Document and Entity Information
Document and Entity Information | 6 Months Ended |
Jun. 30, 2020 | |
Cover [Abstract] | |
Entity Registrant Name | GUIDED THERAPEUTICS INC |
Entity Central Index Key | 0000924515 |
Document Type | S-1/A |
Document Period End Date | Jun. 30, 2020 |
Amendment Flag | true |
Amendment Description | To update financials. |
Entity Filer Category | Non-accelerated Filer |
Entity Emerging Growth Company | false |
Entity Small Business | true |
Entity Incorporation, State or Country Code | DE |
Entity File Number | 0-22179 |
Entity Interactive Data Current | Yes |
Document Fiscal Year Focus | 2020 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
CURRENT ASSETS: | |||
Cash and cash equivalents | $ 763 | $ 899 | $ 0 |
Accounts receivable, net of allowance for doubtful accounts | 0 | 13 | 13 |
Inventory, net of reserves | 51 | 48 | 114 |
Other current assets | 41 | 70 | 69 |
Total current assets | 855 | 1,030 | 196 |
NONCURRENT ASSETS: | |||
Property and equipment, net | 1 | 0 | 21 |
Lease asset-right, net of amortization | 86 | 132 | 0 |
Other assets | 0 | 18 | 19 |
Total noncurrent assets | 87 | 150 | 40 |
Total assets | 942 | 1,180 | 236 |
CURRENT LIABILITIES: | |||
Note payable in default, related parties | 2 | 349 | 334 |
Note payable in default | 307 | 427 | 366 |
Short-term notes payable | 1 | 380 | 225 |
Short-term notes payable, related parties | 0 | 646 | 674 |
Short-term notes payable, related parties, past due | 53 | 0 | |
Convertible note, past due | 1,828 | 0 | |
Convertible notes in default | 432 | 2,915 | 2,778 |
Short-term convertible notes payable | 33 | 73 | 0 |
Short-term convertible notes payable, related parties | 0 | 513 | 380 |
Accounts payable | 2,791 | 2,897 | 3,013 |
Accounts payable, related parties | 125 | 136 | 0 |
Accrued liabilities | 2,871 | 3,235 | 3,156 |
Subscription receivable | 0 | 635 | 0 |
Current portion of lease liability | 86 | 103 | 0 |
Deferred revenue | 101 | 101 | 66 |
Total current liabilities | 8,630 | 12,410 | 10,992 |
LONG-TERM LIABILITIES: | |||
Warrants, at fair value | 7,576 | 5,092 | 4,728 |
Lease liability | 0 | 29 | 0 |
Long-term debt | 50 | 0 | |
Long-term convertible notes payable, net | 525 | 15 | 0 |
Long-term debt-related parties | 584 | 569 | 340 |
Total long-term debt | 8,735 | 5,705 | 5,068 |
Total liabilities | 17,365 | 18,115 | 16,060 |
Commitments & contingencies (Note 7) | |||
STOCKHOLDERS' DEFICIT: | |||
Common stock | 3,403 | 3,394 | 2,877 |
Additional paid-in capital | 121,975 | 118,552 | 118,259 |
Treasury stock, at cost | (132) | (132) | (132) |
Accumulated deficit | (143,604) | (139,555) | (137,634) |
Total stockholders' deficit | (16,423) | (16,935) | (15,824) |
Total liabilities and stockholders' deficit | 942 | 1,180 | 236 |
Series C Convertible Preferred Stock | |||
STOCKHOLDERS' DEFICIT: | |||
Convertible preferred stock | 105 | 105 | 105 |
Series C-1 Convertible Preferred Stock | |||
STOCKHOLDERS' DEFICIT: | |||
Convertible preferred stock | 170 | 170 | 170 |
Series C-2 Convertible Preferred Stock | |||
STOCKHOLDERS' DEFICIT: | |||
Convertible preferred stock | 531 | 531 | $ 531 |
Series D Convertible Preferred Stock | |||
STOCKHOLDERS' DEFICIT: | |||
Convertible preferred stock | 276 | 0 | |
Series E Convertible Preferred Stock | |||
STOCKHOLDERS' DEFICIT: | |||
Convertible preferred stock | $ 853 | $ 0 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
CURRENT ASSETS: | |||
Accounts receivable, net of allowance | $ 125 | $ 114 | $ 157 |
Inventory, net of reserves | $ 838 | $ 831 | $ 767 |
STOCKHOLDERS' DEFICIT: | |||
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 |
Common stock, authorized (in thousands) | 3,000,000 | 3,000,000 | 3,000,000 |
Common stock, issued (in thousands) | 12,765 | 3,319 | 2,669 |
Common stock, outstanding (in thousands) | 12,765 | 3,319 | 2,669 |
Series C Convertible Preferred Stock | |||
STOCKHOLDERS' DEFICIT: | |||
Preferred stock, par value | $ 0.001 | $ 0.001 | $ 0.001 |
Preferred stock, authorized (in thousands) | 9 | 9 | 9 |
Preferred stock, issued (in thousands) | 0.3 | 0.3 | 0.3 |
Preferred stock, outstanding (in thousands) | 0.3 | 0.3 | 0.3 |
Preferred stock, liquidation preference | $ 286 | $ 286 | $ 286 |
Series C-1 Convertible Preferred Stock | |||
STOCKHOLDERS' DEFICIT: | |||
Preferred stock, par value | $ 0.001 | $ 0.001 | $ 0.001 |
Preferred stock, authorized (in thousands) | 20.3 | 20.3 | 20.3 |
Preferred stock, issued (in thousands) | 1 | 1 | 1 |
Preferred stock, outstanding (in thousands) | 1 | 1 | 1 |
Preferred stock, liquidation preference | $ 1,049 | $ 1,049 | $ 1,049 |
Series C-2 Convertible Preferred Stock | |||
STOCKHOLDERS' DEFICIT: | |||
Preferred stock, par value | $ 0.001 | $ 0.001 | $ 0.001 |
Preferred stock, authorized (in thousands) | 5 | 5 | 5 |
Preferred stock, issued (in thousands) | 3.3 | 3.3 | 3.3 |
Preferred stock, outstanding (in thousands) | 3.3 | 3.3 | 3.3 |
Preferred stock, liquidation preference | $ 3,263 | $ 3,263 | $ 3,263 |
Series D Convertible Preferred Stock | |||
STOCKHOLDERS' DEFICIT: | |||
Preferred stock, par value | $ 0.001 | $ 0.001 | |
Preferred stock, authorized (in thousands) | 6 | 6 | |
Preferred stock, issued (in thousands) | 0 | 0 | |
Preferred stock, outstanding (in thousands) | 0 | 0 | |
Preferred stock, liquidation preference | $ 554 | $ 0 | |
Series E Convertible Preferred Stock | |||
STOCKHOLDERS' DEFICIT: | |||
Preferred stock, par value | $ 0.001 | $ 0.001 | |
Preferred stock, authorized (in thousands) | 5 | 0 | |
Preferred stock, issued (in thousands) | 0.9 | 0 | |
Preferred stock, outstanding (in thousands) | 0.9 | 0 | |
Preferred stock, liquidation preference | $ 853 | $ 0 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
REVENUE: | ||||||
Sales - devices and disposables | $ 0 | $ 1 | $ 0 | $ 19 | $ 36 | $ 57 |
Cost of goods sold | 6 | 65 | 6 | 66 | 70 | 89 |
Gross loss | (6) | (64) | (6) | (47) | (34) | (32) |
OPERATING EXPENSES: | ||||||
Research and development | 55 | 43 | 80 | 90 | 122 | 244 |
Sales and marketing | 37 | 31 | 71 | 76 | 87 | 195 |
General and administrative | 271 | 189 | 453 | 371 | 694 | 1,077 |
Total operating expenses | 363 | 263 | 604 | 537 | 903 | 1,516 |
Operating loss | (369) | (327) | (610) | (584) | (937) | (1,548) |
OTHER INCOME (EXPENSES): | ||||||
Other income | 50 | 16 | 51 | 19 | 48 | 54 |
Interest expense | (308) | (264) | (594) | (634) | (1,412) | (1,763) |
(Loss) gain from extinguishment of debt | (343) | 0 | (316) | 0 | 0 | 1,039 |
Change in fair value of warrants | (5,779) | (2,088) | (2,551) | (1,679) | 380 | 3,234 |
Total other (expenses) income | (6,380) | (2,336) | (3,410) | (2,294) | (984) | 2,564 |
(LOSS) INCOME BEFORE INCOME TAXES | (6,749) | (2,663) | (4,020) | (2,878) | (1,921) | 1,016 |
Provision for income taxes | 0 | 0 | 0 | 0 | 0 | 0 |
NET (LOSS) INCOME | (6,749) | (2,663) | (4,020) | (2,878) | (1,921) | 1,016 |
Preferred stock dividends | (17) | 9 | (29) | 0 | 0 | (116) |
NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS | $ (6,766) | $ (2,654) | $ (4,049) | $ (2,878) | $ (1,921) | $ 900 |
NET (LOSS) INCOME PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS | ||||||
Basic | $ (0.57) | $ (0.81) | $ (0.48) | $ (0.87) | $ (0.58) | $ 1.95 |
Diluted | $ (0.57) | $ (0.81) | $ (0.48) | $ (0.87) | $ (0.58) | $ 0.0138 |
WEIGHTED AVERAGE SHARES OUTSTANDING | ||||||
Basic (in thousands) | 11,913 | 3,284 | 8,463 | 3,319 | 3,302 | 462 |
Diluted (in thousands) | 11,913 | 3,284 | 8,463 | 3,319 | 3,302 | 65,227 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT - USD ($) $ in Thousands | Series C Convertible Preferred Stock | Series C-1 Convertible Preferred Stock | Series C-2 Convertible Preferred Stock | Series D Convertible Preferred Stock | Series E Convertible Preferred Stock | Common Stock | Additional Paid-In Capital | Treasury Stock | Accumulated Deficit | Total |
Beginning balance, shares (in thousands) at Dec. 31, 2017 | 1 | 4 | 0 | 0 | 0 | 62 | ||||
Beginning balance, amount at Dec. 31, 2017 | $ 355 | $ 701 | $ 0 | $ 0 | $ 0 | $ 791 | $ 117,416 | $ (132) | $ (138,533) | $ (19,402) |
Conversion of Series C preferred stock to common stock, shares (in thousands) | (1) | 160 | ||||||||
Conversion of Series C preferred stock to common stock, amount | $ (250) | $ 128 | 409 | (117) | 170 | |||||
Conversion of debt into common stock, shares (in thousands) | 2,359 | |||||||||
Conversion of debt into common stock, amount | $ 1,888 | (963) | 925 | |||||||
Issuance of common stock in financing, shares (in thousands) | 88 | |||||||||
Issuance of common stock in financing, amount | $ 70 | (23) | 47 | |||||||
Issuance of warrants in financing | 20 | 20 | ||||||||
Exchange of Series C1 for C2 preferred stock, shares (in thousands) | (3) | 3 | ||||||||
Exchange of Series C1 for C2 preferred stock, amount | $ (531) | $ 531 | 0 | |||||||
Beneficial conversion feature for convertible debt | 689 | 689 | ||||||||
Stock-based compensation | 44 | 44 | ||||||||
Forgiveness of debt | 667 | 667 | ||||||||
Net income (loss) | 900 | 900 | ||||||||
Ending balance, shares (in thousands) at Dec. 31, 2018 | 0 | 1 | 3 | 0 | 0 | 2,669 | ||||
Ending balance, amount at Dec. 31, 2018 | $ 105 | $ 170 | $ 531 | $ 0 | $ 0 | $ 2,877 | 118,259 | (132) | (137,634) | (15,824) |
Conversion of debt into common stock, shares (in thousands) | 650 | |||||||||
Conversion of debt into common stock, amount | $ 517 | (404) | 1 | 114 | ||||||
Issuance of warrants in financing | 0 | |||||||||
Stock-based compensation | 5 | 8 | ||||||||
Net income (loss) | (2,878) | (2,878) | ||||||||
Ending balance, shares (in thousands) at Jun. 30, 2019 | 0 | 1 | 3 | 0 | 0 | 3,319 | ||||
Ending balance, amount at Jun. 30, 2019 | $ 105 | $ 170 | $ 531 | $ 0 | $ 0 | $ 3,394 | 117,860 | (132) | (140,512) | (18,585) |
Beginning balance, shares (in thousands) at Dec. 31, 2018 | 0 | 1 | 3 | 0 | 0 | 2,669 | ||||
Beginning balance, amount at Dec. 31, 2018 | $ 105 | $ 170 | $ 531 | $ 0 | $ 0 | $ 2,877 | 118,259 | (132) | (137,634) | (15,824) |
Shares in transit | 692 | 692 | ||||||||
Conversion of debt into common stock, shares (in thousands) | 650 | |||||||||
Conversion of debt into common stock, amount | $ 517 | (484) | 33 | |||||||
Beneficial conversion feature for convertible debt | 77 | 77 | ||||||||
Stock-based compensation | 8 | 8 | ||||||||
Net income (loss) | (1,921) | (1,921) | ||||||||
Ending balance, shares (in thousands) at Dec. 31, 2019 | 0 | 1 | 3 | 0 | 0 | 3,319 | ||||
Ending balance, amount at Dec. 31, 2019 | $ 105 | $ 170 | $ 531 | $ 0 | $ 0 | $ 3,394 | 118,552 | (132) | (139,555) | (16,935) |
Beginning balance, shares (in thousands) at Mar. 31, 2019 | 0 | 1 | 3 | 0 | 0 | 3,319 | ||||
Beginning balance, amount at Mar. 31, 2019 | $ 105 | $ 170 | $ 531 | $ 0 | $ 0 | $ 3,393 | 117,780 | (132) | (137,858) | (16,011) |
Conversion of debt into common stock, shares (in thousands) | 80 | |||||||||
Conversion of debt into common stock, amount | $ 1 | 79 | 80 | |||||||
Net income (loss) | (2,654) | (2,654) | ||||||||
Ending balance, shares (in thousands) at Jun. 30, 2019 | 0 | 1 | 3 | 0 | 0 | 3,319 | ||||
Ending balance, amount at Jun. 30, 2019 | $ 105 | $ 170 | $ 531 | $ 0 | $ 0 | $ 3,394 | 117,860 | (132) | (140,512) | (18,585) |
Beginning balance, shares (in thousands) at Dec. 31, 2019 | 0 | 1 | 3 | 0 | 0 | 3,319 | ||||
Beginning balance, amount at Dec. 31, 2019 | $ 105 | $ 170 | $ 531 | $ 0 | $ 0 | $ 3,394 | 118,552 | (132) | (139,555) | (16,935) |
Issuance of preferred stock in financing, shares (in thousands) | 763 | 853 | ||||||||
Issuance of preferred stock in financing, amount | $ 276 | $ 853 | 487 | 1,616 | ||||||
Conversion of debt into common stock, shares (in thousands) | 7,957 | |||||||||
Conversion of debt into common stock, amount | $ 8 | 2,692 | 2,700 | |||||||
Issuance of common stock in financing, shares (in thousands) | 1,476 | |||||||||
Issuance of common stock in financing, amount | $ 1 | 177 | 178 | |||||||
Issuance of warrants in financing | 67 | 67 | ||||||||
Issuance of common stock for manufacturing agreements, shares (in thousands) | 13 | |||||||||
Stock-based compensation | 0 | |||||||||
Net income (loss) | (4,049) | (4,049) | ||||||||
Ending balance, shares (in thousands) at Jun. 30, 2020 | 0 | 1 | 3 | 763 | 853 | 12,765 | ||||
Ending balance, amount at Jun. 30, 2020 | $ 105 | $ 170 | $ 531 | $ 276 | $ 853 | $ 3,403 | 121,975 | (132) | (143,604) | (16,423) |
Beginning balance, shares (in thousands) at Mar. 31, 2020 | 0 | 1 | 3 | 738 | 0 | 11,765 | ||||
Beginning balance, amount at Mar. 31, 2020 | $ 105 | $ 170 | $ 531 | $ 268 | $ 0 | $ 3,402 | 121,150 | (132) | (136,839) | (11,345) |
Issuance of preferred stock in financing, shares (in thousands) | 25 | 853 | ||||||||
Issuance of preferred stock in financing, amount | $ 8 | $ 853 | 21 | 1,062 | ||||||
Conversion of debt into common stock, shares (in thousands) | 1,000 | |||||||||
Conversion of debt into common stock, amount | $ 1 | 624 | 625 | |||||||
Net income (loss) | (6,766) | (6,766) | ||||||||
Ending balance, shares (in thousands) at Jun. 30, 2020 | 0 | 1 | 3 | 763 | 853 | 12,765 | ||||
Ending balance, amount at Jun. 30, 2020 | $ 105 | $ 170 | $ 531 | $ 276 | $ 853 | $ 3,403 | $ 121,975 | $ (132) | $ (143,604) | $ (16,423) |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||
Net loss | $ (4,020) | $ (2,878) | $ (1,921) | $ 1,016 |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||||
Bad debt expense | 13 | 0 | 0 | 1 |
Depreciation | 0 | 21 | 21 | 27 |
Amortization of debt issuance costs and discounts | 194 | 46 | 105 | 190 |
Amortization of beneficial conversion feature | 53 | 54 | 92 | 645 |
Share-based compensation | 0 | 8 | 8 | 44 |
Change in fair value of warrants | 2,551 | 1,679 | (380) | (3,234) |
Gain on extinguishment of debt | 316 | 0 | 0 | (1,039) |
Changes in operating assets and liabilities: | ||||
Accounts receivable | 0 | (3) | 0 | (10) |
Inventory | (3) | 66 | 66 | 151 |
Other current assets | 29 | 67 | (2) | 42 |
Other non-current asset | 18 | 0 | 1 | 41 |
Accounts payable | 19 | 29 | 20 | (6) |
Deferred revenue | 0 | 33 | 35 | 45 |
Accrued liabilities | (108) | 504 | 1,149 | 722 |
Total adjustments | 3,082 | 2,558 | 1,115 | (2,382) |
Net cash used in operating activities | (938) | (374) | (806) | (1,365) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||
Additions to property and equipment | (1) | 0 | ||
Net cash used in investing activities | (1) | 0 | ||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||
Proceeds from debt financing, net of discounts and debt issuance costs | 519 | 474 | 1,351 | 1,386 |
Proceeds from issuance of Series E Preferred Stock | 853 | 0 | ||
Payments made on notes and loans payable | (697) | (100) | (281) | (192) |
Proceeds for future issuance of common stock, warrants and preferred stock | 635 | 126 | ||
Net proceeds from issuance of common stock and warrants, net of costs | 128 | 0 | 0 | 44 |
Net cash provided by financing activities | 803 | 374 | 1,705 | 1,364 |
Net change in cash and cash equivalents | (136) | 0 | 899 | (1) |
Cash and cash equivalents, beginning of year | 899 | 0 | 0 | 1 |
Cash and cash equivalents, end of period | 763 | 0 | 899 | 0 |
SUPPLEMENTAL SCHEDULE OF: | ||||
Cash paid for: interest | 209 | 0 | 14 | 116 |
NONCASH INVESTING AND FINANCING ACTIVITIES: | ||||
Issuance of common stock as debt repayment | 2,529 | 33 | 33 | 925 |
Dividends on preferred stock | 29 | 0 | $ 0 | 116 |
Subscription receivable | 635 | 0 | ||
Warrants exchanged for fixed price warrants | $ 67 | $ 0 | $ 20 |
ORGANIZATION, BACKGROUND, AND B
ORGANIZATION, BACKGROUND, AND BASIS OF PRESENTATION | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
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. Basis of Presentation All information and footnote disclosures included in the consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States. The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. Therefore, these financial statements should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended December 31, 2019 filed with the Securities and Exchange Commission (“SEC”) pursuant to Section 13 or 15(d) under the Securities Exchange Act of 1934. In the opinion of management, all adjustments (consisting of normal recurring accruals and other items) considered necessary for a fair presentation have been included. A 1:800 reverse stock split of all of the Company’s issued and outstanding common stock was implemented on March 29, 2019. As a result of the reverse stock split, every 800 shares of issued and outstanding common stock were converted into 1 share of common stock. All fractional shares created by the reverse stock split were rounded to the nearest whole share. The number of authorized shares of common stock did not change. The reverse stock split decreased the Company’s issued and outstanding shares of common stock from 2,652,309,322 shares to 3,319,469 shares as of that date with rounding. See Note 4, Stockholders’ Deficit. Unless otherwise specified, all per share amounts are reported on a post-stock split basis, as of June 30, 2020 and December 31, 2019. 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 June 30, 2020, it had an accumulated deficit of approximately $143.6 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. Certain prior year amounts have been reclassified in order to conform to the current year presentation. 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 June 30, 2020, the Company had a negative working capital of approximately $7.8 million, accumulated deficit of $143.6 million, and net loss of $4.0 million for the six months then ended (the net loss was in part the result of a $2.5 million change in fair value of warrants that was recorded in the period). Stockholders’ deficit totaled approximately $16.4 million at June 30, 2020, primarily due to recurring net losses from operations, deemed dividends on warrants and preferred stock, offset by proceeds from the exercise of options and warrants and proceeds from sales of stock. The Company has taken steps to improve its going concern opinion, including: ● During the end of 2019 and beginning of 2020, the Company was able to raise $4.0 million in equity and debt investments; ● The Company has executed several exchange agreements that converted to approximately $2.3 million of debt for equity, as well as eliminate some existing debt; ● Subsequent to June 30, 2020, the Company uplisted to the Over the Counter (OTC) bulletin board; If sufficient capital cannot be raised during 2020, 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 28.3 million shares of its common stock outstanding at June 30, 2020, with exercise prices ranging between $0.04 and $1.82 per share. Exercises of in the money warrants would generate a total of approximately $5.0 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. | 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. Basis of Presentation All information and footnote disclosures included in the consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States. A 1:800 reverse stock split of all of the Company’s issued and outstanding common stock was implemented on March 29, 2019. As a result of the reverse stock split, every 800 shares of issued and outstanding common stock were converted into 1 share of common stock. All fractional shares created by the reverse stock split were rounded to the nearest whole share. The number of authorized shares of common stock did not change. The reverse stock split decreased the Company’s issued and outstanding shares of common stock from 2,652,309,322 shares to 3,319,486 shares as of that date with rounding. See Note 4, Stockholders’ Deficit. Unless otherwise specified, all per share amounts are reported on a post-stock split basis, as of December 31, 2019 and 2018. 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, 2019, it had an accumulated deficit of approximately $139.6 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. Certain prior year amounts have been reclassified in order to conform to the current year presentation. 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, 2019, the Company had a negative working capital of approximately $11.4 million, accumulated deficit of $139.6 million, and incurred a net loss of $1.9 million for the year then ended (the net loss for the year ended December 31, 2019 was primarily realized due to a $1.4 million in interest expense). Stockholders’ deficit totaled approximately $16.9 million at December 31, 2019, primarily due to recurring net losses from operations, deemed dividends on warrants and preferred stock, offset by proceeds from the exercise of options and warrants and proceeds from sales of stock. During the end of 2019 and beginning of 2020, the Company was able to raise $1.4 million in equity and debt investments. In addition, the Company has executed several exchange agreements that will convert debt for equity, as well as eliminate some existing debt. The Company’s capital-raising efforts are ongoing and the Company has taken the following steps to increase the likelihood of a successful financing: 1) Applied to the Canadian Stock Exchange for a possible listing, 2) Debt has been significantly reduced and additional agreements are in place, contingent on a successful financing, to reduce debt even further either by forgiveness of debt and/or exchanges of debt for equity and 3) Monthly operating expenses are scrutinized and controlled. If sufficient capital cannot be raised during 200, 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 46.0 million shares of its common stock outstanding at December 31, 2019, with exercise prices ranging between $0.04 and $60,000 per share. Exercises of these warrants would generate a total of approximately $1.6 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. However, please refer to Footnote 11 - CONVERTIBLE DEBT IN DEFAULT in the paragraph: Debt Restructuring for more information regarding our warrants. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Accounting Policies [Abstract] | ||
SUMMARY OF 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 embedded conversion options and freestanding warrants. Principles of Consolidation The accompanying consolidated financial statements include the accounts of Guided Therapeutics, Inc. and its wholly owned subsidiary. All intercompany transactions are eliminated. Accounting Standard Updates Recently Adopted Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ASU 2016-13 requires that expected credit losses relating to financial assets are measured on an amortized cost basis and available-for-sale debt securities be recorded through an allowance for credit losses. ASU 2016-13 limits the amount of credit losses to be recognized for available-for-sale debt securities to the amount by which carrying value exceeds fair value and also requires the reversal of previously recognized credit losses if fair value increases. The Company adopted the standard on January 1, 2020. The adoption of ASU 2016-13 did not have a material impact on the Company. In August 2018, the FASB issued Accounting Standards Update No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement, or ASU 2018-13. The amendments in ASU 2018-13 eliminate, add, and modify certain disclosure requirements for fair value measurements. The amendments are effective for the Company’s interim and annual reporting periods beginning after December 15, 2019, with early adoption permitted for either the entire ASU or only the provisions that eliminate or modify requirements. The amendments with respect to changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty are to be applied prospectively. All other amendments are to be applied retrospectively to all periods presented. The adoption of ASU 2016-13 did not have a material impact on the Company. 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 receivable on past due accounts receivable. Concentrations of Credit Risk The Company, from time to time during the years covered by these consolidated financial statements, may have bank balances in excess of its insured limits. Management has deemed this a normal business risk. Inventory Valuation All inventories are stated at lower of cost or net realizable value, with cost determined substantially on a “first-in, first-out” basis. Selling, general, and administrative expenses are not inventoried, but are charged to expense when incurred. At June 30, 2020 and December 31, 2019, our inventories were as follows (in thousands): June 30, December 31, 2020 2019 Raw materials $ 784 $ 781 Work in process 81 81 Finished goods 24 17 Inventory reserve (838 ) (831 ) Total $ 51 $ 48 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 June 30, 2020 and December 31, 2019 (in thousands): June 30, December 31, 2020 2019 Equipment $ 1,350 $ 1,349 Software 740 740 Furniture and fixtures 124 124 Leasehold Improvement 180 180 2,394 2,393 Less accumulated depreciation and amortization (2,393 ) (2,393 ) Total $ 1 $ - 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 approximately $4,000 and $10,000 for the six months ended June 30, 2020 and 2019, respectively. Leases With the implementation of ASU 2016-02, “Leases (Topic 842)”, the Company recorded a lease-right-of-use asset and a lease liability. The implementation required the analysis of certain criteria in determining its treatment. The Company determined that its corporate office lease met those criteria. The Company implemented the guidance using the alternative transition method. Under this alternative, the effective date would be the date of initial application. The Company analyzed the lease at its effective date and calculated an initial lease payment amount of $267,380 with a present value of $213,000 using a 20% discount. As of June 30, 2020, the balance of the lease-right-of-use asset and lease liability was approximately $86,000. The cumulative effect of initially applying the new guidance had an immaterial impact on the opening balance of retained earnings. The Company elected the practical expedients permitted under the transition guidance within the new standards, which allowed the Company to carry forward the historical lease classification. Accrued Liabilities Accrued liabilities are summarized as follows (in thousands): June 30, 2020 December 31, 2019 Compensation $ 1,174 $ 1,123 Professional fees 23 181 Interest 1,361 1,603 Warranty 2 2 Vacation 37 41 Preferred dividends 149 120 Other accrued expenses 125 165 Total $ 2,871 $ 3,235 Subscription receivables Cash received from investors for common stock shares that has not completed processing is recorded as a liability to subscription receivables. As of June 30, 2020, the Company had not issued 50,000 common stock shares to an investor. As of June 30, 2020, the outstanding subscription receivable was $5,820. As of December 31, 2019, the Company had reserved 1,270,000 common stock shares in exchange for $635,000. Revenue Recognition The Company follows, 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. Revenue by product line (in thousands): Six Months Ended June 30, 2020 2019 Devices $ - $ - Disposables - 2 Other - 15 Warranty - 2 Total $ - $ 19 Revenue by geographic location (in thousands): Six Months Ended June 30, 2020 2019 Asia $ - $ 5 Europe - 14 Total $ - $ 19 Significant Distributors During the six months ended June 30, 2020, the Company did not have any revenues. Accounts receivable, that netted to nil, and were reserved against, were from more than one distributor and represents 100% of the balance as of June 30, 2020. During the six months ended June 30, 2019, revenues were from two distributors and for extended warranties. Revenues from these distributors totaled $19,000 for the period ended June 30, 2019. Accounts receivable, not reserved against, were from one distributor and represents 100% of the balance for the period ended June 30, 2019. Deferred revenue The Company defers payments received as revenue until earned based on the related contracts and applying ASC 606 as required. As of June 30, 2020, and December 31, 2019, the Company had $101,000 in deferred revenue. 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 Company uses the liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Management provides valuation allowances against the deferred tax assets for amounts that are not considered more likely than not to be realized. The Company has entered into an agreed upon payment plan with the IRS for delinquent payroll taxes and also with the Georgia Department of State. The Company is currently in process of setting up a payment arrangement for its delinquent state income taxes with the State of Georgia and the returns are currently under review by state authorities. 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, 2019, the Company has approximately $76 million of cumulative net operating losses, but it has not filed its Federal tax returns, therefore this number may not be accurate. Once the returns are filed, the net operating losses 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 current corporate tax rates in the U.S. is 21%. Uncertain Tax Positions The Company assesses each income tax position is assessed using a two-step process. A determination is first made as to whether it is more likely than not that the income tax position will be sustained, based upon technical merits, upon examination by the taxing authorities. If the income tax position is expected to meet the more likely than not criteria, the benefit recorded in the financial statements equals the largest amount that is greater than 50% likely to be realized upon its ultimate settlement. At June 30, 2020 and December 31, 2019, there were no uncertain tax positions. 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 issued to non-employees 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 records compensation expense related to options granted to employees and non-employees based on the fair value of the award. Compensation cost is recorded as earned for all unvested stock options outstanding at the beginning of the first year based upon the grant date fair value estimates, and for compensation cost for all share-based payments granted or modified subsequently based on fair value estimates. For the six months ended June 30, 2020 and 2019, share-based compensation for options attributable to employees, non-employees, officers and Board members were approximately nil and $8,000, respectively. These amounts have been included in the Company’s statements of operations. Compensation costs for stock options which vest over time are recognized over the vesting period. As of June 30, 2020, and 2019 the Company did not have any unrecognized compensation costs related to granted stock options that will be recognized. Beneficial Conversion Features of Convertible Securities Conversion options that are not bifurcated as a derivative pursuant to ASC 815 and not accounted for as a separate equity component under the cash conversion guidance are evaluated to determine whether they are beneficial to the investor at inception (a beneficial conversion feature) or may become beneficial in the future due to potential adjustments. The beneficial conversion feature guidance in ASC 470-20 applies to convertible stock as well as convertible debt which are outside the scope of ASC 815. A beneficial conversion feature is defined as a nondetachable conversion feature that is in the money at the commitment date. The beneficial conversion feature guidance requires recognition of the conversion option’s in-the-money portion, the intrinsic value of the option, in equity, with an offsetting reduction to the carrying amount of the instrument. The resulting discount is amortized as a dividend over either the life of the instrument, if a stated maturity date exists, or to the earliest conversion date, if there is no stated maturity date. If the earliest conversion date is immediately upon issuance, the dividend must be recognized at inception. When there is a subsequent change to the conversion ratio based on a future occurrence, the new conversion price may trigger the recognition of an additional beneficial conversion feature on occurrence. 