |
Derivative warrants exchanged for debt | 1,693 | |
Gain (Loss) on change in fair value of derivative liabilities | (295) | 41,334 |
Ending Balance | $ (310) | $ (1,708) |
11. INCOME TAXES (Details)
11. INCOME TAXES (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Non-current deferred tax asset: | ||
34% of net operating loss carry forwards | $ 11,776,321 | $ 10,968,027 |
Valuation allowance non current | (11,776,321) | (10,968,027) |
Net non-current deferred tax asset | $ 0 | $ 0 |
11. INCOME TAXES (Details 1)
11. INCOME TAXES (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Income Taxes Details 1 | ||
Expected federal income tax benefit | $ 450,287 | $ 774,580 |
Change in valuation allowance | (808,294) | (1,019,040) |
Goodwill amortization | 142,386 | 142,386 |
Derivative gain and loss on debt issued for warrants | (67,524) | 26,569 |
Amortization of beneficial conversion discount | 0 | (47,008) |
Other | 298,303 | 300,706 |
Stock-based compensation | (15,158) | (178,193) |
Income tax expense (benefit) | $ 0 | $ 0 |
11. INCOME TAXES (Details Narra
11. INCOME TAXES (Details Narrative) | Dec. 31, 2015USD ($) |
Income Taxes Details Narrative | |
Net operating loss carryforward | $ 34,600,000 |