10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

For the quarterly period ended: September 30, 2017

OR

[_] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

For the transition period from: ___ to ___.

Commission File Number: 001-336180

ULURU Inc.

(Exact Name of Registrant as Specified in its Charter)

Nevada	41-2118656
(State or Other Jurisdiction of	(I.R.S. Employer Identification No.)
Incorporation or Organization)

4452 Beltway Drive Addison, Texas	75001
(Address of Principal Executive Offices)	(Zip Code)

(214) 905-5145

Registrant's Telephone Number, including Area Code

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  þ    No  o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

    Yes  þ    No  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definition of “accelerated filer”, “large accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act (Check one):

Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	o	Smaller reporting company	þ
		Emerging growth company	o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes  ¨    No  þ   

As of November 13, 2017, there were 201,349,431 shares of the registrant’s Common Stock, $0.001 par value per share (“Common Stock”), nil shares of Series A Preferred Stock, $0.001 par value per share, issued and outstanding, and nil shares of Series B Convertible Preferred Stock, $0.001 par value per share, issued and outstanding.

ULURU Inc.

INDEX TO FORM 10-Q

For the Three and Nine Months Ended SEPTEMBER 30, 2017

		Page
PART I	FINANCIAL INFORMATION
Item 1.	Financial Statements.	3
	Condensed Consolidated Balance Sheets as of September 30, 2017 (unaudited) and December 31, 2016 (audited)	3
	Condensed Consolidated Statements of Operations (unaudited) for the three and nine months ended September 30, 2017 and 2016	4
	Condensed Consolidated Statements of Cash Flows (unaudited) for the nine months ended September 30, 2017 and 2016	5
	Notes to Condensed Consolidated Financial Statements (unaudited)	6
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations.	18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	24
Item 4.	Controls and Procedures.	24
PART II	OTHER INFORMATION
Item 1.	Legal Proceedings.	25
Item 1A.	Risk Factors.	25
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	25
Item 3.	Defaults Upon Senior Securities.	25
Item 4.	Mine Safety Disclosures.	25
Item 5.	Other Information.	26
Item 6.	Exhibits.	26
	Signatures.	26

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PART I – FINANCIAL INFORMATION

ITEM 1. Financial Statements.

ULURU Inc.

CONDENSED CONSOLIDATED BALANCE SHEETS

	September 30, 2017			December 31, 2016
	(Unaudited)			(Audited)
ASSETS
Current Assets
Cash and cash equivalents	$	4,604,005		$	36,615
Accounts receivable, net		163,536			61,788
Inventory		498,100			559,600
Prepaid expenses and deferred charges		144,070			135,394
Total Current Assets		5,409,711			793,397
Property, Equipment and Leasehold Improvements, net		59,203			126,741
Other Assets
Intangible asset - patents, net		189,074			216,781
Intangible asset - licensing rights, net		3,761,567			3,181,087
Deposits		18,069			18,069
Total Other Assets		3,968,710			3,415,937
TOTAL ASSETS	$	9,437,624		$	4,336,075
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable	$	1,839,746		$	2,026,671
Accrued liabilities		159,875			315,300
Accrued interest		68,151			53
Promissory note payable, current portion		---			20,000
Deferred revenue, current portion		35,302			45,764
Total Current Liabilities		2,103,074			2,407,788
Long Term Liabilities
Convertible notes payable, net of unamortized debt discount and debt issuance costs		480,345			---
Deferred revenue, net of current portion		354,151			358,462
Total Long Term Liabilities		834,496			358,462
TOTAL LIABILITIES		2,937,570			2,766,250
COMMITMENTS AND CONTINGENCIES		---			---
STOCKHOLDERS' EQUITY
Preferred Stock - $0.001 par value; 20,000 shares authorized;
Preferred Stock Series A, 1,000 shares designated; no shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively		---			---
Preferred Stock Series B, 1,250 shares designated; no shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively		---			---
Common Stock - $0.001 par value; 750,000,000 shares authorized;
201,349,431 and 62,974,431 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively		201,349			62,974
Additional paid-in capital		68,556,734			62,220,850
Accumulated (deficit)		(62,258,029	)		(60,713,999	)
TOTAL STOCKHOLDERS’ EQUITY		6,500,054			1,569,825
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	9,437,624		$	4,336,075
The accompanying notes are an integral part of these condensed consolidated financial statements.

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ULURU Inc.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended September 30,						Nine months Ended September 30,
	2017			2016			2017			2016
Revenues
License fees	$	1,453		$	1,453		$	4,311		$	362,542
Product sales, net		199,486			4,196			418,059			16,232
Total Revenues		200,939			5,649			422,370			378,774
Costs and Expenses
Cost of product sold		65,144			494			147,423			1,945
Research and development		90,294			119,011			198,615			390,501
Selling, general and administrative		323,915			304,612			1,048,445			1,008,313
Amortization of intangible assets		114,268			201,718			316,602			599,880
Depreciation		5,481			33,237			71,039			99,567
Total Costs and Expenses		599,102			659,072			1,782,124			2,100,206
Operating (Loss)		(398,163	)		(653,423	)		(1,359,754	)		(1,721,432	)
Other Income (Expense)
Interest and miscellaneous income		41			232			45			769
Interest expense		(133,972	)		(32,509	)		(289,113	)		(123,712	)
Foreign currency transaction gain (loss)		(6,151	)		(282	)		(9,222	)		808
Gain on settlement of liability		---			---			114,013			---
Accommodation fee due on promissory note		---			---			---			(25,000	)
(Loss) Before Income Taxes		(538,245	)		(685,982	)		(1,544,031	)		(1,868,567	)
Income taxes		---			---			---			---
Net (Loss)	$	(538,245	)	$	(685,982	)	$	(1,544,031	)	$	(1,868,567	)
Basic and diluted net (loss) per common share	$	(0.00	)	$	(0.01	)	$	(0.02	)	$	(0.03	)
Weighted average number of common shares outstanding		159,229,866			62,974,431			99,919,486			54,566,729
The accompanying notes are an integral part of these consolidated financial statements.

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ULURU Inc.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Nine Months Ended September 30,
	2017			2016
OPERATING ACTIVITIES :
Net loss	$	(1,544,031	)	$	(1,868,567	)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of intangible assets		316,602			599,880
Depreciation		71,039			99,567
Share-based compensation for stock and options issued to employees		7,923			15,554
Share-based compensation for options issued to non-employees		---			44,572
Amortization of debt discount on promissory note		174,577			32,015
Amortization of debt issuance costs		3,976			22,927
Change in operating assets and liabilities:
Accounts receivable		(101,748	)		44,755
Inventory		61,500			(50,031	)
Prepaid expenses and deferred charges		(8,676	)		29,797
Deposits		---			---
Accounts payable		(186,925	)		18,637
Accrued liabilities		(155,424	)		(97,741	)
Accrued interest		68,098			2,239
Deferred revenue		(14,773	)		(277,583	)
Total		236,169			484,588
Net Cash Used in Operating Activities		(1,307,862	)		(1,383,979	)
INVESTING ACTIVITIES :
Purchase of equipment		(3,501	)		(2,165	)
Net Cash Used in Investing Activities		(3,501	)		(2,165	)
FINANCING ACTIVITIES :
Proceeds from issuance of convertible notes and warrant, net		983,092			---
Proceeds from sale of preferred stock, net		4,915,661			---
Proceeds from sale of common stock and warrants, net		---			1,732,338
Offering costs associated with acquisition of licensing rights in 2015		---			(21,950	)
Additional principle due on promissory note due to accommodation fee		---			25,000
Proceeds from issuance of promissory notes		120,000			---
Repayment of principle due on promissory notes		(140,000	)		(343,526	)
Net Cash Provided by Financing Activities		5,878,753			1,391,862
Net Increase in Cash		4,567,390			5,718
Cash,  beginning of period		36,615			180,000
Cash,  end of period	$	4,604,005		$	185,718
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Cash paid for interest	$	2,697		$	16,002
Non-cash investing and financing activities:
Issuance of common stock for acquisition of licensing rights	$	869,375			---
Issuance of common stock for conversion of preferred stock	$	---			---
Issuance of common stock for principle due on promissory note		---		$	51,474
Issuance of common stock for interest due on promissory note		---		$	2,239
Issuance of common stock for services		---		$	36,000
The accompanying notes are an integral part of these condensed consolidated financial statements.