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. | 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 embedded conversion options and freestanding warrants. Principles of Consolidation The accompanying consolidated financial statements include the accounts of Guided Therapeutics, Inc. and its wholly owned subsidiary. All intercompany transactions are eliminated. Accounting Standard Updates Implemented In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)” that requires lessees to recognize on the balance sheet the assets and liabilities associated with the rights and obligations created by those leases. Under the new guidance, a lessee is required to recognize assets and liabilities for leases with lease terms of more than 12 months. Consistent with current U.S. GAAP, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily depends on its classification as finance or operating lease. The update is effective for reporting periods beginning after December 15, 2018. The a In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU 2014-09, “Revenue from Contracts with Distributors (Topic 606),” (“ASU 2014-09”). ASU 2014-09 outlines a new, single comprehensive model for entities to use in accounting for revenue arising from contracts with distributors and supersedes most current revenue recognition guidance, including industry-specific guidance. This new revenue recognition model provides a five-step analysis in determining when and how revenue is recognized. The new model requires revenue recognition to depict the transfer of promised goods or services to distributors in an amount that reflects the consideration a company expects to receive. ASU 2014-09 also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. In August 2015, the FASB issued ASU 2015-14, “Deferral of the Effective Date”, which amends ASU 2014-09. As a result, the effective date will be the first quarter of fiscal year 2018 with early adoption permitted in the first quarter of fiscal year 2017. Subsequently, the FASB has issued the following standards related to ASU 2014-09: ASU 2016-08, “Revenue from Contracts with Distributors (Topic 606), Principal versus Agent Considerations (Reporting Revenue Gross versus Net),” (“ASU 2016-08”); ASU 2016-10, “Revenue from Contracts with Distributors (Topic 606), Identifying Performance Obligations and Licensing,” (“ASU 2016-10”); ASU 2016-12, “Revenue from Contracts with Distributors (Topic 606) Narrow-Scope Improvements and Practical Expedients,” (“ASU 2016-12”); and ASU 2016-20, “Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Distributors,” (“ASU 2016-20”), which are intended to provide additional guidance and clarity to ASU 2014-09. The Company must adopt ASU 2016-08, ASU 2016-10, ASU 2016-12 and ASU 2016-20 along with ASU 2014-09 (collectively, the “New Revenue Standards”). The New Revenue Standards may be applied using one of two retrospective application methods: (1) a full retrospective approach for all periods presented, or (2) a modified retrospective approach that presents a cumulative effect as of the adoption date and additional required disclosures. The Company has evaluated the adoption of this guidance and has taken a modified retrospective approach to the presentation of revenue from contracts with distributors. The Company adopted this standard on January 1, 2018, using the modified retrospective method, with no impact on its 2018 financial statements. The cumulative effect of initially applying the new guidance had no impact on its financial statements in future periods. In February 2018, the FASB issued ASU 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. The amendment of ASU 2018-02 states an entity may elect to reclassify the income tax effects of the Tax Cuts and Jobs Act of 2017 (the “Tax Cuts and Jobs Act”) on items within accumulated other comprehensive income to retained earnings. The amendments in this update are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2018. Early adoption is permitted. The adoption did not have a material effect on the Company’s consolidated financial statements. Except as noted above, the guidance issued by the FASB during the current year is not expected to have a material effect on the Company’s consolidated financial statements. 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. The Company does not accrue interest receivable on past due accounts receivable. Concentrations of Credit Risk The Company, from time to time during the years covered by these consolidated financial statements, may have bank balances in excess of its insured limits. Management has deemed this a normal business risk. Inventory Valuation All inventories are stated at lower of cost or net realizable value, with cost determined substantially on a “first-in, first-out” basis. Selling, general, and administrative expenses are not inventoried, but are charged to expense when incurred. At December 31, 2019 and 2018, our inventories were as follows (in thousands): Year Ended December 31, 2019 2018 Raw materials $ 781 $ 783 Work in process 81 81 Finished goods 17 17 Inventory reserve (831 ) (767 ) Total $ 48 $ 114 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 is 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, 2019 and 2018 (in thousands): Year Ended December 31, 2019 2018 Equipment $ 1,349 $ 1,378 Software 740 740 Furniture and fixtures 124 124 Leasehold Improvement 180 199 2,393 2,441 Less accumulated depreciation (2,393 ) (2,420 ) Total $ - $ 21 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. Other Assets Other assets primarily consist of a deposit for the corporate office. 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 approximately $15,000 and $11,000 in 2019 and 2018, respectively. Leases With the implementation of ASU 2016-02, “Leases (Topic 842)”, the Company recorded a lease asset-right and a lease liability. The implementation required the analysis of certain criteria in determining its treatment. The Company determined that its corporate office lease met those criteria. The Company implemented the guidance using the alternative transition method. Under this alternative, the effective date would be the date of initial application. The Company analyzed the lease at its effective date and calculated an initial lease payment amount of $267,380 with a present value of $213,000 using a 20% discount. As of December 31, 2019, the balance of the lease asset – right and lease liability was approximately $132,000. The cumulative effect of initially applying the new guidance had an immaterial impact on the opening balance of retained earnings, The Company does not expect the guidance to have a material impact on its consolidated net earnings in future periods. The Company elected the Practical expedients permitted under the transition guidance within the new standards, which allowed the Company to carry forward the historical lease classification. Accrued Liabilities Accrued liabilities are summarized as follows at December 31, 2019 and 2018 (in thousands): Year Ended December 31, 2019 2018 Compensation $ 1,123 $ 1,030 Professional fees 181 203 Interest 1,603 892 Warranty 2 2 Vacation 41 53 Preferred dividends 120 120 Stock subscription for licenses - 692 Other accrued expenses 165 164 Total $ 3,235 $ 3,156 Subscription receivables Cash received from investors for common stock shares that has not completed processing is recorded as a liability to subscription receivables. As of December 31, 2019, the Company had reserved 1,270,000 common stock shares in exchange for $635,000. Revenue recognition The Company follows, 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. Revenue by product line: Year Ended December 31, 2019 2018 Devices $ 17 $ 17 Disposables 2 32 Other 15 1 Warranty 2 7 Total $ 36 $ 57 Revenue by geographic location: Year Ended December 31, 2019 2018 Asia $ 22 $ 49 Africa - 8 Europe 14 - Total $ 36 $ 57 Significant Distributors As of the year ended December 31, 2019, all the Company’s revenues were from three distributors and for extended warranties. Revenue from these distributors totaled approximately $36,000 for the year ended December 31, 2019. For the year ended December 31, 2018, 82% of the Company’s revenue was from one distributor and totaled $40,750. There were no amounts due from these distributors as of December 31, 2019, and 2018. Deferred revenue The Company defers payments received as revenue until earned based on the related contracts and applying ASC 606 as required. As of December 31, 2019, and 2018, the Company had $101,000 and $66,000 in deferred revenue, respectively. 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 Company uses the liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Management provides valuation allowances against the deferred tax assets for amounts that are not considered more likely than not to be realized. The Company has filed its 2018 federal and state corporate tax returns. As of January 1, 2018, corporate tax rates in the U.S. have decreased from 34% to 21%. Uncertain Tax Positions The Company assesses each income tax position is assessed using a two-step process. A determination is first made as to whether it is more likely than not that the income tax position will be sustained, based upon technical merits, upon examination by the taxing authorities. If the income tax position is expected to meet the more likely than not criteria, the benefit recorded in the financial statements equals the largest amount that is greater than 50% likely to be realized upon its ultimate settlement. At December 31, 2019 and, 2018, there were no uncertain tax positions. 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 issued to non-employees 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 records compensation expense related to options granted to employees and non-employees based on the fair value of the award. Compensation cost is recorded as earned for all unvested stock options outstanding at the beginning of the first year based upon the grant date fair value estimates, and for compensation cost for all share-based payments granted or modified subsequently based on fair value estimates. For the years ended December 31, 2019 and 2018, share-based compensation for options attributable to employees, officers and Board members were approximately $8,000 and $44,000, respectively. These amounts have been included in the Company’s statements of operations. Compensation costs for stock options which vest over time are recognized over the vesting period. As of December 31, 2019, the Company did not have any unrecognized compensation costs related to granted stock options to be recognized. Beneficial Conversion Features of Convertible Securities Conversion options that are not bifurcated as a derivative pursuant to ASC 815 and not accounted for as a separate equity component under the cash conversion guidance are evaluated to determine whether they are beneficial to the investor at inception (a beneficial conversion feature) or may become beneficial in the future due to potential adjustments. The beneficial conversion feature guidance in ASC 470-20 applies to convertible stock as well as convertible debt which are outside the scope of ASC 815. A beneficial conversion feature is defined as a nondetachable conversion feature that is in the money at the commitment date. The beneficial conversion feature guidance requires recognition of the conversion option’s in-the-money portion, the intrinsic value of the option, in equity, with an offsetting reduction to the carrying amount of the instrument. The resulting discount is amortized as a dividend over either the life of the instrument, if a stated maturity date exists, or to the earliest conversion date, if there is no stated maturity date. If the earliest conversion date is immediately upon issuance, the dividend must be recognized at inception. When there is a subsequent change to the conversion ratio based on a future occurrence, the new conversion price may trigger the recognition of an additional beneficial conversion feature on occurrence. 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 | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Accounting Policies [Abstract] | ||
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, which consisted of warrants as of June 30, 2020. The fair value of the warrants was estimated using the Binomial Simulation model. Gains and losses from changes to derivatives are included in change in fair value of warrants in the statement of operations. The fair value of the Company’s derivative warrants is classified as a Level 3 measurement, since unobservable inputs are used in the valuation. The following table presents the fair value for those liabilities measured on a recurring basis as of June 30, 2020 and December 31, 2019: The following is summary of items that the Company measures at fair value on a recurring basis: Fair Value at June 30, 2020 Level 1 Level 2 Level 3 Total Warrants issued in connection with Short-term loans - - (138 ) (138 ) Warrants issued in connection with Long-term loans - - (3,512 ) (3,512 ) Warrants issued in connection with Senior Secured Debt - - (3,926 ) (3,926 ) Bifurcated conversion option in connection with Auctus $700,000 loan on December 17, 2019 - - - - Total long-term liabilities at fair value $ - $ - $ (7,576 ) $ (7,576 ) Fair Value at December 31, 2019 Level 1 Level 2 Level 3 Total Warrants issued in connection with Distributor Debt - - (114 ) (114 ) Warrants issued in connection with Short-term loans - - (83 ) (83 ) Warrants issued in connection with Long-term loans - - (893 ) (893 ) Warrants issued in connection with Senior Secured Debt - - (4,002 ) (4,002 ) Bifurcated conversion option in connection with Auctus $700,000 loan on December 17, 2019 - - - - Total long-term liabilities at fair value $ - $ - $ (5,092 ) $ (5,092 ) The following is a summary of changes to Level 3 instruments during the six months ended June 30, 2020: Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Distributor Debt Short-Term Loans Senior Secured Debt Long-Term Loans Total Balance, December 31, 2019 $ (114 ) $ (83 ) $ (4,002 ) $ (893 ) $ (5,092 ) Warrants exchanged for fixed price warrants 67 - - - 67 Change in fair value during the year 47 (55 ) 76 (2,619 ) (2,551 ) Balance, June 30, 2020 $ - $ (138 ) $ (3,926 ) $ (3,512 ) $ (7,576 ) As of June 30, 2020, the fair value of warrants was approximately $7.6 million. A net change of approximately $2.6 | The guidance for fair value measurements, ASC820, 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, which consisted of warrants as of December 31, 2019. The fair value of the warrants was estimated using the Binomial Simulation model. Gains and losses from derivative contracts are included in net gain (loss) from derivative contracts in the statement of operations. The fair value of the Company’s derivative warrants is classified as a Level 3 measurement, since unobservable inputs are used in the valuation. The following table presents the fair value for those liabilities measured on a recurring basis as of December 31, 2019 and 2018: FAIR VALUE MEASUREMENTS (In Thousands) The following is summary of items that the Company measures at fair value on a recurring basis: Fair Value at December 31, 2019 Level 1 Level 2 Level 3 Total Warrants issued in connection with Distributor Debt - - (114 ) (114 ) Warrants issued in connection with Short-term loans - - (83 ) (83 ) Warrants issued in connection with Long-term loans - - (893 ) (893 ) Warrants issued in connection with Senior Secured Debt - - (4,002 ) (4,002 ) Embedded derivative due to the conversion option that needed to be bifurcated for the Auctus $700,000 loan on December 17, 2019 - - - - Total long-term liabilities at fair value $ - $ - $ (5,092 ) $ (5,092 ) Fair Value at December 31, 2018 Level 1 Level 2 Level 3 Total Warrants issued in connection with Distributor Debt - - (114 ) (114 ) Warrants issued in connection with Senior Secured Debt - - (4,614 (4,614 Total long-term liabilities at fair value $ - $ - $ (4,728 $ (4,728 The following is a summary of changes to Level 3 instruments during the year ended December 31, 2019: Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Distributor Debt Short-Term Loans Senior Secured Debt Long-Term Loans Total Balance, December 31, 2018 $ (114 ) $ - $ (4,614 ) $ - $ (4,728 ) Warrants issued during the year - (108 ) - (636 ) (744 ) Change in fair value during the year - 25 612 (257 ) 380 Balance, December 31, 2019 $ (114 ) $ (83 ) $ (4,002 ) $ (893 ) $ (5,092 ) As of December 31, 2019, the fair value of warrants was approximately $5.1 million. A net change of approximately $0.4 million has been recorded to the accompanying statement of operations for the year ended. |
STOCKHOLDER'S DEFICIT
STOCKHOLDER'S DEFICIT | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
STOCKHOLDERS' DEFICIT: | ||
STOCKHOLDER'S DEFICIT | Common Stock The Company has authorized 3,000,000,000 shares of common stock with $0.001 par value, of which 12,764,629 were issued and outstanding as of June 30, 2020. As of December 31, 2019, there were 3,000,000,000 authorized shares of common stock, of which 3,319,469 were issued and outstanding. For the six months ended June 30, 2020, the Company issued 9,445,160 shares of common stock as listed below: Exchange of Debt for common stock shares and warrants 7,957,013 Shares issued for manufacturing agreements 12,147 Investments 1,476,000 Issued during the six months ended June 30, 2020 9,445,160 Summary table of common stock share transactions: Balance at December 31, 2019 3,319,469 Issued in 2020 9,445,160 Balance at June 30, 2020 12,764,629 Investments During June 2020, the Company received equity investments in the amount of $853,000. These investors received a total of 852.50 Series E preferred stock (if the Investor elects to convert their Series E preferred stock, each Series E preferred stock shares converts into 4,000 shares of the Company’s common stock shares). During January and April 2020, the Company received equity investments in the amount of $128,000. These investors received a total of 256,000 common stock shares and 256,000 warrants issued to purchase common stock shares at a strike price of $0.25, 256,000 warrants to purchase common stock shares at a strike price of $0.75 and 128 Series D preferred stock (if the Investor elects to convert their Series D preferred stock, each Series D preferred stock shares converts into 3,000 shares of the Company’s common stock shares). Of the amount invested $38,000 was from related parties. During December 2019, the Company received equity investments in the amount of $635,000. The $635,000 of investments were recorded as a subscription liability in December 2019. The common stock shares were issued in January 2020. These investors received a total of 1,270,000 common stock shares and 1,270,000 warrants to purchase common stock shares at a strike price of $0.25, 1,270,000 warrants issued to purchase common stock shares at a strike price of $0.75 and 635 Series D preferred stock (each Series D preferred stock shares converts into 3,000 shares of the Company’s common stock shares). Of the amount invested $350,000 was from related parties. Debt Exchanges On January 8, 2020, the Company exchanged $2,064,366 in debt for several equity instruments (noted below) that were determined to have a total fair value of $2,065,548, resulting in a loss on extinguishment of debt of $1,183 which is recorded in other income (expense) on the accompanying consolidated statements of operations. The Company also issued 6,957,013 warrants to purchase common stock shares; with exercise prices of $0.25, $0.75 and $0.20. In addition, one of the investors forgave approximately $29,000 of debt, which was recorded as a gain for extinguishment of debt. On June 3, 2020, the Company exchanged $328,422 in debt from Auctus, (summarized in footnote 10: Convertible Notes), On June 30, 2020, the Company exchanged $125,000 in debt (during June 2020, $125,000 in payables had been converted into short-term debt) from Mr. James Clavijo, for 500,000 common stock shares and 250,000 warrants to purchase common stock shares. The fair value of the common stock shares was $250,000 (based on a $0.50 fair value for the Company’s stock) and of the warrants to purchase common stock shares was $99,963 (based on a $0.40 black scholes fair valuation). This resulted in a net loss on extinguishment of debt of $224,963 ($349,963 fair value less the $125,000 of exchanged debt). After the exchange transaction a balance was due Mr. Clavijo of $10,213 which was paid. The following table summarizes the debt exchanges: Total Debt and Accrued Interest Total Debt Total Accrued Interest Common Stock Shares Warrants (Exercise $0.25) Warrants (Exercise $0.75) Warrants (Exercise $0.20) Warrants (Exercise $0.15) Warrants (Exercise $0.50) Aquarius $ 145,544 107,500 38,044 291,088 145,544 145,544 - - - K2 Medical (Shenghuo)3 803,653 771,927 31,726 1,905,270 704,334 704,334 496,602 - - Mr. Blumberg 305,320 292,290 13,030 1,167,630 119,656 119,656 928,318 - - Mr. Case 179,291 150,000 29,291 896,456 - - 896,456 - - Mr. Grimm 51,050 50,000 1,050 255,548 - - 255,548 - - Mr. Gould 111,227 100,000 11,227 556,136 - - 556,136 - - Mr. Mamula 15,577 15,000 577 77,885 - - 77,885 - - Dr. Imhoff2 400,417 363,480 36,937 1,699,255 100,944 100,944 1,497,367 - - Ms. Rosenstock1 50,000 50,000 - 100,000 50,000 50,000 - - - Mr. James2 2,286 2,000 286 7,745 1,227 1,227 5,291 - - Auctus 328,422 249,119 79,303 500,000 - - - 700,000 - Mr. Clavijo 125,000 125,000 - 500,000 - - - - 500,000 $ 2,517,787 $ 2,276,316 $ 241,471 7,957,013 1,121,705 1,121,705 4,713,603 700,000 500,000 1 Ms. Rosenstock also forgave $28,986 in debt to the Company. 2 Mr. Imhoff and Mr. James are members of the board of directors and therefore related parties. 3 The Company’s COO and director, Mark Faupel, is a shareholder of Shenghuo, and a former director, Richard Blumberg, is a managing member of Shenghuo. Preferred Stock Overview The Company has authorized 5,000,000 shares of preferred stock with a $.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. The board of directors designated 525,000 shares of preferred stock redeemable convertible preferred stock, none of which remain outstanding, 33,000 shares of preferred stock as Series B Preferred Stock, none of which remain outstanding, 9,000 shares of preferred stock as Series C Convertible Preferred Stock, (the “Series C Preferred Stock”), of which 286 were issued and outstanding at June 30, 2020 and December 31, 2019, respectively and 20,250 shares of preferred stock as Series C1 Preferred Stock, of which 1,050 shares were issued and outstanding at June 30, 2020 and December 31, 2019. 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 June 30, 2020, shares of Series C2 had a conversion price of $0.50 per share, such that each share of Series C preferred stock would convert into approximately 2,000 shares of the Company’s common stock. Series C Convertible 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 June 30, 2020 and December 31, 2019, 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, 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. In addition, 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, 2019, the “make-whole payment” for a converted share of Series C preferred stock would convert to 200 shares of the Company’s common stock. The Series C preferred stock generally has no voting rights except as required by Delaware law. Upon the Company’s liquidation or sale to or merger with another corporation, each share will be entitled to a liquidation preference of $1,000, plus any accrued but unpaid dividends. In addition, the purchasers of the Series C preferred stock received, on a pro rata basis, warrants exercisable to purchase an aggregate of approximately 1 share of Company’s common stock. The warrants contain anti-dilution adjustments in the event that the Company issues shares of common stock, or securities exercisable or convertible into shares of common stock, at prices below the exercise price of such warrants. As a result of the anti-dilution protection, the Company is required to account for the warrants as a liability recorded at fair value each reporting period. At June 30, 2020, the exercise price per share was $512,000. On May 23, 2016, an investor canceled certain of these warrants, exercisable into 903 shares of common stock. The same investor also transferred certain of these warrants, exercisable for 150 shares of common stock, to two investors who also had participated in the 2015 Series C financing. Series C1 Convertible Preferred Stock Between April 27, 2016 and May 3, 2016, the Company entered into various agreements with certain holders of Series C preferred stock, including directors John Imhoff and Mark Faupel, pursuant to which those holders separately agreed to exchange each share of Series C preferred stock held for 2.25 shares of the Company’s newly created Series C1 Preferred Stock and 12 (9,600 pre-split) shares of the Company’s common stock (the “Series C Exchanges”). In connection with the Series C Exchanges, each holder also agreed to roll over the $1,000 stated value per share of the holder’s shares of Series C1 Preferred Stock into the next qualifying financing undertaken by the Company on a dollar-for-dollar basis and, except in the event of an additional $50,000 cash investment in the Company by the holder, to execute a customary “lockup” agreement in connection with the financing. In total, for 1,916 shares of Series C preferred stock surrendered, the Company issued 4,312 shares of Series C1 Preferred Stock and 29 shares of common stock. At June 30, 2020, there were 1,050 shares outstanding with a conversion price of $0.50 per share, such that each share of Series C preferred stock would convert into approximately 381,098 shares of the Company’s common stock. On August 31, 2018, 3,262.25 shares of Series C1 Preferred Stock were surrendered, and the Company issued 3,262.25 shares of Series C2 Preferred Stock. 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 June 30, 2020, shares of Series C2 had a conversion price of $0.50 per share, such that each share of Series C preferred stock would convert into approximately 2,000 shares of the Company’s common stock. The terms of the Series C2 Preferred Stock are substantially the same as the Series C1 Preferred Stock, except that (i) shares of Series C1 Preferred Stock may not be convertible into the Company’s common stock by their holder for a period of 180 days following the date of the filing of the Certificate of Designation (the “Lock-Up Period”); (ii) the Series C2 Preferred Stock has the right to vote as a single class with the Company’s common stock on an as-converted basis, notwithstanding the Lock-Up Period; and (iii) the Series C2 Preferred Stock will automatically convert into that number of securities sold in the next Qualified Financing (as defined in the Exchange Agreement) determined by dividing the stated value ($1,000 per share) of such share of Series C2 Preferred Stock by the purchase price of the securities sold in the Qualified Financing. Series D Convertible Preferred Stock On January 8, 2020, the Company entered into a Security Agreement with the Series D Investors (the “Series D Security Agreement”) pursuant to which all obligations under the Series D Certificate of Designation are secured by all of the Company’s assets and personal properties, with certain accredited investors, including 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 $0.75. Each Series D Preferred Stock is convertible into 3,000 common stock shares. The Series D Preferred Stock will have cumulative dividends at the rate per share of 10% per annum. The stated value and liquidation preference on the Series D Preferred Stock is $554. 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 . The Series D Warrants may be exercised cashlessly if there is no effective registration statement covering the Common Stock issuable upon exercise of the Series D Warrants. The Series D Warrants contain a 4.99% beneficial ownership blocker which may be increased to 9.99% at the holder’s election. On January 8, 2020, the Company also entered into a Registration Rights Agreement (the “Series D Registration Rights Agreement “) with the Series D Investors pursuant to which the Company agreed to file with the SEC, a registration statement on a Form S-3 (or on other appropriate form if a Form S-3 is not available) covering the Common Stock issuable upon conversion of the Series D Warrants within 90 days of the date of the Registration Rights Agreement and cause such registration statement to be declared effective within 120 days of the date of the Registration Rights Agreement. All reasonable expenses related to such registration shall be borne by the Company. Series E Convertible Preferred Stock During June 2020, the Company entered into a Security Agreement with the Series E Investors (the “Series E Security Agreement”) pursuant to which all obligations under the Series E Certificate of Designation are secured by all of the Company’s assets and personal properties, with certain accredited investors. In total, for $853,000 the Company issued 852.50 shares of Series E Preferred Stock. Each Series E Preferred Stock is convertible into 4,000 common stock shares. The Series E Preferred Stock will have cumulative dividends at the rate per share of 6% per annum. The stated value and liquidation preference on the Series E Preferred Stock is $853. 