Cover
Cover - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Mar. 15, 2022 | Jun. 30, 2021 | |
Cover [Abstract] | |||
Entity Registrant Name | GUIDED THERAPEUTICS, INC. | ||
Entity Central Index Key | 0000924515 | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Entity Voluntary Filers | No | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well Known Seasoned Issuer | No | ||
Entity Small Business | true | ||
Entity Shell Company | false | ||
Entity Emerging Growth Company | false | ||
Entity Current Reporting Status | Yes | ||
Document Period End Date | Dec. 31, 2021 | ||
Entity Filer Category | Non-accelerated Filer | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2021 | ||
Entity Common Stock Shares Outstanding | 22,063,995 | ||
Entity Public Float | $ 8,377,034 | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity File Number | 0-22179 | ||
Entity Incorporation State Country Code | DE | ||
Entity Tax Identification Number | 58-2029543 | ||
Entity Address Address Line 1 | 5835 Peachtree Corners East | ||
Entity Address Address Line 2 | Suite B | ||
Entity Address City Or Town | Norcross | ||
Entity Address State Or Province | GA | ||
Entity Address Postal Zip Code | 30092 | ||
City Area Code | 770 | ||
Icfr Auditor Attestation Flag | false | ||
Auditor Firm Id | 1195 | ||
Auditor Name | UHY LLP | ||
Local Phone Number | 242-8723 | ||
Security 12g Title | Common Stock, $0.001 Par Value | ||
Entity Interactive Data Current | Yes | ||
Auditor Location | Sterling Heights, Michigan |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Current Assets: | ||
Cash and cash equivalents | $ 643,000 | $ 182,000 |
Accounts receivable, net of allowance for doubtful accounts of $126 at December 31, 2021 and 2020 | 46,000 | 24,000 |
Inventory, net of reserves of $785 and $758 at December 31, 2021 and 2020, respectively | 571,000 | 605,000 |
Other current assets | 377,000 | 85,000 |
Total current assets | 1,637,000 | 896,000 |
Non-Current Assets: | ||
Property and equipment, net | 14,000 | 1,000 |
Operating lease right-of-use asset, net of amortization | 372,000 | 453,000 |
Other assets | 17,000 | 0 |
Total non-current assets | 403,000 | 454,000 |
TOTAL ASSETS | 2,040,000 | 1,350,000 |
Current Liabilities: | ||
Accounts payable | 2,362,000 | 2,419,000 |
Accounts payable, related parties | 87,000 | 116,000 |
Accrued liabilities | 1,768,000 | 2,995,000 |
Deferred revenue | 337,000 | 42,000 |
Current portion of lease liability | 67,000 | 56,000 |
Current portion of long-term debt | 88,000 | 28,000 |
Notes payable in default | 0 | 328,000 |
Notes payable in default, related parties | 0 | 1,000 |
Short-term notes payable | 48,000 | 45,000 |
Short-term notes payable, related parties | 40,000 | 51,000 |
Convertible notes payable in default | 161,000 | 0 |
Convertible notes payable, past due | 0 | 1,930,000 |
Short-term convertible notes payable | 736,000 | 951,000 |
Total current liabilities | 5,694,000 | 8,962,000 |
Long-Term Liabilities | ||
Warrants, at fair value | 0 | 2,203,000 |
Long-term lease liability | 325,000 | 392,000 |
Derivative liability | 32,000 | 25,000 |
Long-term convertible debt | 820,000 | 23,000 |
Long-term debt | 22,000 | 0 |
Long-term debt, related parties | 592,000 | 600,000 |
Total long-term liabilities | 1,791,000 | 3,243,000 |
Total liabilities | 7,485,000 | 12,205,000 |
STOCKHOLDERS' DEFICIT: | ||
Common stock, $.001 par value; 500,000 shares authorized, 13,673 and 13,138 shares issued and outstanding as of December 31, 2021 and 2020, respectively. | 3,403,000 | 3,403,000 |
Additional Paid In Capital | 126,800,000 | 123,109,000 |
Treasury stock at cost | (132,000) | (132,000) |
Accumulated deficit | (142,387,000) | (139,956,000) |
Total stockholders deficit | (5,445,000) | (10,855,000) |
TOTAL LIABILITIES AND STOCKHOLDERS DEFICIT | 2,040,000 | 1,350,000 |
Series C Convertible Preferred Shares | ||
STOCKHOLDERS' DEFICIT: | ||
Preferred Stock Value | 105,000 | 105,000 |
Series C1 Convertible Preferred Shares | ||
STOCKHOLDERS' DEFICIT: | ||
Preferred Stock Value | 170,000 | 170,000 |
Series C2 Convertible Preferred Shares | ||
STOCKHOLDERS' DEFICIT: | ||
Preferred Stock Value | 531,000 | 531,000 |
Series D Convertible Preferred Shares | ||
STOCKHOLDERS' DEFICIT: | ||
Preferred Stock Value | 276,000 | 276,000 |
Series E Convertible Preferred Shares | ||
STOCKHOLDERS' DEFICIT: | ||
Preferred Stock Value | 1,639,000 | 1,639,000 |
Series F Convertible Preferred Shares | ||
STOCKHOLDERS' DEFICIT: | ||
Preferred Stock Value | 1,187,000 | 0 |
Series F-2 Convertible Preferred Shares | ||
STOCKHOLDERS' DEFICIT: | ||
Preferred Stock Value | 2,963,000 | 0 |
Series G Convertible Preferred Shares | ||
STOCKHOLDERS' DEFICIT: | ||
Preferred Stock Value | $ 0 | $ 0 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
CURRENT ASSETS: | ||
Accounts receivable, net of allowance | $ 126,000 | $ 126,000 |
Inventory, net of reserves | $ 785,000 | $ 758,000 |
STOCKHOLDERS' DEFICIT: | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, authorized | 500,000,000 | 500,000,000 |
Common stock, issued | 13,673,000 | 13,138,000 |
Common stock, outstanding | 13,673,000 | 13,138,000 |
Series C Convertible Preferred Shares | ||
STOCKHOLDERS' DEFICIT: | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, authorized | 9,000 | 9,000 |
Preferred stock, liquidation preference | $ 286,000 | $ 286,000 |
Preferred stock, issued | 300 | 300 |
Preferred stock, outstanding | 300 | 300 |
Series D Convertible Preferred Shares | ||
STOCKHOLDERS' DEFICIT: | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, authorized | 6,000 | 6,000 |
Preferred stock, liquidation preference | $ 763,000 | $ 763,000 |
Preferred stock, issued | 800 | 800 |
Preferred stock, outstanding | 800 | 800 |
Series E Convertible Preferred Shares | ||
STOCKHOLDERS' DEFICIT: | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, authorized | 5,000 | 5,000 |
Preferred stock, liquidation preference | $ 1,736,000 | $ 1,736,000 |
Preferred stock, issued | 1,700 | 1,700 |
Preferred stock, outstanding | 1,700 | 1,700 |
Series F Convertible Preferred Shares | ||
STOCKHOLDERS' DEFICIT: | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, authorized | 1,500 | 1,500 |
Preferred stock, liquidation preference | $ 1,426,000 | $ 0 |
Preferred stock, issued | 1,400 | 0 |
Preferred stock, outstanding | 1,400 | 0 |
Series F-2 Convertible Preferred Shares | ||
STOCKHOLDERS' DEFICIT: | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, authorized | 3,500 | 3,500 |
Preferred stock, liquidation preference | $ 3,237,000 | $ 0 |
Preferred stock, issued | 3,200 | 0 |
Preferred stock, outstanding | 3,200 | 0 |
Series C-1 Convertible Preferred Shares | ||
STOCKHOLDERS' DEFICIT: | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, authorized | 20,300 | 20,300 |
Preferred stock, liquidation preference | $ 1,049,000 | $ 1,049,000 |
Preferred stock, issued | 1,000 | 1,000 |
Preferred stock, outstanding | 1,000 | 1,000 |
Series C-2 Convertible Preferred Shares | ||
STOCKHOLDERS' DEFICIT: | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, authorized | 5,000,000 | 5,000,000 |
Preferred stock, liquidation preference | $ 3,263,000 | $ 3,263,000 |
Preferred stock, issued | 3,300 | 3,300 |
Preferred stock, outstanding | 3,300 | 3,300 |
Series G Convertible Preferred Shares | ||
STOCKHOLDERS' DEFICIT: | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, authorized | 1,000,000 | 1,000,000 |
Preferred stock, liquidation preference | $ 0 | $ 0 |
Preferred stock, issued | 0 | 0 |
Preferred stock, outstanding | 0 | 0 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
CONSOLIDATED STATEMENTS OF OPERATIONS | ||
Sales - devices and disposables | $ 81,000 | $ 102,000 |
Cost of goods sold (recovered) | 61,000 | (41,000) |
Gross profit | 20,000 | 143,000 |
Operating expenses: | ||
Research and development | 69,000 | 143,000 |
Sales and marketing | 141,000 | 139,000 |
General and administrative | 2,172,000 | 913,000 |
Total operating expenses | 2,382,000 | 1,195,000 |
Loss from operations | (2,362,000) | (1,052,000) |
Other income (expenses): | ||
Interest expense | (1,150,000) | (1,056,000) |
Change in fair value of derivative liability | (91,000) | (25,000) |
Gain (loss) from extinguishment of debt | 578,000 | (296,000) |
Change in fair value of warrants | 448,000 | 1,879,000 |
Other income | 507,000 | 271,000 |
Total other income | 292,000 | 773,000 |
Loss before income taxes | (2,070,000) | (279,000) |
Provision for income taxes | 0 | 0 |
Net loss | (2,070,000) | (279,000) |
Preferred stock dividends | (361,000) | (122,000) |
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS | $ (2,431,000) | $ (401,000) |
NET LOSS PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS | ||
Basic | $ (0.18) | $ (0.04) |
Diluted | $ (0.18) | $ (0.04) |
Weighted average shares outstanding | ||
Weighted average shares outstanding Basic | 13,377 | 10,767 |
Weighted average shares outstanding Diluted | 13,377 | 10,767 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (2,071,000) | $ (279,000) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Bad debt expense | 0 | 12,000 |
Inventory reserve | 0 | (73,000) |
Depreciation | 1,000 | 0 |
Amortization of debt issuance costs and discounts | 320,000 | 394,000 |
Amortization of beneficial conversion feature | 8,000 | 102,000 |
Stock based compensation | 228,000 | 310,000 |
Change in fair value of warrants | (448,000) | (1,879,000) |
Loss on extinguishment of debt | 0 | 296,000 |
Extinguishment of derivative liability | (84,000) | 0 |
Change in fair value of derivatives | 91,000 | 25,000 |
Amortization of lease right-of-use-asset | 82,000 | 0 |
Expense for warrants issued to consultants | 664,000 | 0 |
Gain from forgiveness of debt | (578,000) | 0 |
Other non-cash expenses (income) | 117,000 | 0 |
Change in operating assets and liabilities: | ||
Accounts receivable | (22,000) | (23,000) |
Inventory | 33,000 | (483,000) |
Other current assets | (292,000) | (15,000) |
Other non-current assets | (17,000) | 18,000 |
Accounts payable and accrued liabilities | 136,000 | (221,000) |
Lease liabilities | (56,000) | 0 |
Deferred revenue | 296,000 | (59,000) |
NET CASH USED IN OPERATING ACTIVITIES | (1,592,000) | (1,875,000) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of property and equipment | (14,000) | (1,000) |
NET CASH USED FOR INVESTING ACTIVITIES | (14,000) | (1,000) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from debt financing | 1,248,000 | 519,000 |
Payments made on notes payable | (1,468,000) | (1,101,000) |
Payments of debt issuance costs | (86,000) | 0 |
Note payable default penalty | 398,000 | 0 |
Proceeds from issuance of Series D preferred stock | 0 | 102,000 |
Proceeds from issuance of Series E preferred stock | 0 | 1,639,000 |
Proceeds from issuance of common stock, net of costs | 0 | 0 |
Proceeds from Series F offering, net of costs | 1,436,000 | 0 |
Proceeds from Series F-2 offering, net of costs | 539,000 | 0 |
Proceeds from Series G offering, net of costs | 125,000 | 0 |
Redemption of Series G preferred stock | (125,000) | 0 |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 2,067,000 | 1,159,000 |
NET CHANGE IN CASH | 461,000 | (717,000) |
Cash at beginning of period | 182,000 | 899,000 |
CASH AT END OF PERIOD | 643,000 | 182,000 |
SUPPLEMENTAL DISCLOSURE FOR OPERATING ACTIVITIES: | ||
Cash paid for interest | 557,000 | 295,000 |
SUPPLEMENTAL DISCLOSURE FOR NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Dividends on preferred stock | 361,000 | 122,000 |
Debt from related parties exchanged for preferred series F-2 | 323,000 | 0 |
Issuance of series F-2 preferred stock | 2,236,000 | 0 |
Issuance of warrants to finders in connection with Series F and Series F-2 preferred stock | 377,000 | 0 |
Settlement of dividends through common stock issuance | 171,000 | 40,000 |
Settlement of accounts payable through common stock issuance | 62,000 | 0 |
Warrants exchanged for fixed price warrants | 1,755,000 | 131,000 |
Warrants issued with debt | 304,000 | 0 |
Settlement of accounts payable through issuance of promissory note | 97,000 | 0 |
Issuance of common stock as debt repayment | 0 | 2,929,000 |
Conversion of Preferred Series F to common stock | 8,000 | 0 |
Subscription receivable | $ 0 | $ 635,000 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT - USD ($) | Total | Preferred Stock Series C [Member] | Preferred Stock Series C1 [Member] | Preferred Stock Series C2 [Member] | Preferred Stock Series D [Member] | Preferred Stock Series E [Member] | Common Stock [Member] | Additional Paid-In Capital | Treasury Stock [Member] | Accumulated Deficit [Member] | Preferred Stock Series F [Member] | Preferred Stock Series F-2 [Member] | Preferred Stock Series G [Member] |
Balance, shares at Dec. 31, 2019 | 1,000 | 3,000 | 3,319,000 | ||||||||||
Balance, amount at Dec. 31, 2019 | $ (16,935,000) | $ 105,000 | $ 170,000 | $ 531,000 | $ 0 | $ 3,394,000 | $ 118,552,000 | $ (132,000) | $ (139,555,000) | ||||
Issuance of preferred stock in financing, shares | 1,000 | 2,000 | |||||||||||
Issuance of preferred stock in financing, amount | 1,915,000 | 0 | 0 | 0 | $ 276,000 | $ 1,639,000 | $ 0 | $ 0 | $ 0 | ||||
Conversion of debt into common stock | 0 | 0 | 0 | 0 | |||||||||
Conversion of debt into common stock, shares | 8,132,000 | ||||||||||||
Conversion of debt into common stock, amount | 2,929,000 | $ 8,000 | 2,921,000 | ||||||||||
Issuance of common stock in financing | 0 | 0 | 0 | 0 | |||||||||
Warrants exchanged for fixed price warrants | 131,000 | 0 | 0 | 0 | 0 | ||||||||
Issuance of common stock in financing, shares | 1,526,000 | ||||||||||||
Issuance of common stock in financing, amount | 461,000 | $ 1,000 | 460,000 | ||||||||||
Issuance of common stock for manufacturing agreements | 0 | 0 | 0 | 0 | |||||||||
Issuance of common stock for payment of Series D preferred dividends | 0 | 0 | 0 | 0 | |||||||||
Issuance of warrants in financing | 117,000 | 117,000 | |||||||||||
Beneficial conversion feature of convertible debt | 82,000 | 0 | 0 | 0 | 0 | 82,000 | |||||||
Issuance of common stock for manufacturing agreements, shares | 12,000 | ||||||||||||
Adjustment to warrant liability for adoption of ASU 2017-11 | 627,000 | 0 | 0 | 0 | 0 | 627,000 | |||||||
Stock based compensation | 310,000 | 0 | 0 | 0 | 0 | 310,000 | |||||||
Issuance of common stock for payment of Series D preferred dividends, shares | 149,000 | ||||||||||||
Accrued series D preferred stock dividends | (122,000) | 0 | $ 0 | $ 0 | $ 0 | (122,000) | |||||||
Issuance of common stock for payment of Series D preferred dividends, amount | 40,000 | 40,000 | |||||||||||
Net loss | $ (279,000) | 0 | (279,000) | ||||||||||
Balance, shares at Dec. 31, 2020 | 13,138,282 | 1,000 | 3,000 | 1,000 | 2,000 | 13,138,000 | |||||||
Balance, amount at Dec. 31, 2020 | $ (10,855,000) | 105,000 | $ 170,000 | $ 531,000 | $ 276,000 | $ 1,639,000 | $ 3,403,000 | 123,109,000 | (132,000) | (139,956,000) | 0 | 0 | |
Warrants exchanged for fixed price warrants | 1,755,000 | ||||||||||||
Issuance of common stock for payment of Series D preferred dividends | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||
Stock based compensation | 227,000 | 0 | 0 | 0 | 0 | 0 | $ 0 | 227,000 | 0 | 0 | 0 | 0 | 0 |
Issuance of common stock for payment of Series D preferred dividends, shares | 109,000 | ||||||||||||
Issuance of common stock for payment of Series D preferred dividends, amount | 53,000 | $ 0 | 53,000 | 0 | 0 | ||||||||
Net loss | (2,070,000) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (2,070,000) | $ 0 | 0 | 0 |
Series F preferred offering | 1,195,000 | 0 | 0 | 0 | 0 | ||||||||
Series F-2 preferred offering | 404,000 | 0 | 0 | 0 | 0 | ||||||||
Conversion of debt and expenses for Series F-2 preferred stock | $ 2,559,000 | 0 | 0 | 0 | 0 | ||||||||
Series F preferred offering, shares | 1,000 | ||||||||||||
Issuance of common stock to finders | 0 | 0 | 0 | ||||||||||
Issuance of common stock to finders, shares | 98,000 | ||||||||||||
Issuance of common stock to finders, amount | $ 54,000 | 0 | 54,000 | 0 | 0 | ||||||||
Series F preferred offering, amount | 0 | $ 1,195,000 | $ 0 | 0 | |||||||||
Series G preferred offering | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||
Series F-2 preferred offering, shares | 1,000 | ||||||||||||
Series G redemption | 0 | 0 | 0 | 0 | 0 | $ 0 | 0 | 0 | 0 | ||||
Conversion of debt and expenses for Series F-2 preferred stock | 2,000 | ||||||||||||
Issuance of common stock for payment of Series E preferred dividends, shares | 288,000 | ||||||||||||
Series F-2 preferred offering, amount | 0 | 0 | $ 404,000 | 0 | |||||||||
Issuance of common stock for payment of Series E preferred dividends, amount | 118,000 | $ 0 | 118,000 | 0 | 0 | ||||||||
Issuance of warrants to consultants | 1,172,000 | 0 | 0 | 0 | 0 | 0 | 0 | 1,172,000 | 0 | 0 | 0 | 0 | 0 |
Warrants issued with debt | 304,000 | 0 | 0 | 0 | 0 | 0 | 0 | 304,000 | 0 | 0 | 0 | 0 | 0 |
Conversion of debt and expenses for Series F-2 preferred stock, amount | 0 | 0 | 2,559,000 | 0 | |||||||||
Conversion of warrants from liabilities to equity | 1,755,000 | 0 | 0 | 0 | 0 | 0 | $ 0 | 1,755,000 | 0 | 0 | 0 | 0 | 0 |
Conversion of Series F Preferred shares into common stock, shares | 40,000 | ||||||||||||
Conversion of Series F Preferred shares into common stock, amount | 0 | $ 0 | 8,000 | 0 | 0 | ||||||||
Issuance of common stock to finders | 0 | 0 | 0 | 0 | |||||||||
Accrued preferred dividends | $ (361,000) | 0 | 0 | 0 | 0 | 0 | $ 0 | 0 | 0 | (361,000) | 0 | 0 | 0 |
Issuance of common stock for payment of Series E preferred dividends | 0 | 0 | 0 | 0 | 0 | 0 | 0 | $ 0 | |||||
Series G preferred offering, shares | 153,000 | ||||||||||||
Series G preferred offering, amount | 0 | 0 | 0 | $ 0 | |||||||||
Series G redemption, shares | (153,000) | ||||||||||||
Series G redemption, amount | 0 | 0 | 0 | $ 0 | |||||||||
Conversion of Series F Preferred shares into common stock | 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ (8,000) | $ 0 | 0 | |||||
Balance, shares at Dec. 31, 2021 | 13,607,609 | 1,000 | 3,000 | 1,000 | 2,000 | 13,673,000 | 1,000 | 3,000 | |||||
Balance, amount at Dec. 31, 2021 | $ (5,445,000) | $ 105,000 | $ 170,000 | $ 531,000 | $ 276,000 | $ 1,639,000 | $ 3,403,000 | $ 126,800,000 | $ (132,000) | $ (142,387,000) | $ 1,187,000 | $ 2,963,000 | $ 0 |
ORGANIZATION, BACKGROUND, AND B
ORGANIZATION, BACKGROUND, AND BASIS OF PRESENTATION | 12 Months Ended |
Dec. 31, 2021 | |
ORGANIZATION, BACKGROUND, AND BASIS OF PRESENTATION | |
1. ORGANIZATION, BACKGROUND, AND BASIS OF PRESENTATION | 1. ORGANIZATION, BACKGROUND, AND BASIS OF PRESENTATION Guided Therapeutics, Inc. (formerly SpectRx, Inc.), together with its wholly owned subsidiary, InterScan, Inc. (formerly Guided Therapeutics, Inc.), collectively referred to herein as the “Company”, is a medical technology company focused on developing innovative medical devices that have the potential to improve healthcare. The Company’s primary focus is the continued commercialization of its LuViva non-invasive cervical cancer detection device and extension of its cancer detection technology into other cancers, including esophageal. The Company’s technology, including products in research and development, primarily relates to biophotonics technology for the non-invasive detection of cancers. During the year ended December 31, 2021, the Board simultaneously approved a 1-for-20 reverse stock split of our common stock and decreased the total number of authorized common shares to 500,000,000. On November 18, 2021, the Company submitted an Issuer Company Related Action Notification regarding the reverse stock split to the Financial Industry Regulatory Authority (“FINRA”). FINRA has not yet declared an effective date for the reverse stock split. The Company will adjust the number of shares available for future grant under its equity incentive plan and employee stock purchase plans and will also adjust the number of outstanding awards issued to reflect the effects of its reverse split. All historical share and per share amounts reflected throughout this report will be adjusted to reflect stock split at the time it becomes effective. Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principals generally accepted in the United States of America, or U.S. GAAP. All intercompany transactions and balances have been eliminated in consolidation. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the Company as of December 31, 2021 and 2020, and the consolidated results of operations and cash flows for the years ended December 31, 2021 and 2020 have been included. The Company’s prospects must be considered in light of the substantial risks, expenses and difficulties encountered by entrants into the medical device industry. This industry is characterized by an increasing number of participants, intense competition and a high failure rate. The Company has experienced net losses since its inception and, as of December 31, 2021, it had an accumulated deficit of approximately $142.4 million. To date, the Company has engaged primarily in research and development efforts and the early stages of marketing its products. The Company may not be successful in growing sales for its products. Moreover, required regulatory clearances or approvals may not be obtained in a timely manner, or at all. The Company’s products may not ever gain market acceptance and the Company may not ever generate significant revenues or achieve profitability. The development and commercialization of the Company’s products requires substantial development, regulatory, sales and marketing, manufacturing and other expenditures. The Company expects operating losses to continue for the foreseeable future as it continues to expend substantial resources to complete development of its products, obtain regulatory clearances or approvals, build its marketing, sales, manufacturing and finance capabilities, and conduct further research and development. The Company is not organized by multiple operating segments for the purpose of making operating decisions or assessing performance. Accordingly, the Company operates in one reportable operating segment. The Company’s principal decision makers are the Chief Executive Officer and its Chief Financial Officer. Management believes that its business operates as one reportable segment because: a) the Company measures profit and loss as a whole; b) the principal decision makers do not review information based on any operating segment; c) the Company does not maintain discrete financial information on any specific segment; d) the Company has not chosen to organize its business around different products and services, and e) the Company has not chosen to organize its business around geographic areas. Going Concern The Company’s consolidated financial statements have been prepared and presented on a basis assuming it will continue as a going concern. The factors below raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might be necessary from the outcome of this uncertainty. At December 31, 2021, the Company had a negative working capital of approximately $4.1 million, accumulated deficit of $142.4 million, and incurred a net loss including preferred dividends of $2.4 million for the year then ended. Stockholders’ deficit totaled approximately $5.4 million at December 31, 2021, primarily due to recurring net losses from operations. During the year ended December 31, 2021, the Company raised $3.2 million of funds from the sale of preferred stock and 10% convertible debentures. The Company will need to continue to raise capital in order to provide funding for its operations and FDA approval process. If sufficient capital cannot be raised, the Company will continue its plans of curtailing operations by reducing discretionary spending and staffing levels and attempting to operate by only pursuing activities for which it has external financial support. However, there can be no assurance that such external financial support will be sufficient to maintain even limited operations or that the Company will be able to raise additional funds on acceptable terms, or at all. In such a case, the Company might be required to enter into unfavorable agreements or, if that is not possible, be unable to continue operations, and to the extent practicable, liquidate and/or file for bankruptcy protection. The Company had warrants exercisable for approximately 27.7 million shares of its common stock outstanding at December 31, 2021, with exercise prices ranging between $0.15 and $0.80 per share. Exercises of in-the-money warrants would generate a total of approximately $5.1 million in cash, assuming full exercise, although the Company cannot be assured that holders will exercise any warrants. Management may obtain additional funds through the public or private sale of debt or equity, and grants, if available. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2021 | |
SIGNIFICANT ACCOUNTING POLICIES | |