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ULURU Inc.

NOTES TO

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1. COMPANY OVERVIEW AND BASIS OF PRESENTATION

Company Overview

ULURU Inc. (hereinafter “we”, “our”, “us”, “ULURU”, or the “Company”) is a Nevada corporation.  We are a specialty medical technology company committed to developing and commercializing a range of innovative wound care and mucoadhesive film products based on our patented Nanoflex® and OraDiscTM technologies, with the goal of improving outcomes for patients, health care professionals, and health care payers.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and include the accounts of ULURU Inc., a Nevada corporation, and its wholly-owned subsidiary, Uluru Delaware Inc., a Delaware corporation.  They do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. All adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the Company’s financial position as of September 30, 2017 and the results of its operations for the three and nine months ended September 30, 2017 and 2016 and cash flows for the nine months ended September 30, 2017 and 2016 have been made.

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, as well as disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods.  Actual results may differ from those estimates and assumptions.  These differences are usually minor and are included in our consolidated financial statements as soon as they are known.  Our estimates, judgments, and assumptions are continually evaluated based on available information and experience. Because of the use of estimates inherent in the financial reporting process, actual results could differ from those estimates.

All intercompany transactions and balances have been eliminated in consolidation.

Operating results for the three and nine months ended September 30, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017.

These condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016, referred to as our 2016 Form 10-K as filed with the Securities and Exchange Commission on April 17, 2017, including the risk factors set forth therein.

NOTE 2. SIGNIFICANT ACCOUNTING POLICIES

The significant accounting policies used in preparation of these condensed consolidated financial statements for the three and nine months ended September 30, 2017 are consistent with those discussed in Note 2 to the consolidated financial statements in our 2016 Form 10-K, as filed with the Securities and Exchange Commission on April 17, 2017.

NOTE 3. THE EFFECT OF RECENTLY ISSUED ACCOUNTING STANDARDS

There were no new accounting pronouncements adopted or enacted during the periods presented that had, or are expected to have, a material impact on our financial statements.

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NOTE 4. SEGMENT INFORMATION

Our entire business is managed by a single management team, which reports to the Chief Executive Officer.  Our corporate headquarters in the United States collects proceeds from product sales, licensing fees, and royalties from our arrangements with external customers and licensees.  Our revenues are currently derived primarily from distribution partners for international activities and our domestic sales activities for our products.

Revenues per geographic area for the three and nine months ended September 30 are summarized as follows:

	Three Months Ended September 30,										Nine Months Ended September 30,
Revenues	2017		%			2016		%			2017		%			2016		%
Domestic	$	3,012		2	%	$	1,453		26	%	$	8,427		2	%	$	16,232		4	%
International		197,927		98	%		4,196		74	%		413,943		98	%		362,542		96	%
Total	$	200,939		100	%	$	5,649		100	%	$	422,370		100	%	$	378,774		100	%

A significant portion of our revenues are derived from a few major customers.  For the three months ended September 30, 2017 and 2016, one customer and four customers, respectively, had greater than 10% of total revenues. The one customer for the three-month period ending in 2017 represented 98% of total revenues and the four customers for the three-month period ending in 2016 represented, in the aggregate, 71% of total revenues.  For the nine months ended September 30, 2017 and 2016, two customers and two customers, respectively, had greater than 10% of total revenues.  The two customers for the nine-month period ending in 2017 represented, in the aggregate, 97% of total revenues and the two customers for the nine-month period ending in 2016 represented, in the aggregate, 88% of total revenues.

NOTE 5. INVENTORY

As of September 30, 2017, our inventory was comprised of Altrazeal® finished goods, manufacturing costs incurred in the production of Altrazeal®, and raw materials.  Inventories are stated at the lower of cost (first in, first out method) or net realizable value.  We regularly review inventories on hand and write down the carrying value of our inventories for excess and potentially obsolete inventories based on historical usage and estimated future usage.  In assessing the ultimate realization of our inventories, we are required to make judgments as to future demand requirements.  As actual future demand or market conditions may vary from those projected by us, adjustment to inventories may be required.

The components of inventory, at the different stages of production, consisted of the following at September 30, 2017 and December 31, 2016:

Inventory	September 30, 2017		December 31, 2016
Raw materials	$	26,666	$	35,800
Work-in-progress		372,825		424,741
Finished goods		98,609		99,059
Total	$	498,100	$	559,600

NOTE 6. PROPERTY, EQUIPMENT and LEASEHOLD IMPROVEMENTS

Property, equipment and leasehold improvements, net, consisted of the following at September 30, 2017 and December 31, 2016:

Property, equipment and leasehold improvements	September 30, 2017			December 31, 2016
Laboratory equipment	$	424,888		$	424,888
Manufacturing equipment		1,604,894			1,604,894
Computers, office equipment, and furniture		154,781			151,280
Computer software		4,108			4,108
Leasehold improvements		95,841			95,841
		2,284,512			2,281,011
Less: accumulated depreciation and amortization		(2,225,309	)		(2,154,270	)
Property, equipment and leasehold improvements, net	$	59,203		$	126,741

Depreciation expense on property, equipment and leasehold improvements was $5,481 and $33,237 for the three months ended September 30, 2017 and 2016, respectively, and was $71,039 and $99,567 for the nine months ended September 30, 2017 and 2016, respectively.

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NOTE 7. INTANGIBLE ASSETS

Patents

Intangible patent assets are comprised of patents acquired in October, 2005.  Intangible assets, net consisted of the following at September 30, 2017 and December 31, 2016:

Intangible assets – patents	September 30, 2017			December 31, 2016
Patent - Amlexanox (Aphthasol®)	$	2,090,000		$	2,090,000
Patent - Amlexanox (OraDisc™ A)		6,873,080			6,873,080
Patent - OraDisc™		73,000			73,000
Patent - Hydrogel wound dressing		589,858			589,858
		9,625,938			9,625,938
Less: accumulated amortization		(7,409,554	)		(7,381,847	)
Less: reserve for impairment		(2,027,310	)		(2,027,310	)
Intangible assets - patents, net	$	189,074		$	216,781

Amortization expense for intangible patents assets was $9,337 and $119,763 for the three months ended September 30, 2017 and 2016, respectively, and was $27,707 and $356,687 for the nine months ended September 30, 2017 and 2016, respectively.

The future aggregate amortization expense for intangible patent assets, remaining as of September 30, 2017, is as follows:

Calendar Years	Future Amortization Expense
2017 (Three months)	$	9,337
2018		37,044
2019		37,044
2020		37,145
2021		37,044
2022 & Beyond		31,460
Total	$	189,074

Licensing rights

Acquisition of Licensing Rights – 2017

On February 27, 2017, we entered into a Note, Warrant and Preferred Stock Purchase Agreement (the “Purchase Agreement”) with Velocitas Partners, LLC (“Velocitas") and Velocitas I LLC (“Velo LLC”), an entity controlled by Velocitas, with respect to an aggregate financing of up to $6,000,000.

Refer to a description in greater detail of the financing event with Velocitas and Velo LLC in Note 10. Convertible Debt.

At the second closing of the financing event with Velocitas and Velo LLC, which occurred on March 31, 2017, the Company acquired the Altrazeal® distributor agreements Velocitas had with its sub-distributors in exchange for the issuance of 13,375,000 shares of Common Stock.  The Company has valued the acquisition of the Altrazeal® distributor agreement from Velocitas at $869,375 based on the closing price of $0.065 per share of the Company’s Common Stock on March 31, 2017.

