Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | May 15, 2018 | |
Principal Net of Discount | ||
Entity Registrant Name | WOUND MANAGEMENT TECHNOLOGIES, INC. | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Amendment Flag | false | |
Entity Central Index Key | 714,256 | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 236,642,901 | |
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 | 2,018 | |
Document Fiscal Period Focus | Q1 |
Statement - CONSOLIDATED BALANC
Statement - CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Current assets | ||
Cash | $ 261,446 | $ 463,189 |
Accounts receivable, net of allowance for bad debt of $36,400 and $28,910 | 1,016,290 | 786,250 |
Royalty receivable | 50,250 | 50,250 |
Inventory, net of allowance for obsolescence of $144,897 and $144,996 | 613,714 | 711,397 |
Prepaid and other assets | 70,093 | 26,274 |
Total current assets | 2,011,793 | 2,037,360 |
Long-term assets | ||
Property, plant and equipment, net of accumulated depreciation of $60,944 and $56,951 | 60,516 | 63,211 |
Intangible assets, net of accumulated amortization of $451,255 and $434,999 | 101,035 | 117,291 |
Total long-term assets | 161,551 | 180,502 |
Total assets | 2,173,344 | 2,217,862 |
Current liabilities | ||
Accounts Payable | 253,203 | 225,462 |
Accounts Payable - Related Parties | 5,885 | 60,000 |
Accrued royalties and dividends | 102,250 | 244,422 |
Accrued bonus and commissions | 103,962 | 46,534 |
Deferred rent | 13,703 | 13,920 |
Accrued interest | 0 | 324,986 |
Convertible notes payable - Related parties | 0 | 1,200,000 |
Total current liabilities | 479,003 | 2,115,324 |
Long-term liabilities | ||
Total long-term liabilities | 0 | 0 |
Total liabilities | 479,003 | 2,115,324 |
Stockholders' equity | ||
Common Stock: $.001 par value; 250,000,000 shares authorized; 236,646,990 issued and 236,642,901 outstanding as of March 31, 2018 and 113,427,943 issued and 113,423,854 outstanding as of December 31, 2017 | 236,647 | 113,428 |
Additional Paid-in Capital | 48,331,967 | 46,013,982 |
Treasury Stock | (12,039) | (12,039) |
Accumulated Deficit | (46,862,234) | (46,868,443) |
Total shareholders' equity | 1,694,341 | 102,538 |
Total liabilities and shareholders' equity | 2,173,344 | 2,217,862 |
Series C Preferred Stock [Member] | ||
Stockholders' equity | ||
Preferred Stock | $ 0 | $ 855,610 |
Statement - CONSOLIDATED BALAN3
Statement - CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Accounts receivable, net of allowance for bad debt | $ 36,400 | $ 28,910 |
Inventory, net of allowance for obsolescence | 144,897 | 144,996 |
Property plant and equipment accumulated amortization | 60,944 | 56,951 |
Intangible asset accumulated amortization | $ 451,255 | $ 434,999 |
Common Stock, par value | $ 0.001 | $ 0.001 |
Common Stock, shares authorized | 250,000,000 | 250,000,000 |
Common Stock, shares issued | 236,646,990 | 113,427,943 |
Common Stock, shares outstanding | 236,642,901 | 113,423,854 |
Series C Preferred Stock [Member] | ||
Preferred Stock, par value | $ 10 | $ 10 |
Preferred Stock, shares authorized | 100,000 | 100,000 |
Preferred Stock, shares issued | 85,646 | 85,646 |
Preferred Stock, shares outstanding | 85,646 | 85,646 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenues [Abstract] | ||
Revenues | $ 1,961,787 | $ 1,605,246 |
Cost of goods sold | 210,912 | 173,702 |
Gross profit | 1,750,875 | 1,431,544 |
Operating expenses | ||
Selling, general and administrative expense | 1,654,361 | 1,350,062 |
Depreciation and amortization | 20,248 | 20,113 |
Bad debt expense | 9,558 | 3,110 |
Total operating expenses | 1,684,167 | 1,373,285 |
Operating income | 66,708 | 58,259 |
Other income / (expense) | ||
Debt Forgiveness | 0 | 39,709 |
Other income | 109 | 27 |
Change in fair value of derivative liability | 0 | (134) |
Interest Expense | (60,608) | (44,803) |
Total other income (expense) | (60,499) | (5,201) |
Net income | 6,209 | 53,058 |
Series C preferred stock dividends | (28,061) | (12,936) |
Series C Preferred Stock inducement dividends | (103,197) | 0 |
Net income / (loss) available to common stockholders | $ (125,049) | $ 40,122 |
Basic income (loss) per share of Common stock | $ 0 | $ .00 |
Diluted income (loss) per share of Common Stock | $ 0 | $ .00 |
Weighted average number of common shares outstanding basic | 158,903,529 | 109,983,165 |
Weighted average number of common shares outstanding diluted | 158,903,529 | 207,423,800 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Cash flows from operating activities: | ||
Net income | $ 6,209 | $ 53,058 |
Adjustments to reconcile net income to net cash used in operating activities | ||
Depreciation and amortization | 20,248 | 20,113 |
Interest expense on convertible debt | 60,608 | 0 |
Gain on forgiveness of debt | 0 | (39,709) |
Bad debt expense | 9,558 | 3,110 |
Common stock issued for services | 0 | 59,500 |
Loss on change in fair value of derivative liabilities | 0 | 134 |
Changes in assets and liabilities: | ||
(Increase) decrease in accounts receivable | (239,598) | 80,470 |
(Increase) decrease in inventory | 97,683 | 46,646 |
(Increase) decrease in prepaids and other assets | (43,819) | (187,514) |
Increase (decrease) in accrued royalties and dividends | (150,672) | (183,166) |
Increase (decrease) in accounts payable | 27,741 | (2,953) |
Increase (decrease) in accounts payable related parties | (54,115) | (48,547) |
Increase (decrease) in accrued liabilities | 65,711 | 0 |
Increase (decrease) in accrued interest payable | 0 | 35,014 |
Net cash flows used in operating activities | (200,446) | (163,844) |
Cash flows from investing activities: | ||
Purchase of property and equipment | (1,297) | (114,535) |
Net cash flows used in investing activities | (1,297) | (114,535) |
Cash flows from financing activities: | ||
Payments on capital lease obligation | 0 | (1,126) |
Payments on debt | 0 | (72,831) |
Cash proceeds from sale of series C preferred stock | 0 | 50,050 |
Net cash flows used in financing activities | 0 | (23,907) |
Net decrease in cash | (201,743) | (302,286) |
Cash and cash equivalents, beginning of period | 463,189 | 833,480 |
Cash and cash equivalents, end of period | 261,446 | 531,194 |
Cash paid during the period for: | ||
Interest | 0 | 0 |
Income Taxes | 0 | 0 |
Supplemental non-cash investing and financing activities: | ||
Common stock issued for dividends on Series C Preferred Stock | 15,007 | 0 |
Common stock issued for conversion of Series C Preferred Stock | 85,561 | 0 |
Common stock issued for conversion of Related Party debt and interest | $ 1,585,594 | $ 0 |
1. SUMMARY OF SIGNIFICANT ACCOU
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Basis of Presentation The terms “WMT,” “we,” “the Company,” and “us” as used in this report refer to Wound Management Technologies, Inc. and its wholly owned subsidiaries. The accompanying unaudited consolidated balance sheet as of March 31, 2018, and unaudited consolidated statements of operations for the three-months ended March 31, 2018 and 2017, have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. In the opinion of management of WMT, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three-month period ended March 31, 2018, are not necessarily indicative of the results that may be expected for the year ending December 31, 2018, or any other period. These financial statements and notes should be read in conjunction with the financial statements for each of the two years ended December 31, 2017, and December 31, 2016, included in the Company’s Annual Report on Form 10-K. The accompanying consolidated balance sheet as of December 31, 2017, has been derived from the audited financial statements filed in our Form 10-K and is included for comparison purposes in the accompanying balance sheet. Certain prior year amounts have been reclassified to conform to current year presentation. 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. Revenue Recognition On January 1, 2018, we adopted Topic 606 using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under Topic 605. There was no impact to the opening balance of accumulated deficit or revenues for the quarter ended March 31, 2018 as a result of applying Topic 606. The Company applies a five-step approach in determining the amount and timing of revenue to be recognized: (1) identifying the contract with a customer, (2) identifying the performance obligations in the contract, (3) determining the transaction price, (4) allocating the transaction price to the performance obligations in the contract and (5) recognizing revenue when the performance obligation is satisfied. Substantially all of the Company’s revenue is recognized at the time control of the products transfers to the customer. 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. Royalty revenues include $50,250 in accrued income for each of the three-months ended March 31, 2018 and 2017 from the development and license agreement the Resorbable Orthopedic Products, LLC subsidiary (ROP) executed with BioStructures, LLC in 2011. Royalties of 1.5% are earned on sales of products containing ROP patented resorbable bone hemostasis. As of the date of this filing the minimum royalty due for the first quarter has been received. Revenue streams from sales of CellerateRX and HemaQuell products for the three-months ended March 31, 2018 and 2017 are presented below. Three-months Ended March 31, 2018 2017 CellerateRX Powder $ 1,788,276 $ 1,442,938 CellerateRX Gel 121,164 117,613 HemaQuell 6,600 - Other revenue 45,747 44,695 Total Revenue $ 1,961,787 $ 1,605,246 Contract Assets and Liabilities The Company does not have any contract assets or contract liabilities. 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 finished goods and related packaging supplies. The Company recorded inventory obsolescence expense of $99 for the three-months ended March 31, 2018, compared to $26,878 for the three-months ended March 31, 2017. The allowance for obsolete and slow-moving inventory had a balance of $144,897 at March 31, 2018, and $144,996 at December 31, 2017. 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 management’s best estimate of fair value. 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 in the Company’s Annual Report on Form 10-K. Income Per Share The Company computes income per share in accordance with Accounting Standards Codification “ASC” Topic No. 260, “Earnings per Share,” which requires the Company to present basic and dilutive income per share when the effect is dilutive. Basic income per share is computed by dividing income available to common shareholders by the weighted average number of common shares available. Diluted income per share is computed similar to basic income 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. The dilutive effect of the outstanding convertible preferred stock and certain warrants for the three months ended March 31, 2017, was 97,440,635 shares and an adjustment to net income of $12,936. Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASC 842 Leases |
2. NOTES PAYABLE
2. NOTES PAYABLE | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE | Convertible Notes Payable - Related Parties On June 15, 2015, the Company entered into term loan agreements 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 Notes each carried an interest rate of 10% per annum, and (subject to various default provisions) all unpaid principal and accrued but unpaid interest under the Notes were due and payable on June 15, 2018. On February 19, 2018, both Notes totaling $1,200,000 plus $385,594 of accrued interest were converted to 22,651,356 common shares of the Company's Common Stock. The accrued interest included $60,608 of interest expense recognized during the first quarter of 2018. |
3. COMMITMENTS AND CONTINGENCIE
3. COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2018 | |
Commitments And Contingencies | |
COMMITMENTS AND CONTINGENCIES | Royalty agreements. Effective January 3, 2008, WCI entered into separate exclusive license agreements with both Applied Nutritionals, LLC (“Applied”) and its founder George Petito (“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. The licenses were limited to the human health care market, (excluding dental and retail) for external wound care (including surgical wounds) and include any new product developments based on the licensed patent and processes and any continuations. Although the term of these licenses expired on February 27, 2018, the agreements permit WCI to continue to sell and distribute products for a period not exceeding six (6) months from the effective termination date. In consideration for the licenses, WCI agreed to pay Applied and Petito, (in the aggregate), the following royalties, beginning January 3, 2008: (a) an advance royalty of $100,000; (b) a royalty of 15% of gross sales occurring during the first year of the license; (c) an additional advance royalty of $400,000 on January 3, 2009; plus (d) a royalty of 3% of gross sales for all sales occurring after the payment of the $400,000 advance royalty. In addition, WCI must maintain a minimum aggregate annual royalty payment of $375,000 for 2009 and thereafter if the royalty percentage payments made do not meet or exceed that amount. The amounts listed in the two preceding sentences are the aggregate of amounts paid/owed to Applied and Petito) and the Company has paid the minimum aggregate annual royalty payments each year since 2008, including both 2017 and 2016. Sales of CellerateRX occurring after the termination date are subject to the 3% royalty. On September 29, 2009, the Company entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”), by and among the Company, RSIACQ, LLC, a wholly-owned subsidiary of the Company (RSI), Resorbable Orthopedic Products, LLC (“Resorbable”) and Resorbable’s members, pursuant to which, RSI acquired substantially all of Resorbable’s assets, in exchange for (i) 500,000 shares of the Company’s 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. Office leases In March of 2017, and as amended in March 2018, the Company executed a new office lease for office space located at 1200 Summit Ave., Suite 414, Fort Worth, TX 76102. The amended lease is effective May 1, 2018 and ends on June 30, 2021. Monthly base rental payments are as follows: months 1-2, $8,390; months 3-14, $8,565; months 15-26, $8,740; and months 27-38, $8,914. Rent expense is recognized on a straight-line basis over the term of the Lease and the resulting deferred rent liability is $13,703 as of March 31, 2018. Payables to Related Parties As of March 31, 2018, and December 31, 2017, the Company had outstanding payables to related parties totaling $5,885 and $60,000, respectively. The payables are unsecured, bear no interest and due on demand. |
4. SHAREHOLDERS' EQUITY
4. SHAREHOLDERS' EQUITY | 3 Months Ended |
Mar. 31, 2018 | |
Stockholders' Equity Note [Abstract] | |
SHAREHOLDERS' EQUITY | Preferred Stock 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 was entitled to accruing dividends (payable, at the Company’s 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 was senior to the Company’s Common Stock and any other currently issued series of the Company’s Preferred Stock upon liquidation and was 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 was 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 was 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 holder’s Series C shares could have been converted. As of December 31, 2017, there were 85,561 shares of Series C Preferred Stock issued and outstanding. In February and March 2018, the Company issued 100,567,691 shares of Common Stock for the conversion of 85,561 shares of Series C Convertible Preferred Stock and $1,050,468 of related Series C dividends. Dividends were converted at $0.07 per share. As of March 31, 2018, there were no shares of Series C Preferred Stock outstanding and all accrued dividends were converted to Common Stock. Series C Preferred dividends were $28,061 and $12,936 for the quarters ended March 31, 2018 and March 31, 2017, respectively. As an inducement to encourage the Series C Preferred Stock shareholders to convert their Series C Preferred Stock to Common Stock prior to October 10, 2018, the Company offered to apply the full dividend, (accelerated to October 10, 2018) upon the shareholders exercise of their conversion. The fair value of the extra shares of Common Stock issued to Series C Stock shareholders was $103,197 for dividends that would have accrued from the date of their conversion through October 10, 2018. Common Stock On March 6, 2018, the Company issued 22,651,356 shares of Common Stock for the conversion of $1,200,000 in Related Party convertible debt and $385,594 in accrued interest. In February and March 2018, the Company issued 100,567,691 shares of Common Stock for the conversion of 85,561 shares of Series C Convertible Preferred Stock and $1,050,468 of related Series C dividends. Warrants A summary of the status of the warrants granted for the three-months ended March 31, 2018, and changes during the period then ended is presented below: For the Three-months Ended March 31, 2018 Shares Weighted Average Exercise Price Outstanding at beginning of period 5,100,000 $ 0.06 Granted - - Exercised - - Forfeited - - Expired - - Outstanding at end of period 5,100,000 $ 0.06 As of March 31, 2018 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 0.05 $ 0.06 4,500,000 $ 0.06 0.08 200,000 0.37 0.08 200,000 0.08 0.09 400,000 0.23 0.09 400,000 0.09 $ 0.06 -0.09 5,100,000 .47 $ 0.06 5,100,000 $ 0.06 The aggregate intrinsic value of the exercisable warrants as of March 31, 2018, was $0. Stock Options A summary of the status of the stock options granted for the three-month period ended March 31, 2018, and changes during the period then ended is presented below: For the Three-months Ended March 31, 2018 Options Weighted Average Exercise Price Outstanding at beginning of period 1,150,000 $ 0.06 Granted - - Exercised - - Forfeited - - Expired Outstanding at end of period 1,150,000 $ 0.06 As of March 31, 2018 As of March 31, 2018 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 $ 0.06 1,150,000 4.75 $ 0.06 $ - - On December 31, 2017, the Company granted a total of 1,150,000 options to five employees. The shares vest in equal annual amounts over three years and the aggregate fair value of the awards was determined to be $61,322. |
5. RELATED PARTY TRANSACTIONS
5. RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2018 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | On April 25, 2016, and as amended March 10, 2017, the Company and John Siedhoff, the Chairman of the Company’s Board of Directors, entered into a consulting Agreement. The Agreement provides for compensation payable to an entity controlled by Mr. Siedhoff in the amount of $20,000 per month. The consulting fee expense was $60,000 for the three-months ended March 31, 2018. |
6. SUBSEQUENT EVENTS
6. SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | On April 3, 2018, the Company announced that it will be operating under a new trade name, “WNDM Medical Inc.”, a registered DBA of Wound Management Technologies, Inc. The purpose of the change was to better align the Company’s name with its innovative and cost-effective products provided across a broad range clinical needs. As part of the rebrand, the Company also unveiled a new corporate logo and changed its website address to WNDM.com. |
1. SUMMARY OF SIGNIFICANT ACC12
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The terms “WMT,” “we,” “the Company,” and “us” as used in this report refer to Wound Management Technologies, Inc. and its wholly owned subsidiaries. The accompanying unaudited consolidated balance sheet as of March 31, 2018, and unaudited consolidated statements of operations for the three-months ended March 31, 2018 and 2017, have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. In the opinion of management of WMT, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three-month period ended March 31, 2018, are not necessarily indicative of the results that may be expected for the year ending December 31, 2018, or any other period. These financial statements and notes should be read in conjunction with the financial statements for each of the two years ended December 31, 2017, and December 31, 2016, included in the Company’s Annual Report on Form 10-K. The accompanying consolidated balance sheet as of December 31, 2017, has been derived from the audited financial statements filed in our Form 10-K and is included for comparison purposes in the accompanying balance sheet. Certain prior year amounts have been reclassified to conform to current year presentation. |
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. |
Revenue Recognition | On January 1, 2018, we adopted Topic 606 using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under Topic 605. There was no impact to the opening balance of accumulated deficit or revenues for the quarter ended March 31, 2018 as a result of applying Topic 606. The Company applies a five-step approach in determining the amount and timing of revenue to be recognized: (1) identifying the contract with a customer, (2) identifying the performance obligations in the contract, (3) determining the transaction price, (4) allocating the transaction price to the performance obligations in the contract and (5) recognizing revenue when the performance obligation is satisfied. Substantially all of the Company’s revenue is recognized at the time control of the products transfers to the customer. 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. Royalty revenues include $50,250 in accrued income for each of the three-months ended March 31, 2018 and 2017 from the development and license agreement the Resorbable Orthopedic Products, LLC subsidiary (ROP) executed with BioStructures, LLC in 2011. Royalties of 1.5% are earned on sales of products containing ROP patented resorbable bone hemostasis. As of the date of this filing the minimum royalty due for the first quarter has been received. Revenue streams from sales of CellerateRX and HemaQuell products for the three-months ended March 31, 2018 and 2017 are presented below. Three-months Ended March 31, 2018 2017 CellerateRX Powder $ 1,788,276 $ 1,442,938 CellerateRX Gel 121,164 117,613 HemaQuell 6,600 - Other revenue 45,747 44,695 Total Revenue $ 1,961,787 $ 1,605,246 |
Contract Assets and Liabilities | The Company does not have any contract assets or contract liabilities. |
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 finished goods and related packaging supplies. The Company recorded inventory obsolescence expense of $99 for the three-months ended March 31, 2018, compared to $26,878 for the three-months ended March 31, 2017. The allowance for obsolete and slow-moving inventory had a balance of $144,897 at March 31, 2018, and $144,996 at December 31, 2017. |
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 management’s best estimate of fair value. 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 in the Company’s Annual Report on Form 10-K. |
Income Per Share | The Company computes income per share in accordance with Accounting Standards Codification “ASC” Topic No. 260, “Earnings per Share,” which requires the Company to present basic and dilutive income per share when the effect is dilutive. Basic income per share is computed by dividing income available to common shareholders by the weighted average number of common shares available. Diluted income per share is computed similar to basic income 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. The dilutive effect of the outstanding convertible preferred stock and certain warrants for the three months ended March 31, 2017, was 97,440,635 shares and an adjustment to net income of $12,936. |
Recently Issued Accounting Pronouncements | In February 2016, the FASB issued ASC 842 Leases |
1. SUMMARY OF SIGNIFICANT ACC13
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Summary Of Significant Accounting Policies Tables | |
Disaggregation of revenue | Three-months Ended March 31, 2018 2017 CellerateRX Powder $ 1,788,276 $ 1,442,938 CellerateRX Gel 121,164 117,613 HemaQuell 6,600 - Other revenue 45,747 44,695 Total Revenue $ 1,961,787 $ 1,605,246 |
4. SHAREHOLDERS' EQUITY (Tables
4. SHAREHOLDERS' EQUITY (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Stockholders' Equity Note [Abstract] | |
A Summary Of The Status Of The Warrants Granted | For the Three-months Ended March 31, 2018 Shares Weighted Average Exercise Price Outstanding at beginning of period 5,100,000 $ 0.06 Granted - - Exercised - - Forfeited - - Expired - - Outstanding at end of period 5,100,000 $ 0.06 |
Schedule of warrants by warrant price range | As of March 31, 2018 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 0.05 $ 0.06 4,500,000 $ 0.06 0.08 200,000 0.37 0.08 200,000 0.08 0.09 400,000 0.23 0.09 400,000 0.09 $ 0.06 -0.09 5,100,000 .47 $ 0.06 5,100,000 $ 0.06 |
Schedule of option activity | For the Three-months Ended March 31, 2018 Options Weighted Average Exercise Price Outstanding at beginning of period 1,150,000 $ 0.06 Granted - - Exercised - - Forfeited - - Expired Outstanding at end of period 1,150,000 $ 0.06 |
Schedule of options by option price range | As of March 31, 2018 As of March 31, 2018 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 $ 0.06 1,150,000 4.75 $ 0.06 $ - - |
1. SUMMARY OF SIGNIFICANT ACC15
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Total revenue | $ 1,961,787 | $ 1,605,246 |
CellerateRX Powder | ||
Total revenue | 1,788,276 | 1,442,938 |
CellerateRX Gel | ||
Total revenue | 121,164 | 117,613 |
HemaQuell | ||
Total revenue | 6,600 | 0 |
Other revenue | ||
Total revenue | $ 45,747 | $ 44,695 |
1. SUMMARY OF SIGNIFICANT ACC16
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2018 | Dec. 31, 2017 | |
Accounting Policies [Abstract] | |||
Inventory, net of allowance for obsolescence | $ 144,897 | $ 144,996 | |
Dilutive effect of the outstanding warrants | 97,440,635 |
2. NOTES PAYABLE (Details Narra
2. NOTES PAYABLE (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Notes Payable Details Narrative | ||
Interest expense on convertible debt | $ 60,608 | $ 35,014 |
3. COMMITMENTS AND CONTINGENC18
3. COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Commitments And Contingencies Details Narrative | ||
Deferred rent | $ 13,703 | $ 13,920 |
Payables to related parties | $ 5,885 | $ 60,000 |
4. SHAREHOLDERS' EQUITY (Detail
4. SHAREHOLDERS' EQUITY (Details) | 3 Months Ended |
Mar. 31, 2018$ / sharesshares | |
Number Outstanding, Beginning | shares | 1,150,000 |
Number of Options Granted | shares | 0 |
Number of Options Exercised | shares | 0 |
Number of Options Forfeited | shares | 0 |
Number of Options Expired | shares | 0 |
Number Outstanding, Ending | shares | 1,150,000 |
Weighted Average Exercise Price Outstanding, Beginning | $ / shares | $ .06 |
Weighted Average Exercise Price Granted | $ / shares | .00 |
Weighted Average Exercise Price Exercised | $ / shares | .00 |
Weighted Average Exercise Price Forfeited | $ / shares | .00 |
Weighted Average Exercise Price Expired | $ / shares | .00 |
Weighted Average Exercise Price Outstanding, Ending | $ / shares | $ .06 |
Warrant | |
Number Outstanding, Beginning | shares | 5,100,000 |
Number of Options Granted | shares | 0 |
Number of Options Exercised | shares | 0 |
Number of Options Forfeited | shares | 0 |
Number of Options Expired | shares | 0 |
Number Outstanding, Ending | shares | 5,100,000 |
Weighted Average Exercise Price Outstanding, Beginning | $ / shares | $ .06 |
Weighted Average Exercise Price Granted | $ / shares | .00 |
Weighted Average Exercise Price Exercised | $ / shares | .00 |
Weighted Average Exercise Price Forfeited | $ / shares | .00 |
Weighted Average Exercise Price Expired | $ / shares | .00 |
Weighted Average Exercise Price Outstanding, Ending | $ / shares | $ 0.06 |
4. SHAREHOLDERS' EQUITY (Deta20
4. SHAREHOLDERS' EQUITY (Details 1) - $ / shares | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Number Outstanding, Ending | 1,150,000 | 1,150,000 |
Weighted-Average Remaining Contract Life | 4 years 9 months | |
Weighted-Average Exercise Price | $ .06 | $ .06 |
Number Exercisable | 0 | |
Exercisable Weighted Average Exercise Price | $ .00 | |
0.06 | ||
Number Outstanding, Ending | 4,500,000 | |
Weighted-Average Remaining Contract Life | 18 days | |
Weighted-Average Exercise Price | $ .06 | |
Number Exercisable | 4,500,000 | |
Exercisable Weighted Average Exercise Price | $ .06 | |
0.08 | ||
Number Outstanding, Ending | 200,000 | |
Weighted-Average Remaining Contract Life | 4 months 13 days | |
Weighted-Average Exercise Price | $ .08 | |
Number Exercisable | 200,000 | |
Exercisable Weighted Average Exercise Price | $ .08 | |
0.09 | ||
Number Outstanding, Ending | 400,000 | |
Weighted-Average Remaining Contract Life | 2 months 23 days | |
Weighted-Average Exercise Price | $ .09 | |
Number Exercisable | 400,000 | |
Exercisable Weighted Average Exercise Price | $ .09 | |
0.06-0.09 | ||
Number Outstanding, Ending | 5,100,000 | |
Weighted-Average Remaining Contract Life | 5 months 19 days | |
Weighted-Average Exercise Price | $ .06 | |
Number Exercisable | 5,100,000 | |
Exercisable Weighted Average Exercise Price | $ .06 |
4. SHAREHOLDERS' EQUITY (Deta21
4. SHAREHOLDERS' EQUITY (Details 2) | 3 Months Ended |
Mar. 31, 2018$ / sharesshares | |
Shareholders Equity Details 2 | |
Number Outstanding, Beginning | shares | 1,150,000 |
Number of Options Granted | shares | 0 |
Number of Options Exercised | shares | 0 |
Number of Options Forfeited | shares | 0 |
Number of Options Expired | shares | 0 |
Number Outstanding, Ending | shares | 1,150,000 |
Weighted Average Exercise Price Outstanding, Beginning | $ / shares | $ .06 |
Weighted Average Exercise Price Granted | $ / shares | .00 |
Weighted Average Exercise Price Exercised | $ / shares | .00 |
Weighted Average Exercise Price Forfeited | $ / shares | .00 |
Weighted Average Exercise Price Expired | $ / shares | .00 |
Weighted Average Exercise Price Outstanding, Ending | $ / shares | $ .06 |
4. SHAREHOLDERS' EQUITY (Deta22
4. SHAREHOLDERS' EQUITY (Details 3) - $ / shares | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Shareholders Equity Details 3 | ||
Number Outstanding, Ending | 1,150,000 | 1,150,000 |
Weighted-average remaining contract life | 4 years 9 months | |
Weighted Average Exercise Price Outstanding, Ending | $ .06 | $ .06 |
Number Options Exercisable | 0 | |
Weighted-Average Exercise Price Options Exercisable | $ .00 |
4. SHAREHOLDERS' EQUITY (Deta23
4. SHAREHOLDERS' EQUITY (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Shareholders Equity Details Narrative | ||
Series C preferred stock dividends | $ 28,061 | $ 12,936 |
Intrinsic value of the exercisable warrants | $ 0 |