Cover
Cover - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Mar. 27, 2023 | Jun. 30, 2022 | |
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, 2022 | ||
Entity Filer Category | Non-accelerated Filer | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2022 | ||
Entity Common Stock Shares Outstanding | 50,505,463 | ||
Entity Public Float | $ 7,101,547 | ||
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 | 678 | ||
Local Phone Number | 329-7933 | ||
Security 12g Title | Common Stock, $0.001 Par Value | ||
Entity Interactive Data Current | Yes | ||
Icfr Auditor Attestation Flag | false | ||
Auditor Name | UHY LLP | ||
Auditor Location | Sterling Heights, Michigan | ||
Auditor Firm Id | 1195 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Current Assets: | ||
Cash and cash equivalents | $ 2,313 | $ 643 |
Accounts receivable, net of allowance for doubtful accounts of $48 and $126 at December 31, 2022 and 2021, respectively. | 6 | 46 |
Inventory, net of reserves of $818 and $785 at December 31, 2022 and 2021, respectively. | 548 | 571 |
Other current assets | 137 | 377 |
Total current assets | 3,004 | 1,637 |
Non-Current Assets: | ||
Property and equipment, net | 42 | 14 |
Operating lease right-of-use asset, net of amortization | 303 | 372 |
Other assets | 17 | 17 |
Total non-current assets | 362 | 403 |
TOTAL ASSETS | 3,366 | 2,040 |
Current Liabilities: | ||
Accounts payable | 2,186 | 2,362 |
Accounts payable, related parties | 39 | 87 |
Accrued liabilities | 1,247 | 1,768 |
Deferred revenue | 509 | 337 |
Current portion of lease liability | 79 | 67 |
Current portion of long-term debt | 17 | 88 |
Current portion of long-term debt, related parties | 504 | 0 |
Short-term notes payable | 57 | 48 |
Short-term notes payable, related parties | 1 | 40 |
Convertible notes payable in default | 0 | 161 |
Short-term convertible notes payable, including nonconvertible penalty | 230 | 736 |
Total current liabilities | 4,869 | 5,694 |
Long-Term Liabilities | ||
Long-term lease liability | 246 | 325 |
Derivative liability | 5 | 32 |
Long-term convertible debt | 1,046 | 820 |
Long-term debt | 0 | 22 |
Long-term debt, related parties | 83 | 592 |
Total long-term liabilities | 1,380 | 1,791 |
Total liabilities | 6,249 | 7,485 |
STOCKHOLDERS' DEFICIT: | ||
Common stock, $.001 par value; 500,000 shares authorized, 48,596 and 13,673 shares issued and outstanding as of December 31, 2022 and 2021, respectively. | 3,437 | 3,403 |
Additional paid-in capital | 138,090 | 126,801 |
Treasury stock at cost | (132) | (132) |
Accumulated deficit | (147,359) | (142,387) |
Total stockholders' deficit | (2,883) | (5,445) |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | 3,366 | 2,040 |
Series C Convertible Preferred Shares | ||
Current Assets: | ||
Preferred stock, value | 105 | 105 |
Series C1 Convertible Preferred Shares | ||
Current Assets: | ||
Preferred stock, value | 170 | 170 |
Series C2 Convertible Preferred Shares | ||
Current Assets: | ||
Preferred stock, value | 439 | 531 |
Series D Convertible Preferred Shares | ||
Current Assets: | ||
Preferred stock, value | 159 | 276 |
Series E Convertible Preferred Shares | ||
Current Assets: | ||
Preferred stock, value | 839 | 1,639 |
Series F Convertible Preferred Shares | ||
Current Assets: | ||
Preferred stock, value | 880 | 1,187 |
Series F-2 Convertible Preferred Shares | ||
Current Assets: | ||
Preferred stock, value | 489 | 2,962 |
Series G Convertible Preferred Shares | ||
Current Assets: | ||
Preferred stock, value | $ 0 | $ 0 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
CURRENT ASSETS: | ||
Accounts receivable, net of allowance | $ 48,000 | $ 126,000 |
Inventory, net of reserves | $ 818,000 | $ 785,000 |
STOCKHOLDERS' DEFICIT: | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, authorized | 500,000,000 | 500,000,000 |
Common stock, issued | 48,596,000 | 13,673,000 |
Common stock, outstanding | 48,596,000 | 13,673,000 |
Series C Convertible Preferred Shares | ||
STOCKHOLDERS' DEFICIT: | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
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 | $ 438,000 | $ 763,000 |
Preferred stock, issued | 400 | 800 |
Preferred stock, outstanding | 400 | 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 | $ 888,000 | $ 1,736,000 |
Preferred stock, issued | 900 | 1,700 |
Preferred stock, outstanding | 900 | 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 | $ 1,056,000 | $ 1,426,000 |
Preferred stock, issued | 1,100 | 1,400 |
Preferred stock, outstanding | 1,100 | 1,400 |
Series F-2 Convertible Preferred Shares | ||
STOCKHOLDERS' DEFICIT: | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, authorized | 5,000 | 5,000 |
Preferred stock, liquidation preference | $ 535,000 | $ 3,237,000 |
Preferred stock, issued | 500 | 3,200 |
Preferred stock, outstanding | 500 | 3,200 |
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 | $ 2,701,000 | $ 3,263,000 |
Preferred stock, issued | 2,700 | 3,300 |
Preferred stock, outstanding | 2,700 | 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 |
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 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
CONSOLIDATED STATEMENTS OF OPERATIONS | ||
Sales - devices and disposables | $ 13 | $ 81 |
Cost of goods sold | 81 | 61 |
Gross profit (loss) | (68) | 20 |
Operating expenses: | ||
Research and development | 77 | 69 |
Sales and marketing | 181 | 141 |
General and administrative | 3,007 | 2,172 |
Total operating expenses | 3,265 | 2,382 |
Loss from operations | (3,333) | (2,362) |
Other income (expense) | ||
Interest expense | (582) | (1,150) |
Change in fair value of derivative liability | 27 | (91) |
Gain (Loss) from extinguishment of debt | (469) | 578 |
Change in fair value of warrants | 0 | 448 |
Other income | 16 | 507 |
Total other income (expense) | (1,008) | 292 |
Loss before income taxes | (4,341) | (2,070) |
Provision for income taxes | 0 | 0 |
Net loss | (4,341) | (2,070) |
Preferred stock dividends | (631) | (361) |
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS | $ (4,972) | $ (2,431) |
NET LOSS PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS | ||
Basic | $ (0.15) | $ (0.18) |
Diluted | $ (0.15) | $ (0.18) |
Weighted average shares outstanding | ||
Basic | 32,505 | 13,377 |
Diluted | 32,505 | 13,377 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT( Unaudited) - USD ($) $ in Thousands | Total | Preferred Stock Series E [Member] | Preferred Stock Series F [Member] | Preferred Stock Series F-2 [Member] | Preferred Stock Series G [Member] | Common Stock [Member] | Additional Paid-In Capital | Treasury Stock [Member] | Retained Earnings (Accumulated Deficit) | Preferred Stock Series C [Member] | Preferred Stock Series C1 [Member] | Preferred Stock Series C2 [Member] | Preferred Stock Series D [Member] |
Balance, shares at Dec. 31, 2020 | 2,000 | 0 | 0 | 0 | 13,138,000 | 1,000 | 3,000 | 1,000 | |||||
Balance, amount at Dec. 31, 2020 | $ (10,855) | $ 1,639 | $ 0 | $ 0 | $ 0 | $ 3,403 | $ 123,109 | $ (132) | $ (139,956) | $ 105 | $ 170 | $ 531 | $ 276 |
Series F preferred offering | 1,195 | $ 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||
Series F preferred offering, shares | 0 | 1,000 | 0 | 0 | 98,000 | ||||||||
Series F-2 preferred offering | 404 | $ 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||
Series F preferred offering, amount | $ 0 | $ 1,195 | $ 0 | $ 0 | |||||||||
Conversion of debt and expenses for Series F-2 preferred stock | 2,559 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||
Series F-2 preferred offering, shares | 0 | 0 | 1,000 | 0 | |||||||||
Issuance of common stock to finders | $ 0 | $ 0 | $ 0 | $ 0 | 0 | 0 | 0 | 0 | |||||
Series F-2 preferred offering, amount | $ 0 | $ 0 | $ 404 | $ 0 | |||||||||
Issuance of common stock to finders, amount | 54 | 0 | 54 | 0 | 0 | ||||||||
Series G preferred offering | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||
Conversion of debt and expenses for Series F-2 preferred stock, shares | 0 | 0 | 2,000 | 0 | |||||||||
Series G redemption | 0 | $ 0 | $ 0 | $ 0 | $ 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Conversion of debt and expenses for Series F-2 preferred stock, amount | 0 | 0 | 2,559 | 0 | |||||||||
Issuance of common stock for payment of Series D preferred dividends | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||
Issuance of common stock for payment of Series E preferred dividends | 118 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | 118 | 0 | 0 | 0 | 0 | 0 | 0 |
Series G preferred offering, shares | 0 | 0 | 0 | 153,000 | |||||||||
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 | $ 0 | 53 | 0 | 0 | ||||||||
Issuance of warrants to consultants | 1,172 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | 1,172 | 0 | 0 | 0 | 0 | 0 | 0 |
Series G preferred offering, amount | 0 | 0 | 0 | 0 | |||||||||
Issuance of common stock for payment of Series E preferred dividends, shares | 288,000 | ||||||||||||
Warrants issued with debt | 304 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | 304 | 0 | 0 | 0 | 0 | 0 | 0 |
Series G redemption, shares | 0 | 0 | 0 | (153,000) | |||||||||
Conversion of warrants from liabilities to equity | 1,755 | $ 0 | $ 0 | $ 0 | $ 0 | 0 | 1,755 | 0 | 0 | 0 | 0 | 0 | 0 |
Conversion of Series F Preferred shares into common stock | 8 | 0 | (8) | 0 | 0 | 0 | 0 | 0 | 0 | ||||
Stock-based compensation | 227 | 0 | 0 | 0 | 0 | 0 | 227 | 0 | 0 | 0 | 0 | 0 | 0 |
Accrued preferred dividends | (361) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (361) | 0 | 0 | 0 | 0 |
Net loss | (2,070) | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | 0 | 0 | (2,070) | $ 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 | 0 | 0 | ||||||||
Issuances of common stock to investors | $ 0 | ||||||||||||
Conversion of Series C-2 preferred stock to common stock, shares | 40,000 | ||||||||||||
Net loss | $ (2,071) | ||||||||||||
Balance, shares at Dec. 31, 2021 | 2,000 | 1,000 | 3,000 | 0 | 13,673,000 | 0 | 1,000 | 3,000 | 1,000 | ||||
Balance, amount at Dec. 31, 2021 | (5,445) | $ 1,639 | $ 1,187 | $ 2,963 | $ 0 | $ 3,403 | 126,800 | (132) | (142,387) | $ 105 | $ 170 | $ 531 | $ 276 |
Issuance of common stock for payment of Series E preferred dividends | 102 | $ 0 | 102 | 0 | 0 | ||||||||
Issuance of common stock for payment of Series D preferred dividends, shares | 82,000 | ||||||||||||
Issuance of common stock for payment of Series D preferred dividends, amount | 47 | $ 0 | 47 | 0 | 0 | ||||||||
Issuance of common stock for payment of Series E preferred dividends, shares | 181,000 | ||||||||||||
Warrants issued with debt | 0 | ||||||||||||
Conversion of Series F Preferred shares into common stock | 308 | ||||||||||||
Stock-based compensation | 176 | 0 | 0 | 0 | 0 | $ 0 | 176 | 0 | 0 | 0 | 0 | 0 | 0 |
Accrued preferred dividends | (631) | 0 | 0 | 0 | 0 | $ 0 | 0 | 0 | (631) | 0 | 0 | 0 | 0 |
Net loss | (4,341) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||
Common stock warrants exercised, shares | 5,128,000 | ||||||||||||
Common stock warrants exercised, amount | 846 | $ 5 | 841 | 0 | 0 | ||||||||
Issuances of common stock to investors, shares | 6,712,000 | ||||||||||||
Issuances of common stock to investors, amount | 1,429 | $ 7 | 1,422 | 0 | 0 | ||||||||
Common stock warrants exercised | 0 | 0 | 0 | 0 | |||||||||
Issuances of warrants to investors | 1,795 | 0 | 0 | 0 | 0 | 0 | 1,795 | 0 | 0 | 0 | 0 | 0 | 0 |
Common stock warrants exercised | 0 | 0 | 0 | 0 | |||||||||
Issuances of common stock to investors | 1,392 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||
Issuance of common stock for payment of Series F preferred dividends | 0 | 0 | 0 | ||||||||||
Issuance of common stock for payment of Series F preferred dividends, amount | 107 | $ 0 | 107 | 0 | 0 | ||||||||
Issuance of common stock for payment of Series D preferred dividends | 0 | 0 | 0 | 0 | |||||||||
Issuance of common stock for payment of Series F-2 preferred dividends, shares | 114,000 | ||||||||||||
Issuance of common stock for payment of Series F-2 preferred dividends, amount | 75 | $ 0 | 75 | 0 | 0 | ||||||||
Issuance of common stock for payment of Series F preferred dividends | 0 | 0 | 0 | 0 | 0 | 0 | |||||||
Issuance of common stock for payment of interest, shares | 242,000 | ||||||||||||
Issuance of common stock for payment of interest, amount | 150 | $ 0 | 150 | 0 | 0 | ||||||||
Issuance of common stock for payment of Series E preferred dividends | 0 | 0 | 0 | 0 | |||||||||
Issuance of common stock for Series F and Series F-2 one-time 15% dividends, shares | 624,000 | ||||||||||||
Issuance of common stock for Series F and Series F-2 one-time 15% dividends, amount | 400 | $ 1 | 399 | 0 | 0 | ||||||||
Conversion of Series C-2 preferred stock to common stock, shares | 1,125,000 | ||||||||||||
Conversion of Series C-2 preferred stock to common stock, amount | 0 | $ 1 | 91 | 0 | 0 | ||||||||
Issuance of common stock for payment of Series F-2 preferred dividends | $ 0 | 0 | 0 | 0 | 0 | 0 | |||||||
Conversion of Series D preferred stock to common stock, shares | 975,000 | ||||||||||||
Conversion of Series D preferred stock to common stock, amount | 0 | $ 1 | 116 | 0 | 0 | ||||||||
Conversion of Series E preferred stock to common stock, shares | (1,000) | 3,390,000 | |||||||||||
Issuance of common stock for payment of interest | $ 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||
Conversion of Series E preferred stock to common stock, amount | 0 | (800) | 0 | $ 0 | 0 | $ 3 | 797 | 0 | 0 | ||||
Conversion of Series F preferred stock to common stock, shares | 1,480,000 | ||||||||||||