Licensing rights, net consisted of the following at September 30, 2017 and December 31, 2016:

Intangible assets - licensing rights	September 30, 2017			December 31, 2016
Intangible assets – licensing rights, gross	$	4,381,881		$	3,512,506
Less: accumulated amortization		(620,314	)		(331,419	)
Intangible assets - licensing rights, net	$	3,761,567		$	3,181,087

Amortization expense for intangible licensing rights assets was $104,931 and $81,955 for the three months ended September 30, 2017 and 2016, respectively, and was $288,895 and $243,193 for the nine months ended September 30, 2017 and 2016, respectively.

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The future aggregate amortization expense for intangible licensing rights assets, remaining as of September 30, 2017, is as follows:

Calendar Years	Future Amortization Expense
2017 (Three months)	$	104,931
2018		416,303
2019		416,303
2020		416,303
2021		416,303
2022 & Beyond		1,991,424
Total	$	3,761,567

NOTE  8. ACCRUED LIABILITIES

Accrued liabilities consisted of the following at September 30, 2017 and December 31, 2016:

Accrued Liabilities	September 30, 2017		December 31, 2016
Accrued compensation/benefits	$	120,910	$	274,874
Accrued insurance payable		---		40,422
Accrued property taxes		4,215		---
Accrued royalties		34,744		---
Product rebates/returns		6		4
Total accrued liabilities	$	159,875	$	315,300

NOTE 9. PROMISSORY NOTES PAYABLE

On December 15, 2016, January 18, 2017, and February 16, 2017, we issued promissory notes to Velocitas with principal amounts and purchase prices of $20,000, $65,000, and $30,000, respectively.  Each of the promissory notes bore interest at the rate of 6.0% per annum with payment of principal and interest due on the earlier of (i) 180 days from the date of issuance, (ii) the date of closing of any debt or equity financing transaction by and between Uluru and Velocitas, or (iii) the payment to Uluru of certain invoices due from selected Company’s distributors.  Each of the promissory notes was secured by a pledge of certain product inventory, and there were no debt issuance costs incurred by the Company.  On February 27, 2017, each of the promissory notes was repaid in connection with the issuance of the Convertible Promissory Note, dated February 27, 2017, in the amount of $500,000 (the “Initial Note”) under the Purchase Agreement with Velocitas.

On February 21, 2017, we issued a promissory note to Kirkwood Investors, Inc. (“Kirkwood”) with a principal amount and purchase price of $25,000.  The promissory note bore interest at the rate of 6.0% per annum with payment of principal and interest due on the earlier of (i) 60 days from the date of issuance, (ii) the date of closing of any debt or equity financing transaction by Uluru, or (iii) no later than two days after receiving written request by Kirkwood.  The promissory note was secured by a pledge of certain product inventory and accounts receivables and there were no debt issuance costs incurred by the Company.  The Company’s Vice President and Chief Financial Officer, Terrance K. Wallberg, is President and sole shareholder of Kirkwood.  On February 27, 2017, the outstanding promissory note to Kirkwood was repaid in connection with the issuance of the Initial Note under the Purchase Agreement with Velocitas.

NOTE 10. CONVERTIBLE DEBT

Debt Financing – February and March 2017

On February 27, 2017, the Company entered into the Purchase Agreement with Velocitas and Velo LLC under which the Company received gross proceeds of $6,000,000, in two closing with the initial closing occurring on February 27, 2017 and the second closing occurring on March 31, 2017, which we refer to as the March 2017 Offering.

The first closing, which occurred on February 27, 2017, included the purchase by Velocitas at face value of the $500,000 Initial Note, with the Initial Note accruing interest at 12.5% per annum and having a term of two years (subject to acceleration under certain circumstances).

The second closing, which occurred on March 31, 2017, included the purchase by Velocitas at face value of an additional $500,000 Secured Convertible Note, dated March 31, 2017, (the “Second Note”) with the Second Note accruing interest at 12.5% per annum and having a term of two years (subject to acceleration under certain circumstances), and Velo LLC purchasing 1,250 shares of Series B Convertible Preferred Stock of the Company for gross proceeds of $5,000,000, at an as-converted-to-Common Stock purchase price of $0.04 per share.

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The Initial Note and the Second Note are convertible into shares of Common Stock at a conversion price of $0.04 per share, subject to equitable adjustments, with mandatory conversion of all unpaid principal and interest required on the second anniversary of each such note, unless an event of default has occurred and is continuing.  The Initial Note and the Second Note are secured by all of the assets of the Company and its subsidiaries pursuant to a Security Agreement executed at the initial closing.

The Series B Convertible Preferred Stock that was issued in connection with the second closing, (a) voted together with the Common Stock as a single class (subject to standard protective provisions for the Series B Convertible Preferred Stock), (b) had the same dividend rights as the Common Stock, (c) had a liquidation preference equal to the greater of its purchase price and its as converted-to-Common Stock value, (d) automatically converted into Common Stock when the number of authorized shares of Common Stock is increased within 190 days of the second closing as necessary to permit all outstanding convertible or exercisable securities (including the Series B Convertible Preferred Stock) to convert to Common Stock, and (e) was convertible into Common Stock at the discretion of the holder, subject to the availability of authorized shares.

As a condition of the March 2017 Offering, the Company issued to Velocitas at the second closing a warrant to purchase up to 57,055,057 shares of Common Stock (the “Warrant”).  The Warrant has an exercise price of $0.04 per share, a 10-year term and is subject to cashless exercise. In addition, at the second closing, the Company acquired the Altrazeal distributor agreements Velocitas had with its sub-distributors in exchange for the issuance of 13,375,000 shares of Common Stock.

The Company, Velocitas, Velo LLC, and certain affiliates also signed a Voting Agreement (the “Voting Agreement”) pursuant to which the parties agreed to set the size of the Board of Directors at six directors, and agreed to vote for the election to the Board of Directors of four persons designated by Velocitas (initially to be Anish Shah, Oksana Tiedt, Vaidehi Shah and Arindam Bose), one director designated by Bradley J. Sacks and one additional director designated by a major investor or by the Board of Directors.  In addition, the parties to the Voting Agreement agreed to vote in favor of a proposal to amend the Company’s articles of incorporation to increase the authorized shares as required to permit the conversion of the Series B Convertible Preferred Stock.

At the 2017 Annual Meeting of Stockholders, held on July 25, 2017, a proposal to increase the number of authorized shares of Common Stock from 200,000,000 shares to 750,000,000 shares was approved by a majority vote of the stockholders, and the Company filed with the State of Nevada an amendment to its articles of incorporation implementing such increase.  On August 1, 2017, the Company received notice from Velo LLC for the conversion of all 1,250 outstanding shares of Series B Convertible Preferred Stock held by Velo LLC in exchange for 125,000,000 shares of Common Stock.

In addition, the Company, Velocitas, Velo LLC, and certain affiliates entered into an Investor Rights Agreement (the “Investor Rights Agreement”) that provides the parties thereto with demand Form S-3 and piggy back registration rights, Rule 144 information rights, and a right of first offer (or preemptive rights) in connection with future sales of securities by the Company (subject to standard exceptions).  The Investor Rights Agreement includes indemnification obligations associated with the registration rights.  Michael I. Sacks and Bradley Sacks and affiliates are parties to the Investor Rights Agreement, in part in exchange for the termination by certain of such persons and The Punch Trust of a Registration Rights Agreement dated as of January 31, 2014.

As required by the Purchase Agreement, at the initial closing, the Company appointed Ms. Vaidehi Shah to serve as the Company’s Chief Executive Officer and to also serve as a member of the Company’s Board of Directors.  Concurrent with the initial closing and as a condition of the March 2017 Offering, the Company received resignation notices from Helmut Kerschbaumer, the Company’s Interim President, Chief Executive and Director, and Klaus Kuehne, a member of the Company’s Board of Directors.

As required by the Purchase Agreement, at the second closing, the Company appointed Mr. Anish Shah and Ms. Oksana Tiedt to join the Company and to serve as part of the Company’s executive management team and together with Mr. Arindam Bose to join the Company’s Board of Directors.