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 . Warrants The following table summarizes transactions involving the Company’s outstanding warrants to purchase common stock for the six months ended June 30, 2020: Warrants (Underlying Shares) Outstanding, January 1, 2020 46,016,840 Issuances 11,269,013 Cancelled / Expired (70 ) Exchanged in debt restructuring (28,962,508 ) Exercised - Outstanding, June 30, 2020 28,323,275 The Company had the following shares reserved for the warrants as of June 30, 2020: Warrants(Underlying Shares) Exercise Price Expiration Date 4,262 (1) $1.824 per share March 19, 2021 7,185,000 (2) $0.20 per share February 12, 2023 1,725,000 (3) $0.04 per share February 21, 2021 325,000 (4) $0.18 per share April 4, 2022 215,000 (5) $0.25 per share July 1, 2022 100,000 (6) $0.25 per share September 1, 2022 7,500,000 (7) $0.20 per share December 17, 2024 250,000 (8) $0.16 per share March 31, 2025 2,597,705 (9) $0.25 per share December 30, 2022 2,597,705 (10) $0.75 per share December 30, 2022 4,713,603 (11) $0.20 per share December 30, 2022 60,000 (12) $0.25 per share April 23, 2023 50,000 (13) $0.25 per share December 30, 2022 50,000 (14) $0.75 per share December 30, 2022 700,000 (15) $0.15 per share May 21, 2023 250,000 (16) $0.50 per share June 23, 2023 28,323,275* * Footnote 10 - CONVERTIBLE DEBT (1) Issued to investors for a loan in March 2018. (2) Exchanged in January 2020 from amount issued as part of a February 2016 private placement with senior secured debt holder (3) Issued to a placement agent in conjunction with a February 2016 private placement with senior secured debt holder (4) Issued to investors for a loan in April 2019 (5) Issued to investors for a loan in July 2019 (6) Issued to investors for a loan in September 2019 (7) Issued to investors for a loan in December 2019 (8) Issued to investors for a loan in January 2020 (9) Issued to investors as part of Series D Preferred Stock Capital raise in December 2020 (10) Issued to investors as part of Series D Preferred Stock Capital raise in December 2020 (11) (12) (13) (14) (15) (16) Issued to investors as part of Series D Preferred Stock Capital raise in December 2020 Issued to a consultant for services in April 2020 Issued to an investor as part of Series D Preferred Stock Capital raise in April 2020 Issued to an investor as part of Series D Preferred Stock Capital raise in April 2020 Issued to an investor for a loan in May 2020 Issued to an investor in exchange of debt in June 2020 Footnote (2) - On January 16, 2020, the Company entered into an exchange agreement with GPB. This exchange agreement canceled the existing outstanding warrants, which were subject to anti-dilution and ratchet provisions, to purchase 35,937,500 shares of common stock at an exercise price of $0.04 per share and resulted in the issuance of new warrants to purchase 7,185,000 share of common stock at a price of $0.20 per share. The new warrants have fixed exercise prices of $0.20; subject to the Company meeting the agreed upon terms of the exchange agreement. Warrant to purchase 70 shares of common stock were not recorded as their exercise price after considering reverse stock splits, were greater than $60,000 and deemed to be immaterial for disclosure On January 6, 2020, the Company entered into a finder’s fee agreement. The finder will receive 5% cash and 5% warrants on all funds it raises including bridge loans. The three-year common stock share warrants will have an exercise price of $0.25. During 2019 and 2020, the finder helped the Company raise $300,000, therefore a fee of $15,000 was paid and 60,000 warrants will be issued. On January 22, 2020, the Company entered into a promotional agreement with a consultant. The consultant will provide the Company investor and public relations services. As compensation for these services, the Company will issue a total of 5,000,000 common stock warrants at a $0.25 strike price and expiring in three years, if the following conditions occur: 1,250,000 common stock warrants, 6 months after the close of the Series D Preferred Stock units, if the minimum common stock share price is a at least $0.50 based on a 30-day VWAP, with a two year term; 1,250,000 common stock warrants, 12 months after the close of the Series D Preferred Stock units, if the minimum common stock share price is at least $0.75 based on a 30-day VWAP, with a one and half year term; 1,250,000 common stock warrants, 18 months after the close of the Series D Preferred Stock units, if the minimum common stock share price is a minimum of $1.00 based on a 30-day VWAP, with a one year term; and 1,250,000 common stock warrants, 24 months after the close of the Series D Preferred Stock units, if the minimum common stock share price is a minimum of $1.25 based on a 30-day VWAP, with a one year term. The consultant agrees to a 10.0% blocker at any single point in time it cannot own 10.0% of the total common stock shares outstanding. | Common Stock The Company has authorized 3,000,000,000 shares of common stock with $0.001 par value, of which 3,319,486 were issued and outstanding as of December 31, 2019. As of December 31, 2018, there were 3,000,000,000 authorized shares of common stock, of which 2,669,348 were issued and outstanding. For the year ended December 31, 2019, the Company issued 650,138 shares of common stock as listed below: Convertible Debt Conversions 650,138 Summary table of common stock share transactions: Balance at December 31, 2018 2,669,348 Issued in 2019 650,138 Balance at December 31, 2019 3,319,486 Common stock shares to be issued for subscription receivables and debt exchange agreements As of December 31, 2019, the Company received investments for common stock shares and warrants. The Company also received debt exchange agreements for common stock shares and warrants. As of December 31, 2019, the Company had not issued the common stock shares to the investors and debtors. During December 2019, the Company received equity investments in the amount of $635,000. These investors will receive a total of 1,270,000 common stock shares and 1,270,000 warrants to purchase common stock shares at a strike price of $0.25, 1,270,000 warrants to purchase common stock shares at a strike price of $0.75 and 635 Series D preferred stock (each Series D preferred stock shares converts into 3,000 shares of the Company’s common stock shares). Of the amount invested $350,000 was from related parties. On December 5, 2019, the Company entered into an exchange agreement with Aquarius. Based on this agreement the Company will exchange $145,544 of debt outstanding for: 291,088 common stock shares; 145,544 warrants to purchase common stock shares at a strike price of $0.25; and 145,544 warrants to purchase common stock shares at a strike price of $0.75. On December 30, 2019, the Company entered into an exchange agreement with K2 Medical. Based on this agreement the Company will exchange $790,544 of debt outstanding for: 1,881,495 common stock shares; 496,602 warrants to purchase common stock shares at a strike price of $0.20; 692,446 warrants to purchase common stock shares at a strike price of $0.25; and 692,446 warrants to purchase common stock shares at a strike price of $0.75. On December 30, 2019, the Company entered into an exchange agreement with Mr. Blumberg. Based on this agreement the Company will exchange $305,320 of debt outstanding for: 1,167,630 common stock shares; 928,318 warrants to purchase common stock shares at a strike price of $0.20; 119,656 warrants to purchase common stock shares at a strike price of $0.25; and 119,656 warrants to purchase common stock shares at a strike price of $0.75. On December 30, 2019, the Company entered into an exchange agreement with Mr. Case. Based on this agreement the Company will exchange $179,291 of debt outstanding for: 896,456 common stock shares; and 896,455 warrants to purchase common stock shares at a strike price of $0.20. On December 30, 2019, the Company entered into an exchange agreement with Mr. Grimm. Based on this agreement the Company will exchange $51,110 of debt outstanding for: 255,548 common stock shares; and 255,548 warrants to purchase common stock shares at a strike price of $0.20. On December 30, 2019, the Company entered into an exchange agreement with Mr. Gould. Based on this agreement the Company will exchange $111,227 of debt outstanding for: 556,136 common stock shares; and 556,136 warrants to purchase common stock shares at a strike price of $0.20. On December 30, 2019, the Company entered into an exchange agreement with Mr. Mamula. Based on this agreement the Company will exchange $15,577 of debt outstanding for: 77,885 common stock shares; and 77,885 warrants to purchase common stock shares at a strike price of $0.20. On December 30, 2019, the Company entered into an exchange agreement with Dr. Imhoff. Based on this agreement the Company will exchange $400,417 of debt outstanding for: 1,699,255 common stock shares; 1,497,367 warrants to purchase common stock shares at a strike price of $0.20; 100,944 warrants to purchase common stock shares at a strike price of $0.25; and 100,944 warrants to purchase common stock shares at a strike price of $0.75. On December 30, 2019, the Company entered into an exchange agreement with Ms. Rosenstock. Based on this agreement the Company will exchange $78,986 of debt outstanding for: 100,000 common stock shares; and 50,000 warrants to purchase common stock shares at a strike price of $0.25; and 50,000 warrants to purchase common stock shares at a strike price of $0.75. Ms. Rosenstock also forgave $28,986 in debt to the Company. On December 30, 2019, the Company entered into an exchange agreement with Michael James. Based on this agreement the Company will exchange $2,286 of debt outstanding for: 7,746 common stock shares; 1,227 warrants to purchase common stock shares at a strike price of $0.25; 1,227 warrants to purchase common stock shares at a strike price of $0.75; and 5,291 warrants to purchase common stock shares at a strike price of $0.20. The Company’s COO and director, Mark Faupel, is a shareholder of Shenghuo, and a former director, Richard Blumberg, is a managing member of Shenghuo. During 2018, the Company had exercised its rights under the $10,000,000 GHS Equity Financing Agreement entered into on March 1, 2018, to exercise puts of $47,320 for the issuance of 87,500 common stock shares. Pursuant to the agreement a put maybe executed for a price that is 80% of the “market price” which is the average of the two lowest volume weighted average prices of the Company’s common stock for 15 consecutive trading days preceding the put date. Preferred Stock The Company has authorized 5,000,000 shares of preferred stock with a $.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. The board of directors designated 525,000 shares of preferred stock redeemable convertible preferred stock, none of which remain outstanding, 33,000 shares of preferred stock as Series B Preferred Stock, none of which remain outstanding, 9,000 shares of preferred stock as Series C Convertible Preferred Stock, (the “Series C Preferred Stock”), of which 286 were issued and outstanding at December 31, 2019 and 2018, respectively and 20,250 shares of preferred stock as Series C1 Preferred Stock, of which 1,050 shares were issued and outstanding at December 31, 2019 and 2018, respectively. 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 (the “Exchange Agreements”), 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, par value $0.001 per share (the “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. The Company will issue Series D Preferred Stock in 2020. At the end of 2019 and beginning of 2020, the Company had subscriptions from investors that would provide each investor one Series D Preferred Stock share for each $1,000 invested. And each Series D preferred stock converts into 3,000 shares of the Company’s common stock shares. Series C Convertible Preferred Stock On June 29, 2015, the Company entered into a securities purchase agreement with certain accredited investors, including John Imhoff and Mark Faupel, members of the Board, for the issuance, exchange and sale of an aggregate of 6,737 shares of Series C convertible preferred stock, at a purchase price of $750 per share and a stated value of $1,000 per share. Additionally, during October 2015 the Company entered into an interim agreement amending the securities purchase agreement to provide for certain of the investors to purchase an additional aggregate of 1,166 shares. For a total of Series C convertible preferred stock issued of 7,903 shares. Of the 7,903 Series C convertible preferred stock issued, 1,835 were issued in exchange of Series B convertible preferred stock. Therefore 6,068 Series C preferred stock were issued at a purchase price of $750 for gross proceeds of $4,551,000. The Company received net cash proceeds of $3,698,000, after cash and non-cash expenses of $853,000. 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, 2019, 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, 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. In addition, 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, 2019, the “make-whole payment” for a converted share of Series C preferred stock would convert to 200 shares of the Company’s common stock. The Series C preferred stock generally has no voting rights except as required by Delaware law. Upon the Company’s liquidation or sale to or merger with another corporation, each share will be entitled to a liquidation preference of $1,000, plus any accrued but unpaid dividends. In addition, the purchasers of the Series C preferred stock received, on a pro rata basis, warrants exercisable to purchase an aggregate of approximately 1 share of Company’s common stock. The warrants contain anti-dilution adjustments in the event that the Company issues shares of common stock, or securities exercisable or convertible into shares of common stock, at prices below the exercise price of such warrants. As a result of the anti-dilution protection, the Company is required to account for the warrants as a liability recorded at fair value each reporting period. At December 31, 2019, the exercise price per share was $512,000. On May 23, 2016, an investor canceled certain of these warrants, exercisable into 903 shares of common stock. The same investor also transferred certain of these warrants, exercisable for 150 shares of common stock, to two investors who also had participated in the 2015 Series C financing. Series C1 Convertible Preferred Stock Between April 27, 2016 and May 3, 2016, the Company entered into various agreements with certain holders of Series C preferred stock, including directors John Imhoff and Mark Faupel, pursuant to which those holders separately agreed to exchange each share of Series C preferred stock held for 2.25 shares of the Company’s newly created Series C1 Preferred Stock and 12 (9,600 pre-split) shares of the Company’s common stock (the “Series C Exchanges”). In connection with the Series C Exchanges, each holder also agreed to roll over the $1,000 stated value per share of the holder’s shares of Series C1 Preferred Stock into the next qualifying financing undertaken by the Company on a dollar-for-dollar basis and, except in the event of an additional $50,000 cash investment in the Company by the holder, to execute a customary “lockup” agreement in connection with the financing. In total, for 1,916 shares of Series C preferred stock surrendered, the Company issued 4,312 shares of Series C1 Preferred Stock and 29 shares of common stock. At December 31, 2019, there were 1,050 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. On August 31, 2018, 3,262.25 shares of Series C1 Preferred Stock were surrendered, and the Company issued 3,262.25 shares of Series C2 Preferred Stock. At December 31, 2019, 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. 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, 2019, 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. 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. Warrants The following table summarizes transactions involving the Company’s outstanding warrants to purchase common stock for the year ended December 31, 2019: Warrants (Underlying Shares) Outstanding, January 1, 2019 23,551,857 Issuances 22,465,001 Canceled / Expired (18 ) Exercised - Outstanding, December 31, 2019 46,016,840 The Company had the following shares reserved for the warrants as of December 31, 2019: Warrants (Underlying Shares) Exercise Price Expiration Date 13(1) $60,000.00 per share June 14, 2021 2(7) $5,760,000.00 per share December 2, 2020 2(8) $7,040,000.00 per share December 2, 2020 1(9) $7,603,200.00 per share June 29, 2020 13(9) $512,000.00 per share September 21, 2020 24(10) $512,000.00 per share June 29, 2020 12(11) $512,000.00 per share September 4, 2020 1(12) $7,603,200.00 per share September 4, 2020 1(13) $512,000.00 per share October 23, 2020 1(14) $7,603,200.00 per share October 23, 2020 35,937,500(15) $0.04 per share June 14, 2021 1,725,000(16) $0.04 per share February 21, 2021 22(17) $11,137.28 per share June 6, 2021 250(18) $0.04 per share February 13, 2022 25(19) $144.00 per share May 16, 2022 688(20) $15.20 per share November 16, 2020 250(21) $15.20 per share December 28, 2020 75(22) $16.08 per share January 10, 2021 4,262(23) $0.04 per share March 19, 2021 1,875(24) $16.08 per share March 20, 2021 63(25) $48.00 per share April 30, 2021 125(26) $48.00 per share May 17, 2021 125(27) $48.00 per share May 25, 2021 500(28) $48.00 per share June 1, 2021 1,875(29) $200.00 per share August 22, 2021 625(30) $200.00 per share September 18, 2021 1,250(31) $1.12 per share October 23, 2021 19(32) $0.64 per share November 20, 2021 375(33) $0.32 per share December 5, 2021 100(34) $0.16 per share December 19, 2021 188(35) $0.24 per share December 23, 2021 14(36) $0.24 per share December 27, 2021 313(37) $0.24 per share January 7, 2021 188(38) $0.21 per share January 17, 2021 438(39) $0.16 per share January 30, 2021 625(40) $0.16 per share February 15, 2021 325,000(41) $0.18 per share April 4, 2022 200,000(42) $0.20 per share April 25, 2022 215,000(43) $0.20 per share July 1, 2022 100,000(44) $0.20 per share September 1, 2022 7,500,000(45) $0.20 per share December 17, 2024 46,016,840* * Footnote 11 - CONVERTIBLE DEBT IN DEFAULT (1) Issued in June 2015 in exchange for warrants originally issued as part of a May 2013 private placement. (6) Issued in June 2015 in exchange for warrants originally issued as part of a 2014 public offering. (7) Issued as part of a March 2015 private placement. (8) Issued to a placement agent in conjunction with a June 2015 private placement. (9) Issued as part of a June 2015 private placement. (10) Issued as part of a June 2015 private placement. (11) Issued as part of a June 2015 private placement. (12) Issued to a placement agent in conjunction with a June 2015 private placement. (13) Issued as part of a June 2015 private placement. (14) Issued to a placement agent in conjunction with a June 2015 private placement. (15) Issued as part of a February 2016 private placement. (16) Issued to a placement agent in conjunction with a February 2016 private placement. (17) Issued pursuant to a strategic license agreement. (18) Issued as part of a February 2017 private placement. (19) Issued as part of a May 2017 private placement. (20) Issued to investors for a loan in November 2017. (21) Issued to investors for a loan in December 2017. (22) Issued to investors for a loan in January 2018. (23) Issued to investors for a loan in March 2018. (24) Issued to investors for a loan in March 2018. (25) Issued to investors for a loan in April 2018. (26) Issued to investors for a loan in May 2018. (27) Issued to investors for a loan in May 2018. (28) Issued to investors for a loan in June 2018 (29) Issued to investors for a loan in August 2018 (30) Issued to investors for a loan in September 2018 (31) Issued to investors for a loan in October 2018 (32) Issued to investors for a loan in November 2018 (33) Issued to investors for a loan in December 2018 (34) Issued to investors for a loan in December 2018 (35) Issued to investors for a loan in December 2018 (36) Issued to investors for a loan in December 2018 (37) Issued to investors for a loan in January 2019 (38) Issued to investors for a loan in January 2019 (39) Issued to investors for a loan in January 2019 (40) Issued to investors for a loan in February 2019 (41) Issued to investors for a loan in April 2019 (42) Issued to investors for a loan in April 2019 (43) Issued to investors for a loan in July 2019 (44) Issued to investors for a loan in September 2019 (45) Issued to investors for a loan in December 2019 All outstanding warrant agreements provide for anti-dilution adjustments in the event of certain mergers, consolidations, reorganizations, recapitalizations, stock dividends, stock splits or other changes in the Company’s corporate structure; except for (8). In addition, warrants subject to footnotes (1) and (9)-(11), (13), and (15) – (45) in the table above are subject to “lower price issuance” anti-dilution provisions that automatically reduce the exercise price of the warrants (and, in the cases of warrants subject to footnote (1), (15) and (16) in the table above, increase the number of shares of common stock issuable upon exercise), to the offering price in a subsequent issuance of the Company’s common stock, unless such subsequent issuance is exempt under the terms of the warrants. For the warrants to footnote (15), the Company further agreed to amend the warrant issued with the original senior secured convertible note, to adjust the number of shares issuable upon exercise of the warrant to equal the number of shares that will initially be issuable upon conversion of the new convertible note (without giving effect to any beneficial ownership limitations set forth in the terms of the new convertible note). The warrants subject to footnote (1) are subject to a mandatory exercise provision. This provision permits the Company, subject to certain limitations, to require exercise of such warrants at any time following (a) the date that is the 30th day after the later of the Company’s receipt of U.S. FDA approval for LuViva and the date on which the common stock achieves an average market price for 20 consecutive trading days of at least $832,000.00 with an average daily trading volume during such 20 consecutive trading days of at least 250 shares, or (b) the date on which the average market price of the common stock for 20 consecutive trading days immediately prior to the date the Company delivers a notice demanding exercise is at least $103,680,000.00 and the average daily trading volume of the common stock exceeds 250 shares for such 20 consecutive trading days. If these warrants are not timely exercised upon demand, they will expire. Upon the occurrence of certain events, the Company may be required to repurchase these warrants, as well as the warrants subject to footnote (1) in the table above. The holders of the warrants subject to footnote (1) in the table above have agreed to surrender the warrants, upon consummation of a qualified public financing, for new warrants exercisable for 200% of the number of shares underlying the surrendered warrants, but without certain anti-dilution protections included with the surrendered warrants. The warrants subject to footnote (6) in the table above are also subject to a mandatory exercise provision. This provision permits the Company, subject to certain limitations, to require exercise of 50% of the then-outstanding warrants if the trading price of its common stock is at least two times the initial warrant exercise price for any 20-day trading period. Further, in the event that the trading price of the Company’s common stock is at least 2.5 times the initial warrant exercise price for any 20-day trading period, the Company will have the right to require the immediate exercise of 50% of the then-outstanding warrants. Any warrants not exercised within the prescribed time periods will be canceled to the extent of the number of shares subject to mandatory exercise. Series B Tranche B Warrants As discussed in Note 3, Fair Value Measurements, between June 13, 2016 and June 14, 2016, the Company entered into various agreements with holders of the Company’s “Series B Tranche B” warrants, pursuant to which each holder separately agreed to exchange the warrants for either (1) shares of common stock equal to 166% of the number of shares of common stock underlying the surrendered warrants, or (2) new warrants exercisable for 200% of the number of shares underlying the surrendered warrants, but without certain anti-dilution protections included with the surrendered warrants. In total, for surrendered warrants then-exercisable for an aggregate of 1,482 shares of common stock (but subject to exponential increase upon operation of certain anti-dilution provisions), the Company issued or is obligated to issue 21 shares of common stock and new warrants that, if exercised as of the date hereof, would be exercisable for an aggregate of 271 shares of common stock. As of December 31, 2019, the Company had issued 18 shares of common stock and rights to common stock shares for 3. In certain circumstances, in lieu of presently issuing all of the shares (for each holder that opted for shares of common stock), the Company and the holder further agreed that the Company will, subject to the terms and conditions set forth in the applicable warrant exchange agreement, from time to time, be obligated to issue the remaining shares to the holder. No additional consideration will be payable in connection with the issuance of the remaining shares. The holders that elected to receive shares for their surrendered warrants have agreed that they will not sell shares on any trading day in an amount, in the aggregate, exceeding 20% of the composite aggregate trading volume of the common stock for that trading day. The holders that elected to receive new warrants will be required to surrender their old warrants upon consummation of the Company’s next financing resulting in net cash proceeds to the Company of at least $1 million. The new warrants will have an initial exercise price equal to the exercise price of the surrendered warrants as of immediately prior to consummation of the financing, subject to customary “downside price protection” for as long as the Company’s common stock is not listed on a national securities exchange and will expire five years from the date of issuance. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | The Company has incurred net operating losses ("NOLs") since inception. As of December 31, 2019, the company had NOL carryforwards available through 2038 of approximately $75.8 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 $4.2 million may only be used to offset 80% of taxable income and are carried forward indefinitely. Components of deferred taxes are as follow at December 31 (in thousands): 2019 2018 Deferred tax assets: Warrant liability $ 1,087 $ 1,182 Accrued executive compensation 515 498 Reserves and other 468 488 Net operating loss carryforwards 18,961 19,297 21,031 21,465 Valuation allowance (21,031 ) (21,465 Net deferred tax assets $ 0 $ 0 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: 2019 2018 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 % On December 22, 2017, the U.S. government enacted comprehensive tax reform commonly referred to as the Tax Cuts and Jobs Act (“TCJA”). Under ASC 740, the effects of changes in tax rates and laws are recognized in the period which the new legislation is enacted. Among other things, the TCJA (1) reduces the U.S. statutory corporate income tax rate from 34% to 21% effective January 1, 2018 (2) eliminates the corporate alternative minimum tax (3) eliminates the Section 199 deduction (4) changes rules related to uses and limitations of net operating loss carryforwards beginning after December 31, 2017. 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, 2019, 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, 2019. 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 2018 federal and state corporate tax returns. The provision for income taxes as of the dates indicated consisted of the following (in thousands) December 31: 2019 2018 Current $ - $ - Deferred - - Deferred provision - - Impact of change in enacted tax rates - - Change in valuation allowance - - Total provision for income taxes $ - $ - In 2019 and 2018, our effective tax rate differed from the U.S. federal statutory rate due to the valuation allowance over our deferred tax assets. |
STOCK OPTIONS
STOCK OPTIONS | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | ||
STOCK OPTIONS | The Company’s 1995 Stock Plan (the “Plan”) has expired pursuant to its terms, so zero shares remained available for issuance at June 30, 2020 and December 31, 2019. The Plan allowed 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. As of June 30, 2020, and December 31, 2019, there were no stock options outstanding and exercisable. On July 14, 2020, the Company granted 1,800,000 stock options to employees and consultants. 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 Company’s 1995 Stock Plan (the “Plan”) has expired pursuant to its terms, so zero shares remained available for issuance at December 31, 2019 and 2018. The Plan allowed 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. Due to the 1:800 reverse stock split of all of the Company’s issued and outstanding common stock was implemented on March 29, 2019. As a result of the reverse stock split, every 800 shares of issued and outstanding common stock were converted into 1 share of common stock. This resulted in the number of stock options outstanding to be zero. |
LITIGATION AND CLAIMS
LITIGATION AND CLAIMS | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Notes to Financial Statements | ||
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 June 30, 2020, and December 31, 2019, there was no accrual recorded for any potential losses related to pending litigation. | 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, 2019, and 2018, there was no accrual recorded for any potential losses related to pending litigation. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | ||
COMMITMENTS AND CONTINGENCIES | Operating Leases In December 2009, the Company moved its offices, which comprise its administrative, research and development, marketing and production facilities to 5835 Peachtree Corners East, Suite B, Peachtree Corners, Georgia 30092. The Company leased approximately 23,000 square feet under a lease that expired in June 2017. In July 2017, the Company leased the offices on a month to month basis. On February 23, 2018, the Company modified its lease to reduce its occupancy to 12,835 square feet. The fixed monthly lease expense will be: $13,859 each month for the period beginning January 1, 2018 and ending June 30, 2018; $8,022 each month for the period beginning April 1, 2018 and ending June 30, 2019; $8,268 each month for the period beginning April 1, 2019 and ending June 30, 2020; and $8,514 each month for the period beginning April 1, 2020 and ending March 31, 2021. The Company recognizes lease expense on a straight-line basis over the estimated lease term and combine lease and non-lease components. Future minimum rental payments at June 30, 2020 under non-cancellable operating leases for office space and equipment are as follows (in thousands): Year Amount 2020 60 2021 30 Total 90 Less: Interest 6 Present value of lease liability 84 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 (former director Richard Blumberg was the designee). 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 manufacture. 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 March 5, 2020 the Company had recorded an accrued liability for SMI of $692,335, which was reclassified to additional paid in capital and 12,147 common stock shares. 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). 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. | Operating Leases In December 2009, the Company moved its offices, which comprise its administrative, research and development, marketing and production facilities to 5835 Peachtree Corners East, Suite B, Peachtree Corners, Georgia 30092. The Company leased approximately 23,000 square feet under a lease that expired in June 2017. In July 2017, the Company leased the offices on a month to month basis. On February 23, 2018, the Company modified its lease to reduce its occupancy to 12,835 square feet. The fixed monthly lease expense will be: $13,859 each month for the period beginning January 1, 2018 and ending March 31, 2018; $8,022 each month for the period beginning April 1, 2018 and ending March 31, 2019; $8,268 each month for the period beginning April 1, 2019 and ending March 31, 2020; and $8,514 each month for the period beginning April 1, 2020 and ending March 31, 2021. The Company recognizes lease expense on a straight-line basis over the estimated lease term and combine lease and non-lease components. Future minimum rental payments at December 31, 2019 under non-cancellable operating leases for office space and equipment are as follows (in thousands): Year Amount 2020 120 2021 30 Total 159 Less: Interest 27 Present value of lease liability 132 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 (former director Richard Blumberg was the designee). As partial consideration for, and as a condition to, the license, and to further align the strategic interests of the parties, the Company agreed to issue a convertible note to Shenghuo, in exchange for an aggregate cash investment of $200,000. The note will provide for a payment to Shenghuo of $300,000, expected to be due the earlier of 90 days from issuance and consummation of any capital raising transaction by the Company with net cash proceeds of at least $1.0 million. The note will accrue interest at 20% per year on any unpaid amounts due after that date. The note will be convertible into shares of the Company’s common stock at a conversion price per share of $11,137, subject to customary anti-dilution adjustment. The note will be unsecured and is expected to provide for customary events of default. The Company will also issue Shenghuo a five-year warrant exercisable immediately for approximately 22 shares of common stock at an exercise price equal to the conversion price of the note, subject to customary anti-dilution adjustment. 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 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 manufacture. 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 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. The Company had recorded an accrued liability for SMI of $692,335, which will be reclassified to additional paid in capital and 12,147 common stock shares. The common stock shares were issued on March 5, 2020. 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). |
NOTES PAYABLE
NOTES PAYABLE | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Notes Payable [Abstract] | ||
NOTES PAYABLE | Notes Payable in Default At June 30, 2020 and December 31, 2019, the Company maintained notes payable to both related and non-related parties totaling approximately $309,000 and $776,000, respectively. These notes are short term, straight-line amortizing notes. The notes carry annual interest rates between 0% and 10% and have default rates as high as 20%. The Company is accruing interest at the default rate of 18.0% on two of the loans. As described in Note 4: STOCKHOLDERS’ DEFICIT As described previously, the Company entered into an exchange agreement with Dr. Imhoff. Based on this agreement the Company exchanged $199,417 of short-term debt outstanding. As described previously, the Company entered into an exchange agreement with Ms. Rosenstock. Based on this agreement the Company exchanged $50,000 of short-term debt outstanding and forgave $28,986. On February 8, 2019, a note payable in default to Aquarius as reported in the Company’s Form 10-K report - Footnote 9: Notes payable – Note payable in default On July 1, 2019, the Company entered into a loan agreement with Accilent Capital Management Inc / Rev Royalty Income and Growth Trust (“Accilent”), providing for the purchase by Accilent of an unsecured promissory note in the principal amount of $49,389 (CAD$ 65,500). The note was fully funded on July 9, 2019 (net of an 8% original issue discount and other expenses). The note bears an interest rate of 16% and was due and payable on September 11, 2019. Following maturity, demand, default, or judgment and until actual payment in full, interest rate shall be paid at the rate of 19% per annum. The Company issued 315,000 warrants at an exercise price of $0.25 per warrant and exercisable within 3 years from issuance (the “Initial Warrants”). As of June 30, 2020, the loan had been paid off. As of December 31, 2019, $57,946 remained outstanding, which included a fee of $4,951 and interest of $4,606. As described previously, the Company entered into an exchange agreement with Mr. Blumberg. Based on this agreement the Company exchanged $70,320 of short-term debt outstanding. As described previously, the Company entered into an exchange agreement with Mr. James. Based on this agreement the Company exchanged $2,286 of short-term debt outstanding. The following table summarizes the Notes payable in default, including related parties June 30, 2020 December 31, 2019 Dr. Imhoff $ - $ 199 Dr. Cartwright 2 2 Ms. Rosenstock - 50 Mr. Fowler 26 26 Mr. Mermelstein 264 244 GPB 17 17 Aquarius - 108 Accilent - 58 Mr. Blumberg - 70 Mr. James - 2 Notes payable in default $ 309 $ 776 The notes payable to related parties was $2,000 of the $309,000 balance at June 30, 2020 and $349,000 of the $776,000 balance at December 31, 2019. Short Term Notes Payable As described previously, the Company entered into an exchange agreement with Dr. Imhoff. Based on this agreement the Company exchanged $167,000 of short-term debt outstanding. The Company issued promissory notes to Mr. Cartwright and Mr. Faupel, in the amounts of approximately $48,000 and $5,000, respectively. The notes were initially issued with 0% interest, however interest increased to 6.0% interest 90 days after the Company received $1,000,000 in financing proceeds. On August 22, 2018, the Company issued a promissory note to Mr. Case for $150,000 in aggregate principal amount of a 6% promissory note for an aggregate purchase price of $157,500 (representing a $7,500 original issue discount). As of June 30, 2020, the Company had exchanged $179,291 of debt outstanding for: 896,456 common stock shares; and 896,455 warrants issued to purchase common stock shares at a strike price of $0.20. As of December 31, 2019, the Company had not repaid the note and original issue discount of $157,500 ($7,500 is recorded in accrued expenses). As described previously, the Company entered into an exchange agreement with Mr. Mamula. Based on this agreement the Company exchanged $15,577 of short-term debt outstanding. On September 19, 2018, and February 15, 2019, the Company issued promissory notes to Mr. Gould for $50,000 each in aggregate principal amount of a 6% promissory note for an aggregate purchase price of $52,500 each (representing a $2,500 original issue discount). As of June 30, 2020, the Company had entered into an exchange agreement with Mr. Gould. Based on this agreement the Company exchanged $111,227 of debt outstanding for: 556,136 common stock shares; and 556,136 warrants issued to purchase common stock shares at a strike price of $0.20. As of December 31, 2019, the Company had not repaid the note and original issue discount of $52,500 ($2,500 is recorded in accrued expenses) and therefore the accrued interest rate increased to 12%. As described previously, the Company entered into an exchange agreement with K2 Medical. Based on this agreement the Company exchanged $203,000 of short-term debt outstanding. On February 14, 2019, the Company entered into a Purchase and Sale Agreement with Everest Business Funding for the sale of its accounts receivable. The transaction provided the Company with $48,735 after $1,265 in debt issuance costs (bank costs) for a total purchase amount of $50,000, in which the Company would have to repay $68,500. At a minimum the Company would need to pay $535.16 per day or 20.0% of the future collected accounts receivable or “receipts.” The effective interest rate as calculated for this transaction is approximately 132.5%. As of December 31, 2019, $60,105 had been paid, leaving a balance of $8,016. As of June 30, 2020, the balance of $68,121 had been paid in full. In July 2019, the Company entered into a premium finance agreement to finance its insurance policies totaling $142,000. The note requires monthly payments of $14,459, including interest at 4.91% and matures in April 2020. As of June 30, 2020, a balance of $813 remained. The balance due on insurance policies totaled $57,483 at December 31, 2019. As described previously, the Company entered into an exchange agreement with Mr. Blumberg. Based on this agreement the Company exchanged $223,000 of short-term debt outstanding. As described previously, the Company entered into an exchange agreement with Mr. Grimm. Based on this agreement the Company exchanged $51,050 of short-term debt outstanding. At June 30, 2020 and December 31, 2019, the Company maintained short term notes payable to both related and non-related parties totaling $54,000 and $1,026,000, respectively. These notes are short term, straight-line amortizing notes. The notes carry annual interest rates between 5% and 19%. On June 30, 2020, the Company exchanged $125,000 in debt (during June 2020, $125,000 in payables had been converted into short-term debt) from Mr. James Clavijo, for 500,000 common stock shares and 250,000 warrants to purchase common stock shares. The fair value of the common stock shares was $250,000 (based on a $0.50 fair value for the Company’s stock) and of the warrants to purchase common stock shares was $99,963 (based on a $0.40 black scholes fair valuation). This resulted in a net loss on extinguishment of debt of $224,963 ($349,963 fair value less the $125,000 of exchanged debt). After the exchange transaction a balance was due Mr. Clavijo of $10,213 which was paid. The following table summarizes the Short-term notes payable, including related parties June 30, 2020 December 31, 2019 Dr. Imhoff $ - $ 167 Dr. Cartwright 48 48 Dr. Faupel 5 5 Mr. Case - 150 Mr. Mamula - 15 Mr. Gould - 100 K2 (Shenghuo) - 203 Everest - 8 Premium Finance (insurance) 1 58 Mr. Blumberg - 223 Mr. Grimm - 49 Short-term notes payable, including related parties $ 54 $ 1,026 The short-term notes payable past due to related parties was $53,000 of the $54,000 balance at June 30, 2020 and $646,000 of the $1,026,000 balance at December 31, 2019. Troubled Debt Restructuring The debt extinguished for Notes Payable which closed on January 8, 2020, the Company exchanged $2,064,366 in debt for common stock shares and warrants as described above that were determined to have a total fair value of $2,065,548, resulting in a loss on extinguishment of debt of $1,183 which is recorded in other income (expense) on the accompanying consolidated statements of operations. In addition, one of the investors forgave approximately $29,000 of debt, which was recorded as a gain for extinguishment of debt. Also, during June 2020, the Company exchanged $125,000 in debt for common stock shares and warrants as described. This debt extinguished met the criteria for troubled debt. The basic criteria are that the borrower is troubled, ie., 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. The troubled debt restructuring for Notes Payable, had an immaterial effect on the Company’s basic or diluted earnings per share calculation for June 30, 2020 and 2019. | Notes Payable in Default At December 31, 2019 and 2018, the Company maintained notes payable to both related and non-related parties totaling approximately $776,000 and $700,000, respectively. These notes are short term, straight-line amortizing notes. The notes carry annual interest rates between 0% and 10% and have default rates as high a 20%. The Company is accruing interest at the default rate of 18.0% on two of the loans. On July 1, 2019, the Company entered into a loan agreement with Accilent Capital Management Inc / Rev Royalty Income and Growth Trust (“Accilent”), providing for the purchase by Accilent of an unsecured promissory note in the principal amount of $49,389 (CAD$ 65,500). The note was fully funded on July 9, 2019 (net of an 8% original issue discount and other expenses). The note bears an interest rate of 16% and was due and payable on September 11, 2019. Following maturity, demand, default, or judgment and until actual payment in full, interest rate shall be paid at the rate of 19% per annum. The Company will issue warrants to purchase one common share of the Company for each warrant held in the aggregate amount of 215,000 warrants at an exercise price of $0.25 per warrant, or alternatively, the same price as for warrants granted to investors as part of a financing of the Company subject to adjustment and exercisable within 3 years from issuance (the “Initial Warrants”). In the event that the common shares of the Issuer are not listed on the TSX Venture Exchange pursuant to the “Transaction” on or prior to September 1, 2019, an additional 100,000 warrants will be issued at an exercise price equal to the lesser of $0.25 or the price of the next issuance of common shares of the Issuer (the “Revised Exercise Price”). Further, the exercise price of the Initial Warrants will adjust to the Revised Exercise Price has stated herein. As of December 31, 2019, $57,946 remained outstanding, which included a fee of $4,951 and interest of $4,606. The following table summarizes the Notes payable in default, including related parties December 31, 2019 December 31, 2018 Dr. Imhoff $ 199 $ 199 Dr. Cartwright 2 2 Ms. Rosenstock 50 50 Mr. Fowler 26 26 Mr. Mermelstein 244 211 GHS - 15 GPB 17 17 Aquarius 108 108 Accilent 58 - Mr. Blumberg 70 70 Mr. James 2 2 Notes payable in default $ 776 $ 700 The notes payable to related parties was $349,000 of the $776,000 balance at December 31, 2019. Short Term Notes Payable In July 2019, the Company entered into a premium finance agreement to finance its insurance policies totaling $142,000. The note requires monthly payments of $14,459, including interest at 4.91% and matures in April 2020. As of December 31, 2019, the note for the premium finance agreement was $57,483. The balance due on insurance policies totaled $50,000 at December 31, 2018. On August 22, 2018, the Company issued a promissory note to Mr. Case for $150,000 in aggregate principal amount of a 6% promissory note for an aggregate purchase price of $157,500 (representing a $7,500 original issue discount). Pursuant to the promissory note the entire unpaid principal balance on the promissory note together with all accrued and unpaid interest and loan origination fees, if any, at the choice of the investor, shall be due and payable in full from the funds received by the Company from a financing of at least $2,000,000, or at the option of the investor, to be included in the Company’s financing under the same terms as the new investors with the most favorable terms making a cash investment. If the Company does not complete a financing of at least $2,000,000 within 90 days of the execution of this promissory note, any unpaid amounts shall be due in full to the investor and shall accrue interest at 12% (instead of 6%) per annum from the date thereof (90 days after execution), if not paid in full. In addition, the investor will be granted 1,500,000 warrants under this promissory note. The warrants shall be issued and vest upon the financing of at least $2,000,000 and expire on the third anniversary of said financing. The warrant exercise price shall be set at the same price as for warrants granted to the investors with the most favorable terms as part of any $2,000,000 or more financing of the Company or $0.25, whichever is lower. The warrants shall have standard anti-dilution features to protect the holder from dilution due to down rounds of financing. As of December 31, 2019, and 2018, the Company had not repaid the note and original issue discount of $157,500 ($7,500 is recorded in accrued expenses). On September 19, 2018, the Company issued a promissory note to Mr. Gould for $50,000 in aggregate principal amount of a 6% promissory note for an aggregate purchase price of $52,500 (representing a $2,500 original issue discount). Pursuant to the promissory note the entire unpaid principal balance on the promissory note together with all accrued and unpaid interest and loan origination fees, if any, at the choice of the investor, shall be due and payable in full from the funds received by the Company from a financing of at least $2,000,000, or at the option of the investor, to be included in the Company’s financing under the same terms as the new investors with the most favorable terms making a cash investment. If the Company does not complete a financing of at least $2,000,000 within 90 days of the execution of this promissory note, any unpaid amounts shall be due in full to the investor and shall accrue interest at 12% (instead of 6%) per annum from the date thereof (90 days after execution), if not paid in full. In addition, the investor will be granted 500,000 warrants under this promissory note. The warrants shall be issued and vest upon the financing of at least $2,000,000 and expire on the third anniversary of said financing. The warrant exercise price shall be set at the same price as for warrants granted to the investors with the most favorable terms as part of any $2,000,000 or more financing of the Company or $0.25, whichever is lower. The warrants shall have standard anti-dilution features to protect the holder from dilution due to down rounds of financing. As of December 31, 2019, and 2018, the Company had not repaid the note a and original issue discount of $52,500 ($2,500 is recorded in accrued expenses) and therefore the accrued interest rate increased to 12%. On February 15, 2019, the Company issued a promissory note to Mr. Gould for $50,000 in aggregate principal amount of a 6% promissory note for an aggregate purchase price of $52,500 (representing a $2,500 original issue discount). Pursuant to the promissory note the entire unpaid principal balance on the promissory note together with all accrued and unpaid interest and loan origination fees, if any, at the choice of the investor, shall be due and payable in full from the funds received by the Company from a financing of at least $1,000,000, or at the option of the investor, to be included in the Company’s financing under the same terms as the new investors with the most favorable terms making a cash investment. If the Company did not complete a financing of at least $1,000,000 within 90 days of the execution of this promissory note, any unpaid amounts shall be due in full to the investor and shall accrue interest at 12% (instead of 6%) per annum from the date thereof (90 days after execution), if not paid in full. In addition, the investor will be granted 500,000 warrants under this promissory note. The warrants shall be issued and vest upon the financing of at least $1,000,000 and expire on the third anniversary of said financing. The warrant exercise price shall be set at the same price as for warrants granted to the investors with the most favorable terms as part of any $1,000,000 or more financing of the Company or $0.25, whichever is lower. The warrants shall have standard anti-dilution features to protect the holder from dilution due to down rounds of financing. As of December 31, 2019, the Company had not repaid the note and original issue discount of $52,500 ($2,500 is recorded in accrued expenses). For a total note that had not been repaid to Mr. Gould of $100,000 and $5,000 of which is recorded in accrued expenses for original issue discount. On February 8, 2019, a note payable in default as reported in the Company’s Form 10-K report - Footnote 9: Notes payable – Note payable in default On February 14, 2019, the Company entered into a Purchase and Sale Agreement with Everest Business Funding for the sale of its accounts receivable. The transaction provided the Company with $48,735 after $1,265 in debt issuance costs (bank costs) for a total purchase amount of $50,000, in which the Company would have to repay $68,500. At a minimum the Company would need to pay $535.16 per day or 20.0% of the future collected accounts receivable or “receipts.” The effective interest rate as calculated for this transaction is approximately 132.5%. As of December 31, 2019, $60,105 had been paid, leaving a balance of $8,016. At December 31, 2019 and 2018, the Company maintained short term notes payable to both related and non-related parties totaling $1,026,000 and $899,000, respectively. These notes are short term, straight-line amortizing notes. The notes carry annual interest rates between 5% and 19%. The following table summarizes the Short-term notes payable, including related parties December 31, 2019 December 31, 2018 Dr. Imhoff $ 167 $ 135 Dr. Cartwright 48 144 Dr. Faupel 5 123 Ms. Maloof - 25 Mr. Case 150 150 Mr. Mamula 15 - Mr. Gould 100 50 K2 (Shenghuo) 203 177 Everest 8 - Premium Finance (insurance) 58 50 Mr. Blumberg 223 45 Mr. Grimm 49 - Short-term notes payable, including related parties $ 1,026 $ 899 The short-term notes payable in default to related parties was $646,000 of the $1,026,000 balance at December 31, 2019. |
SHORT-TERM CONVERTIBLE DEBT
SHORT-TERM CONVERTIBLE DEBT | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Debt Disclosure [Abstract] | ||
SHORT-TERM CONVERTIBLE DEBT | Related Party Convertible Note Payable – Short-Term On June 5, 2016, the Company entered into a license agreement with a distributor pursuant to which the Company granted the distributor an exclusive license to manufacture, sell and distribute the Company’s LuViva Advanced Cervical Cancer device and related disposables in Taiwan, Brunei Darussalam, Cambodia, Laos, Myanmar, Philippines, Singapore, Thailand, and Vietnam. The distributor was already the Company’s exclusive distributor in China, Macau and Hong Kong, and the license will extend to manufacturing in those countries as well. As partial consideration for, and as a condition to, the license, and to further align the strategic interests of the parties, the Company agreed to issue a convertible note to the distributor, in exchange for an aggregate cash investment of $200,000. The note will provide for a payment to the distributor of $240,000, due upon consummation of any capital raising transaction by the Company within 90 days and with net cash proceeds of at least $1.0 million. As of June 30, 2020, the note had been exchanged for common stock shares and warrants. This was part of the exchange made on January 8, 2020, for $790,544 of debt outstanding for: 1,905,270 common stock shares issued on March 23, 2020; 496,602 warrants issued to purchase common stock shares at a strike price of $0.20; 692,446 warrants issued to purchase common stock shares at a strike price of $0.25; and 692,446 warrants issued to purchase common stock shares at a strike price of $0.75. As of December 31, 2019, the Company had a note due of $512,719. Troubled Debt Restructuring The debt extinguished for Related Party Convertible Note Payable – Short-Term, which closed on January 8, 2020, the Company exchanged in part $512,719 in debt for several common stock shares and warrants as described above. 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. Due to the Company being in default on several of its loans the debt is considered troubled debt. See Note 8: Notes Payable, for total gain or loss recorded in the period. The troubled debt restructuring for Notes Payable, had an immaterial effect on the Company’s basic or diluted earnings per share calculation for June 30, 2020 and 2019. Convertible Note Payable – Short-Term On March 31, 2020, we entered into a securities purchase agreement with Auctus Fund, LLC for the issuance and sale to Auctus of $112,750 in aggregate principal amount of a 12% convertible promissory note. On March 31, 2020, we issued the note to Auctus and issued 250,000 five-year common stock warrants at an exercise price of $0.16. On April 3, 2020, we received net proceeds of $100,000. The note matures on January 26, 2021 and accrues interest at a rate of 12% per year. We may not prepay the note, in whole or in part. After the 90th calendar day after the issuance date, and ending on the later of maturity date and the date of payment of the default amount, Auctus may convert the note, at any time, in whole or in part, provided such conversion does not provide Auctus with more than 4.99% of the outstanding common share stock. The conversion may be made converted into shares of the our common stock, at a conversion price equal to the lesser of: (i) the lowest Trading Price during the twenty-five (25) trading day period on the last trading prior to the issue date and (ii) the variable conversion price (55% multiplied by the market price, market price means the lowest trading price for the common stock during the twenty-five (25) trading day period ending on the latest complete trading day prior to the conversion date. Trading price is the lowest trade price on the trading market as reported. The note includes customary events of default provisions and a default interest rate of 24% per year. As of June 30, 2020, the note outstanding was $112,750, which consisted of unamortized balance of $57,354 of a beneficial conversion feature, unamortized original issue discount of $10,200, unamortized debt issuance costs of $11,034 and interest of $3,345 included in accrued expenses on the accompanying consolidated balance sheet. On May 15, 2019, the Company entered into a securities purchase agreement with Eagle Equities, LLC, providing for the purchase by Eagle of a convertible redeemable note in the principal amount of $57,750. The note was fully funded on May 21, 2019, upon which the Company received $45,000 of net proceeds (net of a 10% original issue discount and other expenses). The note bears an interest rate of 8% is due and payable on May 15, 2020. The note may be converted by Eagle at any time after five months from issuance into shares of the Company common stock (as determined in the notes) calculated at the time of conversion. The conversion price of the notes will be equal to 60% of the average of the two lowest closing bid prices of the Company’s common stock shares as reported on OTC Markets exchange, for the 20 prior trading days including the day upon which the Company receives a notice of conversion. The notes may be prepaid in accordance with the terms set forth in the notes. The notes also contain certain representations, warranties, covenants and events of default including if the Company are delinquent in our periodic report filings with the SEC and increases in the amount of the principal and interest rates under the notes in the event of such defaults. In the event of default, at Eagle’s option and in its sole discretion, Eagle may consider the notes immediately due and payable. During 2020, Eagle provided a forbearance to the Company on the default after a payment was made. On May 15, 2019, the Company had recorded a $38,500 beneficial conversion feature, $5,250 original issue discount and $7,500 of debt issuance costs. As of December 31, 2019, the outstanding note was for $25,651, which consisted of unamortized balance of $14,438 of a beneficial conversion feature, unamortized original issue discount of $1,942, unamortized debt issuance costs of $2,774 and interest of $1,166 included in accrued expenses on the accompanying consolidated balance sheet. On May 14, 2020, the outstanding note was paid off. On May 15, 2019, the Company entered into a securities purchase agreement with Adar Bays, LLC, providing for the purchase by Adar of a convertible redeemable note in the principal amount of $57,750. The note was fully funded on May 21, 2019, upon which the Company received $45,000 of net proceeds (net of a 10% original issue discount and other expenses). The note bears an interest rate of 8% and are due and payable on May 15, 2020. The note may be converted by Adar at any time after five months from issuance into shares of the Company common stock (as determined in the notes) calculated at the time of conversion. The conversion price of the notes will be equal to 60% of the average of the two lowest closing bid prices of the Company’s common stock shares as reported on OTC Markets exchange, for the 20 prior trading days including the day upon which the Company receives a notice of conversion. The notes may be prepaid in accordance with the terms set forth in the notes. The notes also contain certain representations, warranties, covenants and events of default including if the Company are delinquent in our periodic report filings with the SEC and increases in the amount of the principal and interest rates under the notes in the event of such defaults. In the event of default, at Adar’s option and in its sole discretion, Adar may consider the notes immediately due and payable. During 2020, Adar provided a forbearance to the Company on the default after a payment was made. On May 15, 2019, the Company had recorded a $38,500 beneficial conversion feature, $5,250 original issue discount and $7,500 of debt issuance costs. As of December 31, 2019, the note outstanding increased to $84,780 as a default penalty of $27,030 was added to the outstanding balance of the note, which consisted of unamortized balance of $14,438 of a beneficial conversion feature, unamortized original issue discount of $1,942, unamortized debt issuance costs of $2,774 and interest of $3,190 included in accrued expenses on the accompanying consolidated balance sheet. On May 22, 2020, the outstanding note was paid off. The following table summarizes the Convertible notes payable June 30, 2020 December 31, 2019 Shenghuo $ - $ 513 Auctus 113 - Eagle - 26 Adar - 85 Debt discount and issuance costs to be amortized (23 ) (9 ) Debt discount related to beneficial conversion (57 ) (29 ) Short-term convertible notes payable $ 33 $ 586 | Related Party Convertible Note Payable – Short-Term On June 5, 2016, the Company entered into a license agreement with a distributor pursuant to which the Company granted the distributor an exclusive license to manufacture, sell and distribute the Company’s LuViva Advanced Cervical Cancer device and related disposables in Taiwan, Brunei Darussalam, Cambodia, Laos, Myanmar, Philippines, Singapore, Thailand, and Vietnam. The distributor was already the Company’s exclusive distributor in China, Macau and Hong Kong, and the license will extend to manufacturing in those countries as well. As partial consideration for, and as a condition to, the license, and to further align the strategic interests of the parties, the Company agreed to issue a convertible note to the distributor, in exchange for an aggregate cash investment of $200,000. The note will provide for a payment to the distributor of $240,000, due upon consummation of any capital raising transaction by the Company within 90 days and with net cash proceeds of at least $1.0 million. As of December 31, 2019, and 2018, the Company had a note due of $512,719 and $432,000, respectively. The note accrues interest at 20% per year on any unpaid amounts due after that date. The note will be convertible into shares of the Company’s common stock at a conversion price per share of $11,137, subject to customary anti-dilution adjustment. The note will be unsecured and is expected to provide for customary events of default. The Company will also issue the distributor a five-year warrant exercisable immediately for 22 shares of common stock at an exercise price equal to the conversion price of the note, subject to customary anti-dilution adjustment. Convertible Note Payable – Short-Term On March 12, 2018, the Company entered into a securities purchase agreement with Eagle Equities, LLC, providing for the purchase by Eagle of a convertible redeemable note in the principal amount of $66,667. The note was fully funded on March 14, 2018, upon which the Company received $51,000 of net proceeds (net of a 10% original issue discount and other expenses). The note bears an interest rate of 8% and are due and payable on March 12, 2019. The note may be converted by Eagle at any time after twelve months from issuance into shares of our common stock (as determined in the notes) calculated at the time of conversion, except for the second note, which also requires full payment by Eagle of the secured note it issued to us before conversions may be made. The conversion price of the notes will be equal to 60% of the lowest trading price of the common stock for the 20 prior trading days including the day upon which the Company receive a notice of conversion. The notes may be prepaid in accordance with the terms set forth in the notes. The notes also contain certain representations, warranties, covenants and events of default including if the Company are delinquent in our periodic report filings with the SEC and increases in the amount of the principal and interest rates under the notes in the event of such defaults. In the event of default, at Eagle’s option and in its sole discretion, Eagle may consider the notes immediately due and payable. During 2020, Eagle provided a forbearance to the Company on the default after a payment was made. As of December 31, 2019, the notes had been converted and no balance remained outstanding. At December 31, 2018, the outstanding balance was $3,095, including unamortized debt issuance costs of $1,751, and unamortized discount of $1,297 and accrued interest of $177. In addition, as of December 31, 2019 the beneficial conversion feature had been fully amortized. At December 31, 2018, the Company recorded a $44,444 beneficial conversion feature which $35,701 was amortized leaving and unamortized balance of $8,743. As of December 31, 2019, the beneficial conversion feature was fully amortized. On May 15, 2019, the Company entered into a securities purchase agreement with Eagle Equities, LLC, providing for the purchase by Eagle of a convertible redeemable note in the principal amount of $57,750. The note was fully funded on May 21, 2019, upon which the Company received $45,000 of net proceeds (net of a 10% original issue discount and other expenses). The note bears an interest rate of 8% and is due and payable on May 15, 2020. The Company could have prepaid the note, in whole or in part, for 115% of outstanding principal and interest until 30 days from issuance, for 121% of outstanding principal and interest at any time from 31 to 60 days from issuance, for 127% of outstanding principal and interest at any time from 61 to 90 days from issuance, for 133% of outstanding principal and interest at any time from 91 to 120 days from issuance, for 139% of outstanding principal and interest at any time from 121 to 150 days from issuance and for 145% of outstanding principal and interest at any time from 151 days from issuance to 180 days from issuance. The note may not be prepaid after the 180th day. The note may be converted by Eagle at any time after five months from issuance into shares of the Company common stock (as determined in the notes) calculated at the time of conversion. The conversion price of the notes will be equal to 60% of the average of the two lowest closing bid prices of the Company’s common stock shares as reported on OTC Markets exchange, for the 20 prior trading days including the day upon which the Company receive a notice of conversion is received by the Company. The notes may be prepaid in accordance with the terms set forth in the notes. The notes also contain certain representations, warranties, covenants and events of default including if the Company are delinquent in our periodic report filings with the SEC and increases in the amount of the principal and interest rates under the notes in the event of such defaults. In the event of default, at Eagle’s option and in its sole discretion, Eagle may consider the notes immediately due and payable. During 2020, Eagle provided a forbearance to the Company on the default after a payment was made. On May 15, 2019, the Company had recorded a $38,500 beneficial conversion feature, $5,250 original issue discount and $7,500 of debt issuance costs. As of December 31, 2019, the outstanding note was for $25,651, which consisted of unamortized balance of $14,438 of a beneficial conversion feature, unamortized original issue discount of $1,942, unamortized debt issuance costs of $2,774 and interest of $1,166 included in accrued expenses on the accompanying consolidated balance sheet. On May 15, 2019, the Company entered into a securities purchase agreement with Adar Bays, LLC, providing for the purchase by Adar of a convertible redeemable note in the principal amount of $57,750. The note was fully funded on May 21, 2019, upon which the Company received $45,000 of net proceeds (net of a 10% original issue discount and other expenses). The note bears an interest rate of 8% and are due and payable on May 15, 2020. The Company could have prepaid the note, in whole or in part, for 115% of outstanding principal and interest until 30 days from issuance, for 121% of outstanding principal and interest at any time from 31 to 60 days from issuance, for 127% of outstanding principal and interest at any time from 61 to 90 days from issuance, for 133% of outstanding principal and interest at any time from 91 to 120 days from issuance, for 139% of outstanding principal and interest at any time from 121 to 150 days from issuance and for 145% of outstanding principal and interest at any time from 151 days from issuance to 180 days from issuance. The note may not be prepaid after the 180th day. The note may be converted by Adar at any time after five months from issuance into shares of the Company common stock (as determined in the notes) calculated at the time of conversion. The conversion price of the notes will be equal to 60% of the average of the two lowest closing bid prices of the Company’s common stock shares as reported on OTC Markets exchange, for the 20 prior trading days including the day upon which the Company receive a notice of conversion is received by the Company. The notes may be prepaid in accordance with the terms set forth in the notes. The notes also contain certain representations, warranties, covenants and events of default including if the Company are delinquent in our periodic report filings with the SEC and increases in the amount of the principal and interest rates under the notes in the event of such defaults. In the event of default, at Adar’s option and in its sole discretion, Adar may consider the notes immediately due and payable. During 2020, Adar provided a forbearance to the Company on the default after a payment was made. On May 15, 2019, the Company had recorded a $38,500 beneficial conversion feature, $5,250 original issue discount and $7,500 of debt issuance costs. As of December 31, 2019, the note outstanding increased to $84,780 as a default penalty of $27,030 was added to the outstanding balance of the note, which consisted of unamortized balance of $14,438 of a beneficial conversion feature, unamortized original issue discount of $1,942, unamortized debt issuance costs of $2,774 and interest of $3,190 included in accrued expenses on the accompanying consolidated balance sheet. The following table summarizes the Convertible notes payable December 31, 2019 December 31, 2018 Shenghuo $ 513 $ 432 Eagle 26 3 Adar 85 - Debt discount and issuance costs to be amortized (9 ) (10 ) Debt discount related to beneficial conversion (29 ) (45 ) Convertible notes payable, including related parties $ 586 $ 380 The convertible notes payable to related parties was $513,000 of the $586,000 balance at December 31, 2019. |
CONVERTIBLE DEBT IN DEFAULT
CONVERTIBLE DEBT IN DEFAULT | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Debt Disclosure [Abstract] | ||
CONVERTIBLE DEBT IN DEFAULT | Senior Secured Promissory Note Effective February 12, 2016, the Company entered into a securities purchase agreement with GPB Debt Holdings II LLC (“GPB”) for the issuance of a $1,437,500 senior secured convertible note for an aggregate purchase price of $1,029,000 (representing an original issue discount of $287,500 and debt issuance costs of $121,000). On May 28, 2016, the balance of the note was increased by $87,500 for a total principal balance of $1,525,000. On December 7, 2016, the Company entered into an exchange agreement with GPB and as a result the principal balance increased by a transfer $312,500 (see – “Senior Secured Promissory Note”) for a total principal balance of $1,837,500. In addition, GPB received warrants for 2,246 shares of the Company’s common stock. The Company allocated proceeds totaling $359,555 to the fair value of the warrants at issuance and recorded an additional discount on the debt. The warrant is exercisable at any time, pending availability of sufficient authorized but unissued shares of the Company’s common stock, at an exercise price per share equal to the conversion price of the convertible note, subject to certain customary adjustments and anti-dilution provisions contained in the warrant. The warrant has a five-year term. At December 31, 2019, the common stock purchase warrant exercise price had been adjusted to $0.04 and the number of common stock shares exchangeable for was 35,937,500. As of June 30, 2020, and as a result of the January 15, 2020 exchange agreement, the common stock purchase warrant exercise price had been adjusted to $0.20 and the number of common stock shares exchangeable for was 7,185,000. This exchange is subject to the Company meeting repayment conditions. Those conditions involved in part the repayment of $450,000, $100,000 and $950,000 for the completion of each Auctus financing tranche. The Company has executed Tranche 1 and 2 and has paid GPB $550,000. In addition, the Company would need to begin repaying $50,000, in repayment of $1,500,000, each month, beginning on September 15, 2020 (if the Company is not in default it may request an additional four-month forbearance on that repayment). The convertible note required monthly interest payments at a rate of 17% per year and was due on February 12, 2018. Subject to resale restrictions and the availability of sufficient authorized but unissued shares of the Company’s common stock, the note is convertible at a conversion price equal to 70% of the average closing price per share for the five trading days prior to issuance. In an event of default the note will accrue interest at a rate of 22%. Upon the occurrence of an event of default, the holder may require the Company to redeem the convertible note at 120% of the outstanding principal balance, but as of June 30, 2020 and December 31, 2019, had not done so. The note is secured by a lien on substantially all of the Company’s assets. In connection with the transaction, on February 12, 2016, the Company and GPB entered into a four-year consulting agreement, pursuant to which the investor will provide management consulting services to the Company in exchange for a royalty payment, payable quarterly, equal to 3.85% of the Company’s revenues from the sale of products. As of June 30, 2020, and December 31, 2019, GPB had earned approximately $32,000 and $31,000 in royalties that are unpaid, respectively. As of June 30, 2020, the balance due on the convertible debt was $1,828,062, consisting of principal of $1,479,093 and a prepayment penalty of $347,026 and compared to December 31, 2019, where the balance due on the convertible debt was $2,177,030 consisting of principal of $1,830,000 and a prepayment penalty of $347,030. Interest accrued on the note total $1,148,709 and $1,175,925 at June 30, 2020 and December 31, 2019, respectively, and is included in accrued expenses on the accompanying consolidated balance sheet. The Company used a placement agent in connection with the transaction. For its services, the placement agent received a cash placement fee equal to 4% of the aggregate gross proceeds from the transaction and a warrant to purchase shares of common stock equal to an aggregate of 6% of the total number of shares underlying the securities sold in the transaction, at an exercise price equal to, and terms otherwise identical to, the warrant issued to the investor. Finally, the Company agreed to reimburse the placement agent for its reasonable out-of-pocket expenses. Troubled Debt Restructuring The debt restructured for Convertible Debt, which closed on January 15, 2020, the Company restructured several re-payment plans as described above and in addition cancelled warrants and issued new warrants as part of the restructure. This debt restructure met the criteria for troubled debt. The basic criteria are that the borrower is troubled, i.e., they are having financial difficulties, and a concession is granted by the creditor. Due to the Company being in default on several of its loans the debt is considered troubled debt. See Note 8: Notes Payable, for total gain or loss recorded in the period. The troubled debt restructuring for Convertible Debt, based on the reduction in warrants outstanding would have an effect on the Company’s diluted earnings per share calculation for June 30, 2020, but not on the basic earnings per share calculation. The earnings per share value would have adjusted from 0.041 to 0.029 for the three months ended March 31, 2020. However, for the six months ended June 30, 2020 the basic and diluted earnings per share would have remained the same as the Company had a loss. Secured Promissory Note. Effective September 10, 2014, the Company sold a secured promissory note to an accredited investor, GHS Investments, LLC (“GHS”), with an initial principal amount of $1,275,000, for a purchase price of $570,000 (less an original issue discount of $560,000 and debt issuance costs of $145,000). The note is secured by the Company’s current and future accounts receivable and inventory and accrued interest at a rate of 18% per year. The note has subsequently been assigned to different credited investors and the terms of the note were amended extend the maturity until August 31, 2016. The balance of this note was reduced by a transfer of $306,863 as part of a debt restructuring that occurred on December 7, 2016 (see – “Senior Secured Promissory Note”). The holder may convert the outstanding balance into shares of common stock at a conversion price per share equal to 75% of the lowest daily volume average price of common stock during the five days prior to conversion. The balance due on the note was $91,596 and $148,223 at June 30, 2020 and December 31, 2019, respectively. Other Convertible Debt in Default GHS Effective May 19, 2017, the Company entered into a securities purchase agreement with GHS for the purchase of a $66,000 convertible promissory note for the purchase of $60,000 in net proceeds (representing a 10% original issue discount of $6,000). The accrued interest rate of 8% per year until it matured in December 31, 2017. Beginning February 2018, the note is convertible, in whole or in part, at the holder’s option, into shares of the Company’s stock at a conversion price equal to 60% of the lowest trading price during the 25 trading days prior to conversion. Upon the occurrence of an event of default, the note will bear interest at a rate of 20% per year and the holder of the note may require the Company to redeem or convert the note at 150% of the outstanding principal balance. At June 30, 2020 and December 31, 2019, the balance due on this note was $83,094, including a default penalty of $37,926 and accrued interest of $19,956, and $83,094 including a default penalty of $37,926 and accrued interest of $16,641, respectively. GHS converted $12,700 of principal and accrued interest during the year ended December 31, 2019. Effective May 17, 2018, the Company entered into a securities purchase agreement with GHS for the purchase of a convertible promissory note with a principal of $9,250 for a purchase price of $7,500 (representing an original issue discount of $750 and debt issuance costs of $1,000). The note accrued interest at a rate of 8% per year until its matured June 17, 2019. Beginning February 2018, the note is convertible, in whole or in part, at the holder's option, into shares of the Company's stock at a conversion price equal to 70% of the lowest trading price during the 25 trading days prior to conversion (if the note cannot be converted due to Depository Trust Company freeze then rate decreases to 60%). Upon the occurrence of an event of default, the note will bear interest at a rate of 20% per year and the holder of the note may require the Company to redeem or convert the note at 150% of the outstanding principal balance. At June 30, 2020 and December 31, 2019, the balance due on this note was $14,187, including a default penalty of $4,937. Interest accrued on the note totals $4,420 and $3,972 at June 30, 2020 and December 31, 2019, respectively, and is included in accrued expenses on the accompanying consolidated balance sheet. Effective June 22, 2018, the Company entered into a securities purchase agreement with GHS for the purchase of a $68,000 convertible promissory note for a purchase price of $60,000 (representing an original issue discount of $6,000 and debt issuance costs of $2,000). At issuance, the Company recorded a $29,143 beneficial conversion feature, which was fully amortized at December 31, 2019. The accrued interest at a rate of 10% per year until it matured on June 22, 2019. Beginning May 2019, the note is convertible, in whole or in part, at the holder's option, into shares of the Company's stock at a conversion price equal to 70% of the lowest trading price during the 25 trading days prior to conversion (if the note cannot be converted due to Depository Trust Company freeze then rate decreases to 60%). Upon the occurrence of an event of default, the note will bear interest at a rate of 20% per year and the holder of the note may require the Company to redeem or convert the note at 150% of the outstanding principal balance. At June 30, 2020 and December 31, 2019, the balance due on this note was $103,285, including a default penalty of $35,285. Interest accrued on the note totals $34,437 and $29,287 at June 30, 2020 and December 31, 2019, respectively, and is included in accrued expenses on the accompanying consolidated balance sheet. Auctus On May 22, 2020, the Company entered into an exchange agreement with Auctus. Based on this agreement the Company exchanged three outstanding notes, in the amounts of $150,000, $89,250, and $65,000 for a total amount $328,422 of debt outstanding, as well as any accrued interest and default penalty, for: $160,000 in cash payments (payable in monthly payments of $20,000), converted a portion of the notes pursuant to original terms of the notes into 500,000 restricted common stock shares (shares were issued on June 3, 2020); and 700,000 warrants issued to purchase common stock shares at a strike price of $0.15. The fair value of the common stock shares was $250,000 (based on a $0.50 fair value for the Company’s stock) and of the warrants to purchase common stock shares was $196,818 (based on a $0.281 black scholes fair valuation). As of June 30, 2020, a balance of $140,000 remained to be paid for these exchanged loans. Auctus notes exchanged in the May 22, 2020 transaction Effective March 20, 2018, the Company entered into a securities purchase with Auctus Fund, LLC ("Auctus") for the issuance of a $150,000 convertible promissory note and warrants exercisable for 4,262 shares of the Company's common stock. At issuance, the Company recorded a $97,685 beneficial conversion feature, which was fully amortized at December 31, 2018. The warrants are exercisable at any time, at an exercise price equal to $0.04 per share, subject to certain customary adjustments and price-protection provisions contained in the warrant. The warrants have a five-year term. The note accrued interest at a rate of 12% per year until it matured in December 2018. Beginning December 2018, the note is convertible, in whole or in part, at the holder's option, into shares of the Company's stock at a conversion price equal to 60% of the lowest trading price during the 20 trading days prior to conversion. Upon the occurrence of an event of default, the note will bear interest at a rate of 24% per year and the holder of the note may require the Company to redeem or convert the note at 150% of the outstanding principal balance. At June 30, 2020, the balance due on this note was $140,000. On May 22, 2020, the default penalty and outstanding interest was exchanged as described in the preceding paragraph. At December 31, 2019, the balance due on this total was $192,267, including a default penalty of $70,931, respectively. Interest accrued on the note totals $45,629 at December 31, 2019, respectively, and is included in accrued expenses on the accompanying consolidated balance sheet. Auctus converted nil and $14,236 of principal and accrued interested during the six months and year ended June 30, 2020 and December 31, 2019, respectively. At June 30, 2020, the balance due on this note was $140,000. Effective July 3, 2018, the Company entered into a securities purchase with Auctus for the issuance of a $89,250 convertible promissory note. At issuance, the Company recorded a $59,000 beneficial conversion feature, which was fully amortized at December 31, 2019. The note accrued interest at a rate of 12% per year until it matured in April 2019. Beginning April 2019, the note is convertible, in whole or in part, at the holder's option, into shares of the Company's stock at a conversion price equal to 60% of the lowest trading price during the 20 trading days prior to conversion. Upon the occurrence of an event of default, the note will bear interest at a rate of 24% per year and the holder of the note may require the Company to redeem or convert the note at 150% of the outstanding principal balance. At December 31, 2019, the balance due on this total was $90,641, including a default penalty of $56,852, respectively. Interest accrued on the note totals $16,436 at December 31, 2019, respectively, and is included in accrued expenses on the accompanying consolidated balance sheet. At June 30, 2020, the balance due on this note was nil. Effective March 29, 2019, the Company entered into a securities purchase with Auctus for the issuance of a $65,000 convertible promissory note. At issuance, the Company recorded a $65,000 beneficial conversion feature, which was fully amortized at December 31, 2019. The note accrued interest at a rate of 12% until it matured in December 2019. Beginning December 2019, the note is convertible, in whole or in part, at the holder's option, into shares of the Company's stock at a conversion price equal to 50% of the lowest trading price during the 25 trading days prior to conversion. Upon the occurrence of an event of default, the note will bear interest at a rate of 24% per year and the holder of the note may require the Company to redeem or convert the note at 150% of the outstanding principal balance. At December 31, 2019, the balance due on this total was $106,210, including a default penalty of $41,210, respectively. Interest accrued on the note totaled $142 at December 31, 2019 and is included in accrued expenses on the accompanying consolidated balance sheet. At June 30, 2020, the balance due on this note was nil. The following table summarizes the Convertible notes (including debt in default) June 30, 2020 December 31, 2019 GPB $ 1,828 $ 2,177 GHS $ 92 $ 149 83 83 14 14 103 292 103 349 Auctus $ 140 $ 192 - 91 - 140 106 389 Convertible notes (including debt in default) $ 2,260 $ 2,915 The convertible notes payable in default was $432,000 of the $2,260,000 balance at June 30, 2020 and the total balance of $2,915,000 at December 31, 2019. Troubled Debt Restructuring The debt restructured for Convertible Debt in default from Auctus, which closed on May 22, 2020, the Company restructured several re-payment plans as described above and in addition cancelled warrants and issued new warrants as part of the restructure. This debt restructure met the criteria for troubled debt. The basic criteria are that the borrower is troubled, i.e., they are having financial difficulties, and a concession is granted by the creditor. Due to the Company being in default on several of its loans the debt is considered troubled debt. The troubled debt restructuring for Convertible Debt in default from Auctus, had an immaterial effect on the Company’s basic or diluted earnings per share calculation for June 30, 2020 and 2019. | Secured Promissory Note. Effective September 10, 2014, the Company sold a secured promissory note to an accredited investor, GHS Investments, LLC (“GHS”), with an initial principal amount of $1,275,000, for a purchase price of $570,000 (less an original issue discount of $560,000 and debt issuance costs of $130,000). The note is secured by the Company’s current and future accounts receivable and inventory and accrued interest at a rate of 18% per year. The note has subsequently been assigned to different credited investors and the terms of the note were amended extend the maturity until August 31, 2016. The balance of this note was reduced by a transfer of $306,863 as part of a debt restructuring that occurred on December 7, 2016 (see – “Senior Secured Promissory Note”). The holder may convert the outstanding balance into shares of common stock at a conversion price per share equal to 75% of the lowest daily volume average price of common stock during the five days prior to conversion. The balance due on the note was $148,223 and $151,974 at December 31, 2019 and 2018, respectively. Senior Secured Promissory Note Effective February 12, 2016, the Company entered into a securities purchase agreement with GPB Debt Holdings II LLC (“GPB”) for the issuance of a $1,437,500 senior secured convertible note for an aggregate purchase price of $1,029,000 (representing an original issue discount of $287,500 and debt issuance costs of $121,000). On May 28, 2016, the balance of the note was increased by $87,500 for a total principal balance of $1,525,000. On December 7, 2016, the Company entered into an exchange agreement with GPB and as a result the principal balance increased by a transfer $312,500 (see – “Senior Secured Promissory Note”) for a total principal balance of $1,837,500. In addition, GPB received warrants for 2,246 shares of the Company’s common stock. The Company allocated proceeds totaling $359,555 to the fair value of the warrants at issuance and recorded an additional discount on the debt. The warrant is exercisable at any time, pending availability of sufficient authorized but unissued shares of the Company’s common stock, at an exercise price per share equal to the conversion price of the convertible note, subject to certain customary adjustments and anti-dilution provisions contained in the warrant. The warrant has a five-year term. As of December 31, 2019, the exercise price had been adjusted to $0.04 and the number of common stock shares exchangeable for was 35,937,500. The convertible note requires monthly interest payments at a rate of 17% per year and was due on February 12, 2018. Subject to resale restrictions and the availability of sufficient authorized but unissued shares of the Company’s common stock, the note is convertible at a conversion price equal to 70% of the average closing price per share for the five trading days prior to issuance. The note is currently in default and has accrued interest at a rate of 22% as the Company is past due on the required monthly interest payments. Upon the occurrence of an event of default, the holder may require the Company to redeem the convertible note at 120% of the outstanding principal balance, but as of December 31, 2019, had not done so. The note is secured by a lien on substantially all of the Company’s assets. As of December 31, 2019, the balance due on the convertible debt was $2,177,030, consisting of principal of $1,837,500 and a prepayment penalty of $339,050, and $2,198,236 consisting of principal of $1,837,500 and a prepayment penalty of $360,736, respectively. Interest accrued on the note total $1,175,925 and $699,74 at December 31, 2019 and 2018, respectively, and is included in accrued expenses on the accompanying consolidated balance sheet. The Company used a placement agent in connection with the transaction. For its services, the placement agent received a cash placement fee equal to 4% of the aggregate gross proceeds from the transaction and a warrant to purchase shares of common stock equal to an aggregate of 6% of the total number of shares underlying the securities sold in the transaction, at an exercise price equal to, and terms otherwise identical to, the warrant issued to the investor. Finally, the Company agreed to reimburse the placement agent for its reasonable out-of-pocket expenses. In connection with the transaction, on February 12, 2016, the Company and GPB entered into a four-year consulting agreement, pursuant to which the investor will provide management consulting services to the Company in exchange for a royalty payment, payable quarterly, equal to 3.85% of the Company’s revenues from the sale of products. As of December 31, 2019, and 2018, GPB had earned approximately $32,000 and $31,000 in royalties, respectively. Forbearance On August 8, 2017, the Company entered into a forbearance agreement with GPB, with regard to the senior secured convertible note. Under the forbearance agreement, GPB has agreed to forbear from exercising certain of its rights and remedies (but not waive such rights and remedies), arising as a result of the Company’s failure to pay the monthly interest due and owing on the note. In consideration for the forbearance, the Company agreed to waive, release, and discharge GPB from all claims against GPB based on facts existing on or before the date of the forbearance agreement in connection with the note, or the dealings between the Company and GPB, or the Company’s equity holders and GPB, in connection with the note. Pursuant to the forbearance agreement, the Company has reaffirmed its obligations under the note and related documents and executed a confession of judgment regarding the amount due under the note, which GPB may file upon any future event of default by the Company. During the forbearance period, the Company must continue to comply will all the terms, covenants, and provisions of the note and related documents. The “Forbearance Period” shall mean the period beginning on the date hereof and ending on the earliest to occur of: (i) the date on which Lender delivers to Company a written notice terminating the Forbearance Period, which notice may be delivered at any time upon or after the occurrence of any Forbearance Default (as hereinafter defined), and (ii) the date Company repudiates or asserts any defense to any Obligation or other liability under or in respect of this Agreement or the Transaction Documents or applicable law, or makes or pursues any claim or cause of action against Lender; (the occurrence of any of the foregoing clauses (i) and (ii), a “Termination Event”). As used herein, the term “Forbearance Default” shall mean: (A) the occurrence of any Default or Event of Default other than the Specified Default; (B) the failure of Company to timely comply with any material term, condition, or covenant set forth in this Agreement; (C) the failure of any representation or warranty made by Company under or in connection with this Agreement to be true and complete in all material respects as of the date when made; or (D) Lender’s reasonable belief that Company: (1) has ceased or is not actively pursuing mutually acceptable restructuring or foreclosure alternatives with Lender; or (2) is not negotiating such alternatives in good faith. Any Forbearance Default will not be effective until one (1) Business Day after receipt by Company of written notice from Lender of such Forbearance Default. Any effective Forbearance Default shall constitute an immediate Event of Default under the Transaction Documents. Other Convertible Debt in Default Effective May 19, 2017, the Company entered into a securities purchase agreement with GHS for the purchase of a $66,000 convertible promissory note for the purchase of $60,000 in net proceeds (representing a 10% original issue discount of $6,000). The accrued interest rate of 8% per year until it matured in December 31, 2017. Beginning February 2018, the note is convertible, in whole or in part, at the holder’s option, into shares of the Company’s stock at a conversion price equal to 60% of the lowest trading price during the 25 trading days prior to conversion. Upon the occurrence of an event of default, the note will bear interest at a rate of 20% per year and the holder of the note may require the Company to redeem or convert the note at 150% of the outstanding principal balance. At December 31, 2019, and 2018, the balance due on this total was $83,094, including a default penalty of $37,926 and accrued interest of $16,641, and $94,411 including a default penalty of $37,926 and accrued interest of $517, respectively. GHS converted $12,700 and $29,642 of principal and accrued interest during the years ended December 31, 2019, respectively. Effective March 20, 2018, the Company entered into a securities purchase with Auctus Fund, LLC ("Auctus") for the issuance of a $150,000 convertible promissory note and warrants exercisable for 4,262 shares of the Company's common stock. At issuance, the Company recorded a $97,685 beneficial conversion feature, which was fully amortized at December 31, 2018. The warrants are exercisable at any time, at an exercise price equal to $0.04 per share, subject to certain customary adjustments and price-protection provisions contained in the warrant. The warrants have a five-year term. The note accrued interest at a rate of 12% per year until it matured in December 2018. Beginning December 2018, the note is convertible, in whole or in part, at the holder's option, into shares of the Company's stock at a conversion price equal to 60% of the lowest trading price during the 20 trading days prior to conversion. Upon the occurrence of an event of default, the note will bear interest at a rate of 24% per year and the holder of the note may require the Company to redeem or convert the note at 150% of the outstanding principal balance. At December 31, 2019 and 2018, the balance due on this total was $192,267, including a default penalty of $70,931, and $133,870, respectively. Interest accrued on the note totals $45,629 and $517 at December 31, 2019 and 2018, respectively, and is included in accrued expenses on the accompanying consolidated balance sheet. Auctus converted $14,236 and $30,152 of principal and accrued interested during the years ended December 31, 2019 and 2018, respectively. Effective May 17, 2018, the Company entered into a securities purchase agreement with GHS for the purchase of a convertible promissory note with a principal of $9,250 for a purchase price of $7,500 (representing an original issue discount of $750 and debt issuance costs of $1,000). The note accrued interest at a rate of 8% per year until it matured June 17, 2019. Beginning February 2018, the note is convertible, in whole or in part, at the holder's option, into shares of the Company's stock at a conversion price equal to 70% of the lowest trading price during the 25 trading days prior to conversion (if the note cannot be converted due to Depository Trust Company freeze then rate decreases to 60%). Upon the occurrence of an event of default, the note will bear interest at a rate of 20% per year and the holder of the note may require the Company to redeem or convert the note at 150% of the outstanding principal balance. At December 31, 2019 and 2018, the balance due on this total was $14,187, including a default penalty of $4,937, and $14,187, including a default penalty of $4,937 and unamortized debt discount and debt issuance costs of $742, respectively. Interest accrued on the note totals $3,972 and $1,135 at December 31, 2019 and 2018, respectively, and is included in accrued expenses on the accompanying consolidated balance sheet. Effective June 22, 2018, the Company entered into a securities purchase agreement with GHS for the purchase of a $68,000 convertible promissory note for a purchase price of $60,000 (representing an original issue discount of $6,000 and debt issuance costs of $2,000). At issuance, the Company recorded a $29,143 beneficial conversion feature, which was fully amortized at December 31, 2019. The accrued interest at a rate of 10% per year until it matured on June 22, 2019. Beginning May 2019, the note is convertible, in whole or in part, at the holder's option, into shares of the Company's stock at a conversion price equal to 70% of the lowest trading price during the 25 trading days prior to conversion (if the note cannot be converted due to Depository Trust Company freeze then rate decreases to 60%). Upon the occurrence of an event of default, the note will bear interest at a rate of 20% per year and the holder of the note may require the Company to redeem or convert the note at 150% of the outstanding principal balance. At December 31, 2019 and 2018, the balance due on this total was $103,285, including a default penalty of $35,285, and $103,285, including unamortized debt discount and debt issuance costs of $6,162, respectively. Interest accrued on the note totals $29,287 and $8,263 at December 31, 2019 and 2018, respectively, and is included in accrued expenses on the accompanying consolidated balance sheet. Effective July 3, 2018, the Company entered into a securities purchase with Auctus for the issuance of a $89,250 convertible promissory note. At issuance, the Company recorded a $59,000 beneficial conversion feature, which was fully amortized at December 31, 2019. The note accrued interest at a rate of 12% per year until it matured in April 2019. Beginning April 2019, the note is convertible, in whole or in part, at the holder's option, into shares of the Company's stock at a conversion price equal to 60% of the lowest trading price during the 20 trading days prior to conversion. Upon the occurrence of an event of default, the note will bear interest at a rate of 24% per year and the holder of the note may require the Company to redeem or convert the note at 150% of the outstanding principal balance. At December 31, 2019 and 2018, the balance due on this total was $90,641, including a default penalty of $56,852, and $81,528, including unamortized debt discount and debt issuance costs of $7,721, respectively. Interest accrued on the note totals $16,436 and $5,385 at December 31, 2019 and 2018, respectively, and is included in accrued expenses on the accompanying consolidated balance sheet. Effective March 29, 2019, the Company entered into a securities purchase with Auctus for the issuance of a $65,000 convertible promissory note. At issuance, the Company recorded a $65,000 beneficial conversion feature, which was fully amortized at December 31, 2019. The note accrued interest at a rate of 12% until it matured in December 2019. Beginning December 2019, the note is convertible, in whole or in part, at the holder's option, into shares of the Company's stock at a conversion price equal to 50% of the lowest trading price during the 25 trading days prior to conversion. Upon the occurrence of an event of default, the note will bear interest at a rate of 24% per year and the holder of the note may require the Company to redeem or convert the note at 150% of the outstanding principal balance. At December 31, 2019, the balance due on this total was $106,210, including a default penalty of $41,210. Interest accrued on the note totaled $142 at December 31, 2019 and is included in accrued expenses on the accompanying consolidated balance sheet. The following table summarizes the Convertible notes in default December 31, 2019 December 31, 2018 GPB $ 2,177 $ 2,198 GHS 349 364 Auctus 389 215 Convertible notes in default $ 2,915 $ 2,778 |
LONG TERM DEBT
LONG TERM DEBT | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Long-term Debt, Unclassified [Abstract] | ||
LONG-TERM DEBT | Long-term Debt – Related Parties 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. The modification also included simple interest at a 6% rate, with the principal and accrued interest due in total at the date of maturity or September 4, 2021. During the quarter ended September 30, 2018, the Company entered into an exchange agreement dated July 14, 2018, Dr Faupel, agreed to exchange outstanding amounts due to him for loans, interest, bonus, salary and vacation pay in the amount of $661,000 for a $207,000 promissory note dated September 4, 2018. As a result of the exchange agreement, the Company recorded a gain for extinguishment of debt of $199,000 and a capital contribution of $235,000 during the year ended December 31, 2018. The resulting difference of $20,000 was recorded to accrued interest. In the July 20, 2018 exchange agreement, Dr, Cartwright, agreed to exchange outstanding amounts due to him for loans, interest, bonus, salary and vacation pay in the amount of $1,621,000 for a $319,000 promissory note dated September 4, 2018. As a result of the exchange agreement, the Company recorded a gain for extinguishment of debt of $840,000 and a capital contribution of $432,000 during the year ended December 31, 2018. The resulting difference of $30,000 was recorded to accrued interest and elimination of debt. Troubled Debt Restructuring The debt extinguished for Mr. Cartwright and Mr. Faupel meet the criteria for troubled debt. The basic criteria are that the borrower is troubled, i.e., they are having financial difficulties, and a concession is granted by the creditor. Due to the Company being in default on several of its loans the debt is considered troubled debt. The troubled debt restructuring for Long-term Debt – Related Parties, had an immaterial effect on the Company’s basic or diluted earnings per share calculation for June 30, 2020 and 2019 as the gain was recorded in 2018. 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 during the quarter ended September 30, 2018 (454 ) Promissory note dated September 4, 2018 $ 207 Interest accrued through December 31, 2019 17 Balance outstanding at December 31, 2019 $ 224 Interest accrued through June 30, 2020 6 Balance outstanding at June 30, 2020 $ 230 For Dr. Cartwright: Salary $ 337 Bonus 675 Interest on compensation 59 Loans to Company 528 Interest on loans 22 Total outstanding prior to exchange $ 1,621 Amount forgiven during the quarter ended September 30, 2018 (1,302 ) Promissory note dated September 4, 2018 $ 319 Interest accrued through December 31, 2019 26 Balance outstanding at December 31, 2019 $ 345 Interest accrued through June 30, 2020 9 Balance outstanding at June 30, 2020 $ 354 Future debt obligations at June 30, 2020 for Long-term Debt – Related Parties are as follows (in thousands): Year Amount 2020 - 2021 - 2022 200 2023 200 2024 184 Totals 584 Long-term Convertible Notes Payable, net On December 17, 2019, the Company entered into a securities purchase agreement and convertible note with Auctus. The convertible note issued to Auctus will be for a total of $2.4 million. The first tranche of $700,000 was received in December 2019 and matures December 17, 2021 and accrues interest at a rate of ten percent (10%). The note may not be prepaid in whole or in part except as otherwise explicitly allowed. Any amount of principal or interest on the note which is not paid when due shall bear interest at the rate of the lessor of 24% or the maximum permitted by law (the “default interest”). The variable conversion prices shall equal the lesser of: (i) the lowest trading price on the issue date, and (ii) the variable conversion price. The variable conversion price shall mean 95% multiplied by the market price (the market price means the average of the five lowest trading prices during the period beginning on the issue date and ending on the maturity date), minus $0.04 per share, provided however that in no event shall the variable conversion price be less than $0.15. If an event of default under this note occurs and/or the note is not extinguished in its entirety prior to December 17, 2020 the $0.15 price shall no longer apply. In connection with the first tranche of $700,000, the Company issued to 7,500,000 warrants to purchase common stock at an exercise price of $0.20. The fair value of the warrants at the date of issuance was $745,972 and was $635,000 allocated to the warrant liability and a loss of $110,972 was recorded at the date of issuance for the amount of the fair value in excess of the net proceeds received of $635,000. The $700,000 proceeds were received net of debt issuance costs of $65,000 (net proceeds of $635,000, after administrative and legal expenses Company received $570,000). The Company used $65,000 of the proceeds to make a partial payment of the $89,250 convertible promissory note issued on July 3, 2018 to Auctus. On May 27, 2020, the second tranche of $400,000 was received. The last tranche of $1.3 million will be received within 60 days of the S-1 registration statement becoming effective. The conversion price of the notes will be at market value with a minimum conversion amount of $0.15. The last two tranches will have warrants attached. As of June 30, 2020, and December 31, 2019, $700,000 remained outstanding and accrued interest of $38,111 and $2,722, respectively. Further, as of June 30, 2020, and December 31, 2019, the Company had unamortized debt issuance costs of $47,396 and $64,000, respectively and an unamortized debt discount on warrants of $463,020, and $622,000, respectively and providing a net balance of $190,000 and $15,000, respectively. On May 27, 2020, the Company received the second tranche in the amount of $400,000, from the December 17, 2019, securities purchase agreement and convertible note with Auctus. The net amount paid to the Company was $313,000 This second tranche is part of the convertible note issued to Auctus for a total of $2.4 million of which $700,000 has already been provided by Auctus. The notes maturity date is December 17, 2021 and an interest rate of ten percent (10%). The note may not be prepaid in whole or in part except as otherwise explicitly allowed. Any amount of principal or interest on the note which is not paid when due shall bear interest at the rate of the lessor of 24% or the maximum permitted by law (the “default interest”). The variable conversion prices shall equal the lesser of: (i) the lowest trading price on the issue date, and (ii) the variable conversion price. The variable conversion price shall mean 95% multiplied by the market price (the market price means the average of the five lowest trading prices during the period beginning on the issue date and ending on the maturity date), minus $0.04 per share, provided however that in no event shall the variable conversion price be less than $0.15. If an event of default under this note occurs and/or the note is not extinguished in its entirety prior to December 17, 2020 the $0.15 price shall no longer apply. The last tranche of $1.3 million will be received within 60 days of the S-1 registration statement becoming effective. The conversion price of the notes will be at market value with a minimum conversion amount of $0.15. In addition, as part of this transaction the Company was required to pay a 2.0% fee to a registered broker-dealer. As of June 30, 2020, $400,000 remained outstanding and accrued interest of $3,778. Further, as of June 30, 2020, the Company had unamortized debt issuance costs of $63,836, providing a net balance of $336,164. In addition, the Company determined that the conversion option needed to be bifurcated from the debt arrangement and will be valued at fair value each reporting period. The initial value at the date of issuance deemed to be $0 due to the presence of the $0.15 floor price. Future debt obligations at June 30, 2020 for Long-term Convertible Notes Payable, net are as follows (in thousands): Year Amount 2020 - 2021 1,100 2022 - 2023 - 2024 - Totals 1,100 Long-term debt On May 4, 2020, the Company received a loan from the Small Business Administration (SBA) pursuant to the Paycheck Protection Program (PPP) as part of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) in the amount of $50,184. The loan bears interest at a rate of 1.00%, and matures in 24 months, with the principal and interest payments being deferred until the date of forgiveness with interest accruing, then converting to monthly principal and interest payments, at the interest rate provided herein, for the remaining eighteen (18) months. Lender will apply each payment first to pay interest accrued to the day Lender received the payment, then to bring principal current, and will apply any remaining balance to reduce principal. Payments must be made on the same day as the date of this Note in the months they are due. Lender shall adjust payments at least annually as needed to amortize principal over the remaining term of the Note. Under the provisions of the PPP, the loan amounts will be forgiven as long as: the loan proceeds are used to cover payroll costs, and most mortgage interest, rent, and utility costs over a 24 week period after the loan is made; and employee and compensation levels are maintained. In addition, payroll costs are capped at $100,000 on an annualized basis for each employee. Not more than 40% of the forgiven amount may be for non-payroll costs. As of June 30, 2020, the outstanding balance was $50,226 including $41 in accrued interest. | Long-term Debt – Related Parties On July 24, 2019, Dr. Faupel and Mr. Cartwright agreed to an addendum to the 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. The modification also included simple interest at a 6% rate, with the principal and accrued interest due in total at the date of maturity or September 4, 2021. During the quarter ended September 30, 2018, the Company entered into an exchange agreement dated July 14, 2018, Dr Faupel, agreed to exchange outstanding amounts due to him for loans, interest, bonus, salary and vacation pay in the amount of $661,000 for a $207,000 promissory note dated September 4, 2018. As a result of the exchange agreement, the Company recorded a gain for extinguishment of debt of $199,000 and a capital contribution of $235,000 during the year ended December 31, 2018. In the July 20, 2018 exchange agreement, Dr, Cartwright, agreed to exchange outstanding amounts due to him for loans, interest, bonus, salary and vacation pay in the amount of $1,621,000 for a $319,000 promissory note dated September 4, 2018. As a result of the exchange agreement, the Company recorded a gain for extinguishment of debt of $840,000 and a capital contribution of $432,000 during the year ended December 31, 2018. 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 during the quarter ended September 30, 2018 (454 ) Promissory note dated September 4, 2018 $ 207 Interest accrued through December 31, 2019 17 Balance outstanding at December 31, 2019 $ 224 For Dr. Cartwright: Salary $ 337 Bonus 675 Interest on compensation 59 Loans to Company 528 Interest on loans 22 Total outstanding prior to exchange $ 1,621 Amount forgiven during the quarter ended September 30, 2018 (1,302 ) Promissory note dated September 4, 2018 $ 319 Interest accrued through December 31, 2019 26 Balance outstanding at December 31, 2019 $ 345 Long-term Convertible Notes Payable, net On December 17, 2019, the Company entered into a securities purchase agreement and convertible note with Auctus. The convertible note issued to Auctus will be for a total of $2.4 million. The first tranche of $700,000 has been received and will have a maturity date of December 17, 2021 and an interest rate of ten percent (10%). The note may not be prepaid in whole or in part except as otherwise explicitly allowed. Any amount of principal or interest on the note which is not paid when due shall bear interest at the rate of the lessor of 24% or the maximum permitted by law (the “default interest”). The variable conversion prices shall equal the lesser of: (i) the lowest trading price on the issue date, and (ii) the variable conversion price. The variable conversion price shall mean 95% multiplied by the market price (the market price means the average of the five lowest trading prices during the period beginning on the issue date and ending on the maturity date), minus $0.04 per share, provided however that in no event shall the variable conversion price be less than $0.15. If an event of default under this note occurs and/or the note is not extinguished in its entirety prior to December 17, 2020 the $0.15 price shall no longer apply. In connection with the first tranche of $700,000, the Company issued to 7,500,000 warrants to purchase common stock at an exercise price of $0.20. The fair value of the warrants at the date of issuance was $745,972 and was $635,000 allocated to the warrant liability and a loss of $110,972 was recorded at the date of issuance for the amount of the fair value in excess of the net proceeds received of $635,000. The $700,000 proceeds were received net of debt issuance costs of $65,000 (net cash of $635,000). The Company used $65,000 of the proceeds to make a partial payment of the $89,250 convertible promissory note issued on July 3, 2018 to Auctus. At a future date, the second tranche of $400,000 will be received when the Company registers the underlying shares. The last tranche of $1.3 million will be received within 60 days of the S-1 registration statement becoming effective. The conversion price of the notes will be at market value with a minimum conversion amount of $0.15. The last two tranches will have warrants attached. As of December 31, 2019, $700,000 remained outstanding and accrued interest of $2,722. Further, as of December 31, 2019, the Company had unamortized debt issuance costs of $63,000 and an unamortized debt discount on warrants of $622,000, providing a net balance of $15,000 that is carried in long-term convertible notes payable, net. In addition, the Company determined that the conversion option needed to be bifurcated from the debt arrangement and will valued at fair value each reporting period. The initial value at the date of issuance deemed to be $0 due to the presence of the $0.15 floor price. |
INCOME (LOSS) PER COMMON SHARE
INCOME (LOSS) PER COMMON SHARE | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Earnings Per Share [Abstract] | ||
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 and Series D convertible 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 Six months ended June 30, 2020 2019 Net loss $ (4,049 ) $ (2,878 ) Basic weighted average number of shares outstanding 8,463 3,319 Net income loss per share (basic) $ (0.48 ) $ (0.87 ) Diluted weighted average number of shares outstanding 8,463 3,319 Net income (loss) per share (diluted) $ (0.48 ) $ (0.87 ) Dilutive equity instruments (number of equivalent units): Stock options - - Preferred stock - - Convertible debt 31,228 38,786 Warrants 5,341 30,235 Total Dilutive instruments 36,569 69,021 | 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 convertible 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 December 31, 2019 2018 Net income (loss) $ ( 1,921 ) $ 900 Basic weighted average number of shares outstanding 3,302 462 Net income (loss) per share (basic) $ (0.58 ) $ 1.95 Diluted weighted average number of shares outstanding 3,302 65,227 Net income (loss) per share (diluted) $ (0.58 ) $ 0.0138 Dilutive equity instruments (number of equivalent units): Stock options - - Preferred stock - - Convertible debt 39,636 42,226 Warrants 30,208 22,530 Total Dilutive instruments 73,144 65,226 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 are anit-dilutive. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Notes to Financial Statements | ||
SUBSEQUENT EVENTS | During July 2020, the Company received equity investments in the amount of $773,000. These investors will receive 773 Series E Preferred Stock (each Series E Preferred Stock share converts into 4,000 shares of the Company’s common stock shares). The Series E Preferred Stock will have cumulative dividends at the rate per share of 6% per annum. The stated value of the Series E Preferred Stock is $1,000. During July and August 2020, GHS converted outstanding debt in the amount of $50,454 for 175,000 common stock shares. On July 14, 2020, the Company granted stock options to employees and consultants. 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. Stock options granted have a 10-year life and expire 90 days after employment of consulting engagement terminates. Vesting schedule varies per grantee. Generally stock options granted vest as follows: 25% vest immediately, and the remaining stock options vest over 33 months, beginning three months after grant. The following lists the stock options granted: Grant Date Expiration Date Vesting Period Number of Stock Options Granted Exercise Price Black Scholes Valuation Cartwright, Gene 07/14/2020 07/12/2030 Immediate 400,000 $ 0.49 $ 0.483 Faupel, Mark 07/14/2020 07/12/2030 Immediate 400,000 $ 0.49 $ 0.483 Imhoff, John 07/14/2020 07/12/2030 36 months 50,000 $ 0.49 $ 0.483 James, Michael 07/14/2020 07/12/2030 36 months 50,000 $ 0.49 $ 0.483 Clavijo, James 07/14/2020 07/12/2030 36 months 300,000 $ 0.49 $ 0.483 Battle, Lisa 07/14/2020 07/12/2030 36 months 178,000 $ 0.49 $ 0.483 Sufka, Melissa 07/14/2020 07/12/2030 36 months 178,000 $ 0.49 $ 0.483 Waterstreet, Alesandra 07/14/2020 07/12/2030 36 months 178,000 $ 0.49 $ 0.483 Sufka, Melissa 07/14/2020 07/12/2030 18 months 66,000 $ 0.49 $ 0.483 1,800,000 During August 2020, the Company issued 106,560 common stock shares for the payment of Series D Preferred Stock dividends accrued. | During January 2020, the Company received equity investments in the amount of $103,000. These investors received a total of 206,000 common stock shares and 206,000 warrants to purchase common stock shares at a strike price of $0.25, 206,000 warrants to purchase common stock shares at a strike price of $0.75 and 103 Series D preferred stock (each Series D preferred stock shares converts into 3,000 shares of the Company’s common stock shares). On January 6, 2020, the Company entered into an exchange agreement with Jones Day. The Company will exchange $1,744,768 of debt outstanding for: $175,000, an unsecured promissory note in the amount of $550,000; due 13 months form the date of issuance, that may be called by the Company at any time prior to maturity upon a payment of $150,000; and an unsecured promissory note in the principal amount of $444,768, bearing an annualized interest rate of 6.0% and due in four equal annual installments beginning on the second anniversary of the date of issuance. On January 6, 2020, the Company entered into a finder’s fee agreement. The finder will receive 5% cash and 5% warrants on all funds it raises including bridge loans. The three-year common stock share warrants will have an exercise price of $0.25. During 2019 and 2020, the finder helped the Company raise $300,000, therefore a fee of $15,000 was paid and 60,000 warrants will be issued. On January 15, 2020, the Company entered into a promissory note with one of its vendors for the payment of a debt of $99,369. The debt will be paid as follows: $18,000 due initially on January 16, 2020 and then $6,000 per month beginning on February 1, 2020 and on the 1st day of each consecutive month following, until the above sum is paid in full. The debt will bear simple interest at 18% following default. On January 16, 2020, the Company entered into an exchange agreement with GPB. This exchange agreement which has not been completed will call for the exchange of $3,360,811 of debt outstanding as of December 12, 2019 for: cash of $1,500,000; 1,860,811 common stock shares; 7,185,000 warrants to purchase common stock shares at a strike price of $0.20 for existing 2016 warrants; 1,860,811 warrants to purchase common stock shares at a strike price of $0.25; 3,721,622 warrants to purchase common stock shares at a strike price of $0.75; and 2,791 series D preferred stock shares (each Series D preferred stock share converts into 3,000 shares of the Company’s common stock shares). If the Company is able to raise capital in excess of $4,000,000, the exchange amounts shall be adjusted. If the financing is between $4,000,000 and $4,900,000, for every $100,000 raised in excess of $4,000,000 the Company will pay an additional $50,000 to pay down debt. If between $5,000,000 and $6,000,000 is raised thru financings, the Company will pay an additional $1,000,000 to pay down debt. If the financing is in excess of $6,000,000 then the Company will pay the entire debt balance outstanding. In the event of alternative financings, the Company may elect to pay GPB a total of $1,500,000 in cash to GPB at which time GPB shall waive any security interest in the assets of the Company, and GPB shall exchange any remaining debt from the notes into the Series D unit offering. GPB shall have the right to convert the outstanding notes into equity, but not the obligation. A 9.99% blocker shall be in effect such that GPB agrees to restrict its holdings of the Company’s common stock shares to less than 9.99% of the total number of the Company’s outstanding common stock shares at any one point in time. All royalty payments owed to GPB pursuant thereto shall remain obligations of the Company to GPB and shall remain in full force and effect. The Company shall have 8 months from the execution date of this exchange agreement, subject to early termination as forth below (in “forbearance agreement”). The Company shall be entitled to extend the forbearance agreement for four additional months for a $50,000 per month payment. If after the financing is completed and in the event of future financings or significant collaborations with a partner generating sales greater than $1,000,000, the Company agrees to buy back $500,000 of the Series D preferred stock shares. The interest rate will revert to their original non default rates. Also, all existing warrants issued prior to exchange agreement will be canceled. On January 17, 2020, as part of the exchange agreement referred to above the Company paid GPB $450,000. In addition, the Company is negotiating additional exchange agreements that would potentially eliminate or convert debt into equity; as well as convert certain forms of equity for other equity. On January 22, 2020, the Company entered into a promotional agreement with a consultant. The consultant will provide the Company investor and public relations services. As compensation for these services, the Company will issue a total of 5,000,000 common stock warrants at a $0.25 strike price and expiring in three years, if the following conditions occur: 1,250,000 common stock warrants, 6 months after the close of the Series D Preferred Stock units, if the minimum common stock share price is a minimum of $0.50 based on a 30-day VWAP, with a two year term; 1,250,000 common stock warrants, 12 months after the close of the Series D Preferred Stock units, if the minimum common stock share price is a minimum of $0.75 based on a 30-day VWAP, with a one and half year term; 1,250,000 common stock warrants, 18 months after the close of the Series D Preferred Stock units, if the minimum common stock share price is a minimum of $1.00 based on a 30-day VWAP, with a one year term; and 1,250,000 common stock warrants, 24 months after the close of the Series D Preferred Stock units, if the minimum common stock share price is a minimum of $1.25 based on a 30-day VWAP, with a one year term. The consultant agrees to a 10.0% blocker at any single point in time it cannot own 10.0% of the total common stock shares outstanding. On March 31, 2020, the Company entered into a securities purchase agreement with Auctus Fund, LLC for the issuance and sale to Auctus of $112,750 in aggregate principal amount of a 12% convertible promissory note. On March 31, 2020, the Company issued the note to Auctus and issued 250,000 five-year common stock warrants at an exercise price of $0.16. On April 3, 2020, the Company received net proceeds of $100,000. The note matures on January 26, 2021 and accrues interest at a rate of 12% per year. The Company may not prepay the note, in whole or in part. After the 90th calendar day after the issuance date, and ending on the later of maturity date and the date of payment of the default amount, Auctus may convert the note, at any time, in whole or in part, provided such conversion does not provide Auctus with more than 4.99% of the outstanding common share stock. The conversion may be made converted into shares of the Company’s common stock, at a conversion price equal to the lesser of: (i) the lowest Trading Price during the twenty-five (25) trading day period on the latest complete trading prior to the issue date and (ii) the variable conversion price (55% multiplied by the market price, market price means the lowest trading price for the common stock during the twenty-five (25) trading day period ending on the latest complete trading day prior to the conversion date. Trading price is the lowest trade price on the trading market as reported. The note includes customary events of default provisions and a default interest rate of 24% per year. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Accounting Policies [Abstract] | ||
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 embedded conversion options and freestanding warrants. | 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 embedded conversion options and freestanding warrants. |
Principles of Consolidation | The accompanying consolidated financial statements include the accounts of Guided Therapeutics, Inc. and its wholly owned subsidiary. All intercompany transactions are eliminated. | The accompanying consolidated financial statements include the accounts of Guided Therapeutics, Inc. and its wholly owned subsidiary. All intercompany transactions are eliminated. |