Conversion of Series F preferred stock to common stock, amount | 0 | $ 1 | 306 | 0 | 0 | ||||||||
Issuance of common stock for Series F and Series F-2 one-time 15% dividends | 0 | 0 | $ 0 | 0 | |||||||||
Conversion of Series F-2 preferred stock to common stock, shares | (3,000) | 10,808,000 | |||||||||||
Issuance of common stock for Series F and Series F-2 one-time 15% dividends | 0 | 0 | $ 0 | 0 | |||||||||
Conversion of Series F-2 preferred stock to common stock, amount | 0 | 0 | 0 | (2,474) | 0 | $ 11 | 2,463 | 0 | 0 | ||||
Conversion of Series C-2 preferred stock to common stock, shares | (1,000) | ||||||||||||
Conversion of Series C-2 preferred stock to common stock | 0 | 0 | 0 | 0 | |||||||||
Issuances of warrants to consultants | 1,204 | 0 | 0 | 0 | 0 | $ 0 | 1,204 | 0 | 0 | 0 | 0 | $ 0 | 0 |
Conversion of Series C-2 preferred stock to common stock, amount | 0 | 0 | (92) | 0 | |||||||||
Impact of Auctus exchange, shares | 3,900,000 | ||||||||||||
Conversion of Series D preferred stock to common stock | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (117) | |||||
Impact of Auctus exchange, amount | 1,203 | $ 4 | 1,199 | 0 | 0 | ||||||||
Net loss | (4,341) | $ 0 | 0 | 0 | (4,341) | ||||||||
Conversion of Series E preferred stock to common stock | 0 | 0 | 0 | 0 | |||||||||
Conversion of Series F preferred stock to common stock | 0 | 0 | 0 | 0 | |||||||||
Conversion of Series F-2 preferred stock to common stock | 0 | (307) | 0 | 0 | 0 | 0 | 0 | 0 | |||||
Impact of Auctus exchange | $ 0 | $ 0 | 0 | 0 | 0 | $ 0 | $ 0 | $ 0 | |||||
Balance, shares at Dec. 31, 2022 | 1,000 | 1,000 | 48,596,000 | 1,000 | 2,000 | 1,000 | |||||||
Balance, amount at Dec. 31, 2022 | $ (2,883) | $ 839 | $ 880 | $ 489 | $ 0 | $ 3,437 | $ 138,090 | $ (132) | $ (147,359) | $ 105 | $ 170 | $ 439 | $ 159 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (4,341) | $ (2,071) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Bad debt expense | 23 | 0 |
Inventory reserve | 81 | 0 |
Depreciation | 4 | 1 |
Amortization of debt issuance costs and discounts | 143 | 320 |
Amortization of beneficial conversion feature | 0 | 8 |
Stock based compensation | 176 | 228 |
Change in fair value of warrants | 0 | (448) |
Extinguishment of derivative liability | 0 | (84) |
Change in fair value of derivatives | (27) | 91 |
Amortization of lease right-of-use-asset | 68 | 82 |
Expense for warrants issued to consultants | 1,205 | 664 |
Loss on extinguishment of debt | 655 | 0 |
Gain from forgiveness of debt | (186) | (578) |
Other non-cash expenses | 172 | 117 |
Change in operating assets and liabilities: | ||
Accounts receivable | 16 | (22) |
Inventory | (58) | 33 |
Other current assets | 363 | (292) |
Other non-current assets | 0 | (17) |
Accounts payable and accrued liabilities | 123 | 136 |
Lease liabilities | (67) | (56) |
Deferred revenue | 172 | 296 |
NET CASH USED IN OPERATING ACTIVITIES | (1,478) | (1,592) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of property and equipment | (31) | (14) |
NET CASH USED FOR INVESTING ACTIVITIES | (31) | (14) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from warrant exercises | 532 | 0 |
Proceeds from debt financing | 0 | 1,248 |
Payments made on notes payable | (540) | (1,468) |
Payments of debt issuance costs | 0 | (86) |
Note payable default penalty | 0 | 398 |
Proceeds from issuances of common stock, net of costs | 1,392 | 0 |
Proceeds from issuances of warrants, net of costs | 1,796 | 0 |
Proceeds from issuance of common stock, net of costs | 0 | 0 |
Proceeds from Series F offering, net of costs | 0 | 1,436 |
Proceeds from Series F-2 offering, net of costs | 0 | 539 |
Proceeds from Series G offering, net of costs | 0 | 125 |
Redemption of Series G preferred stock | 0 | (125) |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 3,180 | 2,067 |
NET CHANGE IN CASH | 1,671 | 461 |
Cash at beginning of period | 643 | 182 |
CASH AT END OF PERIOD | 2,314 | 643 |
SUPPLEMENTAL DISCLOSURE FOR OPERATING ACTIVITIES: | ||
Cash paid for interest | 149 | 557 |
SUPPLEMENTAL DISCLOSURE FOR NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Dividends on preferred stock | 631 | 361 |
Settlement of interest through common stock issuance | 151 | 0 |
Debt from related parties exchanged for preferred series F-2 | 0 | 323 |
Issuance of series F-2 preferred stock | 0 | 2,236 |
Issuance of warrants to finders in connection with Series F and Series F-2 preferred stock | 0 | 377 |
Settlement of dividends through common stock issuance | 730 | 171 |
Settlement of accounts payable through common stock issuance | 0 | 62 |
Warrants exchanged for fixed price warrants | 0 | 1,755 |
Warrants issued with debt | 0 | 304 |
Settlement of accounts payable through issuance of promissory note | 0 | 97 |
Issuance of common stock as debt repayment | 0 | 0 |
Conversion of Series C-2 Preferred Shares into common stock | 92 | 0 |
Conversion of Series D Preferred Shares into common stock | 118 | 0 |
Conversion of Series E Preferred Shares into common stock | 800 | 0 |
Conversion of Series F Preferred Shares into common stock | 308 | 8 |
Conversion of Series F-2 Preferred Shares into common stock | 2,473 | 0 |
Directors and officers insurance obtained with financing | $ 124 | $ 0 |
ORGANIZATION BACKGROUND AND BAS
ORGANIZATION BACKGROUND AND BASIS OF PRESENTATION | 12 Months Ended |
Dec. 31, 2022 | |
ORGANIZATION BACKGROUND AND BASIS OF PRESENTATION | |
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”). On July 25, 2022, the Company filed a Certificate of Correction with the Secretary of State of Delaware to render null and void ab initio Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles 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, 2022 and 2021, and the consolidated results of operations and cash flows for the years ended December 31, 2022 and 2021 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, 2022, it had an accumulated deficit of approximately $147.4 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 maker is the Chief Executive Officer and acting 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, 2022, the Company had a negative working capital of approximately $1.9 million, accumulated deficit of $147.4 million, and incurred a net loss including preferred dividends of $5.0 million for the year then ended. Stockholders’ deficit totaled approximately $2.9 million at December 31, 2022, primarily due to recurring net losses from operations. During the year ended December 31, 2022, the Company raised $3.2 million from the sale of common stock and warrants (net of expenses), and $495 thousand of proceeds from warrant exercises. 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 35.6 million shares of its common stock outstanding at December 31, 2022, with exercise prices ranging between $0.20 and $0.80 per share. Exercises of in-the-money warrants would generate a total of approximately $2.3 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, 2022 | |
SIGNIFICANT ACCOUNTING POLICIES | |
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 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 maintains cash balances in several financial institutions that are insured by the Federal Deposit Insurance Corporation up to certain federal limitations. At times, the Company’s cash balance exceeds these federal limitations. The amount in excess of insured limitations was approximately $2,064,772 and $392,569 as of December 31, 2022 and 2021, respectively. 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, 2022 and 2021, our inventories were as follows: (in thousands) December 31, December 31, 2022 2021 Raw materials $ 1,260 $ 1,255 Work-in-progress 68 69 Finished goods 38 32 Inventory reserve (818 ) (785 ) Total inventory $ 548 $ 571 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, 2022 and 2021: (in thousands) December 31, December 31, 2022 2021 Equipment $ 1,083 $ 1,048 Software 656 652 Furniture and fixtures 41 41 Leasehold improvements 12 12 Construction in progress - 8 Subtotal 1,792 1,761 Less accumulated depreciation (1,750 ) (1,747 ) Property, equipment and leasehold improvements, net $ 42 $ 14 Depreciation expense related to property and equipment for the years ended December 31, 2022 and 2021 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 (Principally Legal Fees) 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 $5,400 and $14,800 for the years ended December 31, 2022 and 2021, 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, 2022 and 2021 are summarized as follows: (in thousands) December 31, 2022 December 31, 2021 Compensation $ 444 $ 621 Professional fees 285 98 Interest 189 261 Vacation 41 39 Preferred dividends 231 349 Stock subscription payable 36 351 Other accrued expenses 21 49 Total $ 1,247 $ 1,768 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, 2022 or 2021. 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 2022 and 2021, deferred revenue was $509,101 and $337,315, respectively. Significant Customers As of December 31, 2022, accounts receivable outstanding was $54,484; the outstanding amount was netted against a $48,172 allowance, leaving a balance of $6,312 which was from one distributor. As of December 31, 2021, accounts receivable outstanding was $171,153, the outstanding amount was netted against a $125,584 allowance, leaving a balance of $45,569 which was from two customers. 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 2021 federal and state corporate tax returns. 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, 2022, the Company had approximately $65.6 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. 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, 2022 | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | |
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, 2022, we had one derivative liability associated with the bifurcated conversion option of a loan due to Auctus Funds, LLC (“Auctus”) in the amount of $326,016. There was no movement of instruments between fair value hierarchy tiers during the years ended December 31, 2022 or 2021. The following tables present the fair value of those liabilities measured on a recurring basis as of December 31, 2022 and 2021: Fair Value at December 31, 2022 (in thousands) Level 1 Level 2 Level 3 Total Derivative liability/bifurcated conversion option in connection with Auctus $326,016 loan on December 17, 2019 $ - $ - $ (5 ) $ (5 ) Total long-term liabilities at fair value $ - $ - $ (5 ) $ (5 ) 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 ) The following is a summary of changes to Level 3 instruments during the year ended December 31, 2022: (in thousands) Senior Secured Debt Derivative Total Balance, December 31, 2021 $ - $ (32 ) $ (32 ) Change in fair value during the year - 27 27 Balance, December 31, 2022 $ - $ (5 ) $ (5 ) |
STOCKHOLDERS DEFICIT
STOCKHOLDERS DEFICIT | 12 Months Ended |
Dec. 31, 2022 | |
STOCKHOLDERS' DEFICIT: | |
STOCKHOLDERS' DEFICIT | 4. STOCKHOLDERS’ DEFICIT Recent Sales of Securities During the year ended December 31, 2022, the Company entered into certain Securities Purchase Agreements (the “Agreement”) with certain accredited investors (the “Investors”), including Richard Blumberg, Michael James and John Imhoff, each a member of the Company’s Board of Directors, pursuant to which the Company issued 6,711,540 shares of its common stock, four year warrants to purchase an aggregate of 6,711,540 shares of Common Stock at $0.50 per share and 6,711,540 shares of Common Stock at $0.65 per share (the “Warrants”) for an aggregate purchase price of $3,355,270 (the “Transaction”). After payment of all fees and expenses relating to the transaction, the Company received net proceeds of approximately $3.2 million. The primary use of proceeds is to fund the completion and filing of clinical study data needed for FDA approval of the Company’s LuViva Advanced Cervical Scan. Additional use of proceeds is to support international distribution partners to grow sales throughout the remainder of 2022 and into 2023, as well as for general and administrative expenses. Common Stock The Company has authorized 500,000,000 shares of common stock with $0.001 par value. As of December 31, 2022 and December 31,2021, 48,595,715 and 13,673,583 shares were issued and outstanding, respectively. During the years ended December 31, 2022 and 2021 the Company issued 34,922,132 and 535,301 shares of common stock, respectively, as summarized in the following table: Number of Shares 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 Issuances of common stock to investors 6,711,540 Issuances of common stock for warrants exercised 5,127,923 Issuances of common stock to Auctus for Exchange Agreement 3,900,000 Issuances of common stock for payment of Series D Preferred dividends 81,973 Issuances of common stock for payment of Series E Preferred dividends 179,858 Issuances of common stock for payment of Series F Preferred dividends 163,214 Issuances of common stock for payment of Series F-2 Preferred dividends 114,304 Issuances of common stock for payment of interest 241,914 Issuances of common stock for Series F one-time 15% dividend 255,401 Issuances of common stock for Series F-2 one-time 15% dividend 368,505 Conversion of Series C-2 Preferred stock to common stock 1,124,500 Conversion of Series D Preferred stock to common stock 975,000 Conversion of Series E Preferred stock to common stock 3,390,000 Conversion of Series F Preferred stock to common stock 1,480,000 Conversion of Series F-2 Preferred stock to common stock 10,808,000 Issued during the year ended December 31, 2022 34,922,132 Summary table of common stock transactions: Shares outstanding at December 31, 2020 13,138,282 Common shares issued during the year ended December 31, 2021 535,301 Shares outstanding at December 31, 2021 13,673,583 Common shares issued during the year ended December 31, 2022 34,922,132 Shares outstanding at December 31, 2022 48,595,715 Auctus Exchange On October 11, 2022, the Company issued 3,900,000 common shares to Auctus pursuant to the fourth amendment of an exchange agreement entered into on June 2, 2021. Refer to Note 9, “ Auctus Convertible Debt 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, 2022 and 2021, 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, 2022. 