Concurrent with the second closing and as a condition of the second closing, the Company received resignation notices from Robert F. Goldrich and Terrance K. Wallberg, each being a member of the Company’s Board of Directors.  Mr. Wallberg continues to serve as the Company’s Vice President, Chief Financial Officer, Secretary, and Treasurer.  Also occurring at the second closing, Mr. Bradley J. Sacks stepped down as Chairman of the Board of Directors and Ms. Vaidehi Shah, the Company’s Chief Executive Officer and Director, assumed such duties.  Mr. Sacks continues to serve as a Director of the Company.

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Using specific guidelines in accordance with U.S. GAAP, we allocated the value of the proceeds received to the promissory note and to the Warrant on a relative fair value basis.  We calculated the fair value of the Warrant issued with the debt instrument using the Black-Scholes valuation method, using the same assumptions used for valuing employee stock options, except the contractual life of the Warrant was used. Using the effective interest method, the allocated fair value of the Warrant was recorded as a debt discount and is being amortized over the expected term of the promissory note to interest expense.

Information relating to the Initial Note and Second Note is as follows:

											As of September 30, 2017
Transaction	Initial Principal Amount		Interest Rate			Maturity Date	Conversion Price		Principal Balance		Unamortized Debt Discount		Unamortized Debt Issuance Costs		Carrying Value
Initial Note	$	500,000		12.5	%	02/27/2019	$	0.04	$	500,000	$	251,470	$	6,466	$	242,064
Second Note	$	500,000		12.5	%	03/31/2019	$	0.04	$	500,000	$	255,253	$	6,466	$	238,281
Total	$	1,000,000							$	1,000,000	$	506,723	$	12,932	$	480,345

As part of the Initial Note and the Second Note, at the holder’s option, all unpaid principle and interest due under each convertible promissory note may be converted into shares of Common Stock based on a conversion price of $0.04 per share.  The Initial Note and the Second Note mature on February 27, 2019 and March 31, 2019, respectively, and on each maturity date each convertible promissory note, and accrued interest thereon, is subject to mandatory conversion based on a conversion price of $0.04 per share, unless an event of default has occurred and is continuing.

The amount of interest cost recognized from our promissory notes and our convertible debt was $31,507 and $1,106 for the three months ended September 30, 2017 and 2016, respectively, and $68,848 and $14,079 for the nine months ended September 30, 2017 and 2016, respectively.

The amount of debt discount amortized from our promissory notes and our convertible debt was $87,571 and $6,003 for the three months ended September 30, 2017 and 2016, respectively, and $174,577 and $32,015 for the nine months ended September 30, 2017 and 2016, respectively.

The amount of debt issuance costs amortized from our promissory notes was $2,060 and $4,269 for the three months ended September 30, 2017 and 2016, respectively, and $3,976 and $22,927 for the nine months ended September 30, 2017 and 2016, respectively.

NOTE 11. EQUITY TRANSACTIONS

Preferred Stock Transaction

March 2017 Offering

On February 27, 2017, the Company entered into a Note, Warrant and Preferred Stock Purchase Agreement (the “Purchase Agreement”) with Velocitas and Velo LLC under which the Company received gross proceeds of $6,000,000, in two closing with the initial closing occurring on February 27, 2017 and the second closing occurring on March 31, 2017 (the “March 2017 Offering”).

The second closing included, among other transaction components, the purchase by Velo LLC of 1,250 shares of Series B Convertible Preferred Stock of the Company for $5,000,000.

On August 1, 2017, the Company received notice from Velo LLC for the conversion of all 1,250 outstanding shares of Series B Convertible Preferred Stock held by Velo LLC in exchange for 125,000,000 shares of Common Stock.

Refer to a description in greater detail of the financing event with Velocitas and Velo LLC in Note 10. Convertible Debt.

Common Stock Transaction

March 2016 Offering

On March 29, 2016, we entered into a Stock Purchase Agreement with fifteen investors for the offer and sale of 25,245,442 shares of Common Stock and warrants to purchase an additional 25,245,442 shares of Common Stock at a purchase price of $0.0713 per unit, with each unit consisting of one share and one warrant to purchase Common Stock, for an aggregate purchase price of $1,800,000 (the “March 2016 Offering).  The issue price of the shares sold was based on a 10% discount to the average closing price between March 7, 2016 and March 11, 2016 and the warrant exercise price was based on a 10% premium to the same average closing price.  The warrants have an exercise price of $0.0871 per share and a five-year term.  The warrants also include cashless exercise provisions and a “full ratchet” anti-dilution provision under which the exercise price of such warrants resets to any lower sales price at which the Company offers or sells Common Stock or Common Stock equivalents during the one year following the date of issuance (subject to standard exceptions).

The March 2016 Offering resulted in gross proceeds of $1,800,000, of which $1,439,000 was received in March 2016 and $361,000 was received in April 2016.  As part of the offering expenses, we paid to a European placement agent a referral fee of $26,000 which is equal to 10% of the gross proceeds, provided that the investors referred by such placement agent are not U.S. Persons and were solicited outside the United States.

Purchasers in the March 2016 Offering include Michael I. Sacks ($1,000,000), the father of Bradley J. Sacks, the former Chairman of our Board of Directors, Centric Capital Ventures, LLC ($19,000), an investment entity controlled by Bradley J. Sacks, Terrance K. Wallberg ($50,000), our Vice President and Chief Financial Officer, and Daniel G. Moro ($10,000), our former Vice President of Polymer Drug Delivery.

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NOTE 12. STOCKHOLDERS’ EQUITY

Common Stock

As of September 30, 2017, we had 201,349,431 shares of Common Stock issued and outstanding.  For the nine months ended September 30, 2017, we issued 138,375,000 shares of Common Stock which is composed of 13,375,000 shares of Common Stock issued to Velocitas for the acquisition of licensing rights and 125,000,000 shares of Common Stock issued to Velo LLC for the conversion and exchange of all 1,250 outstanding shares of Series B Convertible Preferred Stock held by Velo LLC.

At the 2017 Annual Meeting of Stockholders, held on July 25, 2017, a proposal to increase the number of authorized shares of Common Stock from 200,000,000 shares to 750,000,000 shares was approved by a majority vote of the stockholders and the Company filed with the State of Nevada an amendment to its articles of incorporation implementing such increase.

Preferred Stock

As of September 30, 2017, we had no shares of Series A Preferred Stock issued and outstanding.  For the nine months ended September 30, 2017, we did not issue or redeem any Series A Preferred Stock.

As of September 30, 2017, we had no shares of Series B Convertible Preferred Stock issued and outstanding.  For the nine months ended September 30, 2017, we issued 1,250 Series B Shares to Velo LLC, and on August 1, 2017, all outstanding shares of Series B Convertible Preferred Stock held by Velo LLC were mandatorily converted into an aggregate of 125,000,000 shares of Common Stock.

Warrants

The following table summarizes the warrants outstanding and the number of shares of Common Stock subject to exercise as of September 30, 2017 and the changes therein during the nine months then ended:

	Number of Shares of Common Stock Subject to Exercise		Weighted – Average Exercise Price
Balance as of December 31, 2016		26,179,560	$	0.11
Warrants issued		57,055,057	$	0.04
Warrants exercised		---		---
Warrants cancelled		---		---
Balance as of September 30, 2017		83,234,617	$	0.06

For the nine months ended September 30, 2017, we have issued a warrant to purchase up to an aggregate of 57,055,057 shares of our Common Stock at an exercise price of $0.04 per share pursuant to the March 2017 Offering.

Of the warrant shares subject to exercise as of September 30, 2017, expiration of the right to exercise is as follows:

Date of Expiration	Number of Warrant Shares of Common Stock Subject to Expiration
March 14, 2018		660,000
January 15, 2019		80,000
April 30, 2020		194,118
March 30, 2021		25,245,442
March 31, 2027		57,055,057
Total		83,234,617

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NOTE 13. EARNINGS PER SHARE

Basic and Diluted Net Loss Per Share

In accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 260, Earnings per Share, basic earnings (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period.  Diluted earnings (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period, increased to include potential dilutive common shares.  The effect of outstanding stock options, restricted vesting Common Stock, convertible debt, convertible preferred stock, and warrants, when dilutive, is reflected in diluted earnings (loss) per common share by application of the treasury stock method.  We have excluded all outstanding stock options, restricted vesting Common Stock, convertible debt, convertible preferred stock, and warrants from the calculation of diluted net loss per common share because all such securities are antidilutive for all periods presented.