Recently Adopted Accounting Pronouncements | In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ASU 2016-13 requires that expected credit losses relating to financial assets are measured on an amortized cost basis and available-for-sale debt securities be recorded through an allowance for credit losses. ASU 2016-13 limits the amount of credit losses to be recognized for available-for-sale debt securities to the amount by which carrying value exceeds fair value and also requires the reversal of previously recognized credit losses if fair value increases. The Company adopted the standard on January 1, 2020. The adoption of ASU 2016-13 did not have a material impact on the Company. In August 2018, the FASB issued Accounting Standards Update No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement, or ASU 2018-13. The amendments in ASU 2018-13 eliminate, add, and modify certain disclosure requirements for fair value measurements. The amendments are effective for the Company’s interim and annual reporting periods beginning after December 15, 2019, with early adoption permitted for either the entire ASU or only the provisions that eliminate or modify requirements. The amendments with respect to changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty are to be applied prospectively. All other amendments are to be applied retrospectively to all periods presented. The adoption of ASU 2016-13 did not have a material impact on the Company. 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. | Implemented In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)” that requires lessees to recognize on the balance sheet the assets and liabilities associated with the rights and obligations created by those leases. Under the new guidance, a lessee is required to recognize assets and liabilities for leases with lease terms of more than 12 months. Consistent with current U.S. GAAP, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily depends on its classification as finance or operating lease. The update is effective for reporting periods beginning after December 15, 2018. The a In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU 2014-09, “Revenue from Contracts with Distributors (Topic 606),” (“ASU 2014-09”). ASU 2014-09 outlines a new, single comprehensive model for entities to use in accounting for revenue arising from contracts with distributors and supersedes most current revenue recognition guidance, including industry-specific guidance. This new revenue recognition model provides a five-step analysis in determining when and how revenue is recognized. The new model requires revenue recognition to depict the transfer of promised goods or services to distributors in an amount that reflects the consideration a company expects to receive. ASU 2014-09 also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. In August 2015, the FASB issued ASU 2015-14, “Deferral of the Effective Date”, which amends ASU 2014-09. As a result, the effective date will be the first quarter of fiscal year 2018 with early adoption permitted in the first quarter of fiscal year 2017. Subsequently, the FASB has issued the following standards related to ASU 2014-09: ASU 2016-08, “Revenue from Contracts with Distributors (Topic 606), Principal versus Agent Considerations (Reporting Revenue Gross versus Net),” (“ASU 2016-08”); ASU 2016-10, “Revenue from Contracts with Distributors (Topic 606), Identifying Performance Obligations and Licensing,” (“ASU 2016-10”); ASU 2016-12, “Revenue from Contracts with Distributors (Topic 606) Narrow-Scope Improvements and Practical Expedients,” (“ASU 2016-12”); and ASU 2016-20, “Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Distributors,” (“ASU 2016-20”), which are intended to provide additional guidance and clarity to ASU 2014-09. The Company must adopt ASU 2016-08, ASU 2016-10, ASU 2016-12 and ASU 2016-20 along with ASU 2014-09 (collectively, the “New Revenue Standards”). The New Revenue Standards may be applied using one of two retrospective application methods: (1) a full retrospective approach for all periods presented, or (2) a modified retrospective approach that presents a cumulative effect as of the adoption date and additional required disclosures. The Company has evaluated the adoption of this guidance and has taken a modified retrospective approach to the presentation of revenue from contracts with distributors. The Company adopted this standard on January 1, 2018, using the modified retrospective method, with no impact on its 2018 financial statements. The cumulative effect of initially applying the new guidance had no impact on its financial statements in future periods. In February 2018, the FASB issued ASU 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. The amendment of ASU 2018-02 states an entity may elect to reclassify the income tax effects of the Tax Cuts and Jobs Act of 2017 (the “Tax Cuts and Jobs Act”) on items within accumulated other comprehensive income to retained earnings. The amendments in this update are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2018. Early adoption is permitted. The adoption did not have a material effect on the Company’s consolidated financial statements. Except as noted above, the guidance issued by the FASB during the current year is not expected to have a material effect on the Company’s consolidated financial statements. 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. | 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 receivable on past due 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. The Company does not accrue interest receivable on past due accounts receivable. |
Concentration of Credit Risk | The Company, from time to time during the years covered by these consolidated financial statements, may have bank balances in excess of its insured limits. Management has deemed this a normal business risk. | The Company, from time to time during the years covered by these consolidated financial statements, may have bank balances in excess of its insured limits. Management has deemed this a normal business risk. |
Inventory Valuation | All inventories are stated at lower of cost or net realizable value, with cost determined substantially on a “first-in, first-out” basis. Selling, general, and administrative expenses are not inventoried, but are charged to expense when incurred. At June 30, 2020 and December 31, 2019, our inventories were as follows (in thousands): June 30, December 31, 2020 2019 Raw materials $ 784 $ 781 Work in process 81 81 Finished goods 24 17 Inventory reserve (838 ) (831 ) Total $ 51 $ 48 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. | 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. At December 31, 2019 and 2018, our inventories were as follows (in thousands): Year Ended December 31, 2019 2018 Raw materials $ 781 $ 783 Work in process 81 81 Finished goods 17 17 Inventory reserve (831 ) (767 ) Total $ 48 $ 114 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 June 30, 2020 and December 31, 2019 (in thousands): June 30, December 31, 2020 2019 Equipment $ 1,350 $ 1,349 Software 740 740 Furniture and fixtures 124 124 Leasehold Improvement 180 180 2,394 2,393 Less accumulated depreciation and amortization (2,393 ) (2,393 ) Total $ 1 $ - | 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 is 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, 2019 and 2018 (in thousands): Year Ended December 31, 2019 2018 Equipment $ 1,349 $ 1,378 Software 740 740 Furniture and fixtures 124 124 Leasehold Improvement 180 199 2,393 2,441 Less accumulated depreciation (2,393 ) (2,420 ) Total $ - $ 21 |
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. | 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. |
Other Assets | Other assets primarily consist of a deposit for the corporate office. | |
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 approximately $4,000 and $10,000 for the six months ended June 30, 2020 and 2019, respectively. | 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 approximately $15,000 and $11,000 in 2019 and 2018, respectively. |
Leases | With the implementation of ASU 2016-02, “Leases (Topic 842)”, the Company recorded a lease-right-of-use asset and a lease liability. The implementation required the analysis of certain criteria in determining its treatment. The Company determined that its corporate office lease met those criteria. The Company implemented the guidance using the alternative transition method. Under this alternative, the effective date would be the date of initial application. The Company analyzed the lease at its effective date and calculated an initial lease payment amount of $267,380 with a present value of $213,000 using a 20% discount. As of June 30, 2020, the balance of the lease-right-of-use asset and lease liability was approximately $86,000. The cumulative effect of initially applying the new guidance had an immaterial impact on the opening balance of retained earnings. The Company elected the practical expedients permitted under the transition guidance within the new standards, which allowed the Company to carry forward the historical lease classification. | With the implementation of ASU 2016-02, “Leases (Topic 842)”, the Company recorded a lease asset-right and a lease liability. The implementation required the analysis of certain criteria in determining its treatment. The Company determined that its corporate office lease met those criteria. The Company implemented the guidance using the alternative transition method. Under this alternative, the effective date would be the date of initial application. The Company analyzed the lease at its effective date and calculated an initial lease payment amount of $267,380 with a present value of $213,000 using a 20% discount. As of December 31, 2019, the balance of the lease asset – right and lease liability was approximately $132,000. The cumulative effect of initially applying the new guidance had an immaterial impact on the opening balance of retained earnings, The Company does not expect the guidance to have a material impact on its consolidated net earnings in future periods. The Company elected the Practical expedients permitted under the transition guidance within the new standards, which allowed the Company to carry forward the historical lease classification. |
Accrued Liabilities | Accrued liabilities are summarized as follows (in thousands): June 30, 2020 December 31, 2019 Compensation $ 1,174 $ 1,123 Professional fees 23 181 Interest 1,361 1,603 Warranty 2 2 Vacation 37 41 Preferred dividends 149 120 Other accrued expenses 125 165 Total $ 2,871 $ 3,235 | Accrued liabilities are summarized as follows at December 31, 2019 and 2018 (in thousands): Year Ended December 31, 2019 2018 Compensation $ 1,123 $ 1,030 Professional fees 181 203 Interest 1,603 892 Warranty 2 2 Vacation 41 53 Preferred dividends 120 120 Stock subscription for licenses - 692 Other accrued expenses 165 164 Total $ 3,235 $ 3,156 |
Subscription Receivables | Cash received from investors for common stock shares that has not completed processing is recorded as a liability to subscription receivables. As of June 30, 2020, the Company had not issued 50,000 common stock shares to an investor. As of June 30, 2020, the outstanding subscription receivable was $5,820. As of December 31, 2019, the Company had reserved 1,270,000 common stock shares in exchange for $635,000. | Cash received from investors for common stock shares that has not completed processing is recorded as a liability to subscription receivables. As of December 31, 2019, the Company had reserved 1,270,000 common stock shares in exchange for $635,000. |
Revenue Recognition | The Company follows, 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. Revenue by product line (in thousands): Six Months Ended June 30, 2020 2019 Devices $ - $ - Disposables - 2 Other - 15 Warranty - 2 Total $ - $ 19 Revenue by geographic location (in thousands): Six Months Ended June 30, 2020 2019 Asia $ - $ 5 Europe - 14 Total $ - $ 19 | The Company follows, 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. Revenue by product line: Year Ended December 31, 2019 2018 Devices $ 17 $ 17 Disposables 2 32 Other 15 1 Warranty 2 7 Total $ 36 $ 57 Revenue by geographic location: Year Ended December 31, 2019 2018 Asia $ 22 $ 49 Africa - 8 Europe 14 - Total $ 36 $ 57 |
Significant Distributors | During the six months ended June 30, 2020, the Company did not have any revenues. Accounts receivable, that netted to nil, and were reserved against, were from more than one distributor and represents 100% of the balance as of June 30, 2020. During the six months ended June 30, 2019, revenues were from two distributors and for extended warranties. Revenues from these distributors totaled $19,000 for the period ended June 30, 2019. Accounts receivable, not reserved against, were from one distributor and represents 100% of the balance for the period ended June 30, 2019. | As of the year ended December 31, 2019, all the Company’s revenues were from three distributors and for extended warranties. Revenue from these distributors totaled approximately $36,000 for the year ended December 31, 2019. For the year ended December 31, 2018, 82% of the Company’s revenue was from one distributor and totaled $40,750. There were no amounts due from these distributors as of December 31, 2019, and 2018. |
Deferred Revenue | The Company defers payments received as revenue until earned based on the related contracts and applying ASC 606 as required. As of June 30, 2020, and December 31, 2019, the Company had $101,000 in deferred revenue. | The Company defers payments received as revenue until earned based on the related contracts and applying ASC 606 as required. As of December 31, 2019, and 2018, the Company had $101,000 and $66,000 in deferred revenue, respectively. |
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. | 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 Company uses the liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Management provides valuation allowances against the deferred tax assets for amounts that are not considered more likely than not to be realized. The Company has entered into an agreed upon payment plan with the IRS for delinquent payroll taxes and also with the Georgia Department of State. The Company is currently in process of setting up a payment arrangement for its delinquent state income taxes with the State of Georgia and the returns are currently under review by state authorities. 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, 2019, the Company has approximately $76 million of cumulative net operating losses, but it has not filed its Federal tax returns, therefore this number may not be accurate. Once the returns are filed, the net operating losses 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 current corporate tax rates in the U.S. is 21%. | The Company uses the liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Management provides valuation allowances against the deferred tax assets for amounts that are not considered more likely than not to be realized. The Company has filed its 2018 federal and state corporate tax returns. As of January 1, 2018, corporate tax rates in the U.S. have decreased from 34% to 21%. |
Uncertain Tax Positions | The Company assesses each income tax position is assessed using a two-step process. A determination is first made as to whether it is more likely than not that the income tax position will be sustained, based upon technical merits, upon examination by the taxing authorities. If the income tax position is expected to meet the more likely than not criteria, the benefit recorded in the financial statements equals the largest amount that is greater than 50% likely to be realized upon its ultimate settlement. At June 30, 2020 and December 31, 2019, there were no uncertain tax positions. | The Company assesses each income tax position is assessed using a two-step process. A determination is first made as to whether it is more likely than not that the income tax position will be sustained, based upon technical merits, upon examination by the taxing authorities. If the income tax position is expected to meet the more likely than not criteria, the benefit recorded in the financial statements equals the largest amount that is greater than 50% likely to be realized upon its ultimate settlement. At December 31, 2019 and, 2018, there were no uncertain tax positions. |
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 issued to non-employees 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. | 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 issued to non-employees 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 records compensation expense related to options granted to employees and non-employees based on the fair value of the award. Compensation cost is recorded as earned for all unvested stock options outstanding at the beginning of the first year based upon the grant date fair value estimates, and for compensation cost for all share-based payments granted or modified subsequently based on fair value estimates. For the six months ended June 30, 2020 and 2019, share-based compensation for options attributable to employees, non-employees, officers and Board members were approximately nil and $8,000, respectively. These amounts have been included in the Company’s statements of operations. Compensation costs for stock options which vest over time are recognized over the vesting period. As of June 30, 2020, and 2019 the Company did not have any unrecognized compensation costs related to granted stock options that will be recognized. | The Company records compensation expense related to options granted to employees and non-employees based on the fair value of the award. Compensation cost is recorded as earned for all unvested stock options outstanding at the beginning of the first year based upon the grant date fair value estimates, and for compensation cost for all share-based payments granted or modified subsequently based on fair value estimates. For the years ended December 31, 2019 and 2018, share-based compensation for options attributable to employees, officers and Board members were approximately $8,000 and $44,000, respectively. These amounts have been included in the Company’s statements of operations. Compensation costs for stock options which vest over time are recognized over the vesting period. As of December 31, 2019, the Company did not have any unrecognized compensation costs related to granted stock options to be recognized. |
Beneficial Conversion Features of Convertible Securities | Conversion options that are not bifurcated as a derivative pursuant to ASC 815 and not accounted for as a separate equity component under the cash conversion guidance are evaluated to determine whether they are beneficial to the investor at inception (a beneficial conversion feature) or may become beneficial in the future due to potential adjustments. The beneficial conversion feature guidance in ASC 470-20 applies to convertible stock as well as convertible debt which are outside the scope of ASC 815. A beneficial conversion feature is defined as a nondetachable conversion feature that is in the money at the commitment date. The beneficial conversion feature guidance requires recognition of the conversion option’s in-the-money portion, the intrinsic value of the option, in equity, with an offsetting reduction to the carrying amount of the instrument. The resulting discount is amortized as a dividend over either the life of the instrument, if a stated maturity date exists, or to the earliest conversion date, if there is no stated maturity date. If the earliest conversion date is immediately upon issuance, the dividend must be recognized at inception. When there is a subsequent change to the conversion ratio based on a future occurrence, the new conversion price may trigger the recognition of an additional beneficial conversion feature on occurrence. | Conversion options that are not bifurcated as a derivative pursuant to ASC 815 and not accounted for as a separate equity component under the cash conversion guidance are evaluated to determine whether they are beneficial to the investor at inception (a beneficial conversion feature) or may become beneficial in the future due to potential adjustments. The beneficial conversion feature guidance in ASC 470-20 applies to convertible stock as well as convertible debt which are outside the scope of ASC 815. A beneficial conversion feature is defined as a nondetachable conversion feature that is in the money at the commitment date. The beneficial conversion feature guidance requires recognition of the conversion option’s in-the-money portion, the intrinsic value of the option, in equity, with an offsetting reduction to the carrying amount of the instrument. The resulting discount is amortized as a dividend over either the life of the instrument, if a stated maturity date exists, or to the earliest conversion date, if there is no stated maturity date. If the earliest conversion date is immediately upon issuance, the dividend must be recognized at inception. When there is a subsequent change to the conversion ratio based on a future occurrence, the new conversion price may trigger the recognition of an additional beneficial conversion feature on occurrence. |
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. | 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_2
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Accounting Policies [Abstract] | ||
Inventory valuation | June 30, December 31, 2020 2019 Raw materials $ 784 $ 781 Work in process 81 81 Finished goods 24 17 Inventory reserve (838 ) (831 ) Total $ 51 $ 48 | Year Ended December 31, 2019 2018 Raw materials $ 781 $ 783 Work in process 81 81 Finished goods 17 17 Inventory reserve (831 ) (767 ) Total $ 48 $ 114 |
Property and equipment | June 30, December 31, 2020 2019 Equipment $ 1,350 $ 1,349 Software 740 740 Furniture and fixtures 124 124 Leasehold Improvement 180 180 2,394 2,393 Less accumulated depreciation and amortization (2,393 ) (2,393 ) Total $ 1 $ - | Year Ended December 31, 2019 2018 Equipment $ 1,349 $ 1,378 Software 740 740 Furniture and fixtures 124 124 Leasehold Improvement 180 199 2,393 2,441 Less accumulated depreciation (2,393 ) (2,420 ) Total $ - $ 21 |
Accrued liabilities | June 30, 2020 December 31, 2019 Compensation $ 1,174 $ 1,123 Professional fees 23 181 Interest 1,361 1,603 Warranty 2 2 Vacation 37 41 Preferred dividends 149 120 Other accrued expenses 125 165 Total $ 2,871 $ 3,235 | Year Ended December 31, 2019 2018 Compensation $ 1,123 $ 1,030 Professional fees 181 203 Interest 1,603 892 Warranty 2 2 Vacation 41 53 Preferred dividends 120 120 Stock subscription for licenses - 692 Other accrued expenses 165 164 Total $ 3,235 $ 3,156 |
Disaggregation of revenue | Six Months Ended June 30, 2020 2019 Devices $ - $ - Disposables - 2 Other - 15 Warranty - 2 Total $ - $ 19 Revenue by geographic location (in thousands): Six Months Ended June 30, 2020 2019 Asia $ - $ 5 Europe - 14 Total $ - $ 19 | Year Ended December 31, 2019 2018 Devices $ 17 $ 17 Disposables 2 32 Other 15 1 Warranty 2 7 Total $ 36 $ 57 Revenue by geographic location: Year Ended December 31, 2019 2018 Asia $ 22 $ 49 Africa - 8 Europe 14 - Total $ 36 $ 57 |
FAIR VALUE OF FINANCIAL INSTR_2
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | ||
Fair value for liabilities measured on a recurring basis | Fair Value at June 30, 2020 Level 1 Level 2 Level 3 Total Warrants issued in connection with Short-term loans - - (138 ) (138 ) Warrants issued in connection with Long-term loans - - (3,512 ) (3,512 ) Warrants issued in connection with Senior Secured Debt - - (3,926 ) (3,926 ) Bifurcated conversion option in connection with Auctus $700,000 loan on December 17, 2019 - - - - Total long-term liabilities at fair value $ - $ - $ (7,576 ) $ (7,576 ) Fair Value at December 31, 2019 Level 1 Level 2 Level 3 Total Warrants issued in connection with Distributor Debt - - (114 ) (114 ) Warrants issued in connection with Short-term loans - - (83 ) (83 ) Warrants issued in connection with Long-term loans - - (893 ) (893 ) Warrants issued in connection with Senior Secured Debt - - (4,002 ) (4,002 ) Bifurcated conversion option in connection with Auctus $700,000 loan on December 17, 2019 - - - - Total long-term liabilities at fair value $ - $ - $ (5,092 ) $ (5,092 ) | Fair Value at December 31, 2019 Level 1 Level 2 Level 3 Total Warrants issued in connection with Distributor Debt - - (114 ) (114 ) Warrants issued in connection with Short-term loans - - (83 ) (83 ) Warrants issued in connection with Long-term loans - - (893 ) (893 ) Warrants issued in connection with Senior Secured Debt - - (4,002 ) (4,002 ) Embedded derivative due to the conversion option that needed to be bifurcated for the Auctus $700,000 loan on December 17, 2019 - - - - Total long-term liabilities at fair value $ - $ - $ (5,092 ) $ (5,092 ) |
Changes to Level 3 instruments | Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Distributor Debt Short-Term Loans Senior Secured Debt Long-Term Loans Total Balance, December 31, 2019 $ (114 ) $ (83 ) $ (4,002 ) $ (893 ) $ (5,092 ) Warrants exchanged for fixed price warrants 67 - - - 67 Change in fair value during the year 47 (55 ) 76 (2,619 ) (2,551 ) Balance, June 30, 2020 $ - $ (138 ) $ (3,926 ) $ (3,512 ) $ (7,576 ) | Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Distributor Debt Short-Term Loans Senior Secured Debt Long-Term Loans Total Balance, December 31, 2018 $ (114 ) $ - $ (4,614 ) $ - $ (4,728 ) Warrants issued during the year - (108 ) - (636 ) (744 ) Change in fair value during the year - 25 612 (257 ) 380 Balance, December 31, 2019 $ (114 ) $ (83 ) $ (4,002 ) $ (893 ) $ (5,092 ) |
STOCKHOLDER'S DEFICIT (Tables)
STOCKHOLDER'S DEFICIT (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
STOCKHOLDERS' DEFICIT: | ||
Common stock issued | Exchange of Debt for common stock shares and warrants 7,957,013 Shares issued for manufacturing agreements 12,147 Investments 1,476,000 Issued during the six months ended June 30, 2020 9,445,160 Summary table of common stock share transactions: Balance at December 31, 2019 3,319,469 Issued in 2020 9,445,160 Balance at June 30, 2020 12,764,629 | Convertible Debt Conversions 650,138 Summary table of common stock share transactions: Balance at December 31, 2018 2,669,348 Issued in 2019 650,138 Balance at December 31, 2019 3,319,486 |
Debt exchanges | Total Debt and Accrued Interest Total Debt Total Accrued Interest Common Stock Shares Warrants (Exercise $0.25) Warrants (Exercise $0.75) Warrants (Exercise $0.20) Warrants (Exercise $0.15) Warrants (Exercise $0.50) Aquarius $ 145,544 107,500 38,044 291,088 145,544 145,544 - - - K2 Medical (Shenghuo)3 803,653 771,927 31,726 1,905,270 704,334 704,334 496,602 - - Mr. Blumberg 305,320 292,290 13,030 1,167,630 119,656 119,656 928,318 - - Mr. Case 179,291 150,000 29,291 896,456 - - 896,456 - - Mr. Grimm 51,050 50,000 1,050 255,548 - - 255,548 - - Mr. Gould 111,227 100,000 11,227 556,136 - - 556,136 - - Mr. Mamula 15,577 15,000 577 77,885 - - 77,885 - - Dr. Imhoff2 400,417 363,480 36,937 1,699,255 100,944 100,944 1,497,367 - - Ms. Rosenstock1 50,000 50,000 - 100,000 50,000 50,000 - - - Mr. James2 2,286 2,000 286 7,745 1,227 1,227 5,291 - - Auctus 328,422 249,119 79,303 500,000 - - - 700,000 - Mr. Clavijo 125,000 125,000 - 500,000 - - - - 500,000 $ 2,517,787 $ 2,276,316 $ 241,471 7,957,013 1,121,705 1,121,705 4,713,603 700,000 500,000 | |
Outstanding warrants | Warrants (Underlying Shares) Outstanding, January 1, 2020 46,016,840 Issuances 11,269,013 Cancelled / Expired (70 ) Exchanged in debt restructuring (28,962,508 ) Exercised - Outstanding, June 30, 2020 28,323,275 | Warrants (Underlying Shares) Outstanding, January 1, 2019 23,551,857 Issuances 22,465,001 Canceled / Expired (18 ) Exercised - Outstanding, December 31, 2019 46,016,840 |
Shares reserved for warrants | Warrants(Underlying Shares) Exercise Price Expiration Date 4,262 (1) $1.824 per share March 19, 2021 7,185,000 (2) $0.20 per share February 12, 2023 1,725,000 (3) $0.04 per share February 21, 2021 325,000 (4) $0.18 per share April 4, 2022 215,000 (5) $0.25 per share July 1, 2022 100,000 (6) $0.25 per share September 1, 2022 7,500,000 (7) $0.20 per share December 17, 2024 250,000 (8) $0.16 per share March 31, 2025 2,597,705 (9) $0.25 per share December 30, 2022 2,597,705 (10) $0.75 per share December 30, 2022 4,713,603 (11) $0.20 per share December 30, 2022 60,000 (12) $0.25 per share April 23, 2023 50,000 (13) $0.25 per share December 30, 2022 50,000 (14) $0.75 per share December 30, 2022 700,000 (15) $0.15 per share May 21, 2023 250,000 (16) $0.50 per share June 23, 2023 28,323,275* | Warrants (Underlying Shares) Exercise Price Expiration Date 13(1) $60,000.00 per share June 14, 2021 2(7) $5,760,000.00 per share December 2, 2020 2(8) $7,040,000.00 per share December 2, 2020 1(9) $7,603,200.00 per share June 29, 2020 13(9) $512,000.00 per share September 21, 2020 24(10) $512,000.00 per share June 29, 2020 12(11) $512,000.00 per share September 4, 2020 1(12) $7,603,200.00 per share September 4, 2020 1(13) $512,000.00 per share October 23, 2020 1(14) $7,603,200.00 per share October 23, 2020 35,937,500(15) $0.04 per share June 14, 2021 1,725,000(16) $0.04 per share February 21, 2021 22(17) $11,137.28 per share June 6, 2021 250(18) $0.04 per share February 13, 2022 25(19) $144.00 per share May 16, 2022 688(20) $15.20 per share November 16, 2020 250(21) $15.20 per share December 28, 2020 75(22) $16.08 per share January 10, 2021 4,262(23) $0.04 per share March 19, 2021 1,875(24) $16.08 per share March 20, 2021 63(25) $48.00 per share April 30, 2021 125(26) $48.00 per share May 17, 2021 125(27) $48.00 per share May 25, 2021 500(28) $48.00 per share June 1, 2021 1,875(29) $200.00 per share August 22, 2021 625(30) $200.00 per share September 18, 2021 1,250(31) $1.12 per share October 23, 2021 19(32) $0.64 per share November 20, 2021 375(33) $0.32 per share December 5, 2021 100(34) $0.16 per share December 19, 2021 188(35) $0.24 per share December 23, 2021 14(36) $0.24 per share December 27, 2021 313(37) $0.24 per share January 7, 2021 188(38) $0.21 per share January 17, 2021 438(39) $0.16 per share January 30, 2021 625(40) $0.16 per share February 15, 2021 325,000(41) $0.18 per share April 4, 2022 200,000(42) $0.20 per share April 25, 2022 215,000(43) $0.20 per share July 1, 2022 100,000(44) $0.20 per share September 1, 2022 7,500,000(45) $0.20 per share December 17, 2024 46,016,840* |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Deferred tax assets | 2019 2018 Deferred tax assets: Warrant liability $ 1,087 $ 1,182 Accrued executive compensation 515 498 Reserves and other 468 488 Net operating loss carryforwards 18,961 19,297 21,031 21,465 Valuation allowance (21,031 ) (21,465 Net deferred tax assets $ 0 $ 0 |
Income taxes | 2019 2018 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 | 2019 2018 Current $ - $ - Deferred - - Deferred provision - - Impact of change in enacted tax rates - - Change in valuation allowance - - Total provision for income taxes $ - $ - |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Future minimum rental payments under non-cancellable operating leases | Year Amount 2020 60 2021 30 Total 90 Less: Interest 6 Present value of lease liability 84 | Year Amount 2020 120 2021 30 Total 159 Less: Interest 27 Present value of lease liability 132 |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Notes Payable [Abstract] | ||
Notes payable in default, including related parties | June 30, 2020 December 31, 2019 Dr. Imhoff $ - $ 199 Dr. Cartwright 2 2 Ms. Rosenstock - 50 Mr. Fowler 26 26 Mr. Mermelstein 264 244 GPB 17 17 Aquarius - 108 Accilent - 58 Mr. Blumberg - 70 Mr. James - 2 Notes payable in default $ 309 $ 776 | December 31, 2019 December 31, 2018 Dr. Imhoff $ 199 $ 199 Dr. Cartwright 2 2 Ms. Rosenstock 50 50 Mr. Fowler 26 26 Mr. Mermelstein 244 211 GHS - 15 GPB 17 17 Aquarius 108 108 Accilent 58 - Mr. Blumberg 70 70 Mr. James 2 2 Notes payable in default $ 776 $ 700 |
Short-term notes payable, including related parties | June 30, 2020 December 31, 2019 Dr. Imhoff $ - $ 167 Dr. Cartwright 48 48 Dr. Faupel 5 5 Mr. Case - 150 Mr. Mamula - 15 Mr. Gould - 100 K2 (Shenghuo) - 203 Everest - 8 Premium Finance (insurance) 1 58 Mr. Blumberg - 223 Mr. Grimm - 49 Short-term notes payable, including related parties $ 54 $ 1,026 | December 31, 2019 December 31, 2018 Dr. Imhoff $ 167 $ 135 Dr. Cartwright 48 144 Dr. Faupel 5 123 Ms. Maloof - 25 Mr. Case 150 150 Mr. Mamula 15 - Mr. Gould 100 50 K2 (Shenghuo) 203 177 Everest 8 - Premium Finance (insurance) 58 50 Mr. Blumberg 223 45 Mr. Grimm 49 - Short-term notes payable, including related parties $ 1,026 $ 899 |
SHORT-TERM CONVERTIBLE DEBT (Ta
SHORT-TERM CONVERTIBLE DEBT (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Debt Disclosure [Abstract] | ||
Convertible notes payable | June 30, 2020 December 31, 2019 Shenghuo $ - $ 513 Auctus 113 - Eagle - 26 Adar - 85 Debt discount and issuance costs to be amortized (23 ) (9 ) Debt discount related to beneficial conversion (57 ) (29 ) Short-term convertible notes payable $ 33 $ 586 | December 31, 2019 December 31, 2018 Shenghuo $ 513 $ 432 Eagle 26 3 Adar 85 - Debt discount and issuance costs to be amortized (9 ) (10 ) Debt discount related to beneficial conversion (29 ) (45 ) Convertible notes payable, including related parties $ 586 $ 380 |
CONVERTIBLE DEBT IN DEFAULT (Ta
CONVERTIBLE DEBT IN DEFAULT (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Debt Disclosure [Abstract] | ||
Convertible notes in default | June 30, 2020 December 31, 2019 GPB $ 1,828 $ 2,177 GHS $ 92 $ 149 83 83 14 14 103 292 103 349 Auctus $ 140 $ 192 - 91 - 140 106 389 Convertible notes (including debt in default) $ 2,260 $ 2,915 | December 31, 2019 December 31, 2018 GPB $ 2,177 $ 2,198 GHS 349 364 Auctus 389 215 Convertible notes in default $ 2,915 $ 2,778 |
LONG TERM DEBT (Tables)
LONG TERM DEBT (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Long-term Debt, Unclassified [Abstract] | ||
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 during the quarter ended September 30, 2018 (454 ) Promissory note dated September 4, 2018 $ 207 Interest accrued through December 31, 2019 17 Balance outstanding at December 31, 2019 $ 224 Interest accrued through June 30, 2020 6 Balance outstanding at June 30, 2020 $ 230 For Dr. Cartwright: Salary $ 337 Bonus 675 Interest on compensation 59 Loans to Company 528 Interest on loans 22 Total outstanding prior to exchange $ 1,621 Amount forgiven during the quarter ended September 30, 2018 (1,302 ) Promissory note dated September 4, 2018 $ 319 Interest accrued through December 31, 2019 26 Balance outstanding at December 31, 2019 $ 345 Interest accrued through June 30, 2020 9 Balance outstanding at June 30, 2020 $ 354 | 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 during the quarter ended September 30, 2018 (454 ) Promissory note dated September 4, 2018 $ 207 Interest accrued through December 31, 2019 17 Balance outstanding at December 31, 2019 $ 224 For Dr. Cartwright: Salary $ 337 Bonus 675 Interest on compensation 59 Loans to Company 528 Interest on loans 22 Total outstanding prior to exchange $ 1,621 Amount forgiven during the quarter ended September 30, 2018 (1,302 ) Promissory note dated September 4, 2018 $ 319 Interest accrued through December 31, 2019 26 Balance outstanding at December 31, 2019 $ 345 |
Long-term debt, related parties debt obligations | Future debt obligations at June 30, 2020 for Long-term Debt – Related Parties are as follows (in thousands): Year Amount 2020 - 2021 - 2022 200 2023 200 2024 184 Totals 584 Future debt obligations at June 30, 2020 for Long-term Convertible Notes Payable, net are as follows (in thousands): Year Amount 2020 - 2021 1,100 2022 - 2023 - 2024 - Totals 1,100 |
INCOME (LOSS) PER COMMON SHARE
INCOME (LOSS) PER COMMON SHARE (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Earnings Per Share [Abstract] | ||
Earnings per share | In thousands Six months ended June 30, 2020 2019 Net loss $ (4,049 ) $ (2,878 ) Basic weighted average number of shares outstanding 8,463 3,319 Net income loss per share (basic) $ (0.48 ) $ (0.87 ) Diluted weighted average number of shares outstanding 8,463 3,319 Net income (loss) per share (diluted) $ (0.48 ) $ (0.87 ) Dilutive equity instruments (number of equivalent units): Stock options - - Preferred stock - - Convertible debt 31,228 38,786 Warrants 5,341 30,235 Total Dilutive instruments 36,569 69,021 | In thousands December 31, 2019 2018 Net income (loss) $ ( 1,921 ) $ 900 Basic weighted average number of shares outstanding 3,302 462 Net income (loss) per share (basic) $ (0.58 ) $ 1.95 Diluted weighted average number of shares outstanding 3,302 65,227 Net income (loss) per share (diluted) $ (0.58 ) $ 0.0138 Dilutive equity instruments (number of equivalent units): Stock options - - Preferred stock - - Convertible debt 39,636 42,226 Warrants 30,208 22,530 Total Dilutive instruments 73,144 65,226 |
SUBSEQUENT EVENTS (Tables)
SUBSEQUENT EVENTS (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent events | Grant Date Expiration Date Vesting Period Number of Stock Options Granted Exercise Price Black Scholes Valuation Cartwright, Gene 7/14/2020 7/12/2030 Immediate 400,000 0.49 0.483 Faupel, Mark 7/14/2020 7/12/2030 Immediate 400,000 0.49 0.483 Imhoff, John 7/14/2020 7/12/2030 36 months 50,000 0.49 0.483 James, Michael 7/14/2020 7/12/2030 36 months 50,000 0.49 0.483 Clavijo, James 7/14/2020 7/12/2030 36 months 300,000 0.49 0.483 Battle, Lisa 7/14/2020 7/12/2030 36 months 178,000 0.49 0.483 Sufka, Melissa 7/14/2020 7/12/2030 36 months 178,000 0.49 0.483 Waterstreet, Alesandra 7/14/2020 7/12/2030 36 months 178,000 0.49 0.483 Sufka, Melissa 7/14/2020 7/12/2030 18 months 66,000 0.49 0.483 1,800,000 |
ORGANIZATION, BACKGROUND, AND_2
ORGANIZATION, BACKGROUND, AND BASIS OF PRESENTATION (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||
Common stock, issued (in thousands) | 12,765 | 12,765 | 3,319 | 2,669 | ||
Common stock, outstanding (in thousands) | 12,765 | 12,765 | 3,319 | 2,669 | ||
Working capital | $ (7,800) | $ (7,800) | $ (11,400) | |||
Accumulated deficit | (143,604) | (143,604) | (139,555) | $ (137,634) | ||
Net income (loss) | (6,749) | $ (2,663) | (4,020) | $ (2,878) | (1,921) | 1,016 |
Stockholders' deficit | $ (16,423) | $ (16,423) | $ (16,935) | $ (15,824) |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Accounting Policies [Abstract] | |||
Raw materials | $ 784 | $ 781 | $ 783 |
Work in process | 81 | 81 | 81 |
Finished goods | 24 | 17 | 17 |
Inventory reserve | (838) | (831) | (767) |
Total | $ 51 | $ 48 | $ 114 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Property and equipment, gross | $ 2,394 | $ 2,393 | $ 2,441 |
Less accumulated depreciation and amortization | (2,393) | (2,393) | (2,420) |
Property and equipment, net | 1 | 0 | 21 |
Equipment | |||
Property and equipment, gross | 1,350 | 1,349 | 1,378 |
Software | |||
Property and equipment, gross | 740 | 740 | 740 |
Furniture and Fixtures | |||
Property and equipment, gross | 124 | 124 | 124 |
Leasehold Improvements | |||
Property and equipment, gross | $ 180 | $ 180 | $ 199 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Accounting Policies [Abstract] | |||
Compensation | $ 1,174 | $ 1,123 | $ 1,030 |
Professional fees | 23 | 181 | 203 |
Interest | 1,361 | 1,603 | 892 |
Warranty | 2 | 2 | 2 |
Vacation | 37 | 41 | 53 |
Preferred dividends | 149 | 120 | 120 |
Stock subscription for licenses | 0 | 692 | |
Other accrued expenses | 125 | 165 | 164 |
Total | $ 2,871 | $ 3,235 | $ 3,156 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 3) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Revenue | $ 0 | $ 1 | $ 0 | $ 19 | $ 36 | $ 57 |
Asia | ||||||
Revenue | 0 | 5 | 22 | 49 | ||
Europe | ||||||
Revenue | 0 | 14 | 14 | 0 | ||
Africa | ||||||
Revenue | 0 | 8 | ||||
Devices | ||||||
Revenue | 0 | 0 | 17 | 17 | ||
Disposables | ||||||
Revenue | 0 | 2 | 2 | 32 | ||
Other | ||||||
Revenue | 0 | 15 | 15 | 1 | ||
Warranty | ||||||
Revenue | $ 0 | $ 2 | $ 2 | $ 7 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Accounting Policies [Abstract] | ||||
Patent costs | $ 4 | $ 10 | $ 15 | $ 11 |
Lease asset-right | 86 | 132 | 0 | |
Subscription receivable | 0 | 635 | 0 | |
Deferred revenue | 101 | 101 | 66 | |
Net operating losses | 76,000 | |||
Share-based compensation | 0 | $ 8 | 8 | $ 44 |
Unrecognized compensation costs | $ 0 | $ 0 |
FAIR VALUE OF FINANCIAL INSTR_3
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Warrants | $ (7,576) | $ (5,092) | $ (4,728) |
Distributor Debt | |||
Warrants | 0 | (114) | (114) |
Short-Term Loans | |||
Warrants | (138) | (83) | |
Long-Term Loans | |||
Warrants | (3,512) | (893) | |
Senior Secured Debt | |||
Warrants | (3,926) | (4,002) | (4,614) |
Auctus Loan | |||
Warrants | 0 | 0 | |
Level 1 | |||
Warrants | 0 | 0 | 0 |
Level 1 | Distributor Debt | |||
Warrants | 0 | 0 | 0 |
Level 1 | Short-Term Loans | |||
Warrants | 0 | 0 | |
Level 1 | Long-Term Loans | |||
Warrants | 0 | 0 | |
Level 1 | Senior Secured Debt | |||
Warrants | 0 | 0 | 0 |
Level 1 | Auctus Loan | |||
Warrants | 0 | 0 | |
Level 2 | |||
Warrants | 0 | 0 | 0 |
Level 2 | Distributor Debt | |||
Warrants | 0 | 0 | 0 |
Level 2 | Short-Term Loans | |||
Warrants | 0 | 0 | |
Level 2 | Long-Term Loans | |||
Warrants | 0 | 0 | |
Level 2 | Senior Secured Debt | |||
Warrants | 0 | 0 | 0 |
Level 2 | Auctus Loan | |||
Warrants | 0 | 0 | |
Level 3 | |||
Warrants | (7,576) | (5,092) | (4,728) |
Level 3 | Distributor Debt | |||
Warrants | 0 | (114) | (114) |
Level 3 | Short-Term Loans | |||
Warrants | (138) | (83) | |
Level 3 | Long-Term Loans | |||
Warrants | (3,512) | (893) | |
Level 3 | Senior Secured Debt | |||
Warrants | (3,926) | (4,002) | $ (4,614) |
Level 3 | Auctus Loan | |||
Warrants | $ 0 | $ 0 |
FAIR VALUE OF FINANCIAL INSTR_4
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details 1) - Level 3 - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Beginning balance | $ (5,092) | $ (4,728) |
Warrants exchanged for fixed price warrants | 67 | (744) |
Change in fair value during the period | (2,551) | 380 |
Ending balance | (7,576) | (5,092) |
Distributor Debt | ||
Beginning balance | (114) | (114) |
Warrants exchanged for fixed price warrants | 67 | 0 |
Change in fair value during the period | 47 | 0 |
Ending balance | 0 | (114) |
Short-Term Loans | ||
Beginning balance | (83) | 0 |
Warrants exchanged for fixed price warrants | 0 | (108) |
Change in fair value during the period | (55) | 25 |
Ending balance | (138) | (83) |
Senior Secured Debt | ||
Beginning balance | (4,002) | (4,614) |
Warrants exchanged for fixed price warrants | 0 | 0 |
Change in fair value during the period | 76 | 612 |
Ending balance | (3,926) | (4,002) |
Long-Term Loans | ||
Beginning balance | (893) | 0 |
Warrants exchanged for fixed price warrants | 0 | (636) |
Change in fair value during the period | (2,619) | (257) |
Ending balance | $ (3,512) | $ (893) |
STOCKHOLDERS' DEFICIT (Details)
STOCKHOLDERS' DEFICIT (Details) - shares | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
STOCKHOLDERS' DEFICIT: | ||
Exchange of debt for common stock shares and warrants | 7,957,013 | |
Shares issued for manufacturing agreements | 12,147 | |
Investments | 1,476,000 | |
Issued during the six months ended June 30, 2020 | 9,445,160 | 650,138 |
Convertible debt conversions | 650,138 | |
Stock issued, beginning | 3,319,486 | 2,669,348 |
Issued in period | 9,445,160 | 650,138 |
Stock issued, ending | 12,764,629 | 3,319,486 |
STOCKHOLDERS' DEFICIT (Details
STOCKHOLDERS' DEFICIT (Details 1) $ in Thousands | 6 Months Ended |
Jun. 30, 2020USD ($)shares | |
Total debt and accrued interest | $ | $ 2,517,787 |
Total debt | $ | 2,276,316 |
Total accrued interest | $ | $ 241,471 |
Common stock shares | 7,957,013 |
Warrants (exercise $0.25) | 1,121,705 |
Warrants (exercise $0.75) | 1,121,705 |
Warrants (exercise $0.20) | 4,713,603 |
Warrants (Exercise $0.15) | 700,000 |
Warrants (Exercise $0.50) | 500,000 |
Aquarius | |
Total debt and accrued interest | $ | $ 145,544 |
Total debt | $ | 107,500 |
Total accrued interest | $ | $ 38,044 |
Common stock shares | 291,088 |
Warrants (exercise $0.25) | 145,544 |
Warrants (exercise $0.75) | 145,544 |
Warrants (exercise $0.20) | 0 |
Warrants (Exercise $0.15) | 0 |
Warrants (Exercise $0.50) | 0 |
K2 Medical (Shenghuo) | |
Total debt and accrued interest | $ | $ 803,653 |
Total debt | $ | 771,927 |
Total accrued interest | $ | $ 31,726 |
Common stock shares | 1,905,270 |
Warrants (exercise $0.25) | 704,334 |
Warrants (exercise $0.75) | 704,334 |
Warrants (exercise $0.20) | 496,602 |
Warrants (Exercise $0.15) | 0 |
Warrants (Exercise $0.50) | 0 |
Mr. Blumberg | |
Total debt and accrued interest | $ | $ 305,320 |
Total debt | $ | 292,290 |
Total accrued interest | $ | $ 13,030 |
Common stock shares | 1,167,630 |
Warrants (exercise $0.25) | 119,656 |
Warrants (exercise $0.75) | 119,656 |
Warrants (exercise $0.20) | 928,318 |
Warrants (Exercise $0.15) | 0 |
Warrants (Exercise $0.50) | 0 |
Mr. Case | |
Total debt and accrued interest | $ | $ 179,291 |
Total debt | $ | 150,000 |
Total accrued interest | $ | $ 29,291 |
Common stock shares | 896,456 |
Warrants (exercise $0.25) | 0 |
Warrants (exercise $0.75) | 0 |
Warrants (exercise $0.20) | 896,456 |
Warrants (Exercise $0.15) | 0 |
Warrants (Exercise $0.50) | 0 |
Mr. Grimm | |
Total debt and accrued interest | $ | $ 51,050 |
Total debt | $ | 50,000 |
Total accrued interest | $ | $ 1,050 |
Common stock shares | 255,548 |
Warrants (exercise $0.25) | 0 |
Warrants (exercise $0.75) | 0 |
Warrants (exercise $0.20) | 255,548 |
Warrants (Exercise $0.15) | 0 |
Warrants (Exercise $0.50) | 0 |
Mr. Gould | |
Total debt and accrued interest | $ | $ 111,227 |
Total debt | $ | 100,000 |
Total accrued interest | $ | $ 11,227 |
Common stock shares | 556,136 |
Warrants (exercise $0.25) | 0 |
Warrants (exercise $0.75) | 0 |
Warrants (exercise $0.20) | 556,136 |
Warrants (Exercise $0.15) | 0 |
Warrants (Exercise $0.50) | 0 |
Mr. Mamula | |
Total debt and accrued interest | $ | $ 15,577 |
Total debt | $ | 15,000 |
Total accrued interest | $ | $ 577 |
Common stock shares | 77,885 |
Warrants (exercise $0.25) | 0 |
Warrants (exercise $0.75) | 0 |
Warrants (exercise $0.20) | 77,885 |
Warrants (Exercise $0.15) | 0 |
Warrants (Exercise $0.50) | 0 |
Dr. Imhoff | |
Total debt and accrued interest | $ | $ 400,417 |
Total debt | $ | 363,480 |
Total accrued interest | $ | $ 36,937 |
Common stock shares | 1,699,255 |
Warrants (exercise $0.25) | 100,944 |
Warrants (exercise $0.75) | 100,944 |
Warrants (exercise $0.20) | 1,497,367 |
Warrants (Exercise $0.15) | 0 |
Warrants (Exercise $0.50) | 0 |
Ms. Rosenstock | |
Total debt and accrued interest | $ | $ 50,000 |
Total debt | $ | 50,000 |
Total accrued interest | $ | $ 0 |
Common stock shares | 100,000 |
Warrants (exercise $0.25) | 50,000 |
Warrants (exercise $0.75) | 50,000 |
Warrants (exercise $0.20) | 0 |
Warrants (Exercise $0.15) | 0 |
Warrants (Exercise $0.50) | 0 |
Mr. James | |
Total debt and accrued interest | $ | $ 2,286 |
Total debt | $ | 2,000 |
Total accrued interest | $ | $ 286 |
Common stock shares | 7,745 |
Warrants (exercise $0.25) | 1,227 |
Warrants (exercise $0.75) | 1,227 |
Warrants (exercise $0.20) | 5,291 |
Warrants (Exercise $0.15) | 0 |
Warrants (Exercise $0.50) | 0 |
Auctus | |
Total debt and accrued interest | $ | $ 328,422 |
Total debt | $ | 249,119 |
Total accrued interest | $ | $ 79,303 |
Common stock shares | 500,000 |
Warrants (exercise $0.25) | 0 |
Warrants (exercise $0.75) | 0 |
Warrants (exercise $0.20) | 0 |
Warrants (Exercise $0.15) | 700,000 |
Warrants (Exercise $0.50) | 0 |
Mr. Clavijo | |
Total debt and accrued interest | $ | $ 125,000 |
Total debt | $ | 125,000 |
Total accrued interest | $ | $ 0 |
Common stock shares | 500,000 |
Warrants (exercise $0.25) | 0 |
Warrants (exercise $0.75) | 0 |
Warrants (exercise $0.20) | 0 |
Warrants (Exercise $0.15) | 0 |
Warrants (Exercise $0.50) | 500,000 |
STOCKHOLDERS' DEFICIT (Detail_2
STOCKHOLDERS' DEFICIT (Details 2) - shares | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
STOCKHOLDERS' DEFICIT: | ||
Warrants outstanding, beginning | 46,016,840 | 23,551,857 |
Issuances | 11,269,013 | 22,465,001 |
Canceled/expired | (70) | 0 |
Exchanged in debt restructuring | (28,962,508) | |
Exercised | 0 | (18) |
Warrants outstanding, ending | 28,323,275 | 46,016,840 |
STOCKHOLDER'S DEFICIT (Details
STOCKHOLDER'S DEFICIT (Details 3) - $ / shares | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Warrants outstanding | 28,323,275 | 46,016,840 | 23,551,857 |
Warrants 1 | |||
Warrants outstanding | 4,262 | 13 | |
Warrants exercise price | $ 1.82 | $ 60,000 | |
Expiration date | 19-Mar-21 | 14-Jun-21 | |
Warrants 2 | |||
Warrants outstanding | 7,185,000 | 2 | |
Warrants exercise price | $ 0.20 | $ 5,760,000 | |
Expiration date | 12-Feb-23 | 2-Dec-20 | |
Warrants 3 | |||
Warrants outstanding | 1,725,000 | 2 | |
Warrants exercise price | $ 0.04 | $ 7,040,000 | |
Expiration date | 21-Feb-21 | 2-Dec-20 | |
Warrants 4 | |||
Warrants outstanding | 325,000 | 1 | |
Warrants exercise price | $ 0.18 | $ 7,603,200 | |
Expiration date | 4-Apr-22 | 29-Jun-20 | |
Warrants 5 | |||
Warrants outstanding | 215,000 | 13 | |
Warrants exercise price | $ 0.25 | $ 512,000 | |
Expiration date | 1-Jul-22 | 21-Sep-20 | |
Warrants 6 | |||
Warrants outstanding | 100,000 | 24 | |
Warrants exercise price | $ 0.25 | $ 512,000 | |
Expiration date | 1-Sep-22 | 29-Jun-20 | |
Warrants 7 | |||
Warrants outstanding | 7,500,000 | 12 | |
Warrants exercise price | $ 0.20 | $ 512,000 | |
Expiration date | 17-Dec-24 | 4-Sep-20 | |
Warrants 8 | |||
Warrants outstanding | 250,000 | 1 | |
Warrants exercise price | $ 0.16 | $ 7,603,200 | |
Expiration date | 31-Mar-25 | 4-Sep-20 | |
Warrant 9 | |||
Warrants outstanding | 2,597,705 | 1 | |
Warrants exercise price | $ 0.25 | $ 512,000 | |
Expiration date | 30-Dec-22 | 23-Oct-20 | |
Warrant 10 | |||
Warrants outstanding | 2,597,705 | 1 | |
Warrants exercise price | $ 0.75 | $ 7,603,200 | |
Expiration date | 30-Dec-22 | 23-Oct-20 | |
Warrant 11 | |||
Warrants outstanding | 4,713,603 | 35,937,500 | |
Warrants exercise price | $ 0.20 | $ 0.04 | |
Expiration date | 30-Dec-22 | 14-Jun-21 | |
Warrants 12 | |||
Warrants outstanding | 60,000 | 1,725,000 | |
Warrants exercise price | $ 0.25 | $ 0.04 | |
Expiration date | 23-Apr-23 | 21-Feb-21 | |
Warrants 13 | |||
Warrants outstanding | 50,000 | 22 | |
Warrants exercise price | $ 0.25 | $ 11,137.28 | |
Expiration date | 30-Dec-22 | 6-Jun-21 | |
Warrants 14 | |||
Warrants outstanding | 50,000 | 250 | |
Warrants exercise price | $ 0.75 | $ 0.04 | |
Expiration date | 30-Dec-22 | 13-Feb-22 | |
Warrants 15 | |||
Warrants outstanding | 700,000 | 25 | |
Warrants exercise price | $ 0.15 | $ 144 | |
Expiration date | 21-May-23 | 16-May-22 | |
Warrants 16 | |||
Warrants outstanding | 250,000 | 688 | |
Warrants exercise price | $ 0.50 | $ 15.20 | |
Expiration date | 23-Jun-23 | 16-Nov-20 | |
Warrants 17 | |||
Warrants outstanding | 250 | ||
Warrants exercise price | $ 15.20 | ||
Expiration date | 28-Dec-20 | ||
Warrants 18 | |||
Warrants outstanding | 75 | ||
Warrants exercise price | $ 16.08 | ||
Expiration date | 10-Jan-21 | ||
Warrants 19 | |||
Warrants outstanding | 4,262 | ||
Warrants exercise price | $ 0.04 | ||
Expiration date | 19-Mar-21 | ||
Warrants 20 | |||
Warrants outstanding | 1,875 | ||
Warrants exercise price | $ 16.08 | ||
Expiration date | 20-Mar-21 | ||
Warrants 21 | |||
Warrants outstanding | 63 | ||
Warrants exercise price | $ 48 | ||
Expiration date | 30-Apr-21 | ||
Warrants 22 | |||
Warrants outstanding | 125 | ||
Warrants exercise price | $ 48 | ||
Expiration date | 17-May-21 | ||
Warrants 23 | |||
Warrants outstanding | 125 | ||
Warrants exercise price | $ 48 | ||
Expiration date | 25-May-21 | ||
Warrants 24 | |||
Warrants outstanding | 500 | ||
Warrants exercise price | $ 48 | ||
Expiration date | 1-Jun-21 | ||
Warrants 25 | |||
Warrants outstanding | 1,875 | ||
Warrants exercise price | $ 200 | ||
Expiration date | 22-Aug-21 | ||
Warrants 26 | |||
Warrants outstanding | 625 | ||
Warrants exercise price | $ 200 | ||
Expiration date | 18-Sep-21 | ||
Warrants 27 | |||
Warrants outstanding | 1,250 | ||
Warrants exercise price | $ 1.12 | ||
Expiration date | 23-Oct-21 | ||
Warrants 28 | |||
Warrants outstanding | 19 | ||
Warrants exercise price | $ 0.64 | ||
Expiration date | 20-Nov-21 | ||
Warrants 29 | |||
Warrants outstanding | 375 | ||
Warrants exercise price | $ 0.32 | ||
Expiration date | 5-Dec-21 | ||
Warrants 30 | |||
Warrants outstanding | 100 | ||
Warrants exercise price | $ 0.16 | ||
Expiration date | 19-Dec-21 | ||
Warrants 31 | |||
Warrants outstanding | 188 | ||
Warrants exercise price | $ 0.24 | ||
Expiration date | 23-Dec-21 | ||
Warrants 32 | |||
Warrants outstanding | 14 | ||
Warrants exercise price | $ 0.24 | ||
Expiration date | 27-Dec-21 | ||
Warrants 33 | |||
Warrants outstanding | 313 | ||
Warrants exercise price | $ 0.24 | ||
Expiration date | 7-Jan-21 | ||
Warrants 34 | |||
Warrants outstanding | 188 | ||
Warrants exercise price | $ 0.21 | ||
Expiration date | 17-Jan-21 | ||
Warrants 35 | |||
Warrants outstanding | 438 | ||
Warrants exercise price | $ 0.16 | ||
Expiration date | 30-Jan-21 | ||
Warrants 36 | |||
Warrants outstanding | 625 | ||
Warrants exercise price | $ 0.16 | ||
Expiration date | 15-Feb-21 | ||
Warrants 37 | |||
Warrants outstanding | 325,000 | ||
Warrants exercise price | $ 0.18 | ||
Expiration date | 4-Apr-22 | ||
Warrants 38 | |||
Warrants outstanding | 200,000 | ||
Warrants exercise price | $ 0.20 | ||
Expiration date | 25-Apr-22 | ||
Warrants 39 | |||
Warrants outstanding | 215,000 | ||
Warrants exercise price | $ 0.20 | ||
Expiration date | 1-Jul-22 | ||
Warrants 40 | |||
Warrants outstanding | 100,000 | ||
Warrants exercise price | $ 0.20 | ||
Expiration date | 1-Sep-22 | ||
Warrants 41 | |||
Warrants outstanding | 7,500,000 | ||
Warrants exercise price | $ 0.20 | ||
Expiration date | 17-Dec-24 |
STOCKHOLDERS' DEFICIT (Detail_3
STOCKHOLDERS' DEFICIT (Details Narrative) - $ / shares | Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
STOCKHOLDERS' DEFICIT: | |||
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 |
Common stock, authorized (in thousands) | 3,000,000 | 3,000,000 | 3,000,000 |
Common stock, issued (in thousands) | 12,765 | 3,319 | 2,669 |
Common stock, outstanding (in thousands) | 12,765 | 3,319 | 2,669 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred tax assets: | ||
Warrant liability | $ 1,087 | $ 1,182 |
Accrued executive compensation | 515 | 498 |
Reserves and other | 468 | 488 |
Net operating loss carryforwards | 18,961 | 19,297 |
Gross | 21,031 | 21,465 |
Valuation allowance | (21,031) | (21,465) |
Net | $ 0 | $ 0 |
INCOME TAXES (Details 1)
INCOME TAXES (Details 1) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Statutory federal tax rate | 21.00% | 21.00% |
State taxes, net of federal benefit | 4.00% | 4.00% |
Nondeductible expenses | 0.00% | 0.00% |
Valuation allowance | (25.00%) | (25.00%) |
Effective rate | 0.00% | 0.00% |
INCOME TAXES (Details 2)
INCOME TAXES (Details 2) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Current | $ 0 | $ 0 |
Deferred | 0 | 0 |
Deferred provision | 0 | 0 |
Impact of change in enacted tax rates | 0 | 0 |
Change in valuation allowance | 0 | 0 |
Total provision for income taxes | $ 0 | $ 0 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) $ in Thousands | Dec. 31, 2019USD ($) |
Income Tax Disclosure [Abstract] | |
NOL carryforwards | $ 76,000 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Commitments and Contingencies Disclosure [Abstract] | ||
2020 | $ 60 | $ 120 |
2021 | 30 | 30 |
Total | 90 | 159 |
Less: interest | 6 | 27 |
Present value of lease liability | $ 84 | $ 132 |
NOTES PAYABLE (Details)
NOTES PAYABLE (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Notes payable in default, including related parties | $ 309 | $ 776 | $ 700 |
Dr. Imhoff | |||
Notes payable in default, including related parties | 0 | 199 | 199 |
Dr. Cartwright | |||
Notes payable in default, including related parties | 2 | 2 | 2 |
Ms. Rosenstock | |||
Notes payable in default, including related parties | 0 | 50 | 50 |
Mr. Fowler | |||
Notes payable in default, including related parties | 26 | 26 | 26 |
Mr. Mermelstein | |||
Notes payable in default, including related parties | 264 | 244 | 211 |
GPB | |||
Notes payable in default, including related parties | 17 | 17 | 17 |
Aquarius | |||
Notes payable in default, including related parties | 0 | 108 | 108 |
Accilent | |||
Notes payable in default, including related parties | 0 | 58 | 0 |
Mr. Blumberg | |||
Notes payable in default, including related parties | 0 | 70 | 70 |
Mr. James | |||
Notes payable in default, including related parties | $ 0 | 2 | 2 |
GHS | |||
Notes payable in default, including related parties | $ 0 | $ 15 |
NOTES PAYABLE (Details 1)
NOTES PAYABLE (Details 1) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Short-term notes payable, including related parties | $ 54 | $ 1,026 | $ 899 |
Dr. Imhoff | |||
Short-term notes payable, including related parties | 0 | 167 | 135 |
Dr. Cartwright | |||
Short-term notes payable, including related parties | 48 | 48 | 144 |
Dr. Faupel | |||
Short-term notes payable, including related parties | 5 | 5 | 123 |
Mr. Case | |||
Short-term notes payable, including related parties | 0 | 150 | 150 |
Mr. Mamula | |||
Short-term notes payable, including related parties | 0 | 15 | 0 |
Mr. Gould | |||
Short-term notes payable, including related parties | 0 | 100 | 50 |
K2 | |||
Short-term notes payable, including related parties | 0 | 203 | 177 |
Everest | |||
Short-term notes payable, including related parties | 0 | 8 | 0 |
Premium Finance | |||
Short-term notes payable, including related parties | 1 | 58 | 50 |
Mr. Blumberg | |||
Short-term notes payable, including related parties | 0 | 223 | 45 |
Mr. Grimm | |||
Short-term notes payable, including related parties | $ 0 | 49 | 0 |
Mr. Maloof | |||
Short-term notes payable, including related parties | $ 0 | $ 25 |
SHORT-TERM CONVERTIBLE DEBT (De
SHORT-TERM CONVERTIBLE DEBT (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Total Convertible Notes Payable | |||
Convertible notes payable | $ 33 | $ 586 | $ 380 |
Shenghuo | |||
Convertible notes payable | 0 | 513 | 432 |
Auctus | |||
Convertible notes payable | 113 | 0 | |
Eagle | |||
Convertible notes payable | 0 | 26 | 3 |
Adar | |||
Convertible notes payable | 0 | 85 | 0 |
Debt Discount and Issuance Costs to be Amortized | |||
Convertible notes payable | (23) | (9) | (10) |
Debt Discount Related to Beneficial Conversion | |||
Convertible notes payable | $ (57) | $ (29) | $ (45) |
CONVERTIBLE DEBT IN DEFAULT (De
CONVERTIBLE DEBT IN DEFAULT (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Convertible Notes in Default | |||
Convertible notes in default | $ 2,260 | $ 2,915 | $ 2,778 |
GPB | |||
Convertible notes in default | 1,828 | 2,177 | 364 |
GHS | |||
Convertible notes in default | 292 | 349 | 2,198 |
GHS | Note 1 | |||
Convertible notes in default | 92 | 149 | |
GHS | Note 2 | |||
Convertible notes in default | 83 | 83 | |
GHS | Note 3 | |||
Convertible notes in default | 14 | 14 | |
GHS | Note 4 | |||
Convertible notes in default | 103 | 103 | |
Auctus | |||
Convertible notes in default | 140 | ||
Auctus | Note 1 | |||
Convertible notes in default | 140 | 192 | |
Auctus | Note 2 | |||
Convertible notes in default | 0 | 91 | |
Auctus | Note 3 | |||
Convertible notes in default | $ 0 | 106 | |
Auctus | |||
Convertible notes in default | $ 389 | $ 215 |
LONG TERM DEBT (Details)
LONG TERM DEBT (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Bonus | $ 1,174 | $ 1,123 | $ 1,030 |
Vacation | 37 | 41 | 53 |
Amount forgiven | $ (667) | ||
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) | ||
Promissory note issued in exchange | 207 | ||
Interest accrued | 6 | 17 | |
Balance outstanding, end of period | 230 | 224 | |
Dr. Cartwright | |||
Salary | 337 | ||
Bonus | 675 | ||
Vacation | 0 | ||
Interest on compensation | 59 | ||
Loans to Company | 528 | ||
Interest on loans | 22 | ||
Total outstanding prior to exchange | 1,621 | ||
Amount forgiven | (1,302) | ||
Promissory note issued in exchange | 319 | ||
Interest accrued | 9 | 26 | |
Balance outstanding, end of period | $ 354 | $ 345 |
LONG TERM DEBT (Details 1)
LONG TERM DEBT (Details 1) $ in Thousands | Jun. 30, 2020USD ($) |
Long-Term Debt - Related Parties | |
2020 | $ 0 |
2021 | 0 |
2022 | 200 |
2023 | 200 |
2024 | 184 |
Total | 584 |
Long-Term Convertible Notes Payable | |
2020 | 0 |
2021 | 1,100 |
2022 | 0 |
2023 | 0 |
2024 | 0 |
Total | $ 1,100 |
INCOME (LOSS) PER COMMON SHAR_2
INCOME (LOSS) PER COMMON SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Net loss (income) | $ (6,766) | $ (2,654) | $ (4,049) | $ (2,878) | $ (1,921) | $ 900 |
Basic weighted average number of shares outstanding (in thousands) | 11,913 | 3,284 | 8,463 | 3,319 | 3,302 | 462 |
Net income (loss) per share (basic) | $ (0.57) | $ (0.81) | $ (0.48) | $ (0.87) | $ (0.58) | $ 1.95 |
Diluted weighted average number of shares outstanding (in thousands) | 11,913 | 3,284 | 8,463 | 3,319 | 3,302 | 65,227 |
Net (loss) income per share (diluted) | $ (0.57) | $ (0.81) | $ (0.48) | $ (0.87) | $ (0.58) | $ 0.0138 |
Dilutive equity instruments (number of equivalent units) (in thousands) | 36,569 | 69,021 | 73,144 | 65,226 | ||
Stock Options | ||||||
Dilutive equity instruments (number of equivalent units) (in thousands) | 0 | 0 | 0 | 0 | ||
Preferred Stock | ||||||
Dilutive equity instruments (number of equivalent units) (in thousands) | 0 | 0 | 0 | 0 | ||
Convertible Debt | ||||||
Dilutive equity instruments (number of equivalent units) (in thousands) | 31,228 | 38,786 | 39,636 | 42,226 | ||
Warrants | ||||||
Dilutive equity instruments (number of equivalent units) (in thousands) | 5,341 | 30,235 | 30,208 | 22,530 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) | 6 Months Ended |
Jun. 30, 2020$ / sharesshares | |
Cartwright, Gene | |
Grant date | Jul. 14, 2020 |
Expiration date | Jul. 12, 2030 |
Number of stock options granted | shares | 400,000 |
Exercise price | $ 0.49 |
Black scholes valuation | $ 0.483 |
Faupel, Mark | |
Grant date | Jul. 14, 2020 |
Expiration date | Jul. 12, 2030 |
Number of stock options granted | shares | 400,000 |
Exercise price | $ 0.49 |
Black scholes valuation | $ 0.483 |
Imhoff, John | |
Grant date | Jul. 14, 2020 |
Expiration date | Jul. 12, 2030 |
Vesting period | 36 months |
Number of stock options granted | shares | 50,000 |
Exercise price | $ 0.49 |
Black scholes valuation | $ 0.483 |
James, Michael | |
Grant date | Jul. 14, 2020 |
Expiration date | Jul. 12, 2030 |
Vesting period | 36 months |
Number of stock options granted | shares | 50,000 |
Exercise price | $ 0.49 |
Black scholes valuation | $ 0.483 |
Clavijo, James | |
Grant date | Jul. 14, 2020 |
Expiration date | Jul. 12, 2030 |
Vesting period | 36 months |
Number of stock options granted | shares | 300,000 |
Exercise price | $ 0.49 |
Black scholes valuation | $ 0.483 |
Battle, Lisa | |
Grant date | Jul. 14, 2020 |
Expiration date | Jul. 12, 2030 |
Vesting period | 36 months |
Number of stock options granted | shares | 178,000 |
Exercise price | $ 0.49 |
Black scholes valuation | $ 0.483 |
Sufka, Melissa | |
Grant date | Jul. 14, 2020 |
Expiration date | Jul. 12, 2030 |
Vesting period | 36 months |
Number of stock options granted | shares | 178,000 |
Exercise price | $ 0.49 |
Black scholes valuation | $ 0.483 |
Waterstreet, Alesandra | |
Grant date | Jul. 14, 2020 |
Expiration date | Jul. 12, 2030 |
Vesting period | 36 months |
Number of stock options granted | shares | 178,000 |
Exercise price | $ 0.49 |
Black scholes valuation | $ 0.483 |
Sufka, Melissa (2) | |
Grant date | Jul. 14, 2020 |
Expiration date | Jul. 12, 2030 |
Vesting period | 18 months |
Number of stock options granted | shares | 66,000 |
Exercise price | $ 0.49 |
Black scholes valuation | $ 0.483 |
Subsequent Event | |
Number of stock options granted | shares | 1,800,000 |