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, 2022 and 2021, 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. Series C1 Convertible Preferred Stock The board designated 20,250 shares of preferred stock as Series C1 Preferred Stock, of which 1,049.25 shares were issued and outstanding at December 31, 2022 and 2021. 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, 2022 and 2021, 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, 2022 and 2021, 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, 2022 and 2021, there were 2,700 and 3,262.25 shares outstanding, respectively, each 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 5,400,000 and 6,524,500 common shares, respectively. 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. During the year ended December 31, 2022, the Company issued 1,124,500 common stock shares for the conversion of 562.25 shares of Series C2 Preferred stock. Series D Convertible Preferred Stock The Board designated 6,000 shares of preferred stock as Series D Preferred Stock, 438 of which remained outstanding as of December 31, 2022. 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. Each share of Series D Preferred Stock has a par value of $0.001 per share and a Stated Value equal to $1,000. The 438 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, 2022, none of the 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, 2022, the Company entered into various agreements with Series D Preferred shareholders, pursuant to which each holder separately agreed to exchange their Series D Preferred shares into the Company’s common shares (in accordance with their existing Series D Preferred Share Agreements). In addition, the holders agreed to exchange 650,000 common stock warrants with a strike price of $0.25 for 650,000 warrants with a strike price of $0.20, which were required to be immediately exercised. The Company received $130,000 from the holders for exercises of the aforementioned warrants. During the year ended December 31, 2022, the Company issued 975,000 common stock shares for the conversion of 325 shares of Series D Preferred Stock. During the year ended December 31, 2022, the Company issued 81,973 shares of common stock for the payment of accrued Series D Preferred Stock dividends. As of December 31, 2022, the Company had accrued dividends for Series D preferred shares of $8,213. Series E Convertible Preferred Stock The Board designated 5,000 shares of preferred stock as Series E Preferred Stock, 888 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. 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, 2022, the Company issued 3,390,000 common stock shares for the conversion of 847.5 shares of Series E Convertible Preferred Stock. During the year ended December 31, 2022, the Company issued 179,858 common stock shares for the payment of Series E Preferred Stock dividends. As of December 31, 2022, the Company had accrued dividends for Series E preferred shares of $30,414. Series F Convertible Preferred Stock The Board designated 1,500 shares of preferred stock as Series F Preferred Stock, 1,056 and 1,426 of which were issued and outstanding as of December 31, 2022 and 2021, respectively. 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 is entitled to cumulative dividends at the rate per share of 6% per annum. The stated value on the Series F Preferred Stock is $1,000. 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, 2022, the Company issued 1,480,000 common stock shares for the conversion of 370 shares of Series F Preferred stock and 163,214 common stock shares for the payment of annual Series F Preferred Stock dividends. During the year ended December 31, 2022, the Company issued 255,401 common stock shares for the payment of a one-time, non-recurring 15% dividend to the Series F Preferred shareholders (as required by the Series F Certificate of Designation, in the event the Company did not uplist to the NASDAQ stock exchange or file its clinical data intended for FDA approval of LuViva by December 31, 2021). As of December 31, 2022, the Company had accrued dividends for Series F preferred shares of $48,400. Series F-2 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 3,500 shares of preferred stock as Series F-2 Preferred Stock, 535 and 3,237 of which were issued and outstanding as of December 31, 2022 and 2021, respectively. 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. 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 on the Series F-2 Preferred Stock is $1,000. 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. During the year ended December 31, 2022, the Company issued 10,808,000 common stock shares for the conversion of 2,702 shares of Series F-2 Preferred stock and 114,304 common stock shares for the payment of annual Series F-2 Preferred Stock dividends. During the year ended December 31, 2022, the Company issued 368,505 common stock shares for the payment of a one-time, non-recurring 15% dividend to the Series F-2 Preferred shareholders (as required by the Series F-2 Certificate of Designation in the event the Company did not uplist to the NASDAQ stock exchange or file its clinical data intended for FDA approval of LuViva by December 31, 2021). As of December 31, 2022, the Company had accrued dividends for Series F-2 Preferred shares of $24,267. 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, 2022 and 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, 2022 and 2021: Warrants(Underlying Shares) Weighted-Average Exercise Price Per Share 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 Warrants issued 24,223,080 $ 0.54 Warrants cancelled/expired (4,450,866 ) $ 0.54 Warrants exchanged (8,775,000 ) $ 0.19 Warrants exercised (3,079,868 ) $ 0.17 Outstanding, December 31, 2022 35,586,980 $ 0.46 Warrant Transactions – 2022 During the year ended December 31, 2022, the Company issued 13,423,080 warrants to investors (see “ Recent Sales of Securities” During the year ended December 31, 2022, the Company exchanged 8,775,000 warrants for 7,800,000 newly issued warrants in accordance with an exchange agreement with Auctus. See Note 9, “ Auctus Convertible Debt” During the year ended December 31, 2022, the Company issued 3,000,000 warrants to consultants as consideration for performing services. The expense for such warrants will be recognized on a pro-rata basis over the term of their respective agreements. Management estimated the fair value of the warrants issued during the year ended December 31, 2022 utilizing the Black-Scholes Option Pricing model with the following assumptions: December 31, 2022 Expected term 3.8 Years Volatility 148.4 % Risk-free interest rate 3.6 % Dividend yield 0.00 % During the year ended December 31, 2022, the Company issued 5,127,923 common shares for warrants exercised, 2,193,599 of which were for warrants exercised prior to December 31, 2021. As of December 31, 2022, the Company had received approximately $36,386 of proceeds for the exercise of 145,544 warrants, which was included in Accrued Liabilities as of December 31, 2022 pending issuance of the common shares. 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 years Volatility 142.2 % 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. As of December 31, 2022, the warrants had expired. 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. As of December 31, 2022, the warrants had expired. 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 - 2021 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. |
STOCK OPTIONS
STOCK OPTIONS | 12 Months Ended |
Dec. 31, 2022 | |
STOCK OPTIONS | |
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, 2022 and 2021, the Company recognized stock-based compensation expense of $175,673 and $226,717, respectively. The following table summarizes the Company’s stock option activity and related information for the years ended December 31, 2022 and 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 Options outstanding as of December 31, 2022 1,500,000 $ 0.49 7.5 years $ - Options exercisable as of December 31, 2022 1,318,091 $ 0.49 7.5 years $ - The aggregate intrinsic value is calculated as the difference between the Company’s closing stock price as of December 31, 2022 and the exercise price, multiplied by the number of options. As of December 31, 2022, there was $87,823 total unrecognized stock-based compensation expense. Such costs are expected to be recognized during 2023. The weighted-average fair value of awards granted was nil and $0.47 during the years December 31, 2022 and 2021, 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 the fair value of awards granted during 2021: December 31, 2021 Expected term (years) 10 years Volatility 153.12 % Risk-free interest rate 0.98 % Dividend yield 0.00 % |
LITIGATION AND CLAIMS
LITIGATION AND CLAIMS | 12 Months Ended |
Dec. 31, 2022 | |
COMMITMENTS AND CONTINGENCIES (Note 7) | |
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, 2022 and 2021, there was no accrual recorded for any potential losses related to pending litigation. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2022 | |
COMMITMENTS AND CONTINGENCIES (Note 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 $109,404 and $110,701 for the years ended December 31, 2022 and 2021, respectively. The below table presents total operating lease right-of-use assets and lease liabilities as of December 31, 2022 and 2021: (in thousands) December 31, 2022 December 31, 2021 Operating lease right-of-use assets $ 303 $ 372 Operating lease liabilities $ 325 $ 392 The table below presents the maturities of operating lease liabilities as of December 31, 2022: (in thousands) Operating Leases 2023 $ 112 2024 115 2025 118 2026 50 Total future lease payments 395 Less: discount (70 ) Total lease liabilities $ 325 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, 2022 2022 Weighted average remaining lease term (years) 3.4 4.4 Weighted average discount rate 11.4 % 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 Blumberg & Bowles Consulting, LLC (“BB”), which is partially owned by Mr. Blumberg (a related party), 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. During the years ended December 31, 2022 and 2021, the Company recognized $79,444 and $556,111 of consulting expenses as a result of this agreement, respectively. Unrecognized consulting expense to be recognized under this agreement is nil as of December 31, 2022. During the year ended December 31, 2022, the Company issued 875,000 warrants to Mr. Blumberg and 375,000 warrants Lee Bowles, a partial owner of BB. On March 10, 2021, the Company entered into a consulting agreement with Richard Blumberg. As a result of the consulting agreement Mr. Blumberg provided $350,000, which was recorded to subscription receivable, 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. The Company estimated the fair value of the warrants using the Black-Scholes option pricing model and the following assumptions: Expected term 3.0 Years Volatility 108.65 % Risk-free interest rate 4.25 % Dividend yield 0.00 % During the year ended December 31, 2022, the Company recognized $393,893 of expense for the warrants issued to Mr. Blumberg. Total unrecognized expense for the warrants was $740,520 as of December 31, 2022. During the year ended December 31, 2022, the Company recognized $166,667 of expense for the common shares due to Mr. Blumberg. As the shares had not been issued as of December 31, 2022, the Company estimated the total amount of expense utilizing the closing price of the Company’s common stock as of December 31, 2022. 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. The Company confirmed an obligation to provide Mr. Blumberg with 950,000 fully transferrable warrants, which will expire on January 1, 2024 and have an exercise price of $0.25. Issuance of the warrants owed to Mr. Blumberg for his services 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 investor relations, marketing services and assisting the Company with obtaining financing. During the year ended December 31, 2022, the Company obtained the requisite funding receipts and recorded $307,457 of expense for the warrants, which will be issued to Mr. Blumberg over a period of 24 months subsequent to the financing. The Company estimated the fair value of the warrants using the Black-Scholes option pricing model and the following assumptions: Expected term 1.3 Years Volatility 164.63 % Risk-free interest rate 4.05 % Dividend yield 0.00 % 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. The remaining balance owed for outstanding purchase orders was $26,965 as of September 30, 2022. Under the terms of the amended agreement, the parties agreed that if by October 30, 2022, SMI fails to achieve commercialization of LuViva in China, SMI shall no longer have any rights to manufacture, distribute or sell LuViva. Although our Chinese partner SMI missed the date in the contract when they should have achieved commercialization, patients continue to be enrolled in the clinical studies in China which is sponsored and being paid for by SMI. We continue to work with SMI to finish the clinical study and are in discussions with them to provide additional time to achieve commercialization. A revised agreement reflecting these discussions was signed in the first quarter of 2023. Refer to Note 13, “Subsequent Events.” On August 24, 2022, the Company entered into an agreement with Ironstone Capital Corp. and Alan Grujic (the “Advisory Group”) whereby the Advisory Group agreed to perform marketing and investor relations services over a term of twelve months, commencing on the closing of a financing of at least $2.5 million. In consideration for these services, the Company issued 800,000 warrants with an exercise price of $0.50 to Mr. Grujic, which were due within 10 business days of closing the financing transaction (the “Transaction”) that took place in September 2022 (see Note 4, “ Recent sales of securities”) “Subsequent Events”. The Company estimated the fair value of the 800,000 warrants issued in September 2022 using the Black-Scholes option pricing model and recognized expense of $364,800 for the warrants during the year ended December 31, 2022. The Company estimated the fair value of the warrants with market conditions using the Binomial Lattice model and recognized expense of $60,229 for the warrants (representing the pro rata expense over the expected term of the warrants) during the year ended December 31, 2022. 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. |