Shares used in calculating basic and diluted net loss per common share exclude these potential common shares as of September 30, 2017 and December 31, 2016:

	September 30, 2017		December 31, 2016
Warrants to purchase Common Stock		83,234,617		26,179,560
Stock options to purchase Common Stock		152,403		691,237
Common stock issuable upon the assumed conversion of our convertible promissory notes (1)		31,250,000		---
Common stock issuable upon the assumed conversion of our Series B Convertible Preferred Stock (2)		---		---
Total		114,637,020		26,870,797

(1)

As part of the Initial Note and the Second Note, at the holder’s option, all unpaid principle and interest due under each convertible promissory note may be converted into shares of Common Stock based on a conversion price of $0.04 per share.  The Initial Note and the Second Note mature on February 27, 2019 and March 31, 2019, respectively, and on each maturity date each convertible promissory note, and accrued interest thereon, is subject to mandatory conversion based on a conversion price of $0.04 per share, unless an event of default has occurred and is continuing.  For the purposes of this Table, we have assumed that all outstanding principal and interest will be converted on each applicable maturity date.

(2)

Pursuant to the March 2017 Offering, Velo LLC purchased 1,250 shares of Series B Convertible Preferred Stock of the Company for $5,000,000.  The Series B Convertible Preferred Stock that was issued in the March 2017 Offering, (a) voted together with the Common Stock as a single class (subject to standard protective provisions for the Series B Convertible Preferred Stock), (b) had the same dividend rights as the Common Stock, (c) had a liquidation preference equal to the greater of its purchase price and its as converted-to-Common Stock value, (d) automatically converted into Common Stock when the number of authorized shares of Common Stock was increased within 190 days of the second closing as necessary to permit all outstanding convertible or exercisable securities (including the Series B Convertible Preferred Stock) to convert to Common Stock, and (e) was convertible into Common Stock  at the discretion of the holder, subject to the availability of authorized shares, at an as-converted-to-Common Stock purchase price of $0.04 per share.   On August 1, 2017, all 1,250 outstanding shares of Series B Convertible Preferred Stock converted in exchange for 125,000,000 shares of Common Stock as a result of the approval by the stockholders at the 2017 Annual Meeting of Stockholders held on July 25, 2017, and the filing in July 2017, of an amendment increasing our authorized shares of Common Stock from 200,000,000 shares to 750,000,000 shares.

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NOTE 14. SHARE BASED COMPENSATION

The Company’s share-based compensation plan, the 2006 Equity Incentive Plan, as amended (“Equity Incentive Plan”), is administered by the Board of Directors (“Board”), which selects persons to receive awards and determines the number of shares subject to each award and the terms, conditions, performance measures and other provisions of the award.

Our Board did not grant any incentive stock option awards to executives or employees or any non-statutory stock option awards to directors or non-employees for the three and nine months ended September 30, 2017 and 2016, respectively.

We account for share-based compensation under FASB ASC Topic 718, Stock Compensation, which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees, consultants, and directors based on estimated fair values of the award on the grant date.  We use the Black-Scholes option-pricing model to estimate the fair value of share-based awards.

Stock Options (Incentive and Nonstatutory)

The following table summarizes share-based compensation related to stock options for the three and nine months ended September 30:

	Three Months Ended September 30,						Nine months Ended September 30,
	2017			2016			2017		2016
Research and development	$	(3,345	)	$	(3,079	)	$	---	$	5,914
Selling, general and administrative		2,571			17,190			7,923		54,212
Total share-based compensation expense	$	(774	)	$	14,111		$	7,923	$	60,126

As of September 30, 2017, the balance of unearned share-based compensation to be expensed in future periods related to unvested stock option awards, as adjusted for expected forfeitures, is zero.

The following table summarizes the stock options outstanding and the number of shares of Common Stock subject to exercise as of September 30, 2017 and the changes therein during the nine months then ended:

	Stock Options			Weighted Average Exercise Price per Share
Outstanding as of December 31, 2016		691,237		$	1.94
Granted		---			---
Forfeited/cancelled		(538,834	)	$	1.08
Exercised		---			---
Outstanding as of September 30, 2017		152,403		$	4.98

The following table presents the stock option grants outstanding and exercisable as of September 30, 2017:

Options Outstanding						Options Exercisable
Stock Options Outstanding		Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Life in Years		Stock Options Exercisable		Weighted Average Exercise Price per Share
	90,000	$	0.33		5.5		90,000	$	0.33
	40,000		1.15		7.0		40,000		1.15
	22,403		30.48		0.5		22,403		30.48
	152,403	$	4.98		5.1		152,403	$	4.98

Summary of Plans

2006 Equity Incentive Plan

In March 2006, our Board adopted and our stockholders approved our Equity Incentive Plan, which initially provided for the issuance of up to 133,333 shares of our Common Stock pursuant to stock option and other equity awards.  At the annual meetings of the stockholders held on May 8, 2007, December 17, 2009, June 15, 2010, June 14, 2012, June 13, 2013, and on June 5, 2014, our stockholders approved amendments to the Equity Incentive Plan to increase the total number of shares of Common Stock issuable under the Equity Incentive Plan pursuant to stock options and other equity awards by 266,667 shares, 200,000 shares, 200,000 shares, 400,000 shares, 600,000 shares, and 1,000,000 shares, respectively, to a total of 2,800,000 shares.

In December 2006, we began issuing stock options to employees, consultants, and directors.  The stock options issued generally vest over a period of one to four years and have a maximum contractual term of ten years.  In January 2007, we began issuing restricted stock awards to our employees.  Restricted stock awards generally vest over a period of six months to five years after the date of grant.  Prior to vesting, restricted stock awards do not have dividend equivalent rights, do not have voting rights and the shares underlying the restricted stock awards are not considered issued and outstanding.  Shares of Common Stock are issued on the date the restricted stock awards vest.

As of September 30, 2017, we had granted options to purchase 2,061,167 shares of Common Stock since the inception of the Equity Incentive Plan, of which 152,403 were outstanding at a weighted average exercise price of $4.98 per share, and we had granted awards for 68,616 shares of restricted stock since the inception of the Equity Incentive Plan, of which none were outstanding.  As of September 30, 2017, there were 2,578,151 shares that remained available for future grants under our Equity Incentive Plan.

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NOTE 15. FAIR VALUE MEASUREMENTS

In accordance with FASB ASC Topic 820, Fair Value Measurements, (“ASC Topic 820”) certain assets and liabilities of the Company are required to be recorded at fair value.  Fair value is determined based on the exchange price that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants.  The guidance in ASC Topic 820 also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimized the use of unobservable inputs by requiring that the most observable inputs be used when available.

Observable inputs are based on market data obtained from independent sources, while unobservable inputs are based on our market assumptions.  Unobservable inputs require significant management judgment or estimation.  In some cases, the inputs used to measure an asset or liability may fall into different levels of the fair value hierarchy.  In those instances, the fair value measurement is required to be classified using the lowest level of input that is significant to the fair value measurement.  Such determination requires significant management judgment.

The three-tier value hierarchy, which prioritizes the inputs used in the valuation methodologies, is as follows:

Level 1 — Valuations based on quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 — Valuations based on observable inputs other than quoted prices in Level 1, such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, and other inputs that are observable or can be corroborated by observable market data.

Level 3 — Valuations based on unobservable inputs reflecting the Company’s own assumptions, consistent with reasonably available assumptions made by other market participants.

Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurements.  We review the fair value hierarchy classification on a quarterly basis.  Changes in the observability of valuation inputs may result in a reclassification of levels for certain securities within the fair value hierarchy.

Our financial instruments, including cash, cash equivalents, accounts receivable, and accounts payable are carried at cost, which approximates their fair value because of the short-term maturity of these instruments.  We believe that the carrying value of our promissory note payable balances approximates fair value based on a valuation methodology using the income approach and a discounted cash flow model.