2. SIGNIFICANT ACCOUNTING POLICIES | 2. SIGNIFICANT ACCOUNTING POLICIES Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant areas where estimates are used include the allowance for doubtful accounts, inventory valuation and input variables for Black-Scholes, Monte Carlo simulations and binomial calculations. The Company uses the Monte Carlo simulations and binomial calculations in the calculation of the fair value of the warrant liabilities and the valuation of freestanding warrants. Accounting Standard Updates FASB ASU 2021-04, “ Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options” – FASB ASU NO. 2020-06, “Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” FASB ASU NO. 2019-12, “ Simplifying the Accounting for Income Taxes A variety of proposed or otherwise potential accounting standards are currently under consideration by standard-setting organizations and certain regulatory agencies. Because of the tentative and preliminary nature of such proposed standards, management has not yet determined the effect, if any that the implementation of such proposed standards would have on the Company’s consolidated financial statements. Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be a cash equivalent. Accounts Receivable The Company performs periodic credit evaluations of its distributors’ financial conditions and generally does not require collateral. The Company reviews all outstanding accounts receivable for collectability on a quarterly basis. An allowance for doubtful accounts is recorded for any amounts deemed uncollectable. Uncollectibility is determined based on the determination that a distributor will not be able to make payment and the time frame has exceeded one year. The Company does not accrue interest receivables on past due accounts receivable. Concentrations of Credit Risk The Company, from time to time during the years covered by these consolidated financial statements, may have bank balances in excess of its insured limits. Management has deemed this a normal business risk. Inventory Valuation All inventories are stated at lower of cost or net realizable value, with cost determined substantially on a “first-in, first-out” basis. Selling, general, and administrative expenses are not inventoried, but are charged to expense when incurred. As of December 31, 2021 and 2020, our inventories were as follows: (in thousands) December 31, December 31, 2021 2020 Raw materials $ 1,255 $ 1,276 Work-in-progress 69 80 Finished goods 32 7 Inventory reserve (785 ) (758 ) Total inventory $ 571 $ 605 The company periodically reviews the value of items in inventory and provides write-downs or write-offs of inventory based on its assessment of market conditions. Write-downs and write-offs are charged to cost of goods sold. Property and Equipment Property and equipment are recorded at cost. Depreciation is computed using the straight-line method over estimated useful lives of three to seven years. Leasehold improvements are amortized at the shorter of the useful life of the asset or the remaining lease term. Depreciation and amortization expense are included in general and administrative expense on the statement of operations. Expenditures for repairs and maintenance are expensed as incurred. Property and equipment are summarized as follows at December 31, 2021 and 2020: (in thousands) December 31, December 31, 2021 2020 Equipment $ 1,048 $ 1,042 Software 652 652 Furniture and fixtures 41 41 Leasehold improvements 12 12 Construction in progress 8 - Subtotal 1,761 1,747 Less accumulated depreciation (1,747 ) (1,746 ) Property, equipment and leasehold improvements, net $ 14 $ 1 Depreciation expense related to property and equipment for the years ended December 31, 2021 and 2020 was not material. Debt Issuance Costs Debt issuance costs are capitalized and amortized over the term of the associated debt. Debt issuance costs are presented in the balance sheet as a direct deduction from the carrying amount of the debt liability consistent with the debt discount. Patent Costs Costs incurred in filing, prosecuting, and maintaining patents are recurring, and expensed as incurred. Maintaining patents are expensed as incurred as the Company has not yet received U.S. FDA approval and recovery of these costs is uncertain. Such costs aggregated to approximately $14,800 and $17,000 for the years ended December 31, 2021 and 2020, respectively. Leases A lease provides the lessee the right to control the use of an identified asset for a period of time in exchange for consideration. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and operating lease liabilities represent the Company’s obligation to make lease payments arising from the lease. The Company determines if an arrangement is a lease at inception. Right-of-use assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. Where an operating lease contains extension options that the Company is reasonably certain to exercise, the extension period is included in the calculation of the right-of-use assets and lease liabilities. The discount rate used to determine the commencement date present value of lease payments is the interest rate implicit in the lease, or when that is not readily determinable, the Company utilizes its secured borrowing rate. Right-of-use assets include any lease payments required to be made prior to commencement and exclude lease incentives. Both right-of-use assets and lease liabilities exclude variable payments not based on an index or rate, which are treated as period costs. The Company’s lease agreements do not contain significant residual value guarantees, restrictions or covenants. See Note 7 – Commitments and Contingencies. Accrued Liabilities Accrued liabilities as of December 31, 2021 and 2020 are summarized as follows: (in thousands) December 31, December 31, 2021 2020 Compensation $ 621 $ 1,094 Professional fees 98 83 Interest 261 1,517 Vacation 39 34 Preferred dividends 349 202 Stock subscription payable 351 - Other accrued expenses 49 65 Total $ 1,768 $ 2,995 Stock Subscription Payable Cash received from investors for common stock shares that have not yet been issued is recorded as a liability, which is presented within Accrued Liabilities on the consolidated balance sheet. Revenue Recognition ASC 606, Revenue from Contracts with Customers, establishes a single and comprehensive framework which sets out how much revenue is to be recognized, and when. The core principle is that a vendor should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the vendor expects to be entitled in exchange for those goods or services. Revenue will now be recognized by a vendor when control over the goods or services is transferred to the customer. In contrast, revenue-based revenue recognition around an analysis of the transfer of risks and rewards; this now forms one of a number of criteria that are assessed in determining whether control has been transferred. The application of the core principle in ASC 606 is carried out in five steps: · Step 1 – Identify the contract with a customer: a contract is defined as an agreement (including oral and implied), between two or more parties, that creates enforceable rights and obligations and sets out the criteria for each of those rights and obligations. The contract needs to have commercial substance and it is probable that the entity will collect the consideration to which it will be entitled. · Step 2 – Identify the performance obligations in the contract: a performance obligation in a contract is a promise (including implicit) to transfer a good or service to the customer. Each performance obligation should be capable of being distinct and is separately identifiable in the contract. · Step 3 – Determine the transaction price: transaction price is the amount of consideration that the entity can be entitled to, in exchange for transferring the promised goods and services to a customer, excluding amounts collected on behalf of third parties. · Step 4 – Allocate the transaction price to the performance obligations in the contract: for a contract that has more than one performance obligation, the entity will allocate the transaction price to each performance obligation separately, in exchange for satisfying each performance obligation. The acceptable methods of allocating the transaction price include adjusted market assessment approach, expected cost plus a margin approach, and the residual approach in limited circumstances. Discounts given should be allocated proportionately to all performance obligations unless certain criteria are met and reallocation of changes in standalone selling prices after inception is not permitted. · Step 5 – Recognize revenue as and when the entity satisfies a performance obligation: the entity should recognize revenue at a point in time, except if it meets any of the three criteria, which will require recognition of revenue over time: the entity’s performance creates or enhances an asset controlled by the customer, the customer simultaneously receives and consumes the benefit of the entity’s performance as the entity performs, and the entity does not create an asset that has an alternative use to the entity and the entity has the right to be paid for performance to date. The Company did not recognize material revenues during the years ended December 31, 2021 or 2020. The Company’s revenues do not require significant estimates or judgments. The Company is not party to contracts that include multiple performance obligations or material variable consideration. Contract Balances The Company defers payments received as revenue until earned based on the related contracts and applying ASC 606 as required. As of December 31 2021 and 2020, the Company had $337,000 and $42,000 of deferred revenue, respectively. Significant Distributors As of December 31, 2021, accounts receivable outstanding was $172,000; the outstanding amount was netted against a $126,000 allowance, leaving a balance of $46,000 which was from two distributors. As of December 31, 2020, accounts receivable outstanding was $150,000, the outstanding amount was netted against a $126,000 allowance, leaving a balance of $24,000 which was from one distributor. Research and Development Research and development expenses consist of expenditures for research conducted by the Company and payments made under contracts with consultants or other outside parties and costs associated with internal and contracted clinical trials. All research and development costs are expensed as incurred. Income Taxes The provision for income taxes is determined in accordance with ASC 740, “ Income Taxes The Company has filed its 2020 federal and state corporate tax returns. The Company has entered into an agreed upon payment plan with the IRS for delinquent payroll taxes. The Company has an established payment arrangement for its delinquent state income taxes with the State of Georgia. Although the Company has been experiencing recurring losses, it is obligated to file tax returns for compliance with IRS regulations and that of applicable state jurisdictions. At December 31, 2021, the Company had approximately $61.6 million of net operating losses carryforward available. This net operating loss will be eligible to be carried forward for tax purposes at federal and applicable states level. A full valuation allowance has been recorded related the deferred tax assets generated from the net operating losses. The Company recognizes uncertain tax positions based on a benefit recognition model. Provided that the tax position is deemed more likely than not of being sustained, the Company recognizes the largest amount of tax benefit that is greater than 50.0% likely of being ultimately realized upon settlement. The tax position is derecognized when it is no longer more likely than not of being sustained. The Company classifies income tax related interest and penalties as interest expense and selling, general and administrative expense, respectively, on the consolidated statements of operations. Warrants The Company has issued warrants, which allow the warrant holder to purchase one share of stock at a specified price for a specified period of time. The Company records equity instruments including warrants based on the fair value at the date of issue. The fair value of warrants classified as equity instruments at the date of issuance is estimated using the Black-Scholes Model. The fair value of warrants classified as liabilities at the date of issuance is estimated using the Monte Carlo Simulation or Binomial model. Stock Based Compensation The Company accounts for its stock-based awards in accordance with ASC Subtopic 718, “ Compensation – Stock Compensation The Black-Scholes option pricing model requires the input of certain assumptions that require the Company’s judgment, including the expected term and the expected stock price volatility of the underlying stock. The assumptions used in calculating the fair value of stock-based compensation represent management’s best estimates, but these estimates involve inherent uncertainties and the application of judgment. As a result, if factors change resulting in the use of different assumptions, stock-based compensation expense could be materially different in the future. Beneficial Conversion Features of Convertible Securities The Company has adopted the provisions of ASU 2017-11 to account for the down round features of warrants issued with private placements effective as of January 1, 2020. In doing so, warrants with a down round feature previously treated as derivative liabilities in the consolidated balance sheet and measured at fair value are henceforth treated as equity, with no adjustment for changes in fair value at each reporting period. Previously, the Company accounted for conversion options embedded in convertible notes in accordance with ASC 815. ASC 815 generally requires companies to bifurcate conversion options embedded in convertible notes from their host instruments and to account for them as free-standing derivative financial instruments. ASC 815 provides for an exception to this rule when convertible notes, as host instruments, are deemed to be conventional, as defined by ASC 815-40. The Company accounts for convertible notes deemed conventional and conversion options embedded in non-conventional convertible notes which qualify as equity under ASC 815, in accordance with the provisions of ASC 470-20, which provides guidance on accounting for convertible securities with beneficial conversion features. Accordingly, the Company records, as a discount to convertible notes, the intrinsic value of such conversion options based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt. Conversion options that are not bifurcated as a derivative pursuant to ASC 815 and not accounted for as a separate equity component under the cash conversion guidance are evaluated to determine whether they are beneficial to the investor at inception (a beneficial conversion feature) or may become beneficial in the future due to potential adjustments. The beneficial conversion feature guidance in ASC 470-20 applies to convertible stock as well as convertible debt which are outside the scope of ASC 815. A beneficial conversion feature is defined as a nondetachable conversion feature that is in the money at the commitment date. The beneficial conversion feature guidance requires recognition of the conversion option’s in-the-money portion, the intrinsic value of the option, in equity, with an offsetting reduction to the carrying amount of the instrument. The resulting discount is amortized as a dividend over either the life of the instrument, if a stated maturity date exists, or to the earliest conversion date, if there is no stated maturity date. If the earliest conversion date is immediately upon issuance, the dividend must be recognized at inception. When there is a subsequent change to the conversion ratio based on a future occurrence, the new conversion price may trigger the recognition of an additional beneficial conversion feature on occurrence. During 2021, the Company adopted ASU No. 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity Derivatives The Company reviews the terms of convertible debt issued to determine whether there are embedded derivative instruments, including embedded conversion options, which are required to be bifurcated and accounted for separately as derivative financial instruments. In circumstances where the host instrument contains more than one embedded derivative instrument, including the conversion option, that is required to be bifurcated, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument. Bifurcated embedded derivatives are initially recorded at fair value and are then revalued at each reporting date with changes in the fair value reported as non-operating income or expense. When the equity or convertible debt instruments contain embedded derivative instruments that are to be bifurcated and accounted for as liabilities, the total proceeds received are first allocated to the fair value of all the bifurcated derivative instruments. The remaining proceeds, if any, are then allocated to the host instruments themselves, usually resulting in those instruments being recorded at a discount from their face value. The discount from the face value of the convertible debt, together with the stated interest on the instrument, is amortized over the life of the instrument through periodic charges to interest expense. |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 12 Months Ended |
Dec. 31, 2021 | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | |
3. FAIR VALUE OF FINANCIAL INSTRUMENTS | 3. FAIR VALUE OF FINANCIAL INSTRUMENTS The guidance for fair value measurements, ASC 820, Fair Value Measurements and Disclosures, establishes the authoritative definition of fair value, sets out a framework for measuring fair value, and outlines the required disclosures regarding fair value measurements. Fair value is the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. The Company uses a three-tier fair value hierarchy based upon observable and non-observable inputs as follow: · Level 1–Quoted market prices in active markets for identical assets and liabilities; · Level 2–Inputs, other than level 1 inputs, either directly or indirectly observable; and · Level 3–Unobservable inputs developed using internal estimates and assumptions (there is little or no market date) which reflect those that market participants would use. The Company records its derivative activities at fair value. As of December 31, 2021 we had one instrument that we valued for the derivative liability associated with the bifurcated conversion option of the Auctus loan for $400,000 ($700,000 of the $1,100,000 was paid in during the year ended December 31, 2021). There was no movement of instruments between fair value hierarchy tiers during the years ended December 31, 2021 or 2020. The following tables present the fair value of those liabilities measured on a recurring basis as of December 31, 2021 and 2020: Fair Value at December 31, 2021 (in thousands) Level 1 Level 2 Level 3 Total Derivative liability/bifurcated conversion option in connection with Auctus $400,000 loan on December 17, 2019 $ - $ - $ (32 ) $ (32 ) Total long-term liabilities at fair value $ - $ - $ (32 ) $ (32 ) Fair Value at December 31, 2020 (in thousands) Level 1 Level 2 Level 3 Total Warrants issued in connection with Senior Secured Debt $ $ $ (2,203 ) $ (2,203 ) Derivative liability/bifurcated conversion option in connection with Auctus $400,000 loan on December 17, 2019 - - (25 ) (25 ) Total long-term liabilities at fair value $ - $ - $ (2,228 ) $ (2,228 ) The following is a summary of changes to Level 3 instruments during the year ended December 31, 2021: (in thousands) Senior Secured Debt Derivative Total Balance, December 31, 2020 $ (2,203 ) $ (25 ) $ (2,228 ) Change in the terms of warrants previously recorded as a liability and now reclassified to equity 1,755 - 1,755 Change in value due to warrants expiring during the year 448 - 448 Extinguishment of derivative liability due to payoff of $700,000 loan to Auctus - 84 84 Change in fair value during the year - (91 ) (91 ) Balance, December 31, 2021 $ - $ (32 ) $ (32 ) |
STOCKHOLDERS' DEFICIT
STOCKHOLDERS' DEFICIT | 12 Months Ended |
Dec. 31, 2021 | |
STOCKHOLDERS' DEFICIT: | |
4. STOCKHOLDERS' DEFICIT | 4. STOCKHOLDERS’ DEFICIT Common Stock The Company has authorized 500,000,000 shares of common stock with $0.001 par value. As of December 31, 2021 and 2020, 13,673,583 and 13,138,282 shares were issued and outstanding, respectively. During the years ended December 31, 2021 and 2020 the Company issued 535,301 and 9,818,813 shares of common stock, respectively: Number of Shares Conversion of debt into common shares - exchange agreements 7,957,013 Conversion of debt into common shares 175,000 Shares issued for manufacturing agreements 12,147 Shares issued for payment of Series D dividends 148,653 Shares issued to investors 1,526,000 Issued during the year ended December 31, 2020 9,818,813 Shares issued for payment of Series D dividends 109,039 Shares issued for payment of Series E dividends 288,262 Shares issued for payment of finder fee 98,000 Conversion of Series F Preferred shares into common stock 40,000 Issued during the year ended December 31, 2021 535,301 Summary table of common stock share transactions: Outstanding at December 31, 2019 3,319,469 Issued in 2020 9,818,813 Outstanding at December 31, 2020 13,138,282 Issued in 2021 535,301 Outstanding at December 31, 2021 13,673,583 Conversion of Debt into Common Shares – 2020 Exchange Agreements On January 8, 2020, the Company exchanged $2,064,366 in debt for several equity instruments with an estimated fair value of $2,065,548, resulting in a loss on extinguishment of debt of $1,183 which is recorded in other income (expense) on the accompanying consolidated statements of operations. The Company also issued 6,957,013 warrants to purchase common stock shares; with exercise prices of $0.25, $0.75 and $0.20. In addition, one of the investors forgave approximately $29,000 of debt, which was recorded as a gain for extinguishment of debt during the year ended December 31, 2020. On June 3, 2020, the Company exchanged $328,422 of debt held by Auctus, (summarized in Note 10, “Convertible Notes ” , On June 30, 2020, the Company exchanged $125,000 of debt held by Mr. James Clavijo, for 500,000 shares of common stock and 250,000 warrants to purchase common shares. The fair value of the common shares was $250,000 and the fair value of the warrants was $99,963 (based on an estimated fair value of $0.40, as determined utilizing the Black-Scholes option pricing model). This resulted in a net loss on extinguishment of debt of $224,963 ($349,963 fair value less $125,000 of exchanged debt). On July 9, 2020, the Company entered into an exchange agreement with Mr. Bill Wells (one of its former employees) for an outstanding debt to him of $220,000. In lieu of agreeing to dismiss approximately half of what is owed by the Company, Mr. Wells will receive the following: (i) cash payments of $20,000 within 60 days of the signing of the agreement; cash payments over time in the amount of $90,000 in the form of an unsecured note with the Company to be executed within 30 days of a new financing(s) totaling at least $3.0 million. The note shall bear interest of 6.0% and mature over 18 months; (ii) 66,000 common share stock options that vest at a rate of 3,667 per month and have a $0.49 exercise price (if two consecutive payments in (iii) are not made the stock options will be canceled and a cash payment will be required; and (iv) the total amount of forgiveness by creditor of approximately $110,000 shall be prorated according to amount paid. During the year ended December 31, 2020, the Company made a payment of $20,000; this payment allowed the Company to reduce $40,000 in debt, with the corresponding $20,000 difference recorded as a gain. During the year ended December 31, 2021, the Company obtained the minimum amount of financing and issued the promissory note to Mr. Wells in accordance with the agreement described above. The following table summarizes the debt exchanges: Total Debt and Accrued Interest Total Debt Total Accrued Interest Common Stock Shares Warrants (Exercise $0.15) Warrants (Exercise $0.20) Warrants (Exercise $0.25) Warrants (Exercise $0.50) Warrants (Exercise $0.75) Aquarius $ 145,544 $ 107,500 $ 38,044 291,088 - - 145,544 - 145,544 K2 Medical (Shenghuo) 3 803,653 771,927 31,726 1,905,270 - 496,602 704,334 - 704,334 Mr. Blumberg 305,320 292,290 13,030 1,167,630 - 928,318 119,656 - 119,656 Mr. Case 179,291 150,000 29,291 896,456 - 896,456 - - - Mr. Grimm 51,110 50,000 1,110 255,548 - 255,548 - - - Mr. Gould 111,227 100,000 11,227 556,136 - 556,136 - - - Mr. Mamula 15,577 15,000 577 77,885 - 77,885 - - - Dr. Imhoff 2 400,417 363,480 36,937 1,699,255 - 1,497,367 100,944 - 100,944 Ms. Rosenstock 1 50,000 50,000 - 100,000 - - 50,000 - 50,000 Mr. James 2 2,286 2,000 286 7,745 - 5,291 1,227 - 1,227 Auctus 328,422 249,119 79,303 500,000 700,000 - - - Mr. Clavijo 125,000 125,000 - 500,000 - - - 250,000 - Mr. Wells 4 220,000 220,000 - - - - - - - $ 2,737,847 $ 2,496,316 $ 241,531 7,957,013 700,000 4,713,603 1,121,705 250,000 1,121,705 ____________ 1 2 3 4 Conversion of Debt into Common Shares - 2020 Effective September 10, 2014, the Company sold a secured convertible promissory note to an accredited investor, GHS Investments, LLC (“GHS”), with an initial principal amount of $1,275,000, for a purchase price of $570,000 (less an original issue discount of $560,000 and debt issuance costs of $145,000). The outstanding balance of the note was convertible into shares of common stock at a conversion price per share equal to 75% of the lowest daily volume average price of common stock during the five days prior to conversion. During 2020, GHS converted $50,454 of principal and interest owed for 175,000 shares of common stock. As of December 31, 2020, there was no remaining amount due on the note. Shares Issued for Manufacturing Agreements – 2020 During the year ended December 31, 2020, the Company issued 12,147 shares of common stock to Shandong Yaohua Medical Instrument Corporation (“SMI”), as compensation for manufacturing and distribution services. Refer to Note 7, “ Commitments and Contingencies Shares Issued to Investors – 2020 During the year ended December 31, 2020, the Company issued 1,526,000 shares of common stock to certain accredited investors as part of the Series D Preferred Stock offering (see “Series D Preferred Stock” below). Shares Issued as Payment for Finder’s Fee - 2021 During 2021, the Company issued 98,000 shares of common stock as compensation for the “finder’s fee” associated with the Series F and Series F-2 Preferred Stock offerings (see “Series F Convertible Preferred Stock” and “Series F-2 Convertible Preferred Stock” below). Conversion of Series F Preferred Shares into Common Stock - 2021 During the year ended December 31, 2021, 10 shares of Series F Preferred were converted into 40,000 shares of the Company’s common stock (see “Series F Convertible Preferred Stock” below). Preferred Stock The Company has authorized 5,000,000 shares of preferred stock with a $0.001 par value. The board of directors has the authority to issue these shares and to set dividends, voting and conversion rights, redemption provisions, liquidation preferences, and other rights and restrictions. Series C Convertible Preferred Stock The board designated 9,000 shares of preferred stock as Series C Convertible Preferred Stock, (the “Series C Preferred Stock”). Pursuant to the Series C certificate of designations, shares of Series C preferred stock are convertible into common stock by their holder at any time and may be mandatorily convertible upon the achievement of specified average trading prices for the Company’s common stock. At December 31, 2021 and 2020, there were 286 shares outstanding with a conversion price of $0.50 per share, such that each share of Series C preferred stock would convert into approximately 2,000 shares of the Company’s common stock; for a total of 572,000 common shares, subject to customary adjustments, including for any accrued but unpaid dividends and pursuant to certain anti-dilution provisions, as set forth in the Series C certificate of designations. The conversion price will automatically adjust downward to 80% of the then-current market price of the Company’s common stock 15 trading days after any reverse stock split of the Company’s common stock, and 5 trading days after any conversions of the Company’s outstanding convertible debt. Holders of the Series C preferred stock are entitled to quarterly cumulative dividends at an annual rate of 12.0% until 42 months after the original issuance date (the “Dividend End Date”), payable in cash or, subject to certain conditions, the Company’s common stock. Unpaid accrued dividends were $120,120 as of December 31, 2021. Upon conversion of the Series C preferred stock prior to the Dividend End Date, the Company will also pay to the converting holder a “make-whole payment” equal to the number of unpaid dividends through the Dividend End Date on the converted shares. At December 31, 2021 and 2020, the “make-whole payment” for a converted share of Series C preferred stock would convert to 200 shares of the Company’s common stock. The Series C preferred stock generally has no voting rights except as required by Delaware law. Upon the Company’s liquidation or sale to or merger with another corporation, each share will be entitled to a liquidation preference of $1,000, plus any accrued but unpaid dividends. In addition, the purchasers of the Series C preferred stock received, on a pro rata basis, warrants exercisable to purchase an aggregate of approximately 1 share of Company’s common stock. The warrants contain anti-dilution adjustments