SHORT-TERM NOTES PAYABLE
SHORT-TERM NOTES PAYABLE | 12 Months Ended |
Dec. 31, 2022 | |
SHORT-TERM NOTES PAYABLE | |
SHORT-TERM NOTES PAYABLE | 8. SHORT-TERM NOTES PAYABLE On July 4, 2022, the Company entered into a premium finance agreement to finance its insurance policies totaling $123,889. Monthly payments of $11,409 are due on the note, including interest incurred at a rate of 5.0%. The note, which matures on May 4, 2023, had an outstanding balance of $56,569 and nil as of December 31, 2022 and 2021, respectively. On July 4, 2021, the Company entered into a premium finance agreement to finance its insurance policies totaling $117,560. The note required monthly payments of $11,968, including interest at 4.3%, until it matured in April of 2022. As of December 31, 2022 and 2021, the outstanding balance was nil and $47,615, respectively. During 2019, the Company issued promissory notes to Mr. Cartwright totaling $45,829. 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. As of December 31, 2022 and 2021, the balance on the notes was $619 and $34,141, respectively. 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%. As part of the March 22, 2021 exchange agreement these notes were combined into one short term note payable of $26,400 and $18,718 in principal and interest of the two previous notes, respectively, for a total balance of $45,118. The aforementioned agreement brought the note current. The note carried a monthly payment of $3,850, including interest at 6.0%, until it matured in March 2022. As of December 31, 2022 and 2021, the outstanding balance was nil and $5,759 respectively. The following table summarizes short-term notes payable, including related parties: Short-Term Notes Payable, Including Related Parties December 31, 2022 December 31, 2021 Dr. Cartwright (related party) $ 1 $ 34 Mr. Fowler (related party) - 6 Premium Finance (insurance) 57 48 Short-term notes payable $ 58 $ 88 As of December 31, 2022 and 2021, the short-term notes payable due to related parties was $619 and $39,900, respectively. |
AUCTUS CONVERTIBLE DEBT
AUCTUS CONVERTIBLE DEBT | 12 Months Ended |
Dec. 31, 2022 | |
AUCTUS CONVERTIBLE DEBT | |
AUCTUS CONVERTIBLE DEBT | 9. AUCTUS CONVERTIBLE DEBT On December 17, 2019, the Company entered into a securities purchase agreement and convertible note with Auctus. The convertible note issued to Auctus was for a total of $2.4 million. The note may not have been prepaid in whole or in part except as otherwise explicitly allowed. Any amount of principal or interest on the note which was not paid when due shall bore interest at the rate of the lessor of 24% or the maximum permitted by law (the “default interest”). The variable conversion prices equaled the lesser of: (i) the lowest trading price on the issue date, and (ii) the variable conversion price. The variable conversion price was 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 could the variable conversion price be less than $0.15. If an event of default under this note occurred and/or the note was not extinguished in its entirety prior to December 17, 2020, the $0.15 price floor no longer applied. On September 1, 2022, the Company agreed to exchange certain debt and equity owned by Auctus pursuant to an Exchange Agreement between the Company and Auctus (the “Exchange Agreement”). Immediately prior to the Exchange Agreement, Auctus held $1,228,183 of debt, including an early prepayment penalty of $350,000, default premiums of $281,256, and $91,555 in interest payable. Auctus agreed to reduce the amount owed to $710,911 and to revert the May 27, 2020 note to its original term. Additionally, Auctus agreed to exchange 8,775,000 warrants that were priced between $0.15 and $0.20 and the $350,000 prepayment penalty for 3,900,000 common shares, warrants to purchase 3,900,000 common shares at $0.50 per share and warrants to purchase 3,900,000 common shares at $0.65 per share (the “Exchange”). As a result of the Exchange Agreement, Auctus forgave a default penalty of $225,444. During the year ended December 31, 2022, the Company repaid $221,467 to Auctus pursuant to the terms of the Exchange Agreement (the “Repayment”), of which $161,184 was applied to principal and penalties and $60,283 was applied to interest payable. Following the Exchange and Repayment, the Company will make payments to Auctus in four installments, over an 18-month period. The first installment of $125,000 was paid on September 8, 2022, of which $101,489 was applied to outstanding principal and $23,512 was applied to interest payable. As a result of the Exchange Agreement, the Company recorded a loss on extinguishment of debt of $626,776 during the year ended December 31, 2022. The following table summarizes the Auctus Convertible Notes Payable: December 31, 2022 December 31, 2021 Auctus Tranche 2 $ 326 $ 400 Auctus prepayment penalty - 350 Auctus (March 31, 2020 Note) - 161 Debt discount and issuance costs to be amortized - (14 ) Auctus convertible notes payable $ 326 $ 897 As of December 31, 2022, $230,482 of the total balance owed to Auctus is included in “Short-term convertible notes payable, including non-convertible penalty” within the consolidated balance sheet. The remaining balance is included in “Long-term convertible debt” within the consolidated balance sheet. As of December 31, 2021, the $161,000 Auctus note was included in “Convertible notes payable in default” while the remaining balances were included in “Short-term convertible notes payable, including non-convertible penalty” within the consolidated balance sheet. 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. |
LONG TERM DEBT
LONG TERM DEBT | 12 Months Ended |
Dec. 31, 2022 | |
LONG TERM DEBT | |
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 Exchanged for Series F-2 Preferred Stock (85 ) Interest and salaries accrued through December 31, 2021 10 Balance outstanding at December 31, 2021 $ 161 Interest accrued in the year ended December 31, 2022 9 Balance outstanding at December 31, 2022 $ 170 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 Interest accrued in the year ended December 31, 2022 16 Balance outstanding at December 31, 2022 $ 297 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). The Company exchanged $50,000 of the amount owed of $546,214 for 50 share of Series F-2 Preferred Shares (convertible into 200,000 common stock shares), and a $150,000 unsecured note. The note accrues interest at the rate of 6% (18% in the event of default) beginning on March 22, 2022 and is payable in monthly installments of $3,580 for four years, with the first payment due on March 15, 2022. The effective interest rate of the note is 6.18%. During the year ended December 31, 2022, Mr. Fowler forgave $61,051 of the outstanding balance of deferred compensation and may forgive up to $198,610 of the remaining deferred compensation if the Company complies with the repayment plan described above. The reduction in the outstanding balance 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. The outstanding principal amount owed on the note was $119,814 and $150,000 as of December 31, 2022 and 2021, respectively. Future debt obligations at December 31, 2022 for debt owed to related parties is as follows: Year Amount 2023 504 2024 39 2025 41 2026 3 Thereafter - Total $ 587 As of December 31, 2022, $504,070 of the debt owed to related parties is included in “Current portion of long-term debt, related parties” and $82,984 is included in “Long-term debt, related parties” within the consolidated balance sheet. As of December 31, 2021, the outstanding debt owed is included in “Long-term debt, related parties” within the consolidated balance sheet. 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 accrued interest at a rate of 1.00%, and matured 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. During the year ended December 31, 2021, $23,976 of the loan balance was forgiven. As of December 31, 2022 and 2021, the outstanding balance was nil and $11,181, respectively, and is included in “Current portion of long-term debt” within the consolidated balance sheet. Accrued interest on the note was nil and $385 as of December 31, 2022 and 2021, respectively. 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 stock share (the “conversion price”), subject to adjustment in certain events, at any time prior to maturity date; 2) upon successful uplist to a U.S. National Exchange, the note will automatically convert into the uplisting financing; 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, 2022 and 2021, the balance due on the 10% Senior Secured Convertible Debenture was $1,130,000 and total accrued interest was $58,494 and $73,326, respectively. The bond payable discount and unamortized debt issuance costs as of December 31, 2022 and 2021 are presented below (in thousands): Senior Secured Convertible Debenture December 31, 2022 December 31, 2021 10% Senior Unsecured Convertible Debentures $ 1,130 $ 1,130 Debt Issuance costs to be amortized (40 ) (69 ) Debt Discount (140 ) (241 ) Senior Secured Convertible Debenture $ 950 $ 820 As of December 31, 2022 and 2021, the entire balance of the Senior Secured Convertible Debenture is included in “Long-term convertible debt” within the consolidated balance sheet. 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. During the year ended December 31, 2022, the Company made payments of $80,000 to Mr. Wells, which resulted in forgiveness of $80,000 of the remaining balance of accrued compensation. The reduction in the outstanding balance 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. As of December 31, 2022, the outstanding principal balance on the note was $17,052, and is included in “Current portion of long-term debt” within the consolidated balance sheet. As of December 31, 2021, the outstanding balance on the note was $97,052, of which $75,000 was included in “Current portion of long-term debt” and $22,052 was included in “Long-term debt.” As of December 31, 2022 and 2021, accrued interest on the note was $5,139 and $2,106, respectively. |
INCOME (LOSS) PER COMMON SHARE
INCOME (LOSS) PER COMMON SHARE | 12 Months Ended |
Dec. 31, 2022 | |
NET LOSS PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS | |
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, 2022 2021 Net loss (4,972 ) (2,431 ) Basic weighted average number of shares outstanding 32,505 13,377 Net loss per share (basic) (0.15 ) (0.18 ) Diluted weighted average number of shares outstanding 32,505 13,377 Net loss per share (diluted) (0.15 ) (0.18 ) Dilutive equity instruments (number of equivalent units): Stock options 1,042 1,867 Preferred stock 5,478 18,253 Convertible debt 752 964 Warrants 6,027 15,655 Total Dilutive instruments 13,299 36,739 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 Restructurings - 2022 During the year ended December 31, 2022, three of the Company’s creditors forgave $191,051 of debt. The reductions in the outstanding balances 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. During the year ended December 31, 2022, the troubled debt restructurings in total decreased net loss by $191,051, or $0.01 per share. Troubled Debt Restructurings - 2021 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 in default on several of its loans the debt is considered troubled debt. During the year ended December 31, 2021, the total troubled debt restructuring decreased net loss by $85,000, or $0.01 per share. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2022 | |
INCOME TAXES | |