The following table summarizes the fair value of our financial instruments at September 30, 2017 and December 31, 2016.

Description	September 30, 2017		December 31, 2016
Liabilities:
Convertible promissory note – March 2017	$	500,000		---
Convertible promissory note – February 2017	$	500,000		---
Promissory note – December 2016		---	$	20,000
Total	$	1,000,000	$	20,000

Our financial instruments, including cash, cash equivalents, accounts receivable, and accounts payable are carried at cost, which approximates their fair value because of the short-term maturity of these instruments.  We believe that the carrying value of our promissory notes and our convertible promissory note balances approximates fair value based on a valuation methodology using the income approach and a discounted cash flow model.

NOTE 16. INCOME TAXES

For the nine months ended September 30, 2017, the Company incurred a consolidated tax loss of approximately $1,843,000.

As of September 30, 2017, the Company has consolidated net operating loss carryforwards and research credit carryforwards for income tax purposes of approximately $58,295,000 and $555,000 respectively. The Company has provided a full valuation allowance for all of its deferred tax assets. As a result, the effective tax rate is zero and the net deferred tax assets are zero.

The Tax Reform Act of 1986 contains provisions, which limit the amount of NOL and tax credit carryforwards that companies may utilize in any one year in the event of cumulative changes in ownership over a three-year period in excess of 50%.  Since the effective date of the Tax Reform Act of 1986, the Company has completed significant share issuances in 2003, 2016, and 2017 which may significantly limit our ability to utilize our NOL and tax credit carryforwards against taxable earnings in future periods.

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NOTE 17. COMMITMENTS AND CONTINGENCIES

Operating Leases

On January 31, 2006, we entered into a lease agreement for office and laboratory space in Addison, Texas.  The lease commenced on April 1, 2006 and originally continued until April 1, 2013.  The lease required a minimum monthly lease obligation of $9,330, which was inclusive of monthly operating expenses, until April 1, 2011 and at such time increased to $9,776, which was inclusive of monthly operating expenses.  On February 22, 2013, we executed an Amendment to Lease Agreement (the “Lease Amendment”) that renewed and extended our lease until March 31, 2015.  The Lease Amendment required a minimum monthly lease obligation of $9,193, which was inclusive of monthly operating expenses, until March 31, 2014 and at such time, increased to $9,379, which was inclusive of monthly operating expenses.  On March 17, 2015, we executed a Second Amendment to Lease Agreement (the “Second Amendment”) that renewed and extended our lease until March 31, 2018.  The Second Amendment requires a minimum monthly lease obligation of $9,436, which is inclusive of monthly operating expenses.

On January 16, 2015, we entered into a lease agreement for certain office equipment.  The office equipment lease, that commenced on February 1, 2015 and continues until February 1, 2018, requires a minimum lease obligation of $551 per month.

The future minimum lease payments under the 2015 office lease and the 2015 equipment lease are as follows as of September 30, 2017:

Calendar Years	Future Lease Expense
2017 (Three months)	$	30,300
2018		29,199
2019		---
2020		---
Total	$	59,499

Rent expense for our operating leases amounted to $30,301 and $36,709 for the three months ended September 30, 2017 and 2016, respectively, and $96,245 and $97,241 for the nine months ended September 30, 2017 and 2016, respectively.

Indemnification

In accordance with our restated articles of incorporation and our amended and restated bylaws, we have indemnification obligations to our officers and directors for certain events or occurrences, subject to certain limits, while they are serving at our request in their respective capacities.  We have a director and officer insurance policy that enables us to recover a portion of any amounts paid for future potential claims.  We have also entered into contractual indemnification agreements with each of our officers and directors.

Related Party Transactions and Concentration

Note, Warrant and Preferred Stock Purchase Agreement

On February 27, 2017, we entered into the Purchase Agreement with Velocitas and Velo LLC, an entity controlled by Velocitas, with respect to an aggregate financing of up to $6,000,000.

Refer to a description in greater detail of the financing event with Velocitas and Velo LLC in Note 10. Convertible Debt.

On March 31, 2017, the second closing of the Purchase Agreement included, amongst other transaction components, the Company acquiring the Altrazeal distributor agreements Velocitas had with its sub-distributors in exchange for the issuance of 13,375,000 shares of Common Stock.  The Company has valued the acquisition of the Altrazeal distributor agreement from Velocitas at $869,375 based on the closing price of $0.065 per share of the Company’s Common Stock on March 31, 2017.

For the three months ended September 30, 2017 and 2016, the Company did not record any revenues with Velocitas GmbH, an affiliated entity of Velocitas.  For the nine months ended September 30, 2017 and 2016, the Company recorded revenues, in approximate numbers, of $214,000 and nil, respectively, with Velocitas GmbH which represented 51% and 0% of our total revenues, respectively.  As of September 30, 2017 and December 31, 2016, Velocitas GmbH did not have any outstanding net accounts receivable.

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Consulting Agreement – Velocitas GmbH

On April 1, 2017, the Company entered into a Consulting Agreement with Velocitas GmbH to provide the Company with operational support services in the fields of regulatory administration, finance, international customer account management, manufacturing, supply chain logistics, and other services required by the Company. Velocitas GmbH will receive a monthly payment of $25,833 for providing such services to the Company.

Temporary Advances

On December 15, 2016, January 18, 2017, and February 16, 2017, we issued promissory notes to Velocitas with purchase prices of $20,000, $65,000, and $30,000, respectively.  Each of the promissory notes bore interest at the rate of 6.0% per annum with payment of principal and interest due on the earlier of (i) 180 days from the date of issuance, (ii) the date of closing of any debt or equity financing transaction by and between Uluru and Velocitas, or (iii) the payment to Uluru of certain invoices due from selected Company’s distributors.  Each of the promissory notes was secured by a pledge of certain product inventory and there were no debt issuance costs incurred by the Company.  On February 27, 2017, each of the promissory notes was repaid in connection with the issuance of the Initial Note under the Purchase Agreement with Velocitas.

On February 21, 2017, we issued a promissory note to Kirkwood with a purchase price of $25,000.  The promissory note bore interest at the rate of 6.0% per annum with payment of principal and interest due on the earlier of (i) 60 days from the date of issuance, (ii) the date of closing of any debt or equity financing transaction by the Company, or (iii) no later than two days after receiving written request by Kirkwood.  The promissory note was secured by a pledge of certain product inventory and accounts receivables and there were no debt issuance costs incurred by the Company.  The Company’s Vice President and Chief Financial Officer, Terrance K. Wallberg, is President and sole shareholder of Kirkwood.  On February 27, 2017, the outstanding promissory note to Kirkwood was repaid in connection with the issuance of the Initial Note under the Purchase Agreement with Velocitas.

Related Party Obligations

Since 2011, our named executive officers and certain key executives have temporarily deferred portions of their compensation as part of a plan to conserve and manage the Company’s cash and financial resources.

As of September 30, 2017, the Company’s obligation to these executives for temporarily deferred compensation was approximately $72,000 of which approximately $72,000 was included in accrued liabilities.

As of December 31, 2016, the Company’s obligation to these executives for temporarily deferred compensation was approximately $473,000 of which approximately $200,000 was included in accrued liabilities and approximately $273,000 was included in accounts payable.

Contingent Milestone Obligations

We are subject to paying Access Pharmaceuticals, Inc. (“Access”) for certain milestones based on our achievement of certain annual net sales, cumulative net sales, and/or our having reached certain defined technology milestones including licensing agreements and advancing products to clinical development.  As of September 30, 2017, the future milestone obligations that we are subject to paying Access, if the milestones related thereto are achieved, total $4,750,000.  Such milestones are based on total annual sales of 20 and 40 million dollars of certain products, annual sales of 20 million dollars of any one certain product, and cumulative sales of such products of 50 and 100 million dollars.  As of September 30, 2017, the Company has accrued approximately $35,000 of expense relating to future milestone payments to Access.