in the event that the Company issues shares of common stock, or securities exercisable or convertible into shares of common stock, at prices below the exercise price of such warrants. As a result of the anti-dilution protection, the Company is required to account for the warrants as a liability recorded at fair value each reporting period. As of December 31, 2021, these warrants had expired. Series C1 Convertible Preferred Stock The board designated 20,250 shares of preferred stock as Series C1 Preferred Stock, of which 1,049 shares were issued and outstanding at December 31, 2021 and 2020. In addition, some holders separately agreed to exchange each share of the Series C1 Preferred Stock held for one (1) share of the Company’s newly created Series C2 Preferred Stock. In total, for 3,262.25 shares of Series C1 Preferred Stock to be surrendered, the Company issued 3,262.25 shares of Series C2 Preferred Stock. At December 31, 2021 and 2020, shares of Series C2 had a conversion price of $0.50 per share, such that each share of Series C preferred stock would convert into approximately 2,000 shares of the Company’s common stock. At December 31, 2021 and 2020, there were 1,049.25 shares outstanding with a conversion price of $0.50 per share, such that each share of Series C1 preferred stock would convert into approximately 2,000 shares of the Company’s common stock; for a total of 2,098,500 common shares. The Series C1 preferred stock has terms that are substantially the same as the Series C preferred stock, except that the Series C1 preferred stock does not pay dividends (unless and to the extent declared on the common stock) or at-the-market “make-whole payments” and, while it has the same anti-dilution protections afforded the Series C preferred stock, it does not automatically reset in connection with a reverse stock split or conversion of our outstanding convertible debt. Series C2 Convertible Preferred Stock On August 31, 2018, the Company entered into agreements with certain holders of the Company’s Series C1 Preferred Stock, including the chairman of the Company’s board of directors, and the Chief Operating Officer and a director of the Company pursuant to which those holders separately agreed to exchange each share of the Series C1 Preferred Stock held for one (1) share of the Company’s newly created Series C2 Preferred Stock. In total, for 3,262.25 shares of Series C1 Preferred Stock to be surrendered, the Company issued 3,262.25 shares of Series C2 Preferred Stock. At December 31, 2021 and 2020, shares of Series C2 had a conversion price of $0.50 per share, such that each share of Series C preferred stock would convert into approximately 2,000 shares of the Company’s common stock; for a total of 6,524,500 common shares. The terms of the Series C2 Preferred Stock are substantially the same as the Series C1 Preferred Stock, except that (i) shares of Series C1 Preferred Stock may not be convertible into the Company’s common stock by their holder for a period of 180 days following the date of the filing of the Certificate of Designation (the “Lock-Up Period”); (ii) the Series C2 Preferred Stock has the right to vote as a single class with the Company’s common stock on an as-converted basis, notwithstanding the Lock-Up Period; and (iii) the Series C2 Preferred Stock will automatically convert into that number of securities sold in the next Qualified Financing (as defined in the Exchange Agreement) determined by dividing the stated value ($1,000 per share) of such share of Series C2 Preferred Stock by the purchase price of the securities sold in the Qualified Financing. Series D Convertible Preferred Stock The Board designated 6,000 shares of preferred stock as Series D Preferred Stock, 763 of which remained outstanding as of December 31, 2021. On January 8, 2020, the Company entered into a Stock Purchase Agreement with certain accredited investors (“the Series D Investors”) pursuant to all obligations under the Series D Certificate of Designation. The Series D Investors included the Chief Executive Officer, Chief Operating Officer and a director of the Company. In total, for $763,000 the Company issued 763 shares of Series D Preferred Stock, 1,526,000 common stock shares, 1,526,000 common stock warrants, exercisable at $0.25, and 1,526,000 common stock warrants, exercisable at $0.75. Each Series D Preferred Stock is convertible into 3,000 common shares. The Series D Preferred Stock will have cumulative dividends at the rate per share of 10% per annum. The stated value and liquidation preference on the Series D Preferred Stock is $763. The 763 Series D Preferred Shares are convertible into debt at the option of the holder during a prescribed time period. If the Series D Preferred Shares are converted, the Series D preferences are surrendered and the debt is then secured by the Company’s assets. As of December 31, 2021, none of the 763 Series D Preferred Shares have been converted to secured debt. Each share of Series D Preferred is convertible, at any time for a period of 5 years after issuance, into that number of shares of Common Stock, determined by dividing the stated value by $0.25, subject to certain adjustments set forth in the Series D Certificate of Designation (the “Series D Conversion Price”). The conversion of Series D Preferred is subject to a 4.99% beneficial ownership limitation, which may be increased to 9.99% at the election of the holder of the Series D Preferred. If the average of the VWAPs (as defined in the Series D Certificate of Designation) for any consecutive 5 trading day period (“Measurement Period”) exceeds 200% of the then Series D Conversion Price and the average daily trading volume of the Common Stock on the primary trading market exceeds 1,000 shares per trading day during the Measurement Period (subject to adjustments), the Company may redeem the then outstanding Series D Preferred, for cash in an amount equal to aggregate Stated Value then outstanding plus accrued but unpaid dividends. During the year ended December 31, 2021, the Company issued 109,039 shares of common stock for the payment of accrued Series D Preferred Stock dividends. As of December 31, 2021, the Company had accrued dividends of $14,306. Series E Convertible Preferred Stock The Board designated 5,000 shares of preferred stock as Series E Preferred Stock, 1,736 of which remain outstanding. Each share of Series E Preferred is convertible, at any time for a period of 5 years after issuance, into that number of shares of Common Stock, determined by dividing the Stated Value by $0.25, subject to certain adjustments set forth in the Series E Certificate of Designation (the “Series E Conversion Price”). The conversion of Series E Preferred is subject to a 4.99% beneficial ownership limitation, which may be increased to 9.99% at the election of the holder of the Series E Preferred. If the average of the VWAPs (as defined in the Series E Certificate of Designation) for any consecutive 5 trading day period (“Measurement Period”) exceeds 200% of the then Series E Conversion Price and the average daily trading volume of the Common Stock on the primary trading market exceeds 1,000 shares per trading day during the Measurement Period (subject to adjustments), the Company may redeem the then outstanding Series E Preferred, for cash in an amount equal to aggregate Stated Value then outstanding plus accrued but unpaid dividends. Each share of Series E Preferred Stock has a par value of $0.001 per share and a Stated Value equal to $1,000, subject to increase set forth in its Certificate of Designation. Each holder of Series E Preferred Stock is entitled to receive cumulative dividends of 8% per annum, payable annually on the Stated Value in cash or, following the listing of the Company’s common stock on certain Canadian trading markets and at the option of the Company, shares of common stock. During the year ended December 31, 2021, the Company issued 288,262 shares of common for the payment of Series E Preferred Stock dividends accrued. As of December 31, 2021, the Company had accrued dividends of $54,521. Series F Convertible Preferred Stock The Company was oversubscribed for its Series F Convertible Preferred Stock, resulting in the requirement to file an additional Certificate of Designation for Series F-2 Convertible Preferred Stock with substantially the same terms as the Series F Convertible Preferred Stock. The Board designated 1,500 shares of preferred stock as Series F Preferred Stock, 1,426 of which are issued and outstanding. During 2021, the Company entered into a Stock Purchase Agreement with certain accredited investors (“the Series F Investors”). In total, for $1,436,000 the Company issued 1,436 shares of Series F Preferred Stock. Each Series F Preferred Stock is convertible into 4,000 common stock shares. The Series F Preferred Stock will have cumulative dividends at the rate per share of 6% per annum. The stated value and liquidation preference on the Series F Preferred Stock is $1,436. Each share of Series F Preferred is convertible, at any time for a period of 5 years after issuance, into that number of shares of Common Stock, determined by dividing the stated value by $0.25, subject to certain adjustments set forth in the Series F Certificate of Designation (the “Series F Conversion Price”). The conversion of Series F Preferred is subject to a 4.99% beneficial ownership limitation, which may be increased to 9.99% at the election of the holder of the Series F Preferred. If the average of the VWAPs (as defined in the Series F Certificate of Designation) for any consecutive 5 trading day period (“Measurement Period”) exceeds 200% of the then Series F Conversion Price and the average daily trading volume of the Common Stock on the primary trading market exceeds 1,000 shares per trading day during the Measurement Period (subject to adjustments), the Company may redeem the then outstanding Series F Preferred, for cash in an amount equal to aggregate stated value then outstanding plus accrued but unpaid dividends. During the year ended December 31, 2021, 10 shares of Series F Preferred were converted into 40,000 shares of the Company’s common stock. As of December 31, 2021, the Company had not issued shares as payment of Series F Preferred Stock dividends. As of December 31, 2021, the Company had accrued dividends of $65,718. Series F-2 Convertible Preferred Stock The Board designated 3,500 shares of preferred stock as Series F-2 Preferred Stock, 3,237 of which are issued and outstanding. During 2021, the Company entered into a Stock Purchase Agreement with certain accredited investors (“the Series F-2 Investors”). In total, for $678,000 the Company issued 678 shares of Series F-2 Preferred Stock. In addition, the Company exchanged outstanding debt of $2,559,000 for 2,559 shares of Series F-2 Preferred Stock (see Note 9, “Convertible Debt”). Each Series F-2 Preferred Stock is convertible into 4,000 common stock shares. The Series F-2 Preferred Stock will have cumulative dividends at the rate per share of 6% per annum. The stated value and liquidation preference on the Series F-2 Preferred Stock is $3,237. Each share of Series F-2 Preferred is convertible, at any time for a period of 5 years after issuance, into that number of shares of Common Stock, determined by dividing the Stated Value by $0.25, subject to certain adjustments set forth in the Series F-2 Certificate of Designation (the “Series F-2 Conversion Price”). The conversion of Series F-2 Preferred is subject to a 4.99% beneficial ownership limitation, which may be increased to 9.99% at the election of the holders of the Series F-2 Preferred. If the average of the VWAPs (as defined in the Series F-2 Certificate of Designation) for any consecutive 5 trading day period (“Measurement Period”) exceeds 200% of the then Series F-2 Conversion Price and the average daily trading volume of the Common Stock on the primary trading market exceeds 1,000 shares per trading day during the Measurement Period (subject to adjustments), the Company may redeem the then outstanding Series F-2 Preferred, for cash in an amount equal to aggregate Stated Value then outstanding plus accrued but unpaid dividends. As of December 31, 2021, the Company had not issued shares as payment of Series F-2 Preferred Stock dividends. As of December 31, 2021, the Company had accrued dividends of $94,907. Powerup (Series G Convertible Preferred Stock) During January 2021, the Company finalized an investment by Power Up Lending Group Ltd. Power Up invested $78,500, net to the Company is $75,000, for 91,000 shares of Series G preferred stock with additional tranches of financing up to $925,000 in the aggregate over the terms of the Series G preferred stock. Series G will be non-voting on any matters requiring shareholder vote. The Series G Preferred Stock will have cumulative dividends at the rate per share of 8% per annum. At any time during the period indicated below, after the date of the issuance of shares of Series G preferred stock, the Company will have the right, at the Company’s option, to redeem all of the shares of Series G preferred stock by paying an amount equal to: (i) the number of shares of Series G preferred stock multiplied by then stated value (including accrued dividends); (ii) multiplied by the corresponding percentage as follows: Day 1-60, 105%; Day 61-90, 110%; Day 91-120, 115%; and Day 121-180, 122%. After the expiration of the 180 days following the issuance date, except for mandatory redemption, the Company shall have no right to redeem the Series G preferred stock. Mandatory redemption occurs within 24 months. In addition, if the Company does not redeem the Series G preferred stock then Power Up will have the option to convert to common stock shares. The variable conversion price will be the value equal to a discount of 19% off of the trading price; which is calculated as the average of the three lowest closing bid prices over the last fifteen trading days. The conversion of Series G Preferred is subject to a 4.99% beneficial ownership limitation, which may be increased to 9.99% at the election of the holder of the Series G Preferred. The Company has redeemed all of the Series G preferred stock and the balance is paid. During February 2021, the Company finalized an investment by Power Up Lending Group Ltd. Power Up invested $53,500, net to the Company is $50,000, for 62,000 shares of Series G preferred stock with additional tranches of financing up to $925,000 in the aggregate over the terms of the Series G preferred stock. Series G will be non-voting on any matters requiring shareholder vote. The Series G Preferred Stock will have cumulative dividends at the rate per share of 8% per annum. At any time during the period indicated below, after the date of the issuance of shares of Series G preferred stock, the Company will have the right, at the Company’s option, to redeem all of the shares of Series G preferred stock by paying an amount equal to: (i) the number of shares of Series G preferred stock multiplied by then stated value (including accrued dividends); (ii) multiplied by the corresponding percentage as follows: Day 1-60, 105%; Day 61-90, 110%; Day 91-120, 115%; and Day 121-180, 122%. After the expiration of the 180 days following the issuance date, except for mandatory redemption, the Company shall have no right to redeem the Series G preferred stock. Mandatory redemption occurs within 24 months. In addition, if the Company does not redeem the Series G preferred stock then Power Up will have the option to convert to common stock shares. The variable conversion price will be the value equal to a discount of 19% off of the trading price; which is calculated as the average of the three lowest closing bid prices over the last fifteen trading days. The conversion of Series G Preferred is subject to a 4.99% beneficial ownership limitation, which may be increased to 9.99% at the election of the holder of the Series G Preferred. Due to the mandatory redemption feature of the Series G preferred stock, the total amount of proceeds of $125,000 was recorded as a liability. On June 4, 2021, the Company redeemed the January 2021 investment of $75,000 for $114,597, this $39,597 difference was recorded as interest expense. On July 8, 2021, the Company redeemed the February 2021 investment of $50,000 for $78,094. The difference of $28,094 was recorded as interest expense. As of December 31, 2021, the amount outstanding was nil. Warrants The following table summarizes transactions involving the Company’s outstanding warrants to purchase common stock for the years ended December 31, 2021 and 2020: Warrants (Underlying Shares) Weighted-Average Exercise Price Per Share Outstanding, January 1, 2020 46,016,840 $ 1.71 Warrants issued 11,270,013 $ 0.34 Warrants cancelled/expired (70 ) $ 1,068,423 Warrants exchanged (28,962,508 ) $ 0.04 Outstanding, December 31, 2020 28,324,275 $ 0.25 Warrants issued 7,982,223 $ 0.30 Warrants cancelled/expired (1,729,662 ) $ 0.04 Warrants exchanged (4,713,603 ) $ 0.20 Warrants exercised (2,193,599 ) $ 0.16 Outstanding, December 31, 2021 27,669,634 $ 0.29 Warrant Exchanges – 2021 During the year ended December 31, 2021, the Company entered into various agreements with holders of the Company’s $0.20 strike price warrants, pursuant to which each holder separately agreed to exchange 4,713,603 common stock warrants with a strike price of $0.20 for 4,477,923 common stock warrants with a strike price of $0.16 and a contractual term of 15 days. During December 31, 2021, the Company received approximately $351,000 from the holders for the exercise of 2,193,599 warrants, which was included in Accrued Liabilities as of December 31, 2021, pending issuance of the common shares. The Company measured the effect of the exchange as the excess of fair value of the exchanged instruments over the fair value of the original instruments and determined the effect of the exchange was nil. Management estimated the fair value of the warrants issued utilizing the Black-Scholes Option Pricing model with the following assumptions: December 31, 2021 Expected term 15 days Volatility 143.2 % Risk-free interest rate 0.0 % Dividend yield 0.00 % During the year ended December 31, 2021, the Company entered into various agreements with holders of the Company’s $0.25 strike price warrants, pursuant to which each holder separately agreed that in the event the Company obtains financing of at least $4.0 million, 1,802,161 of common stock warrants with a strike price of $0.25 will be exchanged for 901,081 warrants with terms identical to the warrants granted in the financing and cash payments totaling approximately $90,000, which are due within ten (10) business days of closing of the new financing. In the event Company is not successful in obtaining financing greater than $4.0 million, the warrant’s terms remain unchanged and the common share warrants will expire on their original date. The warrants will have a one-year lockup restriction and a 10% blocker such that the warrant holders will be restricted from owning more than 10% of the total number of the Company’s outstanding common shares at any one point in time after completion of the financing. During the year ended December 31, 2021, the Company entered into various agreements with holders of the Company’s $0.75 strike price warrants, pursuant to which each holder separately agreed that in the event the Company obtains financing of at least $4.0 million, 1,802,161 of common stock warrants with a strike price of $0.75 will be exchanged for 1,802,161 warrants with the same price but with terms identical to the new warrants granted in the financing. In the event Company is not successful in obtaining financing greater than $4.0 million, the warrant’s terms will remain unchanged and the common share warrants will expire on their original date. The new warrants will have a one-year lockup restriction and a 10% blocker such that the warrant holders will be restricted from owning more than 10% of the total number of the Company’s outstanding common shares at any one point in time after completion of the financing. During the year ended December 31, 2021, the Company entered into an agreement with GPB Debt Holdings II LLC (“GPB”), pursuant to which GPB agreed that in the event the Company obtains financing of at least $4.0 million, 7,185,000 of common stock warrants with a strike price of $0.20 will be exchanged for 3,592,500 warrants with terms identical to the warrants granted in the financing and a cash payment of $350,000. In the event Company is not successful in obtaining financing greater than $4.0 million, the warrant’s terms remain unchanged and the common share warrants will expire on their original date. The new warrants, which will vest six months after the closing of a financing greater than $4.0 million, will have a 4.99% blocker such that the warrant holders will be restricted from owning more than 4.99% of the total number of the Company’s outstanding common shares at any one point in time after completion of the financing. Other Warrant Transactions During 2021, the Company issued 10% debenture unit investments in the amount of $1,130,000 and incurred fees due on these debentures of $86,400. The Company issued the finders 263,000 warrants for the Company’s common stock shares which expire on May 31, 2023 and an additional 150,000 warrants to purchase the Company’s common stock shares which expire on May 31, 2024. The investors received a total of 1,130,000 warrants for common stock shares, which expire on May 17, 2023. During 2021, the Company issued equity investments in the amount of $2,114,000 and incurred fees due on these investments of $139,000. The Company also issued the finders 98,000 of the Company’s common stock shares and 643,700 warrants, which expire in the first half of 2024. On January 16, 2020, the Company entered into an exchange agreement with GPB. This exchange agreement canceled the existing outstanding warrants, which were subject to anti-dilution and ratchet provisions, to purchase 35,937,500 shares of common stock at an exercise price of $0.04 per share and resulted in the issuance of new warrants to purchase 7,185,000 shares of common stock at a price of $0.20 per share. The new warrants have fixed exercise prices of $0.20. On January 8, 2021, the Company made a payment of $750,000, as required by the exchange agreement with GPB, which canceled the previously issued warrants. On January 6, 2020, the Company entered into a finder’s fee agreement. The finder will receive 5% cash and 5% warrants on all funds it raises including bridge loans. The three-year common stock share warrants will have an exercise price of $0.25. During 2019 and 2020, the finder helped the Company raise $300,000, therefore a fee of $31,650 was paid and 126,600 warrants were issued. On January 22, 2020, the Company entered into a promotional agreement with a related party, which is partially owned by Mr. Blumberg, to provid |
STOCK OPTIONS
STOCK OPTIONS | 12 Months Ended |
Dec. 31, 2021 | |
STOCK OPTIONS | |
5. STOCK OPTIONS | 5. STOCK OPTIONS The new Stock Plan (the “Plan”) allows for the issuance of incentive stock options, nonqualified stock options, and stock purchase rights. The exercise price of options was determined by the Company’s board of directors, but incentive stock options were granted at an exercise price equal to the fair market value of the Company’s common stock as of the grant date. Options historically granted have generally become exercisable over four years and expire ten years from the date of grant. The plan provides for stock options to be granted up to 10% of the outstanding common stock shares. During the years ended December 31, 2021 and 2020, the Company recognized stock-based compensation expense of $226,717 and $309,905, respectively. The following table summarizes the Company’s stock option activity and related information for the year ended December 31, 2021: Number of Shares Weighted-Average Exercise Price Per Share Weighted-Average Remaining Contractual Life Aggregate Intrinsic Value of In-the-Money Options (in thousands) Options outstanding as of January 1, 2021 1,800,000 $ 0.49 Options granted 25,000 $ 0.48 Options forfeited (167,614 ) $ 0.49 Options expired (157,386 ) $ 0.49 Options outstanding as of December 31, 2021 1,500,000 $ 0.49 8.5 years $ 135 Options exercisable as of December 31, 2021 954,273 $ 0.49 8.5 years $ 86 The aggregate intrinsic value is calculated as the difference between the Company’s closing stock price as of December 31, 2021 and the exercise price, multiplied by the number of options. As of December 31, 2021, there was $263,470 total unrecognized stock-based compensation expense. Such costs are expected to be recognized over a weighted average period of approximately 1.5 years. The weighted-average fair value of awards granted was $0.47 and $0.48 during the years December 31, 2021 and 2020, respectively. The Company recognizes compensation expense for stock option awards on a straight-line basis over the applicable service period of the award. The service period is generally the vesting period. The following weighted-average assumptions were used to calculate stock-based compensation expense: December 31, December 31, 2021 2020 Expected term (years) 10 years 10 years Volatility 153.12 % 153.12 % Risk-free interest rate 0.98 % 0.98 % Dividend yield 0.00 % 0.00 % |
LITIGATION AND CLAIMS
LITIGATION AND CLAIMS | 12 Months Ended |
Dec. 31, 2021 | |
LITIGATION AND CLAIMS | |
6. LITIGATION AND CLAIMS | 6. LITIGATION AND CLAIMS From time to time, the Company may be involved in various legal proceedings and claims arising in the ordinary course of business. Management believes that the dispositions of these matters, individually or in the aggregate, are not expected to have a material adverse effect on the Company’s financial condition. However, depending on the amount and timing of such disposition, an unfavorable resolution of some or all of these matters could materially affect the future results of operations or cash flows in a particular year. As of December 31, 2021 and 2020, there was no accrual recorded for any potential losses related to pending litigation. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2021 | |
LITIGATION AND CLAIMS | |
7. COMMITMENTS AND CONTINGENCIES | 7. COMMITMENTS AND CONTINGENCIES Operating Leases Our corporate offices, which also comprise our administrative, research and development, marketing and production facilities, are located on a 12,835 square foot leased property. Total operating lease cost recognized for this lease was $110,701 and $114,591 for the years ended December 31, 2021 and 2020, respectively. The below table presents total operating lease right-of-use assets and lease liabilities as of December 31, 2021: (in thousands) Year Ended December 31, 2021 Operating lease right-of-use assets $ 372 Operating lease liabilities $ 392 The table below presents the maturities of operating lease liabilities as of December 31, 2021: (in thousands) Operating Leases 2022 $ 108 2023 112 2024 115 2025 118 2026 50 Total future lease payments 503 Less: discount (111 ) Total lease liabilities $ 392 The table below presents the weighted-average remaining lease term and discount rate used in the calculation of operating lease right-of-use assets and lease liabilities: Year Ended December 31, 2021 Weighted average remaining lease term (years) 4.4 Weighted average discount rate 11.4 % Related Party Contracts On June 5, 2016, the Company entered into a license agreement with Shenghuo Medical, LLC pursuant to which the Company granted Shenghuo an exclusive license to manufacture, sell and distribute LuViva in Taiwan, Brunei Darussalam, Cambodia, Laos, Myanmar, Philippines, Singapore, Thailand, and Vietnam. Shenghuo was already the Company’s exclusive distributor in China, Macau and Hong Kong, and the license extended to manufacturing in those countries as well. Under the terms of the license agreement, once Shenghuo was capable of manufacturing LuViva in accordance with ISO 13485 for medical devices, Shenghuo would pay the Company a royalty equal to $2.00 or 20% of the distributor price (subject to a discount under certain circumstances), whichever is higher, per disposable distributed within Shenghuo’s exclusive territories. In connection with the license grant, Shenghuo was to underwrite the cost of securing approval of LuViva with Chinese Food and Drug Administration. At its option, Shenghuo also would provide up to $1.0 million in furtherance of the Company’s efforts to secure regulatory approval for LuViva from the U.S. Food and Drug Administration, in exchange for the right to receive payments equal to 2% of the Company’s future sales in the United States, up to an aggregate of $4.0 million. Pursuant to the license agreement, Shenghuo had the option to have a designee appointed to the Company’s board of directors (current director Richard Blumberg is the designee). On September 6, 2016, the Company entered into a royalty agreement with one of its directors, John Imhoff, and another stockholder, Dolores Maloof, pursuant to which the Company sold to them a royalty of future sales of single-use cervical guides for LuViva. Under the terms of the royalty agreement, and for consideration of $50,000, the Company will pay them an aggregate perpetual royalty initially equal to $0.10, and from and after October 2, 2016, equal to $0.20, for each disposable that the Company sells (or that is sold by a third party pursuant to a licensing arrangement with the Company). On January 22, 2020, the Company entered into a promotional agreement with a related party, which is partially owned by Mr. Blumberg, to provide investor and public relations services for a period of two years. As compensation for these services, the Company will issue a total of 5,000,000 warrants, broken into four tranches of 1,250,000. The warrants have a strike price of $0.25 and are subject to vesting based upon the close of the Series D offering and a minimum share price based on the 30-day VWAP. If the minimum share price per the terms of the agreement is not achieved, the warrants will expire three years after the issuance date. The warrants were valued using the Black Scholes model on the grant date of January 22, 2020, which resulted in a total fair value of $715,000. The Company did not appropriately expense the services received in connection with this agreement in 2020. During the years December 31 2021, the Company recognized $556,111 of consulting expenses as a result of this agreement, which includes twelve months of expense for the year ended December 31, 2020. If the Company had properly accounted for the straight-line expensing of these services in 2020, net loss would have increased by $318,000 for a total net loss of $719,000 for the year ended December 31, 2020 and accumulated deficit would have increased to $140.2 million as of December 31, 2020. Unrecognized consulting expense to be recognized under this agreement is $79,444 as of December 31, 2021. On March 10, 2021, the Company entered into a consulting agreement with Richard Blumberg. As a result of the consulting agreement Mr. Blumberg provided cash of $350,000, which was recorded as a stock subscription payable, to the Company in exchange for the following: (1) on September 26, 2021, 900,000 3-year warrants with an exercise price of $0.30 and 400,000 common stock shares; (2) on March 26, 2022, 900,000 3-year warrants with an exercise price of $0.40 and 400,000 common stock shares; (3) on September 26, 2022, 900,000 3-year warrants with an exercise price of $0.50 and 400,000 common stock shares; and (4) on March 26, 2023, 900,000 3-year warrants with an exercise price of $0.60 and 400,000 common stock shares. During the year ended December 31, 2021, the consulting agreement was amended to clarify that $350,000 is not intended to be debt and will not be required to be repaid in cash. Additionally, issuance of the warrants is now predicated on the Company receiving funding receipts of $1,000,000, whether from a financing, series of financing, or gross sales. The amended agreement clarified that the warrants issued to Mr. Blumberg are compensation for services, which involve obtaining financing. The Company will recognize expense for the services equal to the fair value of the warrants issued to Mr. Blumberg as the services are provided, which will coincide with the successful execution of a financing agreement over $1,000,000. The Company concluded that as of September 30,2021, there was no longer a liability due to Mr. Blumberg of $350,000. The liability was written off in the third quarter of 2021 and a gain of $350,000 was recognized in non-operating income. Other Commitments On July 24, 2019, Shandong Yaohua Medical Instrument Corporation (“SMI”), agreed to modify its existing agreement. Under the terms of this modification, the Company agreed to grant (1) exclusive manufacturing rights, excepting the disposable cervical guides for the Republic of Turkey, and the final assembly rights for Hungary, and (2) exclusive distribution and sales for LuViva in jurisdictions, subject to the following terms and conditions. First, SMI shall complete the payment for parts, per the purchase order, for five additional LuViva devices. Second, in consideration for the $885,144 that the Company received, SMI will receive 12,147 common stock shares. Third, SMI shall honor all existing purchase orders it has executed to date with the Company, in order to maintain jurisdiction sales and distribution rights. If SMI needs to purchase cervical guides then it will do so at a cost including labor, plus ten percent markup. The Company will provide 200 cervical guides at no cost for the clinical trials. Fourth, the Company and SMI will make best efforts to sell devices after CFDA approval. With an initial estimate of year one sales of 200 LuViva devices; year two sales of 500 LuViva devices; year three sales of 1,000 LuViva devices; and year four sales of 1,250 LuViva devices. Fifth, SMI shall pay for entire costs of securing approval of LuViva with the Chinese FDA. Sixth, SMI shall arrange, at its sole cost, for a manufacturer in China to build tooling to support manufacturing. In addition, SMI retains the right to manufacture for China, Hong Kong, Macau and Taiwan, where SMI has distribution and sales rights. For each single-use cervical guide sold by SMI in the jurisdictions, SMI shall transfer funds to escrow agent at a rate of $1.90 per device chip. If within 18 months of the license’s effective date, SMI fails to achieve commercialization of LuViva in China, SMI shall no longer have any rights to manufacture, distribute or sell LuViva. Commercialization is defined as: filing an application with the Chinese FDA for the approval of LuViva; any assembly or manufacture of the devices or disposables that begins in China; and purchase of at least 10 devices and disposables for clinical evaluations and regulatory use and or sales in the jurisdictions. On August 12, 2021, the Company executed an amendment to its agreement with SMI, which established a payment schedule for the balance owed by SMI to the Company for outstanding purchase orders. During the year ended December 31, 2021, the Company received $353,635 from SMI on the aforementioned purchase order. The remaining balance owed for outstanding purchase orders was $177,000 as of December 31, 2021. Under the terms of the amended agreement, the parties agreed that if by October 30, 2022, SMI fails to achieve commercialization of LaViva in China, SMI shall no longer have any rights to manufacture, distribute or sell LaViva. Contingencies Based on the current outbreak of the Coronavirus SARS-CoV-2, the pathogen responsible for COVID-19, which has already had an impact on financial markets, there could be additional repercussions to the Company’s operating business, including but not limited to, the sourcing of materials for product candidates, manufacture of supplies for preclinical and/or clinical studies, delays in clinical operations, which may include the availability or the continued availability of patients for trials due to such things as quarantines, conduct of patient monitoring and clinical trial data retrieval at investigational study sites. The future impact of the outbreak is highly uncertain and cannot be predicted, and the Company cannot provide any assurance that the outbreak will not have a material adverse impact on the Company’s operations or future results or filings with regulatory health authorities. The extent of the impact to the Company, if any, will depend on future developments, including actions taken to contain the coronavirus. The conflict in Ukraine, which has already had an impact on financial markets, could result in additional repercussions in our operating business, including delays in obtaining regulatory approval to market our products in Russia. The future impact of the conflict is highly uncertain and cannot be predicted, and we cannot provide any assurance that the conflict will not have a material adverse impact on our operations or future results or filings with regulatory health authorities. |
NOTES PAYABLE
NOTES PAYABLE | 12 Months Ended |
Dec. 31, 2021 | |
NOTES PAYABLE | |
8. NOTES PAYABLE | 8. NOTES PAYABLE Notes Payable in Default At December 31, 2021 and 2020, the Company maintained notes payable to both related and non-related parties totaling approximately nil and $329,000, respectively. These notes are short term, straight-line amortizing notes. The notes carried annual interest rates between 0% and 10% and have default rates as high as 20%. As described in Note 4: “Stockholders’ Deficit,” During 2021, notes payable of $1,000 due to Dr. Cartwright were paid off and notes payable of $26,000 due to Mr. Fowler were brought current and not in default. The note payable to GPB was exchanged as described in Note 9 , Convertible Debt The following table summarizes notes payable in default, including related parties (in thousands): Notes payable in default, including related parties December 31, 2021 December 31, 2020 Mr. Mermelstein $ - $ 285 Dr. Cartwright - 1 Mr. Fowler - 26 GPB - 17 Notes payable in default $ - $ 329 The notes payable in default to related parties was $27,000 of the $329,000 balance as of December 31, 2020. Short Term Notes Payable At December 31, 2021 and 2020, the Company maintained short term notes payable to both related and non-related parties totaling $165,000 and $96,000, respectively. These notes are short term, straight-line amortizing notes. The notes carry annual interest rates between 4.3% and 6% (16% to 18% in the event of default). On July 4, 2021, the Company entered into a premium finance agreement to finance its insurance policies totaling $117,560. The note requires monthly payments of $11,968, including interest at 4.3% and matured in April 2022. As of December 31, 2021, the balance owed was $47,615. On July 4, 2020, the Company entered into a premium finance agreement to finance its insurance policies totaling $109,000. The note requires monthly payments of $11,299, including interest at 4.968% and matured in April 2021. As of December 31, 2021, the balance was paid. During 2019, the Company issued promissory notes to Dr. Cartwright and Dr. Faupel, in the amounts of approximately $41,000 and $5,000, respectively. The notes were initially issued with 0% interest, however interest increased to 6.0% interest 90 days after the Company received $1,000,000 in financing proceeds. On December 21, 2016 and January 19, 2017, the Company issued promissory notes to Mr. Fowler, in the amounts of approximately $12,500 and $13,900. The notes were initially issued with 0% interest and then went into default with an interest rate of 18%. During the year ended December 31, 2021, the Company entered into an exchange agreement with Mr. Fowler, which combined the notes into one short term note payable of $26,400 and $18,718 in principal and interest of the two previous notes, respectively, for the total balance of $45,118. The agreement brought the note current and will accrue interest at a rate of 6.0%. The note carries a monthly payment of $3,850. As of December 31, 2021, the outstanding principal balance on the note was $5,759. At December 31, 2020 this note was recorded in the Notes payable in default section of the consolidated Balance Sheet. The following table summarizes short-term notes payable, including related parties: Short-term notes payable, including related parties December 31, 2021 December 31, 2020 Dr. Cartwright $ 34 $ 46 Dr. Faupel - 5 Mr. Fowler 6 - Premium Finance (insurance) 48 45 Short-term notes payable $ 88 $ 96 The short-term notes payable due to related parties was $40,000 of the $88,000 balance at December 31, 2021 and $51,000 of the $96,000 balance at December 31, 2020. |
CONVERTIBLE DEBT
CONVERTIBLE DEBT | 12 Months Ended |
Dec. 31, 2021 | |
CONVERTIBLE DEBT | |
9. CONVERTIBLE DEBT | 9. CONVERTIBLE DEBT Short-term Convertible Notes Payable Auctus On December 17, 2019, the Company entered into a securities purchase agreement and convertible note with Auctus. The convertible note issued to Auctus will be for a total of $2.4 million. The first tranche of $700,000 was received in December 2019 and matures December 17, 2021 and accrues interest at a rate of ten percent (10%). The note may not be prepaid in whole or in part except as otherwise explicitly allowed. Any amount of principal or interest on the note which is not paid when due shall bear interest at the rate of the lessor of 24% or the maximum permitted by law (the “default interest”). The variable conversion prices shall equal the lesser of: (i) the lowest trading price on the issue date, and (ii) the variable conversion price. The variable conversion price shall mean 95% multiplied by the market price (the market price means the average of the five lowest trading prices during the period beginning on the issue date and ending on the maturity date), minus $0.04 per share, provided however that in no event shall the variable conversion price be less than $0.15. If an event of default under this note occurs and/or the note is not extinguished in its entirety prior to December 17, 2020 the $0.15 price shall no longer apply. In connection with the first tranche of $700,000, the Company issued 7,500,000 warrants to purchase common stock at an exercise price of $0.20. The fair value of the warrants at the date of issuance was $745,972 and was $635,000 allocated to the warrant liability and a loss of $110,972 was recorded at the date of issuance for the amount of the fair value in excess of the net proceeds received of $635,000. The $700,000 proceeds were received net of debt issuance costs of $65,000 (net proceeds of $635,000, after administrative and legal expenses Company received $570,000). The Company used $65,000 of the proceeds to make a partial payment of the $89,250 convertible promissory note issued on July 3, 2018 to Auctus. The Company made a $700,000 payment on June 1, 2021, which resulted in a prepayment penalty of $350,000 being assessed to the Company, which was outstanding as of December 31, 2021. The Company recorded this prepayment penalty as interest expense. Interest will not be assessed on the prepayment penalty. As of December 31, 2021 and 2020, nil and $700,000, respectively, remained outstanding. As of December 31, 2021, accrued interest was paid in full and at December 31, 2020, $73,889 remained outstanding. Further, as December 31, 2021 and 2020, the Company had unamortized debt issuance costs of nil and $31,146, respectively and an unamortized debt discount on warrants of nil and $179,623, respectively and providing a net balance of $350,000 and $489,231, respectively. On May 27, 2020, the Company received the second tranche in the amount of $400,000, from the December 17, 2019 securities purchase agreement and convertible note with Auctus. The net amount paid to the Company was $313,000 This second tranche is part of the convertible note issued to Auctus for a total of $2.4 million of which $700,000 has already been provided by Auctus. The note matures on May 27, 2022 and incurs interest at a rate of ten percent (10%). The note may not be prepaid in whole or in part except as otherwise explicitly allowed. Any amount of principal or interest on the note which is not paid when due shall bear interest at the rate of the lessor of 24% or the maximum permitted by law (the “default interest”). The variable conversion price is equal to 75% of the average of the five (5) day volume weighted average price of the common stock immediately prior to the issue date of the note (provid\ded, however, that if the common stock is trading on a public market at a price greater than 0.50 per share on the issuance date, than 75% shall be replaced with 80%). If an event of default under this note occurs and/or the note is not extinguished in its entirety prior to December 17, 2020 the $0.15 price shall no longer apply. The last tranche of $1.3 million will be received within 60 days of the S-1 registration statement becoming effective. The conversion price of the notes will be at market value with a minimum conversion amount of $0.15. In addition, as part of this transaction the Company was required to pay a 2.0% fee to a registered broker-dealer. As of December 31, 2021 and 2020, $400,000 remained outstanding and accrued interest was $64,778 and $24,222, respectively. Further, as of December 31, 2021 and 2020, the Company had unamortized debt issuance costs of $13,586 and $47,086, providing a net balance of $451,192 and $377,136. As of December 31, 2021 the bifurcated derivative liability was $31,889. Convertible Notes in Default On March 31, 2020, we entered into a securities purchase agreement with Auctus Fund, LLC for the issuance and sale to Auctus of $112,750 in aggregate principal amount of a 12% convertible promissory note. During the year ended December 31, 2020, we issued the note to Auctus and issued 250,000 five-year common stock warrants at an exercise price of $0.16. On April 3, 2020, we received net proceeds of $100,000. The note matured on January 26, 2021 and accrues interest at the default rate of 24% per year. We may not prepay the note, in whole or in part. After the 90 th The following table summarizes the Short-term Convertible Notes Payable, including debt in default (in thousands): Short-term convertible notes payable , including debt in default December 31, 2021 December 31, 2020 Auctus Tranche 1 - 700 Auctus Tranche 2 $ 400 $ 400 Auctus prepayment penalty 350 - Auctus (March 31, 2020 Note) 161 113 Debt discount and issuance costs to be amortized (14 ) (262 ) Convertible notes payable - short-term $ 897 $ 951 Troubled Debt Restructuring During 2021, the prepayment penalty to Auctus was recorded as debt extinguished for Short-term Convertible Notes Payable. This prepayment penalty resulted in a loss of $350,000. In addition, the gain recognized for the extinguishment of the derivative liability due to the payoff of the $700,000 loan to Auctus of $84,000 was recorded. This debt extinguished met the criteria for troubled debt. The basic criteria are that the borrower is troubled, i.e., they are having financial difficulties, and a concession is granted by the creditor. Senior Secured Promissory Note On February 12, 2016, the Company entered into a securities purchase agreement with GPB Debt Holdings II LLC (“GPB”) for the issuance of a $1,437,500 senior secured convertible note for an aggregate purchase price of $1,029,000 (representing an original issue discount of $287,500 and debt issuance costs of $121,000). On May 28, 2016, the balance of the note was increased by $87,500 for a total principal balance of $1,525,000. On December 7, 2016, the Company entered into an exchange agreement with GPB and as a result the principal balance increased by $312,500 for a total principal balance of $1,837,500. In addition, GPB received warrants for 2,246 shares of the Company’s common stock. The Company allocated proceeds totaling $359,555 to the fair value of the warrants at issuance and recorded an additional discount on the debt. The warrants expired during the year ended December 31, 2021. On January 16, 2020, we entered into an exchange agreement with GPB. Under the terms of this exchange agreement, we exchanged $3,360,811 of debt outstanding for the following: (1) cash payments of $1,500,000, (2) 7,185,000 warrants to purchase common stock, previously outstanding, would be exchanged for new warrants to purchase common stock shares at a strike price of $0.20 and (3) a certain amount of preferred stock shares for the remaining balance outstanding upon the final exchange date. During 2021, we made the final payments totaling $800,000 out of the total $1,500,000 and issued 2,236 shares of Series F-2 preferred stock in accordance with the terms of the agreement. In addition, 7,185,000 of common stock purchase warrants outstanding were exchanged for new warrants with a strike price of $0.20. As of December 31, 2020, the balance due on the convertible debt was $1,709,414 Interest accrued on the note total $1,233,637 at December 31, 2020 and is included in accrued expenses on the accompanying consolidated balance sheet. Other Convertible Debt GHS On May 19, 2017, the Company entered into a securities purchase agreement with GHS for the purchase of a $66,000 convertible promissory note for the purchase of $60,000 in net proceeds (representing a 10% original issue discount of $6,000). The accrued interest rate of 8% per year until it matured in December 31, 2017. Beginning February 2018, the note is convertible, in whole or in part, at the holder’s option, into shares of the Company’s stock at a conversion price equal to 60% of the lowest trading price during the 25 trading days prior to conversion. Upon the occurrence of an event of default, the note bore interest at a rate of 20% per year and the holder of the note may have required the Company to redeem or convert the note at 150% of the outstanding principal balance. As of December 31, 2020, the balance due on this note was $63,520 including a default penalty of $37,926. Interest accrued on the note totaled $17,816, at December 31, 2020 and is included in accrued expenses on the accompanying consolidated balance sheet. As of December 31, 2021, the note was paid in full. Effective May 17, 2018, the Company entered into a securities purchase agreement with GHS for the purchase of a convertible promissory note with a principal of $9,250 for a purchase price of $7,500 (representing an original issue discount of $750 and debt issuance costs of $1,000). The note accrued interest at a rate of 8% per year until its matured June 17, 2019. Beginning February 2018, the note is convertible, in whole or in part, at the holder's option, into shares of the Company's stock at a conversion price equal to 70% of the lowest trading price during the 25 trading days prior to conversion (if the note cannot be converted due to Depository Trust Company freeze then rate decreases to 60%). Upon the occurrence of an event of default, the note bore interest at a rate of 20% per year and the holder of the note may have required the Company to redeem or convert the note at 150% of the outstanding principal balance. As of December 31, 2020, the balance due on this note was $14,187, including a default penalty of $4,937. Interest accrued on the note totaled $5,006 at December 31, 2020 and is included in accrued expenses on the accompanying consolidated balance sheet. As of December 31, 2021, the note was paid in full. Effective June 22, 2018, the Company entered into a securities purchase agreement with GHS for the purchase of a $68,000 convertible promissory note for a purchase price of $60,000 (representing an original issue discount of $6,000 and debt issuance costs of $2,000). The note accrued interest at a rate of 10% per year until it matured on June 22, 2019. Beginning May 2019, the note was convertible, in whole or in part, at the holder's option, into shares of the Company's stock at a conversion price equal to 70% of the lowest trading price during the 25 trading days prior to conversion (if the note cannot be converted due to Depository Trust Company freeze then rate decreases to 60%). Upon the occurrence of an event of default, the note bore interest at a rate of 20% per year and the holder of the note may have required the Company to redeem or convert the note at 150% of the outstanding principal balance. As of December 31, 2020, the balance due on this note was $103,285, including a default penalty of $35,285. Interest accrued on the note totaled $39,644 at December 31, 2020, respectively, and is included in accrued expenses on the accompanying consolidated balance sheet. As of December 31, 2021, the note was paid in full. Auctus On May 22, 2020, the Company entered into an exchange agreement with Auctus. Based on this agreement the Company exchanged three outstanding notes, in the amounts of $150,000, $89,250, and $65,000 for a total amount $328,422 of debt outstanding, as well as any accrued interest and default penalty, for: $160,000 in cash payments (payable in monthly payments of $20,000), 500,000 shares of restricted common stock and 700,000 warrants to purchase common shares at a strike price of $0.15. The fair value of the common stock shares was $250,000 and the fair value of the warrants to purchase common shares was $196,818 (based on an estimated fair value of $0.281 as determined utilizing the Black-Scholes option pricing model). At December 31, 2020, a balance of $40,000 remained to be paid for these exchanged loans. As of December 31, 2021, the loans were paid in full. The following table summarizes the convertible notes, including convertible debt in default (in thousands): Convertible notes payable, including debt in default December 31, 2021 December 31, 2020 GBP $ - $ 1,709 GHS - 181 Auctus - 40 Convertible notes payable $ - $ 1,930 Troubled Debt Restructuring During 2021, the Company restructured debt with GPB resulting in the exchange of $1,709,414 of convertible debt. This debt restructure met the criteria for troubled debt. The basic criteria are that the borrower is troubled, i.e., they are having financial difficulties, and a concession is granted by the creditor. |
LONG TERM DEBT
LONG TERM DEBT | 12 Months Ended |
Dec. 31, 2021 | |
LONG TERM DEBT | |
10. LONG-TERM DEBT | 10. LONG-TERM DEBT Long-term Debt – Related Parties On July 14, 2018, the Company entered into an exchange agreement with Dr. Faupel, whereby Dr. Faupel agreed to exchange outstanding amounts due to him for loans, interest, bonus, salary and vacation pay in the amount of $660,895 for a $207,111 promissory note dated September 4, 2018. On July 20, 2018, the Company entered into an exchange agreement with Dr. Cartwright, whereby Dr. Cartwright agreed to exchange outstanding amounts due to him for loans, interest, bonus, salary and vacation pay in the amount of $1,621,499 for a $319,000 promissory note dated September 4, 2018 that incurs interest at a rate of 6% per annum. On July 24, 2019, Dr. Faupel and Mr. Cartwright agreed to an addendum to the debt restructuring exchange agreement and to modify the terms of the original exchange agreement. Under this modification Dr. Faupel and Mr. Cartwright agreed to extend the note to be due in full on the third anniversary of that agreement. On February 19, 2021, the Company entered into new promissory notes replacing the original notes from September 4, 2018, with Mark Faupel and Gene Cartwright. For Dr. Cartwright the principal amount on the new note was $267,085, matures on February 18, 2023, and will accrue interest at a rate of 6.0%. For Dr. Faupel the principal amount on the new note was $153,178, matures on February 18, 2023, and will accrue interest at a rate of 6.0%. The modifications extended the maturity date on both of the notes. On February 19, 2021, the Company exchanged $100,000 and $85,000 of long-term debt for Dr. Cartwright and Dr. Faupel in exchange for 100 and 85 shares of Series F-2 Preferred Stock, respectively. The table below summarizes the detail of the exchange agreement: For Dr. Faupel: Salary $ 134 Bonus 20 Vacation 95 Interest on compensation 67 Loans to Company 196 Interest on loans 149 Total outstanding prior to exchange 661 Amount forgiven (454 ) Total Interest accrued through December 31, 2020 29 Balance outstanding at December 31, 2020 $ 236 Exchange for Series F-2 Preferred Stock (85 ) Interest and salaries accrued through December 31, 2021 10 Balance outstanding at December 31, 2021 $ 161 For Dr.Cartwright Salary $ 337 Bonus 675 Loans to Company 528 Interest on loans 81 Total outstanding prior to exchange 1,621 Amount forgiven (1,302 ) Total Interest accrued through December 31, 2020 45 Balance outstanding at December 31, 2020 $ 364 Exchange for Series F-2 Preferred Stock (100 ) Interest and salaries accrued through December 31, 2021 17 Balance outstanding at December 31, 2021 $ 281 On March 22, 2021, the Company entered into an exchange agreement with Richard Fowler. As of December 31, 2020, the Company owed Mr. Fowler $546,214 ($412,624 in deferred salary and $133,590 in accrued interest). Mr. Fowler exchanged $50,000 of the amount owed of $546,214 for 50 shares of Series F-2 Preferred Shares (convertible into 200,000 shares of common stock) and a $150,000 unsecured note. The note accrues interest at the rate of 6.0% (18.0% in the event of default) beginning on March 1, 2022 and is payable in monthly installments of $3,600 for four years, with the first payment being due on March 15, 2022. The effective interest rate of the note is 6.18%. Mr. Fowler forgave $86,554 and may forgive up to $259,661 of debt if the Company complies with the repayment plan described above. At the time of the exchange agreement with Mr. Fowler, the Company was in default to the creditor on two notes in the amounts of $12,500 and $13,900 dated December 21, 2016 and January 19, 2017, respectively. The March 22, 2021 exchange agreement modified the notes to current status, payable in full within one year from the date of the agreement, in monthly payments of at least $3,850. The notes accrue at an interest rate of 6% (18% in the event of default). Future debt obligations as shown below include: $281,000, $161,000 and $150,000 for a total of $592,000 for Dr. Cartwright, Dr. Faupel, and Mr. Fowler, respectively. Future debt obligations at December 31, 2021 for debt owed to related parties is as follows: Year Amount 2022 $ 30 2023 479 2024 39 2025 41 2026 3 Thereafter - Total $ 592 Troubled Debt Restructuring The debt extinguished for Dr. Cartwright, Mr. Fowler and Dr. Faupel meet the criteria for troubled debt. The basic criteria are that the borrower is troubled, i.e., they are having financial difficulties, and a concession is granted by the creditor. Due to the Company being in default on several of its loans the debt is considered troubled debt. During the year ended December 31, 2021, the Company recorded a gain of $86,554 for Mr. Fowler’s debt exchange. Small Business Administration Loan On May 4, 2020, the Company received a loan from the Small Business Administration (SBA) pursuant to the Paycheck Protection Program (PPP) as part of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) in the amount of $50,184. The loan bears interest at a rate of 1.00%, and matures in 24 months, with the principal and interest payments being deferred until the date of forgiveness with interest accruing, then converting to monthly principal and interest payments, at the interest rate provided herein, for the remaining eighteen (18) months. Lender will apply each payment first to pay interest accrued to the day Lender received the payment, then to bring principal current, and will apply any remaining balance to reduce principal. Payments must be made on the same day as the date of this Note in the months they are due. Lender shall adjust payments at least annually as needed to amortize principal over the remaining term of the Note. Under the provisions of the PPP, the loan amounts will be forgiven as long as: the loan proceeds are used to cover payroll costs, and most mortgage interest, rent, and utility costs over a 24 week period after the loan is made; and employee and compensation levels are maintained. In addition, payroll costs are capped at $100,000 on an annualized basis for each employee. Not more than 40% of the forgiven amount may be for non-payroll costs. As of December 31, 2021 and 2020, the outstanding balance was $11,000 (this amount is recorded in current portion of long-term debt) and $50,477, including $385 and $293 in accrued interest, respectively. During the year ended December 31, 2021, the Company was notified that the application for loan forgiveness was approved in the amount of $23,742 in principal and $234 in interest. 10% Senior Unsecured Convertible Debenture On May 17, 2021, the Company issued 10% Senior Unsecured convertible debentures to investors, which mature on May 17, 2024 (the “Maturity Date”). The Company subscribed $1,130,000 of the $1,000 convertible debentures. The terms of the debentures are as follows: 1) the principal amount of some or all of the convertible debentures and accrued interest are convertible into common stock shares at the holder’s option, at a price of $0.50 per common share (the “conversion price”), subject to adjustment in certain events, at any time prior to maturity date; 2) prior to successful uplist to a U.S. National Exchange, the Company may, at its election, convert the note at the conversion price, or in the event the Company undertakes a capital raise in connection with the uplisting, the holder may, at their election, exchange some or all of the debentures for securities issued in such capital raise on a $1.00 for $1.00 basis; 3) each debenture unit will have a right to 1,000 warrants for common stock shares, warrants have an exercise price of $0.80 and an expiration date of May 17, 2023; 4) if a Change of Control (as defined in the Convertible Debenture Certificate) occurs prior to the Maturity Date, unless the holder elects in writing to convert the Convertible Debentures into common shares, the Company will repay in cash upon the closing of such Change of Control all outstanding principal and accrued interest under each Convertible Debenture plus a Change of Control premium equal to an additional 3% of the outstanding principal sum under such Convertible Debenture. Prior to the closing of an Change of Control, in lieu of repayment as set forth in the preceding sentence, the holder has the right to elect in writing to convert, effective immediately prior to the effective date of such Change of Control, all outstanding principal and accrued Interest under the Convertible Debentures into common shares at the Conversion Price; 5) Subject to a holder's option of electing conversion prior to the Redemption Date (as such term is defined below), on or after the date that is 24 months from the Closing Date if the daily volume weighted average trading price of the common shares is $1.50 per common share or more for each trading day over a 30 consecutive trading day period, the Company may, at any time (the "Redemption Date"), at its option, redeem all, or any portion of the Convertible Debentures for either: (i) a cash payment (in the form of a certified cheque or bank draft) that is equal to all outstanding principal and accrued interest under each Convertible Debenture up to the Redemption Date; or (ii) by issuing and delivering common shares to the holders of Convertible Debentures at a deemed price of $0.50 per common share that is equal to all outstanding principal and accrued interest under each Convertible Debenture up to the Redemption Date, or any combination of (i) or (ii), upon not less than 30 days and not more than 60 days prior written notice in the manner provided in the Debenture Certificate, to the holder of Convertible Debentures. At December 31, 2021, the balance due on the 10% Senior Secured Convertible Debenture was $1,130,000 and total interest accrued was $73,326. At December 31, 2021, the Company had also recorded a bond payable discount of $240,856 and unamortized debt issuance costs of $69,120, for a net balance of $819,024. Interest is payable at the rate of 10% compounded quarterly, payable semi-annually on July 1 and January 1, beginning on January 1, 2022, each conversion date and on the maturity date. 6% Unsecured Promissory Note On July 9, 2020, we entered into an exchange agreement with Mr. Bill Wells (a former employee). In lieu of agreeing to dismiss approximately half of what was owed to him, or $220,000, Mr. Wells received the following: (i) cash payments of $20,000; (ii) an unsecured promissory note in the amount of $90,000 to be executed within 30 days of completing new financing(s) totaling at least $3.0 million, (iii) 66,000 common share stock options that vest at a rate of 3,667 per month and have a $0.49 exercise price (if two consecutive payments in (ii) are not made the stock options will be canceled and a cash payment will be required; and (iv) the total amount of forgiveness by creditor of approximately $110,000 shall be prorated according to amount paid. During the year ended December 31, 2021, the Company closed a financing round that exceeded the $3.0 million threshold and issued an unsecured promissory note in the amount of $97,052 to Mr. Wells. The note, for which monthly installment payments of $5,000 are due, matures 18 months after the issuance date and incurs interest at a rate of 6.0% per annum. As of December 31, 2021, the total amount owed to Mr. Wells (principal and accrued interest), was $99,158, of which $77,087 was classified as short-term and is included in “Current portion of long-term debt” on the consolidated balance sheet. The remaining balance is classified as long-term and is included in “Long-term debt” on the consolidated balance sheet. |
INCOME (LOSS) PER COMMON SHARE
INCOME (LOSS) PER COMMON SHARE | 12 Months Ended |
Dec. 31, 2021 | |
INCOME (LOSS) PER COMMON SHARE | |
11. INCOME (LOSS) PER COMMON SHARE | 11. INCOME (LOSS) PER COMMON SHARE Basic net income (loss) per share attributable to common stockholders, amounts are computed by dividing the net income (loss) plus preferred stock dividends and deemed dividends on preferred stock by the weighted average number of shares outstanding during the year. Diluted net income (loss) per share attributable to common stockholders amounts are computed by dividing the net income (loss) plus preferred stock dividends, deemed dividends on preferred stock, after-tax interest on convertible debt and convertible dividends by the weighted average number of shares outstanding during the year, plus Series C, Series C-1, Series C-2, Series D, Series E, Series F and Series F-2 convertible preferred stock, Series G preferred stock, convertible debt, convertible preferred dividends and warrants convertible into common stock shares. The following table sets forth pertinent data relating to the computation of basic and diluted net loss per share attributable to common shareholders (in thousands, except for per-share data): December 31, 2021 2020 Net loss (2,431 ) (401 ) Basic weighted average number of shares outstanding 13,377 10,767 Net loss per share (basic) (0.18 ) (0.04 ) Diluted weighted average number of shares outstanding 13,377 10,767 Net loss per share (diluted) (0.18 ) (0.04 ) Dilutive equity instruments (number of equivalent units): Stock options 1,867 - Preferred stock 18,253 - Convertible debt 964 62,095 Warrants 15,655 7,683 Total Dilutive instruments 36,739 69,778 For period of net loss, basic and diluted earnings per share are the same as the assumed exercise of warrants and the conversion of convertible debt and preferred stock are anti-dilutive. Troubled Debt Restructuring As provided in the preceding footnotes, several transactions met the basic criteria for troubled debt, which are that the borrower is troubled, i.e., they are having financial difficulties, and a concession is granted by the creditor. Due to the Company being past due or in default on several of its loans, the debt is considered troubled debt. As of December 31, 2021, the troubled debt restructuring in total would have decreased the net loss by $85,000, causing the per share calculation to change from .18 to .19 net loss per share. This includes $94,392 of accounts payables forgiven during the year ended December 31, 2021 in accordance with an agreement executed on September 30, 2021. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2021 | |
INCOME TAXES | |
12. INCOME TAXES | 12. INCOME TAXES The Company has incurred net operating losses ("NOLs") since inception. As of December 31, 2021, the company had NOL carryforwards available through 2038 of approximately $58.0 million to offset its future income tax liability. The company has recorded deferred tax assets but reserved against, due to uncertainties related to utilization of NOLs as well as calculation of effective tax rate. Utilization of existing NOL carryforwards may be limited in future years based on significant ownership changes. The company is in the process of analyzing their NOL and has not determined if the company has had any change of control issues that could limit the future use of NOL. NOL carryforwards that were generated after 2017 of approximately $9.9 million may only be used to offset 80% of taxable income and are carried forward indefinitely. Components of deferred taxes are as follow at December 31 (in thousands): The following is a summary of the items that caused recorded income taxes to differ from taxes computed using the statutory federal income tax rate for the years ended December 31: 2021 2020 Statutory federal tax rate 21 % 21 % State taxes, net of federal benefit 4 % 4 % Nondeductible expenses - - Valuation allowance 25 % 25 % Effective tax rate 0 % 0 % The Company applies the applicable authoritative guidance which prescribes a comprehensive model for the manner in which a company should recognize, measure, present and disclose in its financial statements all material uncertain tax positions that the Company has taken or expects to take on a tax return. As of December 31, 2021, the Company has no uncertain tax positions. There are no uncertain tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly increase or decrease within twelve months from December 31, 2021. The Company files federal income tax returns and income tax returns in various state tax jurisdictions with varying statutes of limitations. The Company has filed its 2020 federal and state corporate tax returns. The last three tax years are subject to examination. The provision for income taxes as of the dates indicated consisted of the following (in thousands) December 31: 2021 2020 Current $ - $ - Deferred - - Deferred provision (credit) (1,728 ) 1,623 Change in valuation allowance 1,728 (1,623 ) Total provision for income taxes $ - $ - In 2021 and 2020, our effective tax rate differed from the U.S. federal statutory rate due to the valuation allowance over our deferred tax assets. 2021 2020 Deferred tax assets: Warrant liability $ - $ 617 Accrued executive compensation 288 519 Reserves and other 273 289 Stock options 134 132 Net operating loss carryforwards 16,985 17,851 17,680 19,408 Valuation allowance (17,680 ) (19,408 ) Net deferred tax assets $ - $ - |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2021 | |
SUBSEQUENT EVENTS | |
13. SUBSEQUENT EVENTS | 13. SUBSEQUENT EVENTS Auctus Exchange Agreement On June 2, 2021, we entered into an initial exchange agreement Auctus. On February 1, 2022, we entered into a second exchange agreement with Auctus. Pursuant to this second agreement, Auctus agreed to exchange an aggregate of $668,290 of outstanding notes (the "Notes"), including accrued interest, and the associated warrants issued in connection with the Notes (the warrants, for the purpose of the exchange, are valued at, in the aggregate, $1,681,707) into unregistered units of our common stock, warrants and prefunded warrants otherwise in the form and ratios issued in a proposed underwritten public offering on the Nasdaq Capital Markets (the “Nasdaq Offering”). The exchange price will be on a $1 for $1 basis such that Auctus will receive $2,349,997 of units consisting of common stock, warrants and prefunded warrants. The units being issued in the exchange with Auctus are unregistered and are being issued pursuant to Section 4(a)(2) under the Securities Act of 1933, as amended. Additionally, the units and the common stock underlying the units will be subject to a lock up agreement with the underwriters until the earlier of 120 days after the Nasdaq Offering and the date that the daily volume weighted average price of the common stock exceeds 200% of the Nasdaq Offering price for at least five consecutive trading days. Further, the termination date of the June 2, 2021 was extended to April 15, 2022. The $350,000 related to default penalties will be exchanged into $350,000 of securities offered in the Nasdaq Offering. Common Stock Issuances Subsequent to December 31, 2021, we issued 4,477,923 shares of common stock for warrant exercises (see Note 4, “ Warrant Exchanges – 2021” Subsequent to December 31, 2021, we issued 307,000 shares of common stock for the conversion of Series E Preferred shares. Subsequent to December 31, 2021, we issued 625,686 shares of common stock for payment of a one-time 15% dividend to holders of our Series F and Series F-2 Preferred shares. Subsequent to December 31, 2021, we issued 121,262 shares of common stock for payment of interest accrued on the 10% Senior Unsecured Convertible Debenture. Subsequent to December 31, 2021, we issued 60,000 shares of common stock for the conversion of Series F Preferred shares. Subsequent to December 31, 2021, we issued 23,109 shares of common stock for payment of Series D Preferred share dividends. Subsequent to December 31, 2021, we issued 12,432 shares of common stock for payment of Series E Preferred share dividends. |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
SIGNIFICANT ACCOUNTING POLICIES | |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant areas where estimates are used include the allowance for doubtful accounts, inventory valuation and input variables for Black-Scholes, Monte Carlo simulations and binomial calculations. The Company uses the Monte Carlo simulations and binomial calculations in the calculation of the fair value of the warrant liabilities and the valuation of freestanding warrants. |
Accounting Standards Update | Accounting Standard Updates FASB ASU 2021-04, “ Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options” – FASB ASU NO. 2020-06, “Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” FASB ASU NO. 2019-12, “ Simplifying the Accounting for Income Taxes A variety of proposed or otherwise potential accounting standards are currently under consideration by standard-setting organizations and certain regulatory agencies. Because of the tentative and preliminary nature of such proposed standards, management has not yet determined the effect, if any that the implementation of such proposed standards would have on the Company’s consolidated financial statements. |
Cash Equivalents | Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be a cash equivalent. |
Accounts Receivable | Accounts Receivable The Company performs periodic credit evaluations of its distributors’ financial conditions and generally does not require collateral. The Company reviews all outstanding accounts receivable for collectability on a quarterly basis. An allowance for doubtful accounts is recorded for any amounts deemed uncollectable. Uncollectibility is determined based on the determination that a distributor will not be able to make payment and the time frame has exceeded one year. The Company does not accrue interest receivables on past due accounts receivable. |
Concentrations of Credit Risk | Concentrations of Credit Risk The Company, from time to time during the years covered by these consolidated financial statements, may have bank balances in excess of its insured limits. Management has deemed this a normal business risk. |
Inventory Valuation | Inventory Valuation All inventories are stated at lower of cost or net realizable value, with cost determined substantially on a “first-in, first-out” basis. Selling, general, and administrative expenses are not inventoried, but are charged to expense when incurred. As of December 31, 2021 and 2020, our inventories were as follows: (in thousands) December 31, December 31, 2021 2020 Raw materials $ 1,255 $ 1,276 Work-in-progress 69 80 Finished goods 32 7 Inventory reserve (785 ) (758 ) Total inventory $ 571 $ 605 The company periodically reviews the value of items in inventory and provides write-downs or write-offs of inventory based on its assessment of market conditions. Write-downs and write-offs are charged to cost of goods sold. |
Property and Equipment | Property and Equipment Property and equipment are recorded at cost. Depreciation is computed using the straight-line method over estimated useful lives of three to seven years. Leasehold improvements are amortized at the shorter of the useful life of the asset or the remaining lease term. Depreciation and amortization expense are included in general and administrative expense on the statement of operations. Expenditures for repairs and maintenance are expensed as incurred. Property and equipment are summarized as follows at December 31, 2021 and 2020: (in thousands) December 31, December 31, 2021 2020 Equipment $ 1,048 $ 1,042 Software 652 652 Furniture and fixtures 41 41 Leasehold improvements 12 12 Construction in progress 8 - Subtotal 1,761 1,747 Less accumulated depreciation (1,747 ) (1,746 ) Property, equipment and leasehold improvements, net $ 14 $ 1 Depreciation expense related to property and equipment for the years ended December 31, 2021 and 2020 was not material. |
Debt Issuance Costs | Debt Issuance Costs Debt issuance costs are capitalized and amortized over the term of the associated debt. Debt issuance costs are presented in the balance sheet as a direct deduction from the carrying amount of the debt liability consistent with the debt discount. |
Patent Costs (Principally Legal Fees) | Patent Costs Costs incurred in filing, prosecuting, and maintaining patents are recurring, and expensed as incurred. Maintaining patents are expensed as incurred as the Company has not yet received U.S. FDA approval and recovery of these costs is uncertain. Such costs aggregated to approximately $14,800 and $17,000 for the years ended December 31, 2021 and 2020, respectively. |
Leases | Leases A lease provides the lessee the right to control the use of an identified asset for a period of time in exchange for consideration. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and operating lease liabilities represent the Company’s obligation to make lease payments arising from the lease. The Company determines if an arrangement is a lease at inception. Right-of-use assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. Where an operating lease contains extension options that the Company is reasonably certain to exercise, the extension period is included in the calculation of the right-of-use assets and lease liabilities. The discount rate used to determine the commencement date present value of lease payments is the interest rate implicit in the lease, or when that is not readily determinable, the Company utilizes its secured borrowing rate. Right-of-use assets include any lease payments required to be made prior to commencement and exclude lease incentives. Both right-of-use assets and lease liabilities exclude variable payments not based on an index or rate, which are treated as period costs. The Company’s lease agreements do not contain significant residual value guarantees, restrictions or covenants. See Note 7 – Commitments and Contingencies. |
Accrued Liabilities | Accrued Liabilities Accrued liabilities as of December 31, 2021 and 2020 are summarized as follows: (in thousands) December 31, December 31, 2021 2020 Compensation $ 621 $ 1,094 Professional fees 98 83 Interest 261 1,517 Vacation 39 34 Preferred dividends 349 202 Stock subscription payable 351 - Other accrued expenses 49 65 Total $ 1,768 $ 2,995 |
Subscription Receivables | Stock Subscription Payable Cash received from investors for common stock shares that have not yet been issued is recorded as a liability, which is presented within Accrued Liabilities on the consolidated balance sheet. |
Revenue Recognition | Revenue Recognition ASC 606, Revenue from Contracts with Customers, establishes a single and comprehensive framework which sets out how much revenue is to be recognized, and when. The core principle is that a vendor should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the vendor expects to be entitled in exchange for those goods or services. Revenue will now be recognized by a vendor when control over the goods or services is transferred to the customer. In contrast, revenue-based revenue recognition around an analysis of the transfer of risks and rewards; this now forms one of a number of criteria that are assessed in determining whether control has been transferred. The application of the core principle in ASC 606 is carried out in five steps: · Step 1 – Identify the contract with a customer: a contract is defined as an agreement (including oral and implied), between two or more parties, that creates enforceable rights and obligations and sets out the criteria for each of those rights and obligations. The contract needs to have commercial substance and it is probable that the entity will collect the consideration to which it will be entitled. · Step 2 – Identify the performance obligations in the contract: a performance obligation in a contract is a promise (including implicit) to transfer a good or service to the customer. Each performance obligation should be capable of being distinct and is separately identifiable in the contract. · Step 3 – Determine the transaction price: transaction price is the amount of consideration that the entity can be entitled to, in exchange for transferring the promised goods and services to a customer, excluding amounts collected on behalf of third parties. · Step 4 – Allocate the transaction price to the performance obligations in the contract: for a contract that has more than one performance obligation, the entity will allocate the transaction price to each performance obligation separately, in exchange for satisfying each performance obligation. The acceptable methods of allocating the transaction price include adjusted market assessment approach, expected cost plus a margin approach, and the residual approach in limited circumstances. Discounts given should be allocated proportionately to all performance obligations unless certain criteria are met and reallocation of changes in standalone selling prices after inception is not permitted. · Step 5 – Recognize revenue as and when the entity satisfies a performance obligation: the entity should recognize revenue at a point in time, except if it meets any of the three criteria, which will require recognition of revenue over time: the entity’s performance creates or enhances an asset controlled by the customer, the customer simultaneously receives and consumes the benefit of the entity’s performance as the entity performs, and the entity does not create an asset that has an alternative use to the entity and the entity has the right to be paid for performance to date. The Company did not recognize material revenues during the years ended December 31, 2021 or 2020. The Company’s revenues do not require significant estimates or judgments. The Company is not party to contracts that include multiple performance obligations or material variable consideration. Contract Balances The Company defers payments received as revenue until earned based on the related contracts and applying ASC 606 as required. As of December 31 2021 and 2020, the Company had $337,000 and $42,000 of deferred revenue, respectively. |
Significant Distributors | Significant Distributors As of December 31, 2021, accounts receivable outstanding was $172,000; the outstanding amount was netted against a $126,000 allowance, leaving a balance of $46,000 which was from two distributors. As of December 31, 2020, accounts receivable outstanding was $150,000, the outstanding amount was netted against a $126,000 allowance, leaving a balance of $24,000 which was from one distributor. |
Research and Development | Research and Development Research and development expenses consist of expenditures for research conducted by the Company and payments made under contracts with consultants or other outside parties and costs associated with internal and contracted clinical trials. All research and development costs are expensed as incurred. |
Income Taxes | Income Taxes The provision for income taxes is determined in accordance with ASC 740, “ Income Taxes The Company has filed its 2020 federal and state corporate tax returns. The Company has entered into an agreed upon payment plan with the IRS for delinquent payroll taxes. The Company has an established payment arrangement for its delinquent state income taxes with the State of Georgia. Although the Company has been experiencing recurring losses, it is obligated to file tax returns for compliance with IRS regulations and that of applicable state jurisdictions. At December 31, 2021, the Company had approximately $61.6 million of net operating losses carryforward available. This net operating loss will be eligible to be carried forward for tax purposes at federal and applicable states level. A full valuation allowance has been recorded related the deferred tax assets generated from the net operating losses. The Company recognizes uncertain tax positions based on a benefit recognition model. Provided that the tax position is deemed more likely than not of being sustained, the Company recognizes the largest amount of tax benefit that is greater than 50.0% likely of being ultimately realized upon settlement. The tax position is derecognized when it is no longer more likely than not of being sustained. The Company classifies income tax related interest and penalties as interest expense and selling, general and administrative expense, respectively, on the consolidated statements of operations. |
Warrants | Warrants The Company has issued warrants, which allow the warrant holder to purchase one share of stock at a specified price for a specified period of time. The Company records equity instruments including warrants based on the fair value at the date of issue. The fair value of warrants classified as equity instruments at the date of issuance is estimated using the Black-Scholes Model. The fair value of warrants classified as liabilities at the date of issuance is estimated using the Monte Carlo Simulation or Binomial model. |
Stock Based Compensation | Stock Based Compensation The Company accounts for its stock-based awards in accordance with ASC Subtopic 718, “ Compensation – Stock Compensation The Black-Scholes option pricing model requires the input of certain assumptions that require the Company’s judgment, including the expected term and the expected stock price volatility of the underlying stock. The assumptions used in calculating the fair value of stock-based compensation represent management’s best estimates, but these estimates involve inherent uncertainties and the application of judgment. As a result, if factors change resulting in the use of different assumptions, stock-based compensation expense could be materially different in the future. |
Beneficial Conversion Features of Convertible Securities | Beneficial Conversion Features of Convertible Securities The Company has adopted the provisions of ASU 2017-11 to account for the down round features of warrants issued with private placements effective as of January 1, 2020. In doing so, warrants with a down round feature previously treated as derivative liabilities in the consolidated balance sheet and measured at fair value are henceforth treated as equity, with no adjustment for changes in fair value at each reporting period. Previously, the Company accounted for conversion options embedded in convertible notes in accordance with ASC 815. ASC 815 generally requires companies to bifurcate conversion options embedded in convertible notes from their host instruments and to account for them as free-standing derivative financial instruments. ASC 815 provides for an exception to this rule when convertible notes, as host instruments, are deemed to be conventional, as defined by ASC 815-40. The Company accounts for convertible notes deemed conventional and conversion options embedded in non-conventional convertible notes which qualify as equity under ASC 815, in accordance with the provisions of ASC 470-20, which provides guidance on accounting for convertible securities with beneficial conversion features. Accordingly, the Company records, as a discount to convertible notes, the intrinsic value of such conversion options based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt. Conversion options that are not bifurcated as a derivative pursuant to ASC 815 and not accounted for as a separate equity component under the cash conversion guidance are evaluated to determine whether they are beneficial to the investor at inception (a beneficial conversion feature) or may become beneficial in the future due to potential adjustments. The beneficial conversion feature guidance in ASC 470-20 applies to convertible stock as well as convertible debt which are outside the scope of ASC 815. A beneficial conversion feature is defined as a nondetachable conversion feature that is in the money at the commitment date. The beneficial conversion feature guidance requires recognition of the conversion option’s in-the-money portion, the intrinsic value of the option, in equity, with an offsetting reduction to the carrying amount of the instrument. The resulting discount is amortized as a dividend over either the life of the instrument, if a stated maturity date exists, or to the earliest conversion date, if there is no stated maturity date. If the earliest conversion date is immediately upon issuance, the dividend must be recognized at inception. When there is a subsequent change to the conversion ratio based on a future occurrence, the new conversion price may trigger the recognition of an additional beneficial conversion feature on occurrence. During 2021, the Company adopted ASU No. 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity |
Derivatives | Derivatives The Company reviews the terms of convertible debt issued to determine whether there are embedded derivative instruments, including embedded conversion options, which are required to be bifurcated and accounted for separately as derivative financial instruments. In circumstances where the host instrument contains more than one embedded derivative instrument, including the conversion option, that is required to be bifurcated, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument. Bifurcated embedded derivatives are initially recorded at fair value and are then revalued at each reporting date with changes in the fair value reported as non-operating income or expense. When the equity or convertible debt instruments contain embedded derivative instruments that are to be bifurcated and accounted for as liabilities, the total proceeds received are first allocated to the fair value of all the bifurcated derivative instruments. The remaining proceeds, if any, are then allocated to the host instruments themselves, usually resulting in those instruments being recorded at a discount from their face value. The discount from the face value of the convertible debt, together with the stated interest on the instrument, is amortized over the life of the instrument through periodic charges to interest expense. |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
SIGNIFICANT ACCOUNTING POLICIES | |
Inventory valuation | (in thousands) December 31, December 31, 2021 2020 Raw materials $ 1,255 $ 1,276 Work-in-progress 69 80 Finished goods 32 7 Inventory reserve (785 ) (758 ) Total inventory $ 571 $ 605 |
Property and equipment | (in thousands) December 31, December 31, 2021 2020 Equipment $ 1,048 $ 1,042 Software 652 652 Furniture and fixtures 41 41 Leasehold improvements 12 12 Construction in progress 8 - Subtotal 1,761 1,747 Less accumulated depreciation (1,747 ) (1,746 ) Property, equipment and leasehold improvements, net $ 14 $ 1 |
Accrued liabilities | (in thousands) December 31, December 31, 2021 2020 Compensation $ 621 $ 1,094 Professional fees 98 83 Interest 261 1,517 Vacation 39 34 Preferred dividends 349 202 Stock subscription payable 351 - Other accrued expenses 49 65 Total $ 1,768 $ 2,995 |
FAIR VALUE OF FINANCIAL INSTR_2
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | |
Schedule of fair value for liabilities measured on a recurring basis | Fair Value at December 31, 2021 (in thousands) Level 1 Level 2 Level 3 Total Derivative liability/bifurcated conversion option in connection with Auctus $400,000 loan on December 17, 2019 $ - $ - $ (32 ) $ (32 ) Total long-term liabilities at fair value $ - $ - $ (32 ) $ (32 ) Fair Value at December 31, 2020 (in thousands) Level 1 Level 2 Level 3 Total Warrants issued in connection with Senior Secured Debt $ $ $ (2,203 ) $ (2,203 ) Derivative liability/bifurcated conversion option in connection with Auctus $400,000 loan on December 17, 2019 - - (25 ) (25 ) Total long-term liabilities at fair value $ - $ - $ (2,228 ) $ (2,228 ) |
Summary of changes to Level 3 instruments | (in thousands) Senior Secured Debt Derivative Total Balance, December 31, 2020 $ (2,203 ) $ (25 ) $ (2,228 ) Change in the terms of warrants previously recorded as a liability and now reclassified to equity 1,755 - 1,755 Change in value due to warrants expiring during the year 448 - 448 Extinguishment of derivative liability due to payoff of $700,000 loan to Auctus - 84 84 Change in fair value during the year - (91 ) (91 ) Balance, December 31, 2021 $ - $ (32 ) $ (32 ) |
STOCKHOLDERS' DEFICIT (Tables)
STOCKHOLDERS' DEFICIT (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
STOCKHOLDERS' DEFICIT: | |
Common stock issued | Number of Shares Conversion of debt into common shares - exchange agreements 7,957,013 Conversion of debt into common shares 175,000 Shares issued for manufacturing agreements 12,147 Shares issued for payment of Series D dividends 148,653 Shares issued to investors 1,526,000 Issued during the year ended December 31, 2020 9,818,813 Shares issued for payment of Series D dividends 109,039 Shares issued for payment of Series E dividends 288,262 Shares issued for payment of finder fee 98,000 Conversion of Series F Preferred shares into common stock 40,000 Issued during the year ended December 31, 2021 535,301 Summary table of common stock share transactions: Outstanding at December 31, 2019 3,319,469 Issued in 2020 9,818,813 Outstanding at December 31, 2020 13,138,282 Issued in 2021 535,301 Outstanding at December 31, 2021 13,673,583 |
Debt exchanges | Total Debt and Accrued Interest Total Debt Total Accrued Interest Common Stock Shares Warrants (Exercise $0.15) Warrants (Exercise $0.20) Warrants (Exercise $0.25) Warrants (Exercise $0.50) Warrants (Exercise $0.75) Aquarius $ 145,544 $ 107,500 $ 38,044 291,088 - - 145,544 - 145,544 K2 Medical (Shenghuo) 3 803,653 771,927 31,726 1,905,270 - 496,602 704,334 - 704,334 Mr. Blumberg 305,320 292,290 13,030 1,167,630 - 928,318 119,656 - 119,656 Mr. Case 179,291 150,000 29,291 896,456 - 896,456 - - - Mr. Grimm 51,110 50,000 1,110 255,548 - 255,548 - - - Mr. Gould 111,227 100,000 11,227 556,136 - 556,136 - - - Mr. Mamula 15,577 15,000 577 77,885 - 77,885 - - - Dr. Imhoff 2 400,417 363,480 36,937 1,699,255 - 1,497,367 100,944 - 100,944 Ms. Rosenstock 1 50,000 50,000 - 100,000 - - 50,000 - 50,000 Mr. James 2 2,286 2,000 286 7,745 - 5,291 1,227 - 1,227 Auctus 328,422 249,119 79,303 500,000 700,000 - - - Mr. Clavijo 125,000 125,000 - 500,000 - - - 250,000 - Mr. Wells 4 220,000 220,000 - - - - - - - $ 2,737,847 $ 2,496,316 $ 241,531 7,957,013 700,000 4,713,603 1,121,705 250,000 1,121,705 |
Shares reserved for warrants | Warrants (Underlying Shares) Weighted-Average Exercise Price Per Share Outstanding, January 1, 2020 46,016,840 $ 1.71 Warrants issued 11,270,013 $ 0.34 Warrants cancelled/expired (70 ) $ 1,068,423 Warrants exchanged (28,962,508 ) $ 0.04 Outstanding, December 31, 2020 28,324,275 $ 0.25 Warrants issued 7,982,223 $ 0.30 Warrants cancelled/expired (1,729,662 ) $ 0.04 Warrants exchanged (4,713,603 ) $ 0.20 Warrants exercised (2,193,599 ) $ 0.16 Outstanding, December 31, 2021 27,669,634 $ 0.29 |
Schedule of fair value warrants issued under Black-Scholes Option Pricing model | December 31, 2021 Expected term 15 days Volatility 143.2 % Risk-free interest rate 0.0 % Dividend yield 0.00 % |
STOCK OPTIONS (Tables)
STOCK OPTIONS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
STOCK OPTIONS | |
Stock option activity | Number of Shares Weighted-Average Exercise Price Per Share Weighted-Average Remaining Contractual Life Aggregate Intrinsic Value of In-the-Money Options (in thousands) Options outstanding as of January 1, 2021 1,800,000 $ 0.49 Options granted 25,000 $ 0.48 Options forfeited (167,614 ) $ 0.49 Options expired (157,386 ) $ 0.49 Options outstanding as of December 31, 2021 1,500,000 $ 0.49 8.5 years $ 135 Options exercisable as of December 31, 2021 954,273 $ 0.49 8.5 years $ 86 |
Stock options vested, unvested and granted | December 31, December 31, 2021 2020 Expected term (years) 10 years 10 years Volatility 153.12 % 153.12 % Risk-free interest rate 0.98 % 0.98 % Dividend yield 0.00 % 0.00 % |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
LITIGATION AND CLAIMS | |
Future minimum rental payments under non-cancellable operating leases | (in thousands) Operating Leases 2022 $ 108 2023 112 2024 115 2025 118 2026 50 Total future lease payments 503 Less: discount (111 ) Total lease liabilities $ 392 |
Operating lease right-of-use assets and lease liabilities | (in thousands) Year Ended December 31, 2021 Operating lease right-of-use assets $ 372 Operating lease liabilities $ 392 |
Weighted-average remaining lease term and discount rate used in the calculation of operating lease right-of-use assets and lease liabilities | Year Ended December 31, 2021 Weighted average remaining lease term (years) 4.4 Weighted average discount rate 11.4 % |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
NOTES PAYABLE | |
Notes payable in default, including related parties | Notes payable in default, including related parties December 31, 2021 December 31, 2020 Mr. Mermelstein $ - $ 285 Dr. Cartwright - 1 Mr. Fowler - 26 GPB - 17 Notes payable in default $ - $ 329 |
Short-term notes payable, including related parties | Short-term notes payable, including related parties December 31, 2021 December 31, 2020 Dr. Cartwright $ 34 $ 46 Dr. Faupel - 5 Mr. Fowler 6 - Premium Finance (insurance) 48 45 Short-term notes payable $ 88 $ 96 |
CONVERTIBLE DEBT (Tables)
CONVERTIBLE DEBT (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
CONVERTIBLE DEBT | |
Schedule of short-term convertible notes payable | Short-term convertible notes payable , including debt in default December 31, 2021 December 31, 2020 Auctus Tranche 1 - 700 Auctus Tranche 2 $ 400 $ 400 Auctus prepayment penalty 350 - Auctus (March 31, 2020 Note) 161 113 Debt discount and issuance costs to be amortized (14 ) (262 ) Convertible notes payable - short-term $ 897 $ 951 |
Convertible notes in default | Convertible notes payable, including debt in default December 31, 2021 December 31, 2020 GBP $ - $ 1,709 GHS - 181 Auctus - 40 Convertible notes payable $ - $ 1,930 |
LONG TERM DEBT (Tables)
LONG TERM DEBT (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
LONG TERM DEBT | |
Long-term debt, related parties | For Dr. Faupel: Salary $ 134 Bonus 20 Vacation 95 Interest on compensation 67 Loans to Company 196 Interest on loans 149 Total outstanding prior to exchange 661 Amount forgiven (454 ) Total Interest accrued through December 31, 2020 29 Balance outstanding at December 31, 2020 $ 236 Exchange for Series F-2 Preferred Stock (85 ) Interest and salaries accrued through December 31, 2021 10 Balance outstanding at December 31, 2021 $ 161 For Dr.Cartwright Salary $ 337 Bonus 675 Loans to Company 528 Interest on loans 81 Total outstanding prior to exchange 1,621 Amount forgiven (1,302 ) Total Interest accrued through December 31, 2020 45 Balance outstanding at December 31, 2020 $ 364 Exchange for Series F-2 Preferred Stock (100 ) Interest and salaries accrued through December 31, 2021 17 Balance outstanding at December 31, 2021 $ 281 |
Long-term debt, related parties debt obligations | Year Amount 2022 $ 30 2023 479 2024 39 2025 41 2026 3 Thereafter - Total $ 592 |
INCOME (LOSS) PER COMMON SHARE
INCOME (LOSS) PER COMMON SHARE (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
INCOME (LOSS) PER COMMON SHARE | |
Earnings per share | December 31, 2021 2020 Net loss (2,431 ) (401 ) Basic weighted average number of shares outstanding 13,377 10,767 Net loss per share (basic) (0.18 ) (0.04 ) Diluted weighted average number of shares outstanding 13,377 10,767 Net loss per share (diluted) (0.18 ) (0.04 ) Dilutive equity instruments (number of equivalent units): Stock options 1,867 - Preferred stock 18,253 - Convertible debt 964 62,095 Warrants 15,655 7,683 Total Dilutive instruments 36,739 69,778 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
INCOME TAXES | |
Components of deferred taxes | 2021 2020 Deferred tax assets: Warrant liability $ - $ 617 Accrued executive compensation 288 519 Reserves and other 273 289 Stock options 134 132 Net operating loss carryforwards 16,985 17,851 17,680 19,408 Valuation allowance (17,680 ) (19,408 ) Net deferred tax assets $ - $ - |
Income taxes | 2021 2020 Statutory federal tax rate 21 % 21 % State taxes, net of federal benefit 4 % 4 % Nondeductible expenses - - Valuation allowance 25 % 25 % Effective tax rate 0 % 0 % |
Provision for income taxes | 2021 2020 Current $ - $ - Deferred - - Deferred provision (credit) (1,728 ) 1,623 Change in valuation allowance 1,728 (1,623 ) Total provision for income taxes $ - $ - |
ORGANIZATION, BACKGROUND, AND_2
ORGANIZATION, BACKGROUND, AND BASIS OF PRESENTATION (Details Narrative) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Jan. 16, 2020 | |
Working capital | $ (4.1) | |
Accumulated deficit | 142.4 | |
Total stockholders' deficits | $ 5.4 | |
Decrease in authorized common share | 500,000,000 | |
Net loss including preferred dividend | $ 2.4 | |
Warrants exercisable for common stock outstanding | 7,185,000 | |
Warrants exercise price per share | $ 0.04 | |
Warrants [Member] | ||
Warrants exercisable for common stock outstanding | 27,700,000 | |
Proceeds from exercise of warrants | $ 5.1 | |
Warrants [Member] | Minimum | ||
Warrants exercise price per share | $ 0.15 | |
Warrants [Member] | Maximum | ||
Warrants exercise price per share | $ 0.80 | |
10% Convertible Debentures | ||
Proceeds from sale of stocks | $ 3.2 |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
SIGNIFICANT ACCOUNTING POLICIES | ||
Raw materials | $ 1,255 | $ 1,276 |
Work in process | 69 | 80 |
Finished goods | 32 | 7 |
Inventory reserve | (785) | (758) |
Total | $ 571 | $ 605 |
SIGNIFICANT ACCOUNTING POLICI_5
SIGNIFICANT ACCOUNTING POLICIES (Details 1) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Property and equipment, gross | $ 1,761 | $ 1,747 |
Less accumulated depreciation and amortization | (1,747,000) | (1,746,000) |
Property and equipment, net | 14,000 | 1,000 |
Furniture and Fixtures | ||
Property and equipment, gross | 41,000 | 41,000 |
Leasehold Improvement | ||
Property and equipment, gross | 12,000 | 12,000 |
Construction in Progress | ||
Property and equipment, gross | 8 | 0 |
Equipment | ||
Property and equipment, gross | 1,048,000 | 1,042,000 |
Software | ||
Property and equipment, gross | $ 652,000 | $ 652,000 |
SIGNIFICANT ACCOUNTING POLICI_6
SIGNIFICANT ACCOUNTING POLICIES (Details 2) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
SIGNIFICANT ACCOUNTING POLICIES | ||
Compensation | $ 621 | $ 1,094 |
Professional fees | 98 | 83 |
Interest | 261 | 1,517 |
Vacation | 39 | 34 |
Preferred dividends | 349 | 202 |
Other accrued expenses | 49 | 65 |
Stock subscription payable | 351 | 0 |
Total | $ 1,768 | $ 2,995 |
SIGNIFICANT ACCOUNTING POLICI_7
SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2017 | |
SIGNIFICANT ACCOUNTING POLICIES | |||
Patent costs | $ 14,800 | $ 17,000 | |
Accounts receivable outstanding | 172,000 | 150,000 | |
Outstanding amount balance | 46,000 | 24,000 | |
Accounts receivable, net of allowance | 126,000 | 126,000 | |
Deferred revenue | 337,000 | 42,000 | |
Net operating loss carry forward | $ 58,000,000 | $ 61,600,000 | $ 9,900,000 |
FAIR VALUE OF FINANCIAL INSTR_3
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Derivative liability | $ (32,000) | $ (2,228,000) |
Fair Value, Inputs, Level 3 [Member] | ||
Derivative liability | (32,000) | (2,228,000) |
Fair Value, Inputs, Level 1 [Member] | ||
Derivative liability | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | ||
Derivative liability | 0 | 0 |
Auctus Loan | ||
Derivative liability | (32,000) | (25,000) |
Auctus Loan | Fair Value, Inputs, Level 3 [Member] | ||
Derivative liability | (32,000) | (25,000) |
Auctus Loan | Fair Value, Inputs, Level 1 [Member] | ||
Derivative liability | 0 | 0 |
Auctus Loan | Fair Value, Inputs, Level 2 [Member] | ||
Derivative liability | $ 0 | 0 |
Senior Secured Debt | ||
Derivative liability | (2,203,000) | |
Senior Secured Debt | Fair Value, Inputs, Level 3 [Member] | ||
Derivative liability | $ (2,203,000) |
FAIR VALUE OF FINANCIAL INSTR_4
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details 1) - Fair Value, Inputs, Level 3 [Member] $ in Thousands | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Beginning Balance, Warrants | $ (2,228) |
Change in the terms of warrants previously recorded as a liability and now reclassified to equity | 1,755 |
Change in value due to warrants expiring during the year | 448 |
Extinguishment of derivative liability due to payoff of $700,000 loan to Auctus | 84 |
Change in fair value during the year | (91) |
Ending Balance, Warrants | (32) |
Senior Secured Debt | |
Beginning Balance, Warrants | (2,203) |
Change in the terms of warrants previously recorded as a liability and now reclassified to equity | 1,755 |
Change in value due to warrants expiring during the year | 448 |
Extinguishment of derivative liability due to payoff of $700,000 loan to Auctus | 0 |
Change in fair value during the year | 0 |
Ending Balance, Warrants | 0 |
Derivative | |
Beginning Balance, Warrants | (25) |
Change in the terms of warrants previously recorded as a liability and now reclassified to equity | 0 |
Change in value due to warrants expiring during the year | 0 |
Extinguishment of derivative liability due to payoff of $700,000 loan to Auctus | 84 |
Change in fair value during the year | (91) |
Ending Balance, Warrants | $ (32) |
FAIR VALUE OF FINANCIAL INSTR_5
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Derivative liability/bifurcated conversion option in connection with auctus loan | $ 1,100,000 | |
Extinguishment of derivative liability due to payoff of loan to Auctus | 700,000 | |
Derivative liability | 400,000 | |
Fair Value, Inputs, Level 3 [Member] | ||
Extinguishment of derivative liability due to payoff of loan to Auctus | 700,000 | |
December 17, 2019 [Member] | ||
Derivative liability/bifurcated conversion option in connection with auctus loan | $ 400,000 | $ 400,000 |
STOCKHOLDERS DEFICIT (Details)
STOCKHOLDERS DEFICIT (Details) - shares | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
STOCKHOLDERS' DEFICIT: | |||
Conversion of debt into common shares - exchange agreements | 7,957,013 | ||
Conversion of debt into common shares | 175,000 | ||
Shares issued for manufacturing agreements | 12,147 | ||
Shares issued for payment of Series D dividends | 109,039 | 148,653 | |
Shares issued for payment of Series E dividends | 288,262 | ||
Shares issued for payment of finder fee | 98,000 | ||
Conversion of Series F Preferred shares into common stock | 40,000 | ||
Shares issued to investors | 1,526,000 | ||
Issued during the year ended | 535,301 | 9,818,813 | |
Share issued | 535,301 | 9,818,813 | |
Outstanding | 13,673,583 | 13,138,282 | 3,319,469 |
STOCKHOLDERS DEFICIT (Details 1
STOCKHOLDERS DEFICIT (Details 1) | 12 Months Ended |
Dec. 31, 2021USD ($)shares | |
Total debt and accrued interest | $ | $ 2,737,847 |
Total debt | $ | 2,496,316 |
Total accrued interest | $ | $ 241,531 |
Common stock shares | 7,957,013 |
Warrants (Exercise $0.15) | 700,000 |
Warrants (exercise $0.20) | 4,713,603 |
Warrants (exercise $0.25) | 1,121,705 |
Warrants (Exercise $0.50) | 250,000 |
Warrants (exercise $0.75) | 1,121,705 |
K2 Medical (Shenghuo) | |
Total debt and accrued interest | $ | $ 803,653 |
Total debt | $ | 771,927 |
Total accrued interest | $ | $ 31,726 |
Warrants (Exercise $0.15) | 0 |
Warrants (exercise $0.20) | 496,602 |
Warrants (exercise $0.25) | 704,334 |
Warrants (Exercise $0.50) | 0 |
Warrants (exercise $0.75) | 704,334 |
Common stock shares | 1,905,270 |
Mr. Mamula | |
Total debt and accrued interest | $ | $ 15,577 |
Total debt | $ | 15,000 |
Total accrued interest | $ | $ 577 |
Warrants (Exercise $0.15) | 0 |
Warrants (exercise $0.20) | 77,885 |
Warrants (exercise $0.25) | 0 |
Warrants (Exercise $0.50) | 0 |
Warrants (exercise $0.75) | 0 |
Common stock shares | 77,885 |
Mr. Clavijo | |
Total debt and accrued interest | $ | $ 125,000 |
Total debt | $ | 125,000 |
Total accrued interest | $ | $ 0 |
Warrants (Exercise $0.15) | 0 |
Warrants (exercise $0.20) | 0 |
Warrants (exercise $0.25) | 0 |
Warrants (Exercise $0.50) | 250,000 |
Warrants (exercise $0.75) | 0 |
Common stock shares | 500,000 |
Mr. Wells | |
Total debt and accrued interest | $ | $ 220,000 |
Total debt | $ | 220,000 |
Total accrued interest | $ | $ 0 |
Warrants (Exercise $0.15) | 0 |
Warrants (exercise $0.20) | 0 |
Warrants (exercise $0.25) | 0 |
Warrants (Exercise $0.50) | 0 |
Warrants (exercise $0.75) | 0 |
Common stock shares | 0 |
Aquarius | |
Total debt and accrued interest | $ | $ 145,544 |
Total debt | $ | 107,500 |
Total accrued interest | $ | $ 38,044 |
Warrants (Exercise $0.15) | 0 |
Warrants (exercise $0.20) | 0 |
Warrants (exercise $0.25) | 145,544 |
Warrants (Exercise $0.50) | 0 |
Warrants (exercise $0.75) | 145,544 |
Common stock shares | 291,088 |
Mr. Blumberg | |
Total debt and accrued interest | $ | $ 305,320 |
Total debt | $ | 292,290 |
Total accrued interest | $ | $ 13,030 |
Warrants (Exercise $0.15) | 0 |
Warrants (exercise $0.20) | 928,318 |
Warrants (exercise $0.25) | 119,656 |
Warrants (Exercise $0.50) | 0 |
Warrants (exercise $0.75) | 119,656 |
Common stock shares | 1,167,630 |
Mr. Case | |
Total debt and accrued interest | $ | $ 179,291 |
Total debt | $ | 150,000 |
Total accrued interest | $ | $ 29,291 |
Warrants (Exercise $0.15) | 0 |
Warrants (exercise $0.20) | 896,456 |
Warrants (exercise $0.25) | 0 |
Warrants (Exercise $0.50) | 0 |
Warrants (exercise $0.75) | 0 |
Common stock shares | 896,456 |
Mr. Grimm | |
Total debt and accrued interest | $ | $ 51,110 |
Total debt | $ | 50,000 |
Total accrued interest | $ | $ 1,110 |
Warrants (Exercise $0.15) | 0 |
Warrants (exercise $0.20) | 255,548 |
Warrants (exercise $0.25) | 0 |
Warrants (Exercise $0.50) | 0 |
Warrants (exercise $0.75) | 0 |
Common stock shares | 255,548 |
Mr. Gould | |
Total debt and accrued interest | $ | $ 111,227 |
Total debt | $ | 100,000 |
Total accrued interest | $ | $ 11,227 |
Warrants (Exercise $0.15) | 0 |
Warrants (exercise $0.20) | 556,136 |
Warrants (exercise $0.25) | 0 |
Warrants (Exercise $0.50) | 0 |
Warrants (exercise $0.75) | 0 |
Common stock shares | 556,136 |
Dr. Imhoff | |
Total debt and accrued interest | $ | $ 400,417 |
Total debt | $ | 363,480 |
Total accrued interest | $ | $ 36,937 |
Warrants (Exercise $0.15) | 0 |
Warrants (exercise $0.20) | 1,497,367 |
Warrants (exercise $0.25) | 100,944 |
Warrants (Exercise $0.50) | 0 |
Warrants (exercise $0.75) | 100,944 |
Common stock shares | 1,699,255 |
Ms. Rosenstock | |
Total debt and accrued interest | $ | $ 50,000 |
Total debt | $ | 50,000 |
Total accrued interest | $ | $ 0 |
Warrants (Exercise $0.15) | 0 |
Warrants (exercise $0.20) | 0 |
Warrants (exercise $0.25) | 50,000 |
Warrants (Exercise $0.50) | 0 |
Warrants (exercise $0.75) | 50,000 |
Common stock shares | 100,000 |
Mr. James | |
Total debt and accrued interest | $ | $ 2,286 |
Total debt | $ | 2,000 |
Total accrued interest | $ | $ 286 |
Warrants (Exercise $0.15) | 0 |
Warrants (exercise $0.25) | 1,227 |
Warrants (Exercise $0.50) | 0 |
Warrants (exercise $0.75) | 1,227 |
Common stock shares | 7,745 |
Warrants (exercise $0.20)AB | 5,291 |
Auctus [Member] | |
Total debt and accrued interest | $ | $ 328,422 |
Total debt | $ | 249,119 |
Total accrued interest | $ | $ 79,303 |
Warrants (exercise $0.20) | 0 |
Warrants (exercise $0.25) | 0 |
Warrants (Exercise $0.50) | 0 |
Warrants (exercise $0.75) | 0 |
Common stock shares | 500,000 |
Warrants (Exercise $0.15) | 700,000 |
STOCKHOLDERS DEFICIT (Details 2
STOCKHOLDERS DEFICIT (Details 2) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
STOCKHOLDERS' DEFICIT: | ||
Warrants outstanding, beginning | 28,324,275 | 46,016,840 |
Warrants issued | 7,982,223 | 11,270,013 |
Warrants cancelled/expired | (1,729,662) | (70) |
Warrants exchanged | $ (4,713,603) | $ (28,962,508) |
Warrants exercised | (2,193,599) | |
Warrants outstanding, end | 27,669,634 | 28,324,275 |
Weighted Average Exercise Price Per Share, beginning | $ 0.25 | $ 1.71 |
Weighted Average Exercise Price Per Share, Warrants issued | 0.30 | 0.34 |
Weighted Average Exercise Price Per Share, Warrants cancelled/expired | 0.04 | 1,068,423 |
Weighted Average Exercise Price Per Share, Warrants exchanged | 0.20 | 0.04 |
Weighted Average Exercise Price Per Share, Warrants exercised | 0.16 | |
Weighted Average Exercise Price Per Share, ending | $ 0.29 | $ 0.25 |
STOCKHOLDERS DEFICIT (Details 3
STOCKHOLDERS DEFICIT (Details 3) | 12 Months Ended |
Dec. 31, 2021 | |
STOCKHOLDERS' DEFICIT: | |
Expected term | 15 years |
Volatility | 143.20% |
Risk-free interest rate | 0.00% |
Dividend yield | 0.00% |
STOCKHOLDERS DEFICIT (Details N
STOCKHOLDERS DEFICIT (Details Narrative) - USD ($) | Jul. 08, 2021 | Jul. 09, 2020 | Jun. 03, 2020 | Jan. 08, 2020 | Aug. 02, 2018 | Sep. 10, 2014 | Feb. 28, 2021 | Jan. 31, 2021 | Jun. 30, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2021 | Jan. 08, 2021 | Jan. 22, 2020 | Jan. 16, 2020 | Jul. 24, 2019 |
Cash payment | $ 350,000 | |||||||||||||||
Warrants | 3,592,500 | |||||||||||||||
Warrants price per share | $ 0.20 | |||||||||||||||
Successful in obtaining financing greater than amount | $ 4,000,000 | |||||||||||||||
Financing amount | 4,000,000 | |||||||||||||||
Warrants closing of financing greater than amount | $ 4,000,000 | |||||||||||||||
Warrant holders percentage description | 4.99% blocker such that the warrant holders will be restricted from owning more than 4.99% of the total number | |||||||||||||||
Common stock warrants | 7,185,000 | 1,250,000 | ||||||||||||||
Additional warrants to purchase common stock shares | 150,000 | 1,250,000 | ||||||||||||||
Additional warrants to purchase common stock shares expire date | May 31, 2024 | |||||||||||||||
Warratns issued | 263,000 | 5,000,000 | ||||||||||||||
Issued equity investments | $ 2,114,000 | |||||||||||||||
Issued common stock shares to finders | 98,000 | |||||||||||||||
Warrants to purchase shares of common stock | 35,937,500 | |||||||||||||||
Warrants to purchase shares of common stock exercise price | $ 0.04 | |||||||||||||||
Issuance of new warrants to purchase shares of common stock | 7,185,000 | |||||||||||||||
Issuance of new warrants to purchase shares of common stock exercise price | $ 0.20 | |||||||||||||||
Payment | $ 750,000 | |||||||||||||||
Finder compensation in percentage | The finder will receive 5% cash and 5% warrants on all funds it raises including bridge loans. The three-year common stock share warrants will have an exercise price of $0.25. | |||||||||||||||
Raise funds | $ 300,000 | |||||||||||||||
Fee payment | $ 31,650 | |||||||||||||||
Warrants issued to finder | 126,600 | |||||||||||||||
Common stock, shares authorized | 500,000,000 | |||||||||||||||
Common stock, share price | $ 0.50 | |||||||||||||||
Additional warrants to purchase common stock shares price | $ 1 | |||||||||||||||
Additional common stock warrants | 1,250,000 | |||||||||||||||
Additional common stock warrants price per share | $ 1.25 | |||||||||||||||
Common stock shares issued | 13,673,583 | 13,138,282 | ||||||||||||||
Common stock shares outstanding | 13,673,583 | 13,138,282 | ||||||||||||||
Common stock, par value | $ 0.001 | $ 0.001 | ||||||||||||||
Common stock issued during period | 535,301 | 9,818,813 | ||||||||||||||
Shares exchange | 13,607,609 | 13,138,282 | 13,180,417 | |||||||||||||
Strike price of warrants | $ 0.25 | |||||||||||||||
Warrants holders percentage description | The consultant agrees to a 10.0% blocker at any single point in time it cannot own 10.0% of the total common stock shares outstanding. The Company issued 1,250,000 common stock warrants during the year ended December 31, 2021, in accordance with the agreement. Refer to Note 7, “Commitments and Contingencies” for additional information. | |||||||||||||||
Preferred stock shares converts into common stock | 40,000 | |||||||||||||||
Shares outstanding | 1,049 | |||||||||||||||
Common stock warrants | 4,477,923 | |||||||||||||||
Debt | $ 2,496,316 | |||||||||||||||
Preferred stock shares surrendered | 3,262 | |||||||||||||||
Forgive repayment amount | $ 94,392 | |||||||||||||||
Principal amount of promissory note | 46,000 | $ 24,000 | ||||||||||||||
Gain loss on extinguishment of debt | 578,000 | $ (296,000) | ||||||||||||||
Convertible debt estimated fair value | $ 2,737,847 | |||||||||||||||
Common stock shares | 7,957,013 | |||||||||||||||
2020 Exchange Agreements [Member] | ||||||||||||||||
Warrants to purchase shares of common stock exercise price | $ 0.25 | |||||||||||||||
Gain loss on extinguishment of debt | $ 118,396 | $ 1,183 | $ 224,963 | |||||||||||||
Convertible debt | $ 328,422 | 2,064,366 | $ 125,000 | |||||||||||||
Convertible debt estimated fair value | $ 2,065,548 | |||||||||||||||
Warrants to purchase common stock shares | 700,000 | 6,957,013 | 250,000 | |||||||||||||
Exercise Price of warrants to purchased common stock share issued, Two | $ 0.75 | |||||||||||||||
Exercise Price of warrants to purchased common stock share issued, Three | $ 0.20 | |||||||||||||||
Debt | $ 29,000 | |||||||||||||||
Common stock shares | 500,000 | 500,000 | ||||||||||||||
Fair value of the common stock shares | $ 250,000 | $ 250,000 | ||||||||||||||
Fair value of the warrants | $ 196,818 | $ 99,963 | ||||||||||||||
Estimated fair value price | $ 0.281 | $ 0.40 | ||||||||||||||
Fair Value | $ 446,818 | $ 349,963 | ||||||||||||||
Ms. Rosenstock | ||||||||||||||||
Debt | $ 50,000 | |||||||||||||||
Convertible debt estimated fair value | 50,000 | |||||||||||||||
Ms. Rosenstock | 2020 Exchange Agreements [Member] | ||||||||||||||||
Forgive repayment amount | 28,986 | |||||||||||||||
Shandong Yaohua Medical Instrument Corporation [Member] | ||||||||||||||||
Shares exchange | 12,147 | 12,147 | ||||||||||||||
Mr. Bill Wells | ||||||||||||||||
Forgive repayment amount | $ 110,000 | 40,000 | ||||||||||||||
Salary | 220,000 | |||||||||||||||
Received cash payment | 20,000 | 20,000 | ||||||||||||||
Principal amount of promissory note | 90,000 | 97,052 | ||||||||||||||
Total amount to be receive | $ 3,000,000 | $ 3,000,000 | ||||||||||||||
Common share stock option | 66,000 | |||||||||||||||
Shares vested per month | 3,667 | |||||||||||||||
Common stock exercise price | $ 0.49 | |||||||||||||||
Promissory note interest rate | 6.0 | |||||||||||||||
Loan maturity term | 18 months | |||||||||||||||
Gain loss on extinguishment of debt | $ 20,000 | |||||||||||||||
Investments | ||||||||||||||||
Warrants to purchase shares of common stock | 643,700 | |||||||||||||||
Issuance of new warrants to purchase shares of common stock | 1,130,000 | |||||||||||||||
Common stock, issued public shares | 98,000 | |||||||||||||||
Total investment amount | $ 2,114,000 | |||||||||||||||
Equity investments fee | 139,000 | |||||||||||||||
Proceeds from debenture unit investments | 1,130,000 | |||||||||||||||
Debenture fee | $ 86,400 | |||||||||||||||
Debentures convertible into common stock shares | 2,260,000 | |||||||||||||||
GHS Investments, LLC [Member] | ||||||||||||||||
Principal amount of promissory note | $ 1,275,000 | $ 50,454 | ||||||||||||||
Common stock shares | 175,000 | |||||||||||||||
Purchase price | 570,000 | |||||||||||||||
Original issue discount | 560,000 | |||||||||||||||
Debt issuance costs | $ 145,000 | |||||||||||||||
Lowest daily volume average price | 75.00% | |||||||||||||||
Series C Convertible Preferred Shares | ||||||||||||||||
Preferred stock shares designated | 9,000 | |||||||||||||||
Conversion price per share | $ 0.50 | |||||||||||||||
Preferred stock shares converts into common stock | 2,000 | |||||||||||||||
Liquidation preference | $ 1,000 | |||||||||||||||
Preferred stock shares issued | 300 | 300 | ||||||||||||||
Preferred stock shares par value | $ 0.001 | $ 0.001 | ||||||||||||||
Preferred stock shares authorized | 9,000 | 9,000 | ||||||||||||||
Preferred stock shares outstanding | 300 | 300 | ||||||||||||||
Total convertible of common stock shares | 6,524,500 | 572,000 | ||||||||||||||
Convertible of common stock shares description | The conversion price will automatically adjust downward to 80% of the then-current market price of the Company’s common stock 15 trading days after any reverse stock split of the Company’s common stock, and 5 trading days after any conversions of the Company’s outstanding convertible debt. Holders of the Series C preferred stock are entitled to quarterly cumulative dividends at an annual rate of 12.0% until 42 months after the original issuance date | |||||||||||||||
Preferred stock, liquidation preference | $ 286,000 | $ 286,000 | ||||||||||||||
Unpaid accrued dividends | $ 120,120 | |||||||||||||||
Series C1 Convertible Preferred Shares | ||||||||||||||||
Preferred stock shares designated | 20,250 | |||||||||||||||
Conversion price per share | $ 0.50 | |||||||||||||||
Preferred stock shares converts into common stock | 2,000 | |||||||||||||||
Preferred stock shares issued | 1,049 | 1,049 | ||||||||||||||
Shares outstanding | 1,024,925 | |||||||||||||||
Preferred stock shares outstanding | 1,049 | 1,049 | ||||||||||||||
Total convertible of common stock shares | 2,098,500 | |||||||||||||||
Series C2 Convertible Preferred Shares | ||||||||||||||||
Shares exchange | 3,262 | |||||||||||||||
Conversion price per share | $ 0.50 | $ 0.50 | ||||||||||||||
Total convertible of common stock shares | 2,000 | 2,000 | ||||||||||||||
Dividing the stated value | $ 1 | |||||||||||||||
Series F Convertible Preferred Shares | ||||||||||||||||
Preferred stock shares converts into common stock | 40,000 | |||||||||||||||
Preferred stock shares issued | 1,400 | 0 | ||||||||||||||
Preferred stock shares par value | $ 0.001 | $ 0.001 | ||||||||||||||
Preferred stock shares authorized | 1,500 | 1,500 | ||||||||||||||
Preferred stock shares outstanding | 1,400 | 0 | ||||||||||||||
Preferred stock, liquidation preference | $ 1,426,000 | $ 0 | ||||||||||||||
Number of shares converted | 10 | |||||||||||||||
Series F-2 Convertible Preferred Shares | ||||||||||||||||
Preferred stock shares designated | 3,500 | |||||||||||||||
Preferred stock shares converts into common stock | 4,000 | |||||||||||||||
Liquidation preference | $ 3,237 | |||||||||||||||
Increased beneficial ownership percentage | 9.99% | |||||||||||||||
Preferred stock shares issued | 3,200 | 0 | ||||||||||||||
Common Stock primary trading shares exceed | 1,000 | |||||||||||||||
Exceeds percentage | 200.00% | |||||||||||||||
Preferred stock shares authorized | 92,500,000 | 5,000 | ||||||||||||||
Preferred stock shares par value | $ 0.001 | $ 0.001 | ||||||||||||||
Preferred stock shares outstanding | 2,559 | |||||||||||||||
Preferred stock shares issued | 3,237 | |||||||||||||||
Shares issued | 678 | |||||||||||||||
Convertible preferred stock description 1 | Each share of Series F-2 Preferred is convertible, at any time for a period of 5 years after issuance, into that number of shares of Common Stock, determined by dividing the Stated Value by $0.25, subject to certain adjustments set forth in the Series F-2 Certificate of Designation (the “Series F-2 Conversion Price”). The conversion of Series F-2 Preferred is subject to a 4.99% beneficial ownership limitation, which may be increased to 9.99% at the election of the holders of the Series F-2 Preferred. If the average of the VWAPs (as defined in the Series F-2 Certificate of Designation) for any consecutive 5 trading day period (“Measurement Period”) exceeds 200% of the then Series F-2 Conversion Price and the average daily trading volume of the Common Stock on the primary trading market exceeds 1,000 shares per trading day during the Measurement Period (subject to adjustments), the Company may redeem the then outstanding Series F-2 Preferred, for cash in an amount equal to aggregate Stated Value then outstanding plus accrued but unpaid dividends. As of December 31, 2021, the Company had not issued shares as payment of Series F-2 Preferred Stock dividends. As of December 31, 2021, the Company had accrued dividends of $94,907. | |||||||||||||||
Preferred stock shares received | 678,000 | |||||||||||||||
Outstanding debt | $ 2,559,000 | |||||||||||||||
Final payment | 750,000 | 750,000 | ||||||||||||||
Exchange agreement payment | $ 1,500,000 | |||||||||||||||
Dividends Paid Amount | $ 94,907 | |||||||||||||||
Conversion beneficial ownership limitation | 4.99% | |||||||||||||||
Preferred stock shares authorized | 3,500 | 3,500 | ||||||||||||||
Preferred stock shares outstanding | 3,200 | 0 | ||||||||||||||
Preferred stock, liquidation preference | $ 3,237,000 | $ 0 | ||||||||||||||
Series G Convertible Preferred Shares | ||||||||||||||||
Preferred stock shares issued | 0 | 0 | ||||||||||||||
Preferred stock shares par value | $ 0.001 | $ 0.001 | ||||||||||||||
Preferred stock shares received | 153,000 | |||||||||||||||
Preferred stock shares authorized | 1,000,000 | 1,000,000 | ||||||||||||||
Convertible preferred stock description | During February 2021, the Company finalized an investment by Power Up Lending Group Ltd. Power Up invested $53,500, net to the Company is $50,000, for 62,000 shares of Series G preferred stock with additional tranches of financing up to $925,000 in the aggregate over the terms of the Series G preferred stock. Series G will be non-voting on any matters requiring shareholder vote. The Series G Preferred Stock will have cumulative dividends at the rate per share of 8% per annum. At any time during the period indicated below, after the date of the issuance of shares of Series G preferred stock, the Company will have the right, at the Company’s option, to redeem all of the shares of Series G preferred stock by paying an amount equal to: (i) the number of shares of Series G preferred stock multiplied by then stated value (including accrued dividends); (ii) multiplied by the corresponding percentage as follows: Day 1-60, 105%; Day 61-90, 110%; Day 91-120, 115%; and Day 121-180, 122%. After the expiration of the 180 days following the issuance date, except for mandatory redemption, the Company shall have no right to redeem the Series G preferred stock. Mandatory redemption occurs within 24 months. In addition, if the Company does not redeem the Series G preferred stock then Power Up will have the option to convert to common stock shares. The variable conversion price will be the value equal to a discount of 19% off of the trading price; which is calculated as the average of the three lowest closing bid prices over the last fifteen trading days. The conversion of Series G Preferred is subject to a 4.99% beneficial ownership limitation, which may be increased to 9.99% at the election of the holder of the Series G Preferred. | |||||||||||||||
Preferred stock shares issued | 0 | 0 | ||||||||||||||
Investment net | $ 114,597 | |||||||||||||||
Preferred stock redeemed | 91,000 | |||||||||||||||
Preferred stock shares outstanding | 0 | 0 | ||||||||||||||
Preferred stock, liquidation preference | $ 0 | $ 0 | ||||||||||||||
Series G Convertible Preferred Shares | Power Up Lending Group Ltd [Member] | ||||||||||||||||
Total investment amount | 75,000 | |||||||||||||||
Investment net | $ 53,500 | $ 78,500 | 53,500 | |||||||||||||
Additional Series G preferred stock shares, amount | 50,000 | 75,000 | ||||||||||||||
Additional tranches of financing | 925,000 | $ 925,000 | ||||||||||||||
Financing cost | $ 925,000 | $ 925,000 | ||||||||||||||
Discount rate | 19.00% | |||||||||||||||
Discounted rate | 19.00% | 19.00% | ||||||||||||||
Redemption of february 2021 investment, amount | $ 78,094 | |||||||||||||||
Difference of interest expense | $ 28,094 | $ 39,597 | ||||||||||||||
Conversion beneficial ownership limitation | 4.99% | 4.99% | ||||||||||||||
Increased election holders | 9.99% | 9.99% | ||||||||||||||
Cumulative dividends rate | 8.00% | 8.00% | ||||||||||||||
Corresponding percentage Description | Day 1-60, 105%; Day 61-90, 110%; Day 91-120, 115%; and Day 121-180, 122%. | Day 1-60, 105%; Day 61-90, 110%; Day 91-120, 115%; and Day 121-180, 122%. | ||||||||||||||
Additional Series G preferred stock shares | 62,000 | |||||||||||||||
Net proceeds | 125,000 | |||||||||||||||
Outstanding amount | $ 50,000 | |||||||||||||||
Series D Preferred Shares | ||||||||||||||||
Shares exchange | 109,039 | 1,526,000 | ||||||||||||||
Common stock, issued public shares | 1,526,000 | |||||||||||||||
Preferred stock shares designated | 1,436,000 | |||||||||||||||
Conversion price per share | $ 0.25 | |||||||||||||||
Preferred stock shares converts into common stock | 763 | |||||||||||||||
Liquidation preference | $ 763 | |||||||||||||||
Beneficial ownership percentage | 4.99% | |||||||||||||||
Increased beneficial ownership percentage | 9.99 | |||||||||||||||
Preferred stock shares issued | 763,000 | |||||||||||||||
Shares outstanding | 763 | |||||||||||||||
Common stock warrants 1 | 1,526,000 | |||||||||||||||
Warrant exercise price per share | 0.25 | |||||||||||||||
Common stock warrants | 1,526,000 | |||||||||||||||
Common stock warrants exercise price 1 | $ 0.75 | |||||||||||||||
Conversion of investor shares | 763 | |||||||||||||||
Preferred stock dividends accrued | $ 14,306 | |||||||||||||||
Common Stock primary trading shares exceed | 1,000 | |||||||||||||||
Exceeds percentage | 200.00% | |||||||||||||||
Preferred Stock [Member] | ||||||||||||||||
Preferred stock shares par value | $ 0.001 | |||||||||||||||
Preferred stock shares authorized | 500,000,000 | |||||||||||||||
Series E Preferred Shares | ||||||||||||||||
Preferred stock shares designated | 5,000 | |||||||||||||||
Conversion price per share | $ 0.25 | |||||||||||||||
Liquidation preference | $ 1,736 | |||||||||||||||
Common Stock primary trading shares exceed | 1,000 | |||||||||||||||
Exceeds percentage | 200.00% | |||||||||||||||
Preferred stock shares par value | $ 0.001 | |||||||||||||||
Conversion beneficial ownership limitation | 4.99% | |||||||||||||||
Preferred stock stated value | $ 1,000 | |||||||||||||||
Common stock shares issued for preferred stock dividends | 288,262 | |||||||||||||||
Accrued dividends | $ 54,521 | |||||||||||||||
Increased election holder | 9.99% | |||||||||||||||
Maturity period | 5 years | |||||||||||||||
Series F Preferred Shares | ||||||||||||||||
Preferred stock shares designated | 1,500 | |||||||||||||||
Conversion price per share | $ 0.25 | |||||||||||||||
Preferred stock shares converts into common stock | 4,000 | |||||||||||||||
Liquidation preference | $ 1,436 | |||||||||||||||
Preferred stock shares issued | 1,426 | |||||||||||||||
Common Stock primary trading shares exceed | 1,000 | |||||||||||||||
Exceeds percentage | 200.00% | |||||||||||||||
Conversion beneficial ownership limitation | 4.99% | |||||||||||||||
Increased election holder | 9.99% | |||||||||||||||
Maturity period | 5 years | |||||||||||||||
Preferred stock shares outstanding | 1,426 | |||||||||||||||
Number of shares converted into common stock | 10 | |||||||||||||||
Shares converted into common stock | 40,000 | |||||||||||||||
Accrued dividend amount | $ 65,718 | |||||||||||||||
Cumulative dividend rate | 6.00% | |||||||||||||||
Accredited investors | $ 1,436,000 | |||||||||||||||
Series F and Series F-2 Preferred Shares | ||||||||||||||||
Preferred stock shares converts into common stock | 4,000 | |||||||||||||||
Warrants Exchanges - 2021 - 1 | ||||||||||||||||
Financing amount | $ 4,000,000 | |||||||||||||||
Warrants closing of financing greater than amount | $ 4,000,000 | |||||||||||||||
Common stock warrants | 1,802,161 | |||||||||||||||
Payment | $ 90,000 | |||||||||||||||
Strike price of warrants | $ 0.25 | |||||||||||||||
Warrants holders percentage description | The warrants will have a one-year lockup restriction and a 10% blocker such that the warrant holders will be restricted from owning more than 10% of the total number of the Company’s outstanding common shares at any one point in time after completion of the financing. | |||||||||||||||
Exchange common stock warrants | 901,081 | |||||||||||||||
Common stock warrants strike price per share | $ 0.25 | |||||||||||||||
Warrants Exchanges - 2021 - 2 | ||||||||||||||||
Financing amount | $ 4,000,000 | |||||||||||||||
Warrants closing of financing greater than amount | $ 4,000,000 | |||||||||||||||
Common stock warrants | 1,802,161 | |||||||||||||||
Strike price of warrants | $ 0.75 | |||||||||||||||
Warrants holders percentage description | The new warrants will have a one-year lockup restriction and a 10% blocker such that the warrant holders will be restricted from owning more than 10% of the total number of the Company’s outstanding common shares at any one point in time after completion of the financing. | |||||||||||||||
Exchange common stock warrants | 1,802,161 | |||||||||||||||
Common stock warrants strike price per share | $ 0.75 | |||||||||||||||
Warrants Exchanges - 2021 | ||||||||||||||||
Common stock warrants | 4,477,923 | |||||||||||||||
Strike price of warrants | $ 0.20 | |||||||||||||||
Exchange common stock warrants | 4,713,603 | |||||||||||||||
Common stock warrants strike price per share | $ 0.16 | |||||||||||||||
Exercise of warrants, value | $ 351,000 | |||||||||||||||
Exercise of warrants, shares | 2,193,599 | |||||||||||||||
Debt Exchanges - 2021 | ||||||||||||||||
Debt | $ 1,500,000 | |||||||||||||||
Debt final payment | $ 75,000 |
STOCK OPTIONS (Details)
STOCK OPTIONS (Details) | 12 Months Ended |
Dec. 31, 2021USD ($)$ / sharesshares | |
STOCK OPTIONS | |
Outstanding at beginning of year | shares | 1,800,000 |
Options granted | shares | 25,000 |
Options forfeited | shares | (167,614) |
Options expired | shares | (157,386) |
Outstanding at ending of year | shares | 1,500,000 |
Number of shares exercisable | shares | 954,273 |
Options outstanding weighted average exercise price, beginning | $ / shares | $ 0.49 |
Options granted weighted average exercise price | $ / shares | 0.48 |
Options forfeited weighted average exercise price | $ / shares | 0.49 |
Options expired weighted average exercise price | $ / shares | 0.49 |
Options outstanding weighted average exercise price, Ending | $ / shares | 0.49 |
Weighted average exercise price per share exercisable | $ / shares | $ 0.49 |
Weighted average remaining contractual life outstanding | 8 years 6 months |
Weighted average remaining contractual life exercisable | 8 years 6 months |
Agrregate intrensic value outstanding | $ | $ 135 |
Agrregate intrensic value exercisable | $ | $ 86 |
STOCK OPTIONS (Details 1)
STOCK OPTIONS (Details 1) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
STOCK OPTIONS | ||
Expected term (years) | 10 years | 10 years |
Volatility | 153.12% | 153.12% |
Risk-free interest rate | 0.98% | 0.98% |
Dividend yield | 0.00% | 0.00% |
STOCK OPTION (Details Narrative
STOCK OPTION (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
STOCK OPTIONS | ||
Weighted average period | 1 year 6 months | |
Unrecognized stock-based compensation expense | $ 263,470 | |
Weighted-average fair value of awards granted | $ 0.47 | $ 0.48 |
Stock options granted outstanding common stock shares percentage | 10.00% | |
Options granted expiration term | ten years | |
Options granted exercisable term | four years | |
Stock-based compensation expense | $ 226,717 | $ 309,905 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
LITIGATION AND CLAIMS | ||
Operating lease right-of-use assets | $ 372 | $ 453 |
Total lease liabilities | $ 392 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES (Details 1) $ in Thousands | Dec. 31, 2021USD ($) |
LITIGATION AND CLAIMS | |
2022 | $ 108 |
2023 | 112 |
2024 | 115 |
2025 | 118 |
2026 | 50 |
Total future lease payments | 503 |
Less: discount | (111) |
Total lease liabilities | $ 392 |
COMMITMENTS AND CONTINGENCIES_4
COMMITMENTS AND CONTINGENCIES (Details 2) | 12 Months Ended |
Dec. 31, 2021 | |
LITIGATION AND CLAIMS | |
Weighted average remaining lease term (years) | 4 years 4 months 24 days |
Weighted average discount rate | 11.40% |
COMMITMENTS AND CONTINGENCIES_5
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | Mar. 10, 2021 | Sep. 06, 2016 | Jun. 05, 2016 | Jan. 22, 2020 | Dec. 31, 2009 | Dec. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2021 | Mar. 31, 2021 | Jul. 24, 2019 |
Area of operating leases | 12,835 | |||||||||
Escrow agent rate per share | $ 1.90 | |||||||||
Consideration received | $ 885,144 | |||||||||
Financing agreement amount | $ 1,000,000 | |||||||||
Operating lease cost | $ 110,701 | $ 114,591 | ||||||||
Royalty percent | 20 | |||||||||
Licences | $ 1,000,000 | |||||||||
Warrants | 5,000,000 | |||||||||
Warrants broken into four tranches | 1,250,000 | |||||||||
Strike price | $ 0.25 | |||||||||
Net loss increased | $ 318,000 | |||||||||
Sales | $ 4,000,000 | |||||||||
Shares exchange | 13,607,609 | 13,138,282 | 13,180,417 | |||||||
Netl loss | $ (2,070,000) | $ (279,000) | ||||||||
Accumulated deficit | 142,400,000 | |||||||||
Shenghuo Medical, LLC [Member] | ||||||||||
Payment receive descriptions | the right to receive payments equal to 2% of the Company’s future sales in the United States, up to an aggregate of $4.0 million. | |||||||||
Shandong Yaohua Medical Instrument Corporation [Member] | ||||||||||
Balance due for outstanding purchase order | 177,000 | |||||||||
Proceeds from related party debt | 353,635 | |||||||||
Shares exchange | 12,147 | 12,147 | ||||||||
Consulting Agreement [Member] | Mr. Blumberg | ||||||||||
Terms of amendment to agreement | the consulting agreement was amended to clarify that $350,000 is not intended to be debt and will not be required to be repaid in cash. Additionally, issuance of the warrants is now predicated on the Company receiving funding receipts of $1,000,000, | |||||||||
Related party liability written off | $ 350,000 | |||||||||
Gain on writing off the liability | $ 350,000 | |||||||||
Description of exchange of subscription | (1) on September 26, 2021, 900,000 3-year warrants with an exercise price of $0.30 and 400,000 common stock shares; (2) on March 26, 2022, 900,000 3-year warrants with an exercise price of $0.40 and 400,000 common stock shares; (3) on September 26, 2022, 900,000 3-year warrants with an exercise price of $0.50 and 400,000 common stock shares; and (4) on March 26, 2023, 900,000 3-year warrants with an exercise price of $0.60 and 400,000 common stock shares. | |||||||||
Subscription receivable | $ 350,000 | |||||||||
Promotional Agreement [Member] | ||||||||||
Consulting expenses | 556,111 | |||||||||
Netl loss | $ 719,000,000 | |||||||||
Accumulated deficit | $ 140,200,000 | |||||||||
Fair vaue of warrants | $ 715,000 | |||||||||
Unrecognized consulting expense | $ 79,444 | |||||||||
Royalty Agreement [Member] | ||||||||||
Royalty paid description | royalty initially equal to $0.10, and from and after October 2, 2016, equal to $0.20, for each disposable | |||||||||
Royalty consideration | $ 50,000 |
NOTES PAYABLE (Details)
NOTES PAYABLE (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Notes payable in default, including related parties | $ 0 | $ 329 |
Mr. Mermelstein | ||
Notes payable in default, including related parties | 0 | 285 |
Dr. Cartwright | ||
Notes payable in default, including related parties | 0 | 1 |
Mr. Fowler | ||
Notes payable in default, including related parties | 0 | 26 |
GPB | ||
Notes payable in default, including related parties | $ 0 | $ 17 |
NOTES PAYABLE (Details 1)
NOTES PAYABLE (Details 1) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Short-term notes payable, including related parties | $ 88 | $ 96 |
Dr. Cartwright | ||
Short-term notes payable, including related parties | 34 | 46 |
Mr. Fowler | ||
Short-term notes payable, including related parties | 6 | 0 |
Dr. Faupel | ||
Short-term notes payable, including related parties | 0 | 5 |
Premium Finance (Insurance) | ||
Short-term notes payable, including related parties | $ 48 | $ 45 |
NOTES PAYABLE (Details Narrativ
NOTES PAYABLE (Details Narrative) - USD ($) | Jul. 04, 2021 | Jul. 04, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2021 | Feb. 19, 2021 | Jan. 19, 2017 | Dec. 21, 2016 |
Short-term notes payable | $ 165,000 | $ 96,000 | |||||||
Notes payable | $ 27,000 | 329,000 | $ 285,244 | ||||||
Annual interest rate description | The notes carry annual interest rates between 4.3% and 6% (16% to 18% in the event of default). | ||||||||
Annual interest rate description | The notes carried annual interest rates between 0% and 10% and have default rates as high as 20%. | ||||||||
Short-term notes payable, including related parties | $ 88,000 | 96,000 | |||||||
Notes payable in default, including related parties others | 0 | 329,000 | |||||||
Outstanding principal balance | 46,000 | 24,000 | |||||||
Accrued interest | 1,768,000 | 2,995,000 | $ 32,945 | ||||||
Promissory notes issued | 323,000 | 0 | |||||||
Premium Finance Agreement [Member] | |||||||||
Monthly payment of insurance | $ 11,968 | $ 11,299 | |||||||
Line of credit facility, maximum borrowing capacity | $ 117,560 | $ 109,000 | |||||||
Interest and maturity date description | interest at 4.3% and matured in April 2022 | interest at 4.968% and matured in April 2021 | |||||||
Line of credit, balance | $ 47,615 | ||||||||
Short-term Debt [Member] | |||||||||
Annual interest rate description | The notes carried annual interest rates between 0% and 10% and have default rates as high as 20%. | ||||||||
Short-term notes payable, including related parties | $ 40,000 | 51,000 | |||||||
Dr. Cartwright | |||||||||
Annual interest rate description | The notes were initially issued with 0% interest, however interest increased to 6.0% interest | ||||||||
Notes payable in default, including related parties others | 1,000,000 | ||||||||
Outstanding principal balance | $ 1,621,000 | ||||||||
Promissory notes issued | 100,000 | $ 41,000 | |||||||
Financing proceeds received by company | $ 1,000,000 | ||||||||
Mr. Fowler | |||||||||
Annual interest rate description | The notes were initially issued with 0% interest and then went into default with an interest rate of 18%. | ||||||||
Notes payable in default, including related parties others | $ 26,000,000 | ||||||||
Outstanding principal balance | 12,601 | $ 13,900 | $ 12,500 | ||||||
Mr. Fowler | March 22, 2021 exchange agreement [Member] | |||||||||
Annual interest rate description | The agreement brought the note current and will accrue interest at a rate of 6.0%. | ||||||||
Accrued interest | 18,718 | ||||||||
Monthly payment of insurance | 3,850 | ||||||||
Short term promissory note | 45,118 | ||||||||
Short term promissory note, principal | 26,400 | ||||||||
Dr. Faupel | |||||||||
Annual interest rate description | The notes were initially issued with 0% interest, however interest increased to 6.0% interest | ||||||||
Outstanding principal balance | $ 661,000 | ||||||||
Promissory notes issued | $ 85,000 | $ 5,000 | |||||||
Financing proceeds received by company | $ 1,000,000 |
CONVERTIBLE DEBT (Details)
CONVERTIBLE DEBT (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 | May 27, 2020 |
Debt discount and issuance costs to be amortized | $ (14,000) | $ (262,000) | |
Convertible notes payable - Short term | 897,000 | 951,000 | |
Convertible notes payable - Short term | 161,000 | 0 | |
AuctusTranche 2 [Member] | |||
Convertible notes payable - Short term | 400,000 | 400,000 | $ 400,000 |
Auctus Prepayment Penalty | |||
Convertible notes payable - Short term | 350,000 | 0 | |
Auctus Tranche 1 [Member] | |||
Convertible notes payable - Short term | 0 | 700,000 | |
Auctus March 31 2020 Note [Member] | |||
Convertible notes payable - Short term | $ 161,000 | $ 113,000 |
CONVERTIBLE DEBT (Details 1)
CONVERTIBLE DEBT (Details 1) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Convertible notes in default | $ 0 | $ 1,930,000 |
Auctus [Member] | ||
Convertible notes in default | 0 | 40,000 |
GPB | ||
Convertible notes in default | 0 | 1,709,000 |
GHS [Member] | ||
Convertible notes in default | $ 0 | $ 181,000 |
CONVERTIBLE DEBT (Details Narra
CONVERTIBLE DEBT (Details Narrative) - USD ($) | Apr. 03, 2020 | Feb. 12, 2016 | May 27, 2020 | May 22, 2020 | Mar. 31, 2020 | Jan. 16, 2020 | Dec. 17, 2019 | Jun. 22, 2018 | May 17, 2018 | May 17, 2017 | May 28, 2016 | Dec. 31, 2021 | Dec. 31, 2020 | Jan. 22, 2020 | May 19, 2017 | Dec. 07, 2016 |
Debt issuance costs | $ 86,000 | $ 0 | ||||||||||||||
Outstanding principal balance | 46,000 | 24,000 | ||||||||||||||
Convertible notes | 161,000 | 0 | ||||||||||||||
Strike price | $ 0.25 | |||||||||||||||
Exercise Price of Warrants | $ 0.04 | |||||||||||||||
Accured interest | 261,000 | 1,517,000 | ||||||||||||||
Derivative liabilities | (32,000) | (2,228,000) | ||||||||||||||
Troubled Debt Restructuring [Member] | ||||||||||||||||
Convertible notes | 700,000 | |||||||||||||||
Derivative liabilities | 84,000 | |||||||||||||||
Prepayment penalty | $ 350,000 | 350,000 | ||||||||||||||
Convertible debt restructured | 1,709,414 | |||||||||||||||
AuctusTranche 2 [Member] | ||||||||||||||||
Convertible promissory note | 451,192 | 377,136 | ||||||||||||||
Conversion price | $ 0.15 | |||||||||||||||
Convertible notes | $ 400,000 | 400,000 | 400,000 | |||||||||||||
Interesr rate | 10.00% | |||||||||||||||
Unamortized debt issuance costs | 13,586 | 47,086 | ||||||||||||||
Accured interest | 64,778 | 24,222 | ||||||||||||||
Maturity date | May 27, 2022 | |||||||||||||||
Amount paid to company | $ 313,000 | |||||||||||||||
Variable conversion price | 75.00% | |||||||||||||||
Public market price | $ 0.50 | |||||||||||||||
Replaced variable conversion price | 80.00% | |||||||||||||||
Broker fees | 2.00% | |||||||||||||||
Derivative liabilities | 31,889 | |||||||||||||||
Auctus Tranche 1 [Member] | ||||||||||||||||
Convertible promissory note | $ 700,000 | 350,000 | 489,231 | |||||||||||||
Debt issuance costs | $ 65,000 | |||||||||||||||
Convertible notes | 0 | 700,000 | ||||||||||||||
Warrant to purchase common stock | 7,500,000 | |||||||||||||||
Interesr rate | 10.00% | |||||||||||||||
Unamortized debt issuance costs | 0 | 31,146 | ||||||||||||||
Accured interest | 0 | 73,889 | ||||||||||||||
Maturity date | Dec. 17, 2021 | |||||||||||||||
Warrant exercise price | $ 0.20 | |||||||||||||||
Fair value of warrant | $ 745,972 | |||||||||||||||
Amount allocated to the warrant liability | 635,000 | |||||||||||||||
Fair value adjustment of warrants | (110,972) | |||||||||||||||
Proceeds recevied | 635,000 | |||||||||||||||
Proceeds recevied after administrative and legal expenses | 570,000 | |||||||||||||||
Partial payment of covertiable debt | 89,250 | |||||||||||||||
Prepayment penlity | 350,000 | |||||||||||||||
Unamortized debt issuance costs on warrant | 0 | 179,623 | ||||||||||||||
Auctus March 31 2020 Note [Member] | ||||||||||||||||
Convertible notes | 161,000 | $ 113,000 | ||||||||||||||
Auctus Member | ||||||||||||||||
Convertible promissory note | $ 2,400,000 | |||||||||||||||
Conversion rate | 55.00% | 95.00% | ||||||||||||||
Bearing interest rate | 24.00% | |||||||||||||||
Lowest trading price | $ 0.04 | |||||||||||||||
Conversion price | $ 0.15 | |||||||||||||||
Convertible notes | $ 328,422 | |||||||||||||||
Default penatly | 160,000 | 48,434 | ||||||||||||||
Monthly penalty payment | $ 20,000 | |||||||||||||||
Restricted common stock | 500,000 | |||||||||||||||
Warrant to purchase common stock | 700,000 | |||||||||||||||
Strike price | $ 0.15 | |||||||||||||||
Last tranche of covertiable note | $ 1,300,000 | |||||||||||||||
Issuance and sale of securities | $ 100,000 | $ 112,750 | ||||||||||||||
Interesr rate | 12.00% | |||||||||||||||
Common stock warrant issued | 250,000 | |||||||||||||||
Warrant term | 5 years | |||||||||||||||
Exercise Price of Warrants | $ 0.16 | |||||||||||||||
Percent of common stock outstanding | 4.99% | |||||||||||||||
Unamortized debt issuance costs | 0 | $ 5,100 | ||||||||||||||
Accured interest | $ 36,428 | 10,260 | ||||||||||||||
Senior Secured Promissory Note | ||||||||||||||||
Original issue discount | $ 287,500 | |||||||||||||||
Debt issuance costs | 121,000,000 | |||||||||||||||
Interest accrued | 1,233,637 | |||||||||||||||
Issuance of debt | 1,437,500 | $ 87,500 | ||||||||||||||
Proceeds from debt | $ 1,029,000 | $ 1,525,000 | ||||||||||||||
Outstanding principal balance | $ 1,837,500 | |||||||||||||||
Warrants Recieve | 2,246 | |||||||||||||||
Convertible debt | 1,709,414 | |||||||||||||||
Note 1 | Auctus Member | ||||||||||||||||
Convertible notes | $ 150,000 | |||||||||||||||
Note 2 | Auctus Member | ||||||||||||||||
Convertible notes | 89,250 | |||||||||||||||
Note 3 | Auctus Member | ||||||||||||||||
Convertible notes | 65,000 | |||||||||||||||
GPB | ||||||||||||||||
Exercise Price of Warrants | $ 0.20 | |||||||||||||||
Series F-2 Preferred Stock issued upon conversion of debt | 2,236 | |||||||||||||||
GPB | Senior Secured Promissory Note | ||||||||||||||||
Issuance of debt | $ 312,500 | |||||||||||||||
Exchange agreement description | we exchanged $3,360,811 of debt outstanding for the following: (1) cash payments of $1,500,000, (2) 7,185,000 warrants to purchase common stock, previously outstanding, would be exchanged for new warrants to purchase common stock shares at a strike price of $0.20 and (3) a certain amount of preferred stock shares for the remaining balance outstanding upon the final exchange date. During 2021, we made the final payments totaling $800,000 out of the total $1,500,000 and issued 2,236 shares of Series F-2 preferred stock in accordance with the terms of the agreement | |||||||||||||||
GHS [Member] | ||||||||||||||||
Original issue discount | $ 6,000 | $ 750 | $ 6,000 | |||||||||||||
Convertible promissory note | 60,000 | 9,250 | $ 50,000 | $ 60,000 | ||||||||||||
Debt issuance costs | $ 2,000 | 1,000 | ||||||||||||||
Proceeds from debt | $ 7,500 | |||||||||||||||
Conversion rate | 70.00% | 70.00% | 60.00% | |||||||||||||
Bearing interest rate | 20.00% | 20.00% | 20.00% | |||||||||||||
Interesr rate | 10.00% | 8.00% | 8.00% | |||||||||||||
Percent of outstanding principal balance | 150.00% | 150.00% | 150.00% | |||||||||||||
Interestr rate decrease | 60.00% | 60.00% | ||||||||||||||
Net proceeds | $ 68,000 | $ 66,000 | ||||||||||||||
June 22, 2018 [Member] | GHS [Member] | ||||||||||||||||
Original issue discount | 2,000 | |||||||||||||||
Convertible promissory note | $ 68,000 | |||||||||||||||
June 22 2018 [Member] | GHS [Member] | ||||||||||||||||
Convertible notes | 103,285 | |||||||||||||||
Default penatly | 35,285 | |||||||||||||||
Accured interest | 39,644 | |||||||||||||||
May 22, 2020 [Member] | Auctus Member | ||||||||||||||||
Fair value of common stock | 250,000 | |||||||||||||||
Fair Value of warrant to purchase common stock | $ 196,818 | |||||||||||||||
Eastmated fair value | $ 0.281 | |||||||||||||||
Outstanding balance of exchanged loans | $ 40,000 | |||||||||||||||
May 19 2017 [Member] | GHS [Member] | ||||||||||||||||
Convertible notes | 63,520 | |||||||||||||||
Default penatly | 37,926 | |||||||||||||||
Accured interest | 17,816 | |||||||||||||||
May 17 2018 [Member] | GHS [Member] | ||||||||||||||||
Convertible notes | 14,187 | |||||||||||||||
Default penatly | 4,937 | |||||||||||||||
Accured interest | $ 5,006 |
LONG TERM DEBT (Details)
LONG TERM DEBT (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Feb. 19, 2021 | |
Bonus | $ 621,000 | $ 1,094,000 | ||
Vacation | 39,000 | 34,000 | ||
Outstanding principal balance | 46,000 | 24,000 | ||
Amount forgiven | (94,392) | |||
Exchange for Series F-2 Preferred Stock | 323,000 | 0 | ||
Dr. Cartwright | ||||
Salary | $ 337,000 | |||
Bonus | 675,000 | |||
Loans to Company | 528,000 | |||
Interest on loans | 81,000 | |||
Outstanding principal balance | 1,621,000 | |||
Amount forgiven | (1,302,000) | |||
Total interest accrued | 45,000 | |||
Exchange for Series F-2 Preferred Stock | 100,000 | $ 41,000 | ||
Interest accrued | 17,000 | |||
Balance outstanding, end of period | 364,000 | 281,000 | ||
Dr. Faupel | ||||
Salary | 134,000 | |||
Bonus | 20,000 | |||
Vacation | 95,000 | |||
Interest on compensation | 67,000 | |||
Loans to Company | 196,000 | |||
Interest on loans | 149,000 | |||
Outstanding principal balance | 661,000 | |||
Amount forgiven | (454,000) | |||
Total interest accrued | 29,000 | |||
Exchange for Series F-2 Preferred Stock | 85,000 | $ 5,000 | ||
Interest accrued | $ 10,000 | |||
Balance outstanding, end of period | $ 236,000 | $ 161,000 |
LONG TERM DEBT (Details 1)
LONG TERM DEBT (Details 1) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Total | $ 820 | $ 23 |
Long-Term Debt - Related Parties | Mr. Fowler | ||
2022 | 30 | |
2023 | 479 | |
2024 | 39 | |
2025 | 41 | |
2026 | 3 | |
Thereafter | 0 | |
Total | $ 592 |
LONG TERM DEBT (Details Narrati
LONG TERM DEBT (Details Narrative) - USD ($) | Jul. 09, 2020 | May 04, 2020 | May 17, 2021 | Mar. 22, 2021 | Feb. 19, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2018 | Sep. 04, 2018 | Jan. 19, 2017 | Dec. 21, 2016 |
Debt issuance costs | $ 86,000 | $ 0 | |||||||||
Outstanding principal balance | 46,000 | 24,000 | |||||||||
Gain for extinguishment of debt | 578,000 | (296,000) | |||||||||
Current portion of long-term debt | 88,000 | 28,000 | |||||||||
Long-term debt-related parties | 59,200 | ||||||||||
Accrued interest | 261,000 | 1,517,000 | |||||||||
Debt forgiveness amount | 94,392 | ||||||||||
Paycheck Protection Program | |||||||||||
Current portion of long-term debt | 11,000 | 50,477 | |||||||||
Accrued interest | 385 | 293 | |||||||||
Debt forgiveness amount | 23,742 | ||||||||||
Proceeds from loan | $ 50,184 | ||||||||||
Loan interest rate | 1.00 | ||||||||||
Loan maturity term | 24 months | ||||||||||
Payroll costs | 100,000 | ||||||||||
Debt interest forgiveness amount | 234 | ||||||||||
10% Senior Unsecured Convertible Debenture | |||||||||||
Debt issuance costs | 819,024 | ||||||||||
Accrued interest | 73,326 | 293 | |||||||||
Convertible debentures right description | each debenture unit will have a right to 1,000 warrants for common stock shares, warrants have an exercise price of $0.80 and an expiration date of May 17, 2023 | ||||||||||
Change of Control premium percentage | 3 | ||||||||||
Deemed price | $ 0.50 | ||||||||||
Convertible debentures | $ 1,000 | 1,130,000 | |||||||||
Bond payable discount | 240,856 | ||||||||||
Unamortized debt issuance costs | 69,120 | ||||||||||
Debt maturity date | May 17, 2024 | ||||||||||
Proceeds from convertible debenture | $ 1,130,000 | ||||||||||
Conversion price | $ 0.50 | ||||||||||
Mr. Bill Wells | |||||||||||
Outstanding principal balance | $ 90,000 | 97,052 | |||||||||
Gain for extinguishment of debt | 20,000 | ||||||||||
Current portion of long-term debt | $ 77,087 | ||||||||||
Promissory note interest rate | 6.0 | ||||||||||
Debt forgiveness amount | $ 110,000 | $ 40,000 | |||||||||
Loan maturity term | 18 months | ||||||||||
Common share stock option | 66,000 | ||||||||||
Salary | $ 220,000 | ||||||||||
Received cash payment | 20,000 | $ 20,000 | |||||||||
Total amount to be receive | $ 3,000,000 | 3,000,000 | |||||||||
Shares vested per month | 3,667 | ||||||||||
Common stock exercise price | $ 0.49 | ||||||||||
Monthly payment due | 5,000 | ||||||||||
Principal and accrued interest | 99,158 | ||||||||||
Dr. Cartwright | |||||||||||
Outstanding principal balance | $ 1,621,000 | ||||||||||
Gain for extinguishment of debt | $ 840,000 | ||||||||||
Long-term debt-related parties | 281,000 | ||||||||||
Principal amount of promissory note | $ 267,085 | 1,621,000 | |||||||||
Due to related party | $ 1,621,000 | ||||||||||
Loans, interest, bonus, salary and vacation paid amount | $ 1,621,499 | ||||||||||
Interest rate per annum | 6.00% | ||||||||||
Issuance of promissory note in exchange of related party debt | $ 319,000 | ||||||||||
Capital contribution | 432,000 | ||||||||||
Promissory note maturity date | February 18, 2023 | ||||||||||
Promissory note interest rate | 6.0 | ||||||||||
Debt instrument converted amount | $ 85,000 | ||||||||||
Series F-2 Preferred Stock issued upon conversion of debt | 100 | ||||||||||
Debt forgiveness amount | 1,302,000 | ||||||||||
Salary | $ 337,000 | ||||||||||
Mr. Fowler | |||||||||||
Outstanding principal balance | 12,601 | $ 13,900 | $ 12,500 | ||||||||
Long-term debt-related parties | 150,000 | ||||||||||
Due to related party | $ 546,214 | ||||||||||
Promissory note interest rate | 6.0 | ||||||||||
Debt instrument converted amount | $ 50,000 | ||||||||||
Series F-2 Preferred Stock issued upon conversion of debt | 50 | ||||||||||
Accrued interest | $ 133,590 | ||||||||||
Due to related party, amount | $ 546,214 | ||||||||||
Promissory note interest rate description | The note accrues interest at the rate of 6.0% (18.0% in the event of default) beginning on March 1, 2022 and is payable in monthly installments of $3,600 for four years, | ||||||||||
Accrued interest rate description | The notes accrue at an interest rate of 6% (18% in the event of default). | ||||||||||
Promissory note default interest rate | 18 | ||||||||||
Promissory note monthly installment | $ 3,600 | ||||||||||
Preferred shares converted into common stock | 200,000 | ||||||||||
Effective interest rate | 6.18 | ||||||||||
Deferred salary | $ 412,624 | ||||||||||
Unsecured note issued upon conversion of debt | 150,000 | ||||||||||
Mr. Fowler | Maximum | Debt Exchanges - 2021 | |||||||||||
Debt forgiveness amount | 259,661 | ||||||||||
Mr. Fowler | Long-Term Debt - Related Parties | |||||||||||
Outstanding principal balance | 26,400 | ||||||||||
Accrued interest | 18,718 | ||||||||||
Debt forgiveness amount | $ 86,554 | ||||||||||
Dr. Faupel | |||||||||||
Outstanding principal balance | 661,000 | ||||||||||
Gain for extinguishment of debt | 199,000 | ||||||||||
Long-term debt-related parties | 161,000 | ||||||||||
Principal amount of promissory note | $ 153,178 | $ 661,000 | $ 3,850 | ||||||||
Due to related party | 660,895 | ||||||||||
Issuance of promissory note in exchange of related party debt | $ 207,111 | ||||||||||
Capital contribution | $ 235,000 | ||||||||||
Promissory note maturity date | February 18, 2023 | ||||||||||
Promissory note interest rate | 6.0 | ||||||||||
Debt instrument converted amount | $ 100,000 | ||||||||||
Series F-2 Preferred Stock issued upon conversion of debt | 85 | ||||||||||
Debt forgiveness amount | $ 454,000 | ||||||||||
Salary | $ 134,000 | ||||||||||
Dr. Faupel and Mr. Cartwright [Member] | July 24, 2019 [Member] | |||||||||||
Simple interest rate | 6.0 |
INCOME (LOSS) PER COMMON SHAR_2
INCOME (LOSS) PER COMMON SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Net loss | $ (2,431) | $ (401) |
Basic weighted average number of shares outstanding | 13,377 | 10,767 |
Net loss per share (basic) | $ (0.18) | $ (0.04) |
Diluted weighted average number of shares outstanding | 13,377 | 10,767 |
Net loss per share (diluted) | $ (0.18) | $ (0.04) |
Dilutive equity instruments (number of equivalent units): | ||
Dilutive equity instruments (number of equivalent units) | 36,739 | 69,778 |
Warrants [Member] | ||
Dilutive equity instruments (number of equivalent units): | ||
Dilutive equity instruments (number of equivalent units) | 15,655 | 7,683 |
Convertible Debt [Member] | ||
Dilutive equity instruments (number of equivalent units): | ||
Dilutive equity instruments (number of equivalent units) | 964 | 62,095 |
Preferred Stock [Member] | ||
Dilutive equity instruments (number of equivalent units): | ||
Dilutive equity instruments (number of equivalent units) | 18,253 | 0 |
Stock Option [Member] | ||
Dilutive equity instruments (number of equivalent units): | ||
Dilutive equity instruments (number of equivalent units) | 1,867 | 0 |
INCOME (LOSS) PER COMMON SHAR_3
INCOME (LOSS) PER COMMON SHARE (Details Narrative) | 12 Months Ended |
Dec. 31, 2021USD ($) | |
INCOME (LOSS) PER COMMON SHARE | |
Decrease in net loss | $ 85,000 |
Account payable forgivness amount | $ 94,392 |
Troubled debt restructuring description | the troubled debt restructuring in total would have decreased the net loss by $85,000, causing the per share calculation to change from .18 to .19 net loss per share. |
INCOME TAXES (Details)
INCOME TAXES (Details) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
INCOME TAXES | ||
Statutory federal tax rate | 21.00% | 21.00% |
State taxes, net of federal benefit | 4.00% | 4.00% |
Nondeductible expenses | 0.00% | 0.00% |
Valuation allowance | 25.00% | 25.00% |
Effective rate | 0.00% | 0.00% |
INCOME TAXES (Details 1)
INCOME TAXES (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
INCOME TAXES | ||
Current | $ 0 | $ 0 |
Deferred | 0 | 0 |
Deferred provision (credit) | (1,728,000) | 1,623,000 |
Change in valuation allowance | 1,728,000 | (1,623,000) |
Total provision for income taxes | $ 0 | $ 0 |
INCOME TAXES (Details 2)
INCOME TAXES (Details 2) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred tax assets: | ||
Warrant liability | $ 0 | $ 617,000 |
Accrued executive compensation | 288,000 | 519,000 |
Reserves and other | 273,000 | 289,000 |
Stock options | 134,000 | 132,000 |
Net operating loss carryforwards | 16,985,000 | 17,851,000 |
Gross deferred tax assets | 17,680,000 | 19,408,000 |
Valuation allowance | (17,680,000) | (19,408,000) |
Net deferred tax assets | $ 0 | $ 0 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2017 | |
INCOME TAXES | |||
NOL carryforwards | $ 58 | $ 61.6 | $ 9.9 |
Offset taxable income percentage | 80.00% |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | Jun. 02, 2021 | Dec. 31, 2021 | Dec. 31, 2020 |
Common stock warrants | 4,477,923 | ||
Common stock share issued | 13,673,000 | 13,138,000 | |
Preferred stock shares converts into common stock | 40,000 | ||
Exchange Agreements | Auctus Member | |||
Exchange price basis | The exchange price will be on a $1 for $1 basis | ||
Warrant exchange value | $ 1,681,707 | ||
Aggregate outstanding notes exchange value | 668,290 | ||
Amount received of common stock, warrants and prefunded warrants | 2,349,997 | ||
Default penalties | 350,000 | ||
Securities | $ 350,000 | ||
Weighted average price of common stock exceeds percentage rate | 200.00% | ||
10% Senior Unsecured Convertible Debenture | |||
Common stock share issued | 121,262 | ||
Dividend percentage | 10.00% | ||
Series F and Series F-2 Preferred shares | |||
Common stock share issued | 625,686 | ||
Dividend percentage | 15.00% | ||
Series D Preferred share dividends | |||
Common stock share issued | 23,109 | ||
Series E Preferred share dividends | |||
Common stock share issued | 12,432 | ||
Series E Preferred shares | |||
Preferred stock shares converts into common stock | 307,000 | ||
Series F Preferred shares | |||
Preferred stock shares converts into common stock | 60,000 |