INCOME TAXES | 12. INCOME TAXES The Company has incurred net operating losses (“NOLs”) since inception. As of December 31, 2022, the company had NOL carryforwards available through 2038 of approximately $52.4 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 $13.2 million may only be used to offset 80% of taxable income and are carried forward indefinitely. Components of deferred taxes are as follows at December 31 (in thousands): 2022 2021 Deferred tax assets: Warrant liability $ - $ 439 Accrued executive compensation 259 288 Reserves and other 415 466 Net operating loss carryforwards 16,390 16,993 17,064 18,186 Valuation allowance (17,064 ) (18,186 ) Net deferred tax assets $ - $ - 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: 2022 2021 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, 2022, 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, 2022. 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 2021 federal and state corporate tax returns. The provision for income taxes as of the dates indicated consisted of the following (in thousands) December 31: 2022 2021 Current $ - $ - Deferred - - Deferred provision (credit) (617 ) (1,223 ) Change in valuation allowance 617 1,223 Total provision for income taxes $ - $ - In 2022 and 2021, our effective tax rate differed from the U.S. federal statutory rate due to the valuation allowance over our deferred tax assets. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2022 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | 13. SUBSEQUENT EVENTS Stock Option Grants On February 10, 2023, the Company granted 925,000 stock options to employees, executives and directors of the Company. The stock options, which have exercise prices of $0.2629, will expire on February 9, 2033. One fourth of the stock options vested immediately, while the remaining options will vest over a period of 33 months, beginning on May 10, 2023. On March 7, 2023, the Company granted 100,000 stock options, which have exercise prices of $0.27 and will expire on March 6, 2033, to Alan Grujic, upon appointing him to the Board of Directors (see Changes to Named Executive Officers and Directors Amendments to Related Party Loans On February 18, 2023 the Company amended the terms of the promissory notes held by Mark Faupel and Gene Cartwright. Under the terms of the new agreements, the promissory notes will mature on February 18, 2025. SMI Agreement Amended On March 3, 2023, the Company entered into a third amendment with SMI pursuant to which the Company extended the deadline for SMI to achieve commercialization of LuViva in China to April 30, 2024. Changes to Named Executive Officers and Directors On March 3, 2023, Dr. Gene Cartwright notified the Board of Directors of his intent to retire from his position as President and Chief Executive Officer of the Company and as a member of the Board, effective immediately. Mr. Cartwright’s retirement was not the result of any disagreement with management or the Company on any matter relating to the Company’s operations, policies or practices. Upon his departure, Mr. Cartwright forfeited 150,000 unvested stock options granted to him on February 10, 2023. On March 7, 2023, the Board appointed Dr. Mark Faupel, Ph.D., the Company’s Chief Operating Officer since December 2016, to replace Mr. Cartwright as the Company’s President and Chief Executive Officer, effective as of March 6, 2023. On March 7, 2023, the Board appointed Mr. Alan Grujic to replace Mr. Cartwright on the Board, effective March 8, 2023. Mr. Grujic was not appointed as a member of any of the committees of the Board. Warrants Issued and Exchanged Subsequent to December 31, 2022, the Company issued 900,000 3-year warrants with an exercise price of $0.30 and 400,000 common shares to Richard Blumberg. The securities were issued in accordance with a consulting agreement the Company entered into on March 10, 2021. Subsequent to December 31, 2022, the Company entered into various agreements with holders of the Company’s $0.25 strike price warrants, pursuant to which each holder separately agreed to exchange a total of 1,025,000 common stock warrants with a strike price of $0.25 for 973,750 common stock warrants with a strike price of $0.20 and a contractual term requiring immediate exercise of the warrants. Subsequent to December 31, 2022, the Company received approximately $194,750 from the holders for the exercises of the warrants. Common Stock Issuances Subsequent to December 31, 2022, we issued 926,250 shares of common stock pursuant to the warrant exchanges described above. See “ Warrants Issued and Exchanged.” Subsequent to December 31, 2022, we issued 145,544 shares of common stock for exercises of warrants. Subsequent to December 31, 2022, we issued 400,000 shares of common stock to Mr. Blumberg, a related party, pursuant to a consulting agreement. Subsequent to December 31, 2022, we issued 177,921 shares of common stock for the payment of interest. Subsequent to December 31, 2022, we issued 25,635 shares of common stock for Series D dividends. Subsequent to December 31, 2022, we issued 25,729 shares of common stock for Series E dividends and 20,000 shares of common stock for the conversion of 5 Series E Preferred shares. Subsequent to December 31, 2022, we issued 5,938 shares of common stock for Series F dividends and 120,000 shares of common stock for the conversion of 30 Series F Preferred shares. Subsequent to December 31, 2022, we issued 2,731 shares of common stock for Series F-2 dividends and 60,000 shares of common stock for the conversion of 15 Series F Preferred shares. |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
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 Standards Update | 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 maintains cash balances in several financial institutions that are insured by the Federal Deposit Insurance Corporation up to certain federal limitations. At times, the Company’s cash balance exceeds these federal limitations. The amount in excess of insured limitations was approximately $2,064,772 and $392,569 as of December 31, 2022 and 2021, respectively. |
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, 2022 and 2021, our inventories were as follows: (in thousands) December 31, December 31, 2022 2021 Raw materials $ 1,260 $ 1,255 Work-in-progress 68 69 Finished goods 38 32 Inventory reserve (818 ) (785 ) Total inventory $ 548 $ 571 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, 2022 and 2021: (in thousands) December 31, December 31, 2022 2021 Equipment $ 1,083 $ 1,048 Software 656 652 Furniture and fixtures 41 41 Leasehold improvements 12 12 Construction in progress - 8 Subtotal 1,792 1,761 Less accumulated depreciation (1,750 ) (1,747 ) Property, equipment and leasehold improvements, net $ 42 $ 14 Depreciation expense related to property and equipment for the years ended December 31, 2022 and 2021 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 (Principally Legal Fees) | 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 $5,400 and $14,800 for the years ended December 31, 2022 and 2021, 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, 2022 and 2021 are summarized as follows: (in thousands) December 31, 2022 December 31, 2021 Compensation $ 444 $ 621 Professional fees 285 98 Interest 189 261 Vacation 41 39 Preferred dividends 231 349 Stock subscription payable 36 351 Other accrued expenses 21 49 Total $ 1,247 $ 1,768 |
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, 2022 or 2021. 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 2022 and 2021, deferred revenue was $509,101 and $337,315, respectively. |
Significant Distributors | As of December 31, 2022, accounts receivable outstanding was $54,484; the outstanding amount was netted against a $48,172 allowance, leaving a balance of $6,312 which was from one distributor. As of December 31, 2021, accounts receivable outstanding was $171,153, the outstanding amount was netted against a $125,584 allowance, leaving a balance of $45,569 which was from two customers. |
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 2021 federal and state corporate tax returns. 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, 2022, the Company had approximately $65.6 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. |
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, 2022 | |
SIGNIFICANT ACCOUNTING POLICIES | |
Inventory valuation | (in thousands) December 31, December 31, 2022 2021 Raw materials $ 1,260 $ 1,255 Work-in-progress 68 69 Finished goods 38 32 Inventory reserve (818 ) (785 ) Total inventory $ 548 $ 571 |
Property and equipment | (in thousands) December 31, December 31, 2022 2021 Equipment $ 1,083 $ 1,048 Software 656 652 Furniture and fixtures 41 41 Leasehold improvements 12 12 Construction in progress - 8 Subtotal 1,792 1,761 Less accumulated depreciation (1,750 ) (1,747 ) Property, equipment and leasehold improvements, net $ 42 $ 14 |
Accrued liabilities | (in thousands) December 31, 2022 December 31, 2021 Compensation $ 444 $ 621 Professional fees 285 98 Interest 189 261 Vacation 41 39 Preferred dividends 231 349 Stock subscription payable 36 351 Other accrued expenses 21 49 Total $ 1,247 $ 1,768 |
FAIR VALUE OF FINANCIAL INSTR_2
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | |
Schedule of fair value for liabilities measured on a recurring basis | Fair Value at December 31, 2022 (in thousands) Level 1 Level 2 Level 3 Total Derivative liability/bifurcated conversion option in connection with Auctus $326,016 loan on December 17, 2019 $ - $ - $ (5 ) $ (5 ) Total long-term liabilities at fair value $ - $ - $ (5 ) $ (5 ) 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 ) |
Summary of changes to Level 3 instruments | (in thousands) Senior Secured Debt Derivative Total Balance, December 31, 2021 $ - $ (32 ) $ (32 ) Change in fair value during the year - 27 27 Balance, December 31, 2022 $ - $ (5 ) $ (5 ) |
STOCKHOLDERS DEFICIT (Tables)
STOCKHOLDERS DEFICIT (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
STOCKHOLDERS' DEFICIT: | |
Common stock issued | Number of Shares 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 Issuances of common stock to investors 6,711,540 Issuances of common stock for warrants exercised 5,127,923 Issuances of common stock to Auctus for Exchange Agreement 3,900,000 Issuances of common stock for payment of Series D Preferred dividends 81,973 Issuances of common stock for payment of Series E Preferred dividends 179,858 Issuances of common stock for payment of Series F Preferred dividends 163,214 Issuances of common stock for payment of Series F-2 Preferred dividends 114,304 Issuances of common stock for payment of interest 241,914 Issuances of common stock for Series F one-time 15% dividend 255,401 Issuances of common stock for Series F-2 one-time 15% dividend 368,505 Conversion of Series C-2 Preferred stock to common stock 1,124,500 Conversion of Series D Preferred stock to common stock 975,000 Conversion of Series E Preferred stock to common stock 3,390,000 Conversion of Series F Preferred stock to common stock 1,480,000 Conversion of Series F-2 Preferred stock to common stock 10,808,000 Issued during the year ended December 31, 2022 34,922,132 Summary table of common stock transactions: Shares outstanding at December 31, 2020 13,138,282 Common shares issued during the year ended December 31, 2021 535,301 Shares outstanding at December 31, 2021 13,673,583 Common shares issued during the year ended December 31, 2022 34,922,132 Shares outstanding at December 31, 2022 48,595,715 |
Company's outstanding warrants to purchase common stock | Warrants(Underlying Shares) Weighted-Average Exercise Price Per Share 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 Warrants issued 24,223,080 $ 0.54 Warrants cancelled/expired (4,450,866 ) $ 0.54 Warrants exchanged (8,775,000 ) $ 0.19 Warrants exercised (3,079,868 ) $ 0.17 Outstanding, December 31, 2022 35,586,980 $ 0.46 |
Schedule of fair value warrants issued under Black-Scholes Option Pricing model | December 31, 2022 Expected term 3.8 Years Volatility 148.4 % Risk-free interest rate 3.6 % Dividend yield 0.00 % December 31, 2021 Expected term 15 years Volatility 142.2 % Risk-free interest rate 0.0 % Dividend yield 0.00 % |
STOCK OPTIONS (Tables)
STOCK OPTIONS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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 Options outstanding as of December 31, 2022 1,500,000 $ 0.49 7.5 years $ - Options exercisable as of December 31, 2022 1,318,091 $ 0.49 7.5 years $ - |
Stock options vested, unvested and granted | December 31, 2021 Expected term (years) 10 years Volatility 153.12 % Risk-free interest rate 0.98 % Dividend yield 0.00 % |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
COMMITMENTS AND CONTINGENCIES (Note 7) | |
Operating lease right-of-use assets and lease liabilities | (in thousands) December 31, 2022 December 31, 2021 Operating lease right-of-use assets $ 303 $ 372 Operating lease liabilities $ 325 $ 392 |
Future minimum rental payment operating leases | (in thousands) Operating Leases 2023 $ 112 2024 115 2025 118 2026 50 Total future lease payments 395 Less: discount (70 ) Total lease liabilities $ 325 |
Weighted-average remaining lease term and discount rate | Year Ended December 31, 2022 2022 Weighted average remaining lease term (years) 3.4 4.4 Weighted average discount rate 11.4 % 11.4 % |
Fair value of the warrants using the Black-Scholes option pricing model | Expected term 3.0 Years Volatility 108.65 % Risk-free interest rate 4.25 % Dividend yield 0.00 % Expected term 1.3 Years Volatility 164.63 % Risk-free interest rate 4.05 % Dividend yield 0.00 % |
SHORT-TERM NOTES PAYABLE (Table
SHORT-TERM NOTES PAYABLE (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
SHORT-TERM NOTES PAYABLE | |
Short-term notes payable, including related parties | Short-Term Notes Payable, Including Related Parties December 31, 2022 December 31, 2021 Dr. Cartwright (related party) $ 1 $ 34 Mr. Fowler (related party) - 6 Premium Finance (insurance) 57 48 Short-term notes payable $ 58 $ 88 |
AUCTUS CONVERTIBLE DEBT (Tables
AUCTUS CONVERTIBLE DEBT (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
AUCTUS CONVERTIBLE DEBT | |
Schedule of Auctus Convertible Notes Payable | December 31, 2022 December 31, 2021 Auctus Tranche 2 $ 326 $ 400 Auctus prepayment penalty - 350 Auctus (March 31, 2020 Note) - 161 Debt discount and issuance costs to be amortized - (14 ) Auctus convertible notes payable $ 326 $ 897 |
LONG TERM DEBT (Tables)
LONG TERM DEBT (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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 Exchanged for Series F-2 Preferred Stock (85 ) Interest and salaries accrued through December 31, 2021 10 Balance outstanding at December 31, 2021 $ 161 Interest accrued in the year ended December 31, 2022 9 Balance outstanding at December 31, 2022 $ 170 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 Interest accrued in the year ended December 31, 2022 16 Balance outstanding at December 31, 2022 $ 297 |
Long-term debt, related parties debt obligations | Year Amount 2023 504 2024 39 2025 41 2026 3 Thereafter - Total $ 587 |
Schedule of Senior Secured Convertible Debenture | Senior Secured Convertible Debenture December 31, 2022 December 31, 2021 10% Senior Unsecured Convertible Debentures $ 1,130 $ 1,130 Debt Issuance costs to be amortized (40 ) (69 ) Debt Discount (140 ) (241 ) Senior Secured Convertible Debenture $ 950 $ 820 |
INCOME (LOSS) PER COMMON SHARE
INCOME (LOSS) PER COMMON SHARE (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
NET LOSS PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS | |
Earnings per share | December 31, 2022 2021 Net loss (4,972 ) (2,431 ) Basic weighted average number of shares outstanding 32,505 13,377 Net loss per share (basic) (0.15 ) (0.18 ) Diluted weighted average number of shares outstanding 32,505 13,377 Net loss per share (diluted) (0.15 ) (0.18 ) Dilutive equity instruments (number of equivalent units): Stock options 1,042 1,867 Preferred stock 5,478 18,253 Convertible debt 752 964 Warrants 6,027 15,655 Total Dilutive instruments 13,299 36,739 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
INCOME TAXES | |
Components of deferred taxes | 2022 2021 Deferred tax assets: Warrant liability $ - $ 439 Accrued executive compensation 259 288 Reserves and other 415 466 Net operating loss carryforwards 16,390 16,993 17,064 18,186 Valuation allowance (17,064 ) (18,186 ) Net deferred tax assets $ - $ - |
Income taxes | 2022 2021 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 | 2022 2021 Current $ - $ - Deferred - - Deferred provision (credit) (617 ) (1,223 ) Change in valuation allowance 617 1,223 Total provision for income taxes $ - $ - |
ORGANIZATION BACKGROUND AND B_2
ORGANIZATION BACKGROUND AND BASIS OF PRESENTATION (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Decrease in authorized common share | 500,000,000 | ||
Accumulated deficit | $ (147,359) | $ (142,387) | |
Total stockholders' deficit | (2,883) | $ (5,445) | $ (10,855) |
Working capital deficit | 1,900 | ||
Net loss including preferred dividend | 5,000 | ||
Proceeds from sale of common stock | 3,200 | ||
Proceeds from exercise of warrants | $ 495 | ||
Warrants [Member] | Minimum | |||
Warrants exercise price per share | $ 0.20 | ||
Warrants [Member] | Maximum | |||
Warrants exercise price per share | $ 0.80 | ||
Warrants [Member] | Exchange Agreement With GPB [Member] | |||
Accumulated deficit | 147,400,000 | ||
Warrants exercisable for common stock outstanding | 35,600,000 | ||
Exercise of the in money warrants | $ 2,300 |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
SIGNIFICANT ACCOUNTING POLICIES | ||
Raw materials | $ 1,260 | $ 1,255 |
Work in process | 68 | 69 |
Finished goods | 38 | 32 |
Inventory reserve | (818) | (785) |
Total | $ 548 | $ 571 |
SIGNIFICANT ACCOUNTING POLICI_5
SIGNIFICANT ACCOUNTING POLICIES (Details 1) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Less accumulated depreciation and amortization | $ (1,750,000) | $ (1,747,000) |
Property and equipment, net | 42,000 | 14,000 |
Subtotal | 1,792,000 | 1,761,000 |
Furniture and Fixtures | ||
Property and equipment, gross | 41,000 | 41,000 |
Construction in Progress [Member] | ||
Property and equipment, gross | 0 | 8,000 |
Equipment | ||
Property and equipment, gross | 1,083,000 | 1,048,000 |
Software | ||
Property and equipment, gross | 656,000 | 652,000 |
Leasehold Improvement | ||
Property and equipment, gross | $ 12,000 | $ 12,000 |
SIGNIFICANT ACCOUNTING POLICI_6
SIGNIFICANT ACCOUNTING POLICIES (Details 2) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
SIGNIFICANT ACCOUNTING POLICIES | ||
Compensation | $ 444 | $ 621 |
Professional fees | 285 | 98 |
Interest | 189 | 261 |
Vacation | 41 | 39 |
Preferred dividends | 231 | 349 |
Stock Subscription Payable | 36 | 351 |
Other accrued expenses | 21 | 49 |
Total | $ 1,247 | $ 1,768 |
SIGNIFICANT ACCOUNTING POLICI_7
SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
SIGNIFICANT ACCOUNTING POLICIES | ||
Costs incurred in filing | $ 5,400 | $ 14,800 |
Accounts receivable outstanding | 54,484 | 171,153 |
Accounts receivable, net of allowance | 48,172 | 125,584 |
Deferred revenue | 509,101 | 337,315 |
Remaining balance | 6,312 | 45,569 |
Net operating loss carry forward | 65,600,000 | |
Excess amount of insured limitations | $ 2,064,772 | $ 392,569 |
Percentage amount of tax benefit | 50% |
FAIR VALUE OF FINANCIAL INSTR_3
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Derivative liability | $ (5) | $ (32) |
Fair Value, Inputs, Level 3 [Member] | ||
Derivative liability | (5) | (32) |
Fair Value, Inputs, Level 1 [Member] | ||
Derivative liability | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | ||
Derivative liability | 0 | 0 |
Auctus Loan | ||
Derivative liability | (5) | (32) |
Auctus Loan | Fair Value, Inputs, Level 3 [Member] | ||
Derivative liability | (5) | (32) |
Auctus Loan | Fair Value, Inputs, Level 1 [Member] | ||
Derivative liability | 0 | 0 |
Auctus Loan | Fair Value, Inputs, Level 2 [Member] | ||
Derivative liability | $ 0 | $ 0 |
FAIR VALUE OF FINANCIAL INSTR_4
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details 1) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Change in fair value during the year | $ 0 | $ (448) |
Fair Value, Inputs, Level 3 [Member] | ||
Beginning Balance, Warrants | 0 | |
Change in fair value during the year | 0 | |
Ending Balance, Warrants | 0 | |
Fair Value, Inputs, Level 3 [Member] | Senior Secured Debt | ||
Beginning Balance, Warrants | (32) | |
Change in fair value during the year | 27 | |
Ending Balance, Warrants | (5) | |
Fair Value, Inputs, Level 3 [Member] | Derivative | ||
Beginning Balance, Warrants | (32) | |
Change in fair value during the year | 27 | |
Ending Balance, Warrants | $ (5) |
FAIR VALUE OF FINANCIAL INSTR_5
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2020 | |
Extinguishment of derivative liability due to payoff of loan to Auctus | $ 326,016 | |
December 17, 2019 [Member] | ||
Derivative liability/bifurcated conversion option in connection with auctus loan | $ 326,016 | $ 400,000 |
STOCKHOLDERS DEFICIT (Details)
STOCKHOLDERS DEFICIT (Details) - shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
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 | |
Issuances of common stock | 34,922,132 | 535,301 |
Conversion of common stock | 40,000 | |
Share outstanding, beginning | 13,673,583 | 13,138,282 |
Common shares issued during the year ended | 34,922,132 | 535,301 |
Share outstanding, ending | 48,595,715 | 13,673,583 |
Issuances of common stock for warrants exercised | ||
Issuances of common stock | 5,127,923 | |
Issuances of common stock to Auctus for Exchange Agreement | ||
Issuances of common stock | 3,900,000 | |
Issuances of common stock for payment of Series D Preferred dividends | ||
Issuances of common stock | 81,973 | |
Issuances of common stock to investors | ||
Issuances of common stock | 6,711,540 | |
Issuances of common stock for payment of Series E Preferred dividends | ||
Issuances of common stock | 179,858 | |
Issuances of common stock for payment of Series F Preferred dividends | ||
Issuances of common stock | 163,214 | |
Issuances of common stock for payment of Series F-2 Preferred dividends | ||
Issuances of common stock | 114,304 | |
Issuances of common stock for payment of interest | ||
Issuances of common stock | 241,914 | |
Issuances of common stock for Series F one-time 15% dividend | ||
Issuances of common stock | 255,401 | |
Issuances of common stock for Series F-2 one-time 15% dividend | ||
Issuances of common stock | 368,505 | |
Conversion of Series C-2 Preferred stock to common stock | ||
Conversion of common stock | 1,124,500 | |
Conversion of Series D Preferred stock to common stock | ||
Conversion of common stock | 975,000 | |
Conversion of Series E Preferred stock to common stock | ||
Conversion of common stock | 3,390,000 | |
Conversion of Series F Preferred stock to common stock | ||
Conversion of common stock | 1,480,000 | |
Conversion of Series F-2 Preferred stock to common stock | ||
Conversion of common stock | 10,808,000 |
STOCKHOLDERS DEFICIT (Details 1
STOCKHOLDERS DEFICIT (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
STOCKHOLDERS' DEFICIT: | ||
Warrants outstanding, beginning | 27,669,634 | 28,324,275 |
Warrants issued | 24,223,080 | 7,982,223 |
Warrants cancelled/expired | (4,450,866) | (1,729,662) |
Warrants exchanged | $ (8,775,000) | $ (4,713,603) |
Warrants exercised | (3,079,868) | (2,193,599) |
Warrants outstanding, end | 35,586,980 | 27,669,634 |
Weighted Average Exercise Price Per Share, beginning | $ 0.29 | $ 0.25 |
Weighted Average Exercise Price Per Share, Warrants issued | 0.54 | 0.30 |
Weighted Average Exercise Price Per Share, Warrants cancelled/expired | 0.54 | 0.04 |
Weighted Average Exercise Price Per Share, Warrants exchanged | 0.19 | 0.20 |
Weighted Average Exercise Price Per Share, Warrants exercised | 0.17 | 0.16 |
Weighted Average Exercise Price Per Share, ending | $ 0.46 | $ 0.29 |
STOCKHOLDERS DEFICIT (Details 2
STOCKHOLDERS DEFICIT (Details 2) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
STOCKHOLDERS' DEFICIT: | ||
Expected term | 3 years 9 months 18 days | 15 years |
Volatility | 148.40% | 142.20% |
Risk-free interest rate | 3.60% | 0% |
Dividend yield | 0% | 0% |
STOCKHOLDERS DEFICIT (Details N
STOCKHOLDERS DEFICIT (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |||||||
Sep. 01, 2022 | Jul. 08, 2021 | Aug. 02, 2018 | Feb. 28, 2021 | Jan. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Jan. 22, 2020 | Dec. 17, 2019 | |
Common stock, shares authorized | 500,000,000 | ||||||||
Shares of common stock issued | 6,711,540 | ||||||||
Aggregate shares of common stock | $ 6,711,540 | ||||||||
Price per share | $ 0.65 | ||||||||
Aggregate purchase price | $ 3,355,270 | ||||||||
Common stock shares issued | 48,595,715 | 13,673,583 | |||||||
Common stock shares outstanding | 48,595,715 | 13,673,583 | |||||||
Common stock, par value | $ 0.001 | $ 0.001 | |||||||
Issuance of the common shares | 34,922,132 | 535,301 | |||||||
Common Stock issued | 535,301 | ||||||||
Preferred stock shares converts into common stock | 40,000 | ||||||||
Strike price | $ 0.25 | $ 0.04 | |||||||
Investments | |||||||||
Additional warrants to purchase common stock shares | 150,000 | ||||||||
Additional warrants to purchase common stock shares expire date | May 31, 2024 | ||||||||
Warratns issued | 263,000 | ||||||||
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 | ||||||||
Investment amount | $ 2,114,000 | ||||||||
Equity investments fee | 139,000 | ||||||||
Proceeds from debenture unit investments | 1,130,000 | ||||||||
Debenture fee | 86,400 | ||||||||
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 final payment | $ 75,000 | ||||||||
Warrants Exchanges - 2021 - 3 | |||||||||
Cash payment | $ 350,000 | ||||||||
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 | ||||||||
Common stock warrants | 7,185,000 | ||||||||
Warrants holders percentage description | 4.99% blocker such that the warrant holders will be restricted from owning more than 4.99% of the total number | ||||||||
Exchange common stock warrants | 3,592,500 | ||||||||
Common stock warrants strike price per share | $ 0.20 | ||||||||
Warrants Exchanges - 2022 | |||||||||
Common shares for warrants exercised | 5,127,923 | 2,193,599 | |||||||
Warrants issued to investors | 13,423,080 | ||||||||
Warrants exchanged | 8,775,000 | ||||||||
Newly exchanged warrants issued | 7,800,000 | ||||||||
Warrants issued to consultant | 3,000,000 | ||||||||
Received from the stock holders | $ 36,386 | ||||||||
Series C Convertible Preferred Shares | |||||||||
Preferred stock shares converts into common stock | 2,000 | 2,000 | |||||||
Conversion price per share | $ 0.50 | $ 0.50 | |||||||
Preferred stock shares designated | 9,000 | ||||||||
Liquidation preference | $ 1,000 | $ 1,000 | |||||||
Total convertible of common stock shares | 6,524,500 | 572,000 | 572,000 | ||||||
Dividing the stated value | 286 | 286 | |||||||
Cumulative dividend annual rate | 12% | ||||||||
Unpaid accrued dividends | $ 120,120 | $ 120,120 | |||||||
Make-whole payment for converted share | 200 | 200 | |||||||
Preferred stock, par value | $ 0.001 | $ 0.001 | |||||||
Preferred stock shares issued | 300 | 300 | |||||||
Preferred stock shares outstanding | 300 | 300 | |||||||
Cumulative dividends annual rate | 0.12% | ||||||||
Series C1 Convertible Preferred Shares | |||||||||
Preferred stock shares converts into common stock | 2,000 | ||||||||
Conversion price per share | $ 0.50 | $ 0.50 | |||||||
Preferred stock shares designated | 20,250 | ||||||||
Total convertible of common stock shares | 2,098,500 | ||||||||
Preferred stock shares issued | 1,049 | 1,049 | |||||||
Preferred stock shares outstanding | 1,049 | 1,049 | |||||||
Preferred stock shares surrendered | 3,262 | ||||||||
Series C2 Convertible Preferred Shares | |||||||||
Preferred stock shares converts into common stock | 562 | ||||||||
Conversion price per share | $ 0.50 | $ 0.50 | |||||||
Dividing the stated value | 1,000 | ||||||||
Preferred stock shares outstanding | 2,700 | 3,262 | |||||||
Common stock shares issued for conversion | 1,124,500 | ||||||||
Number of shares converted to common stock | $ 2,000 | ||||||||
Total convertible common stock | $ 5,400,000 | $ 6,524,500 | |||||||
Series F-2 Convertible Preferred Shares | |||||||||
Preferred stock shares converts into common stock | 4,000 | ||||||||
Conversion price per share | $ 0.25 | ||||||||
Preferred stock shares designated | 3,500 | ||||||||
Liquidation preference | $ 3,237 | ||||||||
Outstanding shares exchanged to Preferred stock | 2,559 | ||||||||
Convertible common stock | $ 4,000 | ||||||||
Company issued common stock | 10,808,000 | ||||||||
Preferred stock, par value | $ 0.001 | $ 0.001 | |||||||
Percentage of dividend | 6% | ||||||||
Preferred stock shares issued | 53,500 | 323,700 | |||||||
Increased beneficial ownership percentage | 9.99% | ||||||||
Common Stock primary trading shares exceed | 1,000 | ||||||||
Exceeds percentage | 200% | ||||||||
Preferred stock shares outstanding | 535 | 3,237 | |||||||
Conversion beneficial ownership limitation | 4.99% | ||||||||
Maturity period | 5 years | ||||||||
Additional stock issued during period for payment of non recurring dividend | 368,505 | ||||||||
Cumulative dividends at the rate | 6% | ||||||||
Series F-2 Preferred stock coversion shares | 466 | ||||||||
Series F-2 Preferred Stock dividends shares | 114,304 | ||||||||
Preferred stock shares received | 678,000 | ||||||||
Stated value of preference share | $ 1,000 | ||||||||
Accrued dividends of preferred shares | 24,267 | ||||||||
Outstanding debt | $ 2,559,000 | ||||||||
Non recurring dividend percent | 15% | ||||||||
Preferred stock shares issued | 500 | 3,200 | |||||||
Preferred stock shares outstanding | 500 | 3,200 | |||||||
Preferred stock shares authorized | 5,000 | 5,000 | |||||||
Series G Convertible Preferred Shares | |||||||||
Preferred stock, par value | $ 0.001 | $ 0.001 | |||||||
Preferred stock shares issued | 0 | 0 | |||||||
Preferred stock shares outstanding | 0 | 0 | |||||||
Preferred stock shares authorized | 1,000,000 | 1,000,000 | |||||||
Investment net | $ 114,597 | ||||||||
Preferred stock redeemed | 91,000 | ||||||||
Series G Convertible Preferred Shares | Power Up Lending Group Ltd [Member] | |||||||||
Cumulative dividends at the rate | 8% | 8% | |||||||
Investment net | $ 53,500 | $ 78,500 | |||||||
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% | 19% | 19% | ||||||
Redemption of february 2021 investment, amount | $ 78,094 | ||||||||
Interest expense | $ 28,094 | $ 39,597 | |||||||
Conversion beneficial ownership limitation | 4.99% | 4.99% | |||||||
Increased election holders | 9.99% | 9.99% | |||||||
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 | |||||||||
Preferred stock shares converts into common stock | 975,000 | ||||||||
Strike price | $ 0.20 | ||||||||
Conversion price per share | $ 0.25 | ||||||||
Preferred stock shares designated | 6,000 | ||||||||
Liquidation preference | $ 763 | ||||||||
Dividing the stated value | 1,000 | ||||||||
Increased beneficial ownership percentage | 9.99% | ||||||||
Common Stock primary trading shares exceed | 1,000 | ||||||||
Exceeds percentage | 200% | ||||||||
Preferred stock shares issued | 763 | ||||||||
Common stock, issued public shares | 1,526,000 | ||||||||
Shares exchange | 650,000 | ||||||||
Warrants exchange | 650,000 | ||||||||
Proceed from excercise of warrant | $ 130,000 | ||||||||
Preferred stock converted share | 325 | ||||||||
Shares issued for payment of accured stock dividend | $ 81,973 | ||||||||
Beneficial ownership percentage | 499% | ||||||||
Shares outstanding | 438 | ||||||||
Common stock warrants 1 | 1,526,000 | ||||||||
Warrant exercise price per share | $ 0.25 | ||||||||
Common stock warrants exercise price 1 | $ 0.75 | ||||||||
Preferred stock dividends accrued | $ 8,213 | ||||||||
Series F Preferred Shares | |||||||||
Preferred stock shares converts into common stock | 4,000 | ||||||||
Conversion price per share | $ 0.25 | ||||||||
Preferred stock shares designated | 1,500 | ||||||||
Liquidation preference | $ 1,000 | ||||||||
Common Stock primary trading shares exceed | 1,000 | ||||||||
Exceeds percentage | 200% | ||||||||
Conversion beneficial ownership limitation | 4.99% | ||||||||
Maturity period | 5 years | ||||||||
Additional stock issued during period for payment of non recurring dividend | 255,401 | ||||||||
Preferred stock shares issued | 1,056 | 1,426 | |||||||
Increased election holder | 9.99% | ||||||||
Preferred stock shares outstanding | 1,436 | ||||||||
Number of shares converted into common stock | 1,480,000 | ||||||||
Shares issued common stock | $ 1,436,000 | ||||||||
Shares converted into common stock | 370 | ||||||||
Cumulative dividend rate | 6% | ||||||||
Issuance of common stock for payment pf annual series | 163,214 | ||||||||
Accrued dividends | $ 48,400 | ||||||||
Preferred Stock [Member] | |||||||||
Preferred stock, par value | $ 0.001 | ||||||||
Preferred stock shares authorized | 500,000,000 | ||||||||
Series E Preferred Shares | |||||||||
Conversion price per share | $ 0.25 | ||||||||
Preferred stock shares designated | 5,000 | ||||||||
Liquidation preference | $ 888 | ||||||||
Preferred stock, par value | $ 0.001 | ||||||||
Common Stock primary trading shares exceed | 1,000 | ||||||||
Exceeds percentage | 200% | ||||||||
Conversion beneficial ownership limitation | 4.99% | ||||||||
Maturity period | 5 years | ||||||||
Increased election holder | 9.99% | ||||||||
Preferred stock stated value | $ 1,000 | ||||||||
Common stock shares issued for preferred stock dividends | 179,858 | ||||||||
Accrued dividends | $ 30,414 | ||||||||
Issuance of common stock for conversion of Series E Convertible Preferred Stock | 3,390,000 | ||||||||
Auctus Exchange | |||||||||
Common Stock issued | 3,900,000 |
STOCK OPTIONS (Details)
STOCK OPTIONS (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
STOCK OPTIONS | ||
Outstanding at beginning of year | 1,800,000 | |
Options granted | 25,000 | |
Options forfeited | (167,614) | |
Options expired | (157,386) | |
Outstanding at ending of year | 1,500,000 | 1,500,000 |
Number of shares exercisable | 1,318,091 | 954,273 |
Options outstanding weighted average exercise price, beginning | $ 0.49 | $ 0.49 |
Options granted weighted average exercise price | 0.48 | |
Options forfeited weighted average exercise price | 0.49 | |
Options expired weighted average exercise price | 0.49 | |
Options outstanding weighted average exercise price, Ending | 0.49 | 0.49 |
Weighted average exercise price per share exercisable | $ 0.49 | $ 0.49 |
Weighted average remaining contractual life outstanding | 7 years 6 months | 8 years 6 months |
Weighted average remaining contractual life exercisable | 7 years 6 months | 8 years 6 months |
Agrregate intrensic value outstanding | $ 0 | $ 135 |
Agrregate intrensic value exercisable | $ 0 | $ 86 |
STOCK OPTIONS (Details 1)
STOCK OPTIONS (Details 1) | 12 Months Ended |
Dec. 31, 2022 | |
STOCK OPTIONS | |
Expected term (years) | 10 years |
Volatility | 153.12% |
Risk-free interest rate | 0.98% |
Dividend yield | 0% |
STOCK OPTION (Details Narrative
STOCK OPTION (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
STOCK OPTIONS | ||
Unrecognized stock-based compensation expense | $ 87,823 | |
Weighted-average fair value of awards granted | $ 0.47 | $ 0.47 |
Stock options granted outstanding common stock shares percentage | 10% | |
Options granted exercisable term | four years | |
Options granted expiration term | ten years | |
Stock-based compensation expense | $ 175,673 | $ 226,717 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
COMMITMENTS AND CONTINGENCIES (Note 7) | ||
Operating lease right-of-use assets | $ 303 | $ 372 |
Operating lease liabilities | $ 325 | $ 392 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES (Details 1) $ in Thousands | Dec. 31, 2022 USD ($) |
COMMITMENTS AND CONTINGENCIES (Note 7) | |
2023 | $ 112 |
2024 | 115 |
2025 | 118 |
2026 | 50 |
Total future lease payments | 395 |
Less: discount | (70) |
Total lease liabilities | $ 325 |
COMMITMENTS AND CONTINGENCIES_4
COMMITMENTS AND CONTINGENCIES (Details 2) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
COMMITMENTS AND CONTINGENCIES (Note 7) | ||
Weighted average remaining lease term (years) | 3 years 4 months 24 days | 4 years 4 months 24 days |
Weighted average discount rate | 11.40% | 11.40% |
COMMITMENTS AND CONTINGENCIES_5
COMMITMENTS AND CONTINGENCIES (Details 3) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
COMMITMENTS AND CONTINGENCIES (Note 7) | ||
Expected term | 3 years | 1 year 3 months 18 days |
Volatility | 108.65% | 164.63% |
Risk-free interest rate | 4.25% | 4.05% |
Dividend yield | 0% | 0% |
COMMITMENTS AND CONTINGENCIES_6
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |||||||||
Mar. 10, 2021 | Sep. 06, 2016 | Jun. 05, 2016 | Jan. 22, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Aug. 24, 2022 | Jan. 22, 2020 | Dec. 17, 2019 | Jul. 24, 2019 | |
Consideration received | $ 885,144 | ||||||||||
Area of operating leases | 12,835 | ||||||||||
Operating lease cost | $ 109,404 | $ 110,701 | |||||||||
Financing agreement amount | $ 1,000,000 | $ 1,000,000 | |||||||||
Royalty percent | 20% | ||||||||||
Warrants broken into four tranches | 1,250,000 | ||||||||||
Strike price | $ 0.25 | $ 0.04 | |||||||||
Escrow agent rate per share | $ 1.90 | ||||||||||
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 | $ 26,965 | ||||||||||
Shares exchange | 12,147 | ||||||||||
Consulting Agreement [Member] | Advisory Group | |||||||||||
Warrants | 800,000 | 5,000,000 | |||||||||
Exercise price | $ 0.50 | ||||||||||
Consulting Agreement [Member] | Mr. Gruijic | |||||||||||
Warrants | 600,000 | ||||||||||
Exercise price | $ 0.75 | ||||||||||
Additional Warrants | 600,000 | ||||||||||
Consulting Agreement [Member] | Mr. Blumberg | |||||||||||
Warrants | 875,000 | 375,000 | |||||||||
Expense for the warrants | $ 307,457 | $ 393,893 | |||||||||
Unrecognized expense for the warrants | 740,520 | ||||||||||
Recognized expense for the common shares due | $ 166,667 | ||||||||||
Terms of amendment to agreement | 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 | royalty initially equal to $0.10, and from and after October 2, 2016, equal to $0.20, for each disposable | 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. The Company confirmed an obligation to provide Mr. Blumberg with 950,000 fully transferrable warrants, which will expire on January 1, 2024 and have an exercise price of $0.25. Issuance of the warrants owed to Mr. Blumberg for his services is now predicated on the Company receiving funding receipts of $1,000,000 | ||||||||
Subscription receivable | $ 350,000 | ||||||||||
Consulting Agreement [Member] | Lee Bowles | |||||||||||
Warrants | 375,000 | ||||||||||
Consulting Agreement [Member] | Black-scholes | |||||||||||
Warrants | 800,000 | ||||||||||
Recognized expense | 364,800 | ||||||||||
Consulting Agreement [Member] | Binomial Lattice Model | |||||||||||
Recognized expense | 60,229 | ||||||||||
Promotional Agreement [Member] | |||||||||||
Consulting expenses | $ 79,444 | $ 556,111 | |||||||||
Fair vaue of warrants | $ 715,000 | ||||||||||
Unrecognized consulting expense | $ 0 | ||||||||||
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 |
SHORT TERM NOTES PAYABLE (Detai
SHORT TERM NOTES PAYABLE (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Short term notes payable | $ 58,000 | $ 88,000 |
Dr. Cartwright | ||
Notes payable in default, including related parties | 1,000 | 34,000 |
Mr. Fowler | ||
Notes payable in default, including related parties | 0 | 6,000 |
Premium Finance insurance | ||
Notes payable in default, including related parties | $ 57,000 | $ 48,000 |
SHORT TERM NOTES PAYABLE (Det_2
SHORT TERM NOTES PAYABLE (Details Narrative) - USD ($) | 1 Months Ended | |||||||
Jul. 04, 2022 | Jul. 04, 2021 | Mar. 22, 2021 | Dec. 31, 2019 | Jan. 19, 2017 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 21, 2016 | |
Line of credit, balance | $ 619 | $ 39,900 | ||||||
Outstanding principal balance | 0 | 47,615 | ||||||
Accrued interest | 1,247,000 | 1,768,000 | ||||||
Short term promissory note | 58,000 | 88,000 | ||||||
Dr. Cartwright | ||||||||
Line of credit, balance | 619 | 34,141 | ||||||
Notes initially issued with interest | 0% | |||||||
Percentage of increased interest | 6% | |||||||
Promissory notes issued | $ 45,829 | |||||||
Financing proceeds received by company | $ 1,000,000 | |||||||
Annual interest rate description | 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 | |||||||
Mr. Fowler | ||||||||
Outstanding principal balance | $ 13,900 | 0 | 5,759 | $ 12,500 | ||||
Annual interest rate description | The notes were initially issued with 0% interest and then went into default with an interest rate of 18% | |||||||
Mr. Fowler | Long-Term Debt - Related Parties | ||||||||
Outstanding principal balance | $ 26,400 | |||||||
March 22, 2021 exchange agreement [Member] | Mr. Fowler | ||||||||
Accrued interest | 18,718 | |||||||
Monthly payment of insurance | 3,850 | |||||||
Short term promissory note | $ 45,118 | |||||||
Premium Finance Agreement [Member] | ||||||||
Outstanding principal balance | $ 56,569 | $ 56,569 | ||||||
Line of credit facility, maximum borrowing capacity | $ 123,889 | $ 117,560 | ||||||
Monthly payment of insurance | $ 11,409 | $ 11,968 | ||||||
Interest and maturity date description | including interest incurred at a rate of 5.0%. The note, which matures on May 4, 2023 | interest at 4.3%, until it matured in April of 2022 |
AUCTUS CONVERTIBLE DEBT (Detail
AUCTUS CONVERTIBLE DEBT (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Debt discount and issuance costs to be amortized | $ 0 | $ (14) |
Convertible notes payable - Short term | 0 | 161 |
Convertible notes payable - Short term | 326 | 897 |
Auctus March 31 2020 Note [Member] | ||
Convertible notes payable - Short term | 0 | 161 |
Auctus Prepayment Penalty | ||
Convertible notes payable - Short term | 0 | 350 |
Auctus Tranche 2 [Member] | ||
Convertible notes payable - Short term | $ 326 | $ 400 |
AUCTUS CONVERTIBLE DEBT (Deta_2
AUCTUS CONVERTIBLE DEBT (Details Narrative) - USD ($) | 12 Months Ended | ||||||
Sep. 08, 2022 | Sep. 02, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Sep. 01, 2022 | Jan. 22, 2020 | Dec. 17, 2019 | |
Bearing interest rate | 24% | ||||||
Convertible promissory note | $ 2,400,000 | ||||||
Convertible debt conversion price description | variable conversion price was 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 | ||||||
Trading price | $ 0.25 | $ 0.04 | |||||
Variable conversion price | $ 0.15 | ||||||
Early prepayment penalty | $ 350,000 | ||||||
Default premiums | 281,256 | ||||||
Interest payable | $ 23,512 | 91,555 | $ 60,283 | ||||
Reduced amount owed to Auctus after the Exchange | $ 710,911 | ||||||
Warrants exchanged by Auctus | 8,775,000 | ||||||
Share Issue | 535,301 | ||||||
Default penalty forgiven by Auctus | $ 225,444 | ||||||
Amount repaid by the company to Auctus | 221,467 | ||||||
Debt instrument principal and penalties paid | 161,184 | ||||||
First installment payment made by the company to auctus | 125,000 | ||||||
First installment payment made by the company outstanding principal | $ 101,489 | ||||||
Loss on extinguishment of debt | 1,228,183 | ||||||
Short-term convertible notes payable, including non-convertible penalty | 230,482 | $ 350,000 | |||||
Convertible notes payable in default | 161,000 | ||||||
Convertible notes payable in default | 0 | 161,000 | |||||
Derivative liabilities | $ (5,000) | (32,000) | |||||
Troubled Debt Restructuring [Member] | |||||||
Convertible notes payable in default | 700,000 | ||||||
Derivative liabilities | $ 84,000 | ||||||
Warrant One [Member] | |||||||
Warrant exchange price | $ 0.50 | ||||||
Warrant to purchase | 3,900,000 | ||||||
Warrant Two [Member] | |||||||
Warrant exchange price | $ 0.65 | ||||||
Warrant to purchase | 3,900,000 | ||||||
Auctus [Member] | |||||||
Share Issue | 3,900,000 | ||||||
Prepayment penalty | $ 350,000 | ||||||
Minimum [Member] | |||||||
Warrant exchange price | $ 0.15 | ||||||
Maximum [Member] | |||||||
Warrant exchange price | $ 0.20 |
LONG TERM DEBT (Details)
LONG TERM DEBT (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Bonus | $ 444,000 | $ 621,000 | |
Vacation | 41,000 | 39,000 | |
Amount forgiven in prior years | (191,051) | ||
Dr. Cartwright | |||
Salary | 337,000 | ||
Bonus | 675,000 | ||
Loans to Company | 528,000 | ||
Interest on loans | 81,000 | ||
Total outstanding prior to exchange | 1,621,000 | ||
Amount forgiven in prior years | (1,302,000) | ||
Amount exchanged for Series F-2 Preferred Stock | (100,000) | ||
Total interest accrued through December 31, 2020 | 17,000 | $ 45,000 | |
Balance outstanding at December 31, 2020 | 16,000 | ||
Balance outstanding, end of period | 297,000 | 281,000 | 364,000 |
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 | ||
Total outstanding prior to exchange | 661,000 | ||
Amount forgiven in prior years | (454,000) | ||
Amount exchanged for Series F-2 Preferred Stock | (85,000) | ||
Total interest accrued through December 31, 2020 | 9,000 | 10,000 | 29,000 |
Balance outstanding at December 31, 2020 | 236,000 | ||
Balance outstanding, end of period | $ 170,000 | $ 161,000 | $ 236,000 |
LONG TERM DEBT (Details 1)
LONG TERM DEBT (Details 1) - Long-Term Debt - Related Parties - Mr. Fowler $ in Thousands | Dec. 31, 2022 USD ($) |
2023 | $ 504 |
2024 | 39 |
2025 | 41 |
2026 | 3 |
Thereafter | 0 |
Total | $ 587 |
LONG TERM DEBT (Details 2)
LONG TERM DEBT (Details 2) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
LONG TERM DEBT | ||
10% Senior Unsecured Convertible Debentures | $ 1,130 | $ 1,130 |
Debt Issuance costs to be amortized | (40) | (69) |
Debt Discount | (140) | (241) |
Long-term convertible debt | $ 950 | $ 820 |
LONG TERM DEBT (Details Narrati
LONG TERM DEBT (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||||||||
May 04, 2020 | Dec. 31, 2021 | May 17, 2021 | Mar. 22, 2021 | Feb. 19, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Jul. 09, 2020 | Dec. 17, 2019 | Sep. 04, 2018 | |
Interest payable | $ 261,000 | $ 189,000 | $ 261,000 | |||||||
Current portion of long-term debt | 88,000 | 17,000 | 88,000 | |||||||
Convertible debentures | $ 2,400,000 | |||||||||
6% Unsecured Promissory Note | ||||||||||
Interest payable | 2,106 | 5,139 | 2,106 | |||||||
Principal amount of promissory note | 17,052 | |||||||||
Current portion of long-term debt | 75,000 | 75,000 | ||||||||
Long term debt | 22,052 | |||||||||
Outstanding balance | 97,052 | |||||||||
10% Senior Unsecured Convertible Debenture | ||||||||||
Interest payable | $ 73,326 | $ 58,494 | $ 73,326 | |||||||
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% | |||||||||
Senior Secured Convertible rate | 10% | 10% | 10% | |||||||
Deemed price | $ 0.50 | |||||||||
Convertible debentures | $ 1,130,000 | $ 1,000 | $ 1,130,000 | $ 1,130,000 | ||||||
Debt maturity date | May 17, 2024 | |||||||||
Proceeds from convertible debenture | $ 1,130,000 | |||||||||
Conversion price | $ 0.50 | |||||||||
Paycheck Protection Program | ||||||||||
Interest payable | 385 | 385 | 385 | |||||||
Loan balance | 23,976 | |||||||||
Current portion of long-term debt | 11,181 | 0 | 11,181 | |||||||
Loan maturity term | 24 months | |||||||||
Proceeds from loan | $ 50,184 | |||||||||
Loan interest rate | 1% | |||||||||
Dr. Cartwright | ||||||||||
Total outstanding prior to exchange | 1,621,000 | |||||||||
Promissory note interest rate | 6% | |||||||||
Debt instrument converted amount | $ 85,000 | |||||||||
Series F-2 Preferred Stock issued upon conversion of debt | 100 | |||||||||
Principal amount of promissory note | $ 267,085 | |||||||||
Issuance of promissory note in exchange of related party debt | $ 319,000 | |||||||||
Loans, interest, bonus, salary and vacation paid amount | $ 1,621,499 | |||||||||
Interest rate per annum | 6% | |||||||||
Promissory note maturity date | Feb. 18, 2023 | |||||||||
Salary | 337,000 | |||||||||
Mr. Fowler | ||||||||||
Total outstanding prior to exchange | 61,051 | |||||||||
Deferred compensation | 198,610 | |||||||||
Long-term debt-related parties | 150,000 | 119,814 | 150,000 | |||||||
Due to related party | $ 546,214 | 82,984 | ||||||||
Debt instrument converted amount | 504,070 | |||||||||
Series F-2 Preferred Stock issued upon conversion of debt | 50 | |||||||||
Interest payable | $ 133,590 | |||||||||
Due to related party, amount | $ 546,214 | |||||||||
Promissory note default interest rate | 18% | |||||||||
Promissory note monthly installment | $ 3,580 | |||||||||
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 | |||||||||
Dr. Faupel | ||||||||||
Total outstanding prior to exchange | 661,000 | |||||||||
Due to related party | $ 660,895 | |||||||||
Promissory note interest rate | 6% | |||||||||
Debt instrument converted amount | $ 100,000 | |||||||||
Series F-2 Preferred Stock issued upon conversion of debt | 85 | |||||||||
Principal amount of promissory note | $ 153,178 | |||||||||
Issuance of promissory note in exchange of related party debt | $ 207,111 | |||||||||
Salary | 134,000 | |||||||||
Mr. Bill Wells | ||||||||||
Total outstanding prior to exchange | $ 97,052 | 97,052 | $ 90,000 | |||||||
Promissory note interest rate | 6% | |||||||||
Common share stock option | 66,000 | |||||||||
Salary | $ 220,000 | |||||||||
Amount paid | $ 110,000 | |||||||||
Exercise price | $ 0.49 | |||||||||
Received cash payment | 80,000 | $ 20,000 | ||||||||
Accrued compensation | $ 80,000 | |||||||||
Total amount to be receive | $ 3,000,000 | 3,000,000 | 3,000,000 | |||||||
Monthly payment due | $ 5,000 | $ 5,000 | $ 3,667 |
INCOME (LOSS) PER COMMON SHAR_2
INCOME (LOSS) PER COMMON SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Net loss | $ (4,972) | $ (2,431) |
Basic weighted average number of shares outstanding | 32,505 | 13,377 |
Net loss per share (basic) | $ (0.15) | $ (0.18) |
Diluted weighted average number of shares outstanding | 32,505 | 13,377 |
Net loss per share (diluted) | $ (0.15) | $ (0.18) |
Stock Option [Member] | ||
Dilutive equity instruments (number of equivalent units): | ||
Dilutive equity instruments (number of equivalent units) | 1,042 | 1,867 |
Warrants [Member] | ||
Dilutive equity instruments (number of equivalent units): | ||
Dilutive equity instruments (number of equivalent units) | 6,027 | 15,655 |
Total Dilutive instruments [Member] | ||
Dilutive equity instruments (number of equivalent units): | ||
Dilutive equity instruments (number of equivalent units) | 13,299 | 36,739 |
Convertible Debt [Member] | ||
Dilutive equity instruments (number of equivalent units): | ||
Dilutive equity instruments (number of equivalent units) | 752 | 964 |
Preferred Stock [Member] | ||
Dilutive equity instruments (number of equivalent units): | ||
Dilutive equity instruments (number of equivalent units) | 5,478 | 18,253 |
INCOME (LOSS) PER COMMON SHAR_3
INCOME (LOSS) PER COMMON SHARE (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
NET LOSS PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS | ||
Decrease in net loss | $ 191,051 | $ 85,000 |
Account payable forgivness amount | $ 191,051 | |
Troubled debt restructuring description | the troubled debt restructurings in total decreased net loss by $191,051, or $0.01 per share | the total troubled debt restructuring decreased net loss by $85,000, or $0.01 per share |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred tax assets: | ||
Warrant liability | $ 0 | $ 439 |
Accrued executive compensation | 259 | 288 |
Reserves and other | 415 | 466 |
Net operating loss carryforwards | 16,390 | 16,993 |
Gross deferred tax assets | 17,064 | 18,186 |
Valuation allowance | (17,064) | (18,186) |
Net deferred tax assets | $ 0 | $ 0 |
INCOME TAXES (Details 1)
INCOME TAXES (Details 1) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
INCOME TAXES | ||
Statutory federal tax rate | 21% | 21% |
State taxes, net of federal benefit | 4% | 4% |
Nondeductible expenses | 0% | 0% |
Valuation allowance | (25.00%) | (25.00%) |
Effective rate | 0% | 0% |
INCOME TAXES (Details 2)
INCOME TAXES (Details 2) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
INCOME TAXES | ||
Current | $ 0 | $ 0 |
Deferred | 0 | 0 |
Deferred provision (credit) | (617) | (1,223) |
Change in valuation allowance | 617 | 1,223 |
Total provision for income taxes | $ 0 | $ 0 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2017 | |
INCOME TAXES | ||
NOL carryforwards | $ 52.4 | $ 13.2 |
Offset taxable income percentage | 80% |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Feb. 10, 2023 | Mar. 27, 2023 | Dec. 31, 2021 | Mar. 07, 2023 | Dec. 31, 2022 | |
Common stock shares issued | 13,673,000 | 48,596,000 | |||
Preferred stock shares converts into common stock | 40,000 | ||||
Borad of Directors [Member] | |||||
Forfeited unvested stock options granted | 150,000 | ||||
Exercise price | $ 0.27 | ||||
Common stock shares issued | 100,000 | ||||
Employees Executives And Directors [Member] | |||||
Exercise price | $ 0.2629 | ||||
Common stock shares issued | 925,000 | ||||
Subsequent Event [Member] | |||||
Common stock shares issued | 2,731 | ||||
Common stock warrants | 926,250 | ||||
Subsequent Event [Member] | Blumberg [Member] | |||||
Common stock shares issued | 400,000 | ||||
Subsequent Event [Member] | Exercises Of Warrants [Member] | |||||
Common stock shares issued | 145,544 | ||||
Subsequent Event [Member] | Payment Of Interest [Member] | |||||
Common stock shares issued | 177,921 | ||||
Subsequent Event [Member] | Series E Dividend [Member] | |||||
Common stock shares issued | 25,729 | ||||
Subsequent Event [Member] | Series D Dividend [Member] | |||||
Common stock shares issued | 25,635 | ||||
Subsequent Event [Member] | Series F Dividend [Member] | |||||
Common stock shares issued | 5,938 | ||||
Subsequent Event [Member] | Series F Preferred shares | |||||
Share issued for conversion | 120,000 | ||||
Preferred stock shares converts into common stock | 30 | ||||
Subsequent Event [Member] | Series F One Preferred shares | |||||
Share issued for conversion | 60,000 | ||||
Preferred stock shares converts into common stock | 15 | ||||
Subsequent Event [Member] | Series E Preferred share dividends | |||||
Share issued for conversion | 20,000 | ||||
Preferred stock shares converts into common stock | 5 | ||||
Subsequent Event [Member] | Warrants Issued And Exchanged [Member] | |||||
Exercise price | $ 0.30 | ||||
Common stock shares issued | 400,000 | ||||
Issued of three year warrant | 900,000 | ||||
Strike price warrant | $ 0.25 | ||||
Amount receive from exercise of warrant | $ 194,750 |