On March 7, 2008, we terminated the license agreement with ProStrakan Ltd. for Amlexanox-related products in the United Kingdom and Ireland.  As part of the termination, we agreed to pay ProStrakan Ltd. a royalty of 30% on any future payments received by us from a new licensee in the United Kingdom and Ireland territories, up to a maximum of $1,400,000.  On November 17, 2008, we entered into a licensing agreement for Amlexanox-related product rights to the United Kingdom and Ireland territories with MEDA AB.

Prescription Drug User Fee Obligation

The Company was assessed prescription drug user fees (“PDUFA”) by the United States Department of Health and Human Services (the “DHHS”) for the sale and manufacture of Aphthasol®.  The Company had contested the assessments as it believed such fees should be waived because the Company should qualify for abatement of the PDUFA fees.  However, the Company’s challenge has been denied by the DHHS.  As of September 30, 2017, the Company has recognized amounts due, to include potential penalties and interest, of approximately $1,067,000 related to the unpaid PDUFA fees.  The PDUFA fees remain unpaid as of the date of this Quarterly Report on Form 10-Q.  Since the Company has not yet reached a settlement with the DHHS, it is possible that the Company may be subject to additional collection costs.

NOTE 18. LEGAL PROCEEDINGS

From time to time, we may be involved in litigation relating to claims arising out of our operations in the normal course of business. We are not currently a party to any legal proceedings, the adverse outcome of which, in management’s opinion, individually or in the aggregate, would have a material adverse effect on the results of our operations or financial position. There are no material proceedings to which any director, officer or any of our affiliates, any owner of record or beneficially of more than five percent of any class of our voting securities, or any associate of any such director, officer, our affiliates, or security holder, is a party adverse to us or our consolidated subsidiary or has a material interest adverse thereto; however, one or more events may lead to a formal dispute or proceeding in the future.

NOTE 19. SUBSEQUENT EVENTS

None.

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ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

You should read the following discussion and analysis together with all financial and non-financial information appearing elsewhere in this Quarterly Report on Form 10-Q (this “Report”) and with our consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2016, referred to as our 2016 Form 10-K, which has been previously filed with the Securities and Exchange Commission on April 17, 2017, including the risk factors set forth therein.  In addition to historical information, the following discussion and other parts of this Report contain forward-looking information that involves risks and uncertainties.  Our actual results could differ materially from those anticipated by such forward-looking information due to competitive factors and other risks discussed in our 2016 Form 10-K under “Risks Associated with our Business”.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Report and other written and oral statements ULURU Inc. (together with our subsidiaries, “we”, “our”, “us”, “ULURU” or the “Company”) makes from time to time contain certain “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.  You can identify these forward-looking statements by the fact that they do not relate strictly to historical or current facts.  Forward-looking statements may include words such as “should”, “expect”, “anticipate”, “estimate”, “target”, “may”, “project”, “guidance”, “will”, “intend”, “plan”, “believe” and other words and terms of similar meaning and expression in connection with any discussion of future operating or financial performance. Such forward-looking statements are based on current expectations and involve inherent risks and uncertainties, including factors that could delay, divert or change any of them, and could cause actual outcomes to differ materially from current expectations. These statements are likely to relate to, among other things, the Company’s goals, plans and projections regarding its financial position, statements indicating that the Company has cash and cash equivalents sufficient to fund our operations in the future, statements regarding expected cash flows, market position, product development, product approvals, increases in revenue, expense levels, performance or results of current and anticipated products and the outcome of contingencies such as legal proceedings, acquisitions, and financial results, which are based on current expectations that involve inherent risks and uncertainties, including internal or external factors that could delay, divert or change any of them in the next several years.

No assurance can be given that any goal or plan set forth in forward-looking statements can be achieved, and readers are cautioned not to place undue reliance on such statements, which speak only as of the date made.  We undertake no obligation to release publicly any revisions to forward-looking statements as a result of new information, future events or otherwise.

Business Overview

ULURU Inc. is a Nevada corporation.  We are a specialty medical technology company committed to developing and commercializing a range of innovative wound care and muco-adhesive film products based on our patented Nanoflex® and OraDiscTM technologies, with the goal of improving outcomes for patients, health care professionals and payers.

Utilizing these two platform technologies, a number of products were developed of which one is being actively marketed in the wound care market. This product, Altrazeal® Transforming Powder Dressing (“Altrazeal®”), based on our Nanoflex® technology, has the potential to change the way health care providers approach wound treatment.  Altrazeal® is indicated for both exuding acute wounds such as partial thickness burns, donor sites, surgical wounds, and trauma and for chronic wounds such as venous leg ulcers, diabetic foot ulcers, and pressure ulcers. Altrazeal® is registered for sale with the United States Food and Drug Administration (the “FDA”), the European Union (the “EU”) and a number of other international markets.

Our current strategy is to primarily focus on the commercialization of Altrazeal® and to establish a leadership position in wound management by developing and commercializing a customer focused portfolio of innovative wound care products.  We will also evaluate the potential for commercialization of the other products as well as explore strategic collaborations to further develop our oral mucoadhesive film technology (OraDiscTM) for systemic drug delivery and for delivery of actives to the oral cavity.  We will also continue to execute a series of operational plans to enhance and streamline our business. We are restructuring our operations to improve efficiency and reduce cost, including production, distribution, and administration costs. We are also undertaking efforts to stimulate sales, enhance marketing, and expedite regulatory approvals for new market entry of Altrazeal®.

Recent Developments

Operations

On February 27, 2017, the Company appointed Vaidehi Shah to serve as the Company’s Chief Executive Officer.  Effective as of April 1, 2017 the Company engaged Velocitas GmbH to provide operational support services in the fields of regulatory administration, finance, international customer account management, manufacturing, supply chain logistics and other services required by the Company.  Starting in April 2017, our new team initiated a number of business activities with the aim of reassessing Altrazeal®’s marketing strategy to accelerate sales as well as improving the Company’s operations to create a strong organizational foundation going forward.  These activities include (i) showcasing Altrazeal® to new physicians, hospitals, clinics, and marketing partners to evaluate potential strategies for the domestic market, (ii) recruiting and increasing staff responsible for oversight of international sales and marketing, (iii) engaging third-party experts to assess and oversee the Company’s quality management system and regulatory affairs, (iv) reviewing manufacturing and operational processes to increase cost efficiencies, and (v) negotiating and settling pending financial liabilities.

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Debt Financing and Preferred Stock Offering – March 2017

On February 27, 2017, the Company entered into a Note, Warrant and Preferred Stock Purchase Agreement (the “Purchase Agreement”) with Velocitas Partners, LLC (“Velocitas") and Velocitas I LLC (“Velo LLC”), an entity controlled by Velocitas, under which the Company received gross proceeds of $6,000,000, in two closing with the initial closing occurring on February 27, 2017 and the second closing occurring on March 31, 2017 (the “March 2017 Offering”).

The first closing, which occurred on February 27, 2017, included the purchase by Velocitas at face value of a $500,000 Secured Convertible Note dated February 27, 2017 (the “Initial Note”), with the Initial Note accruing interest at 12.5% per annum and having a term of two years (subject to acceleration under certain circumstances).  The second closing, which occurred on March 31, 2017, included the purchase by Velocitas at face value the additional $500,000 Secured Convertible Note (the “Second Note”) with the Second Note accruing interest at 12.5% per annum and having a term of two years (subject to acceleration under certain circumstances),, and Velo LLC purchasing 1,250 shares of Series B Convertible Preferred Stock of the Company for gross proceeds of $5,000,000, at an as-converted-to-Common Stock purchase price of $0.04 per share.

The Initial Note and the Second Note are convertible into shares of Common Stock at a conversion price of $0.04 per share, subject to equitable adjustments, with mandatory conversion of all unpaid principal and interest required on the second anniversary of each such note, unless an event of default has occurred and is continuing.  The Initial Note and the Second Note are secured by all of the assets of the Company and its subsidiaries pursuant to a Security Agreement executed at the initial closing.

The Series B Convertible Preferred Stock that was issued in connection with the second closing, (a) voted together with the Common Stock as a single class (subject to standard protective provisions for the Series B Convertible Preferred Stock), (b) had the same dividend rights as the Common Stock, (c) had a liquidation preference equal to the greater of its purchase price and its as converted-to-Common Stock value, (d) automatically converted into Common Stock when the number of authorized shares of Common Stock was increased within 190 days of the second closing as necessary to permit all outstanding convertible or exercisable securities (including the Series B Convertible Preferred Stock) to convert to Common Stock, and (e) was convertible into Common Stock at the discretion of the holder, subject to the availability of authorized shares.

As a condition of the March 2017 Offering, the Company issued to Velocitas at the second closing a warrant to purchase up to 57,055,057 shares of Common Stock (the “Warrant”).  The Warrant has an exercise price of $0.04 per share, a 10-year term and is subject to cashless exercise. In addition, at the second closing, the Company acquired the Altrazeal distributor agreements Velocitas had with its sub-distributors in exchange for the issuance of 13,375,000 shares of Common Stock.

In addition, the Company, Velocitas, Velo LLC, and certain affiliates signed a Voting Agreement (the “Voting Agreement”) pursuant to which the parties agreed to set the size of the Board of Directors at six directors, and agreed to vote for the election to the Board of Directors of four persons designated by Velocitas (initially to be Anish Shah, Oksana Tiedt, Vaidehi Shah and Arindam Bose), one director designated by Bradley J. Sacks and one additional director designated by a major investor or by the Board of Directors.  In addition, the parties to the Voting Agreement have agreed to vote in favor of a proposal to amend the Company’s articles of incorporation to increase the authorized shares as required to permit the conversion of the Series B Convertible Preferred Stock.

At the 2017 Annual Meeting of Stockholders, held on July 25, 2017, a proposal to increase the number of authorized shares of Common Stock from 200,000,000 shares to 750,000,000 shares was approved by a majority vote of the stockholders and the Company filed with the State of Nevada an amendment to its articles of incorporation implementing such increase.  On August 1, 2017, the Company received notice from Velo LLC for the conversion of all 1,250 outstanding shares of Series B Convertible Preferred Stock held by Velo LLC in exchange for 125,000,000 shares of Common Stock.

In addition, the Company, Velocitas, Velo LLC, and certain affiliates entered into an Investor Rights Agreement (the “Investor Rights Agreement”) that provides the parties thereto with demand Form S-3 and piggy back registration rights, Rule 144 information rights, and rights of first offer (or preemptive rights) in connection with future sales of securities by the Company (subject to standard exceptions).  The Investor Rights Agreement includes indemnification obligations associated with the registration rights.  Michael I. Sacks and Bradley Sacks and affiliates are parties to the Investor Rights Agreement, in part in exchange for the termination by certain of such persons and The Punch Trust of a Registration Rights Agreement dated as of January 31, 2014.

As required by the Purchase Agreement, at the initial closing, the Company appointed Ms. Vaidehi Shah to serve as the Company’s Chief Executive Officer and to also serve as a member of the Company’s Board of Directors.  Concurrent with the initial closing and as a condition of the March 2017 Offering, the Company received resignation notices from Helmut Kerschbaumer, the Company’s Interim President, Chief Executive and Director, and Klaus Kuehne, a member of the Company’s Board of Directors.

As required by the Purchase Agreement, at the second closing, the Company appointed Mr. Anish Shah and Ms. Oksana Tiedt to join the Company and to serve as part of the Company’s executive management team and together with Mr. Arindam Bose to join the Company’s Board of Directors.

Concurrent with the second closing and as a condition of the second closing, the Company received resignation notices from Robert F. Goldrich and Terrance K. Wallberg, each being a member of the Company’s Board of Directors.  Mr. Wallberg continues to serve as the Company’s Vice President, Chief Financial Officer, Secretary, and Treasurer.  Also occurring at the second closing, Mr. Bradley J. Sacks stepped down as Chairman of the Board of Directors and Ms. Vaidehi Shah, the Company’s Chief Executive Officer and Director, assumed such duties.  Mr. Sacks continues to serve as a Director of the Company.

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RESULTS OF OPERATIONS

Fluctuations in Operating Results

Our results of operations have fluctuated significantly from period to period in the past and are likely to continue to do so in the future. We anticipate that our quarterly and annual results of operations will be impacted for the foreseeable future by several factors, including the timing and amount of payments received pursuant to our current and future collaborations, and the progress and timing of expenditures related to our development and commercialization efforts. Due to these fluctuations, we believe that the period-to-period comparisons of our operating results may not be a good indication of our future performance.

Comparison of the three months ended September 30, 2017 and 2016

Total Revenues

Revenues were approximately $201,000 for the three months ended September 30, 2017, as compared to revenues of approximately $6,000 for the three months ended September 30, 2016, and were composed of, in approximate amounts, product sales of $200,000 for Altrazeal® and licensing fees of $1,000 from a OraDisc™ licensing agreement.  The increase of approximately $195,000 in revenues is primarily attributable to product sales to our international distributors.

Costs and Expenses

Cost of Goods Sold

Cost of goods sold for the three months ended September 30, 2017 was approximately $65,000 and was composed of, in approximate amounts, $60,000 from the sale of Altrazeal® and $5,000 from the write-off of obsolete raw materials.  Cost of goods sold for the three months ended September 30, 2016 was approximately $500 and was composed entirely of costs associated with the sale of Altrazeal®.

Research and Development

Research and development expenses totaled approximately $90,000 for the three months ended September 30, 2017, including a credit of $3,000 in share-based compensation, compared to approximately $119,000 for the three months ended September 30, 2016, which included a credit of $3,000 in share-based compensation.  The decrease of approximately $29,000 in research and development expenses was primarily due to, in approximate numbers, a decrease of $60,000 in scientific compensation related to our restructuring of staffing, a decrease of $22,000 in direct research costs related to product development costs for Altrazeal®, and a decrease of $2,000 in other miscellaneous expenses. These expense decreases were partially offset by an increase of approximately $55,000 in regulatory consulting costs.

Selling, General and Administrative

Selling, general and administrative expenses totaled approximately $324,000 for the three months ended September 30, 2017, including $2,000 in share-based compensation, compared to approximately $305,000 for the three months ended September 30, 2016, which included $17,000 in share-based compensation.  The increase of approximately $19,000 in selling, general and administrative expenses was primarily due to, in approximate numbers, an increase of $20,000 in compensation related to an increase in head count, an increase of $42,000 in bad debt expense as the prior year included a non-recurring credit adjustment, and an increase of $4,000 in other miscellaneous expenses.  These expense increases were partially offset by, in approximate numbers, a decrease of $24,000 in operating costs for product marketing and sales, a decrease of $14,000 in share-based director fee compensation, and a decrease of $9,000 in insurance costs.

Amortization of Intangible Assets

Amortization of intangible assets expense totaled approximately $114,000 for the three months ended September 30, 2017 as compared to approximately $202,000 for the three months ended September 30, 2016.  The expense for each period consists primarily of amortization associated with our acquired patents and licensing rights.  The decrease of approximately $88,000 is attributable to the impairment in 2016 of two patents; “Amlexanox (OraDisc™ A)” and “OraDisc™”.  We did not purchase any additional patents or licensing rights during the three months ended September 30, 2017.

Depreciation

Depreciation expense totaled approximately $5,000 for the three months ended September 30, 2017 as compared to approximately $33,000 for the three months ended September 30, 2016.  The decrease of approximately $28,000 is attributable to certain equipment being fully depreciated.

Interest and Miscellaneous Income

Interest and miscellaneous income totaled approximately $40 for the three months ended September 30, 2017 as compared to approximately $230 for the three months ended September 30, 2016.

Interest Expense

Interest expense totaled approximately $134,000 for the three months ended September 30, 2017 as compared to approximately $33,000 for the three months ended September 30, 2016.  Interest expense typically includes financing costs for our insurance policies, interest costs related to regulatory fees, and interest costs and amortization of debt discount and debt issuance costs related to our promissory notes.  The increase of approximately $101,000 in interest expense is primarily attributable to costs associated with the two convertible promissory notes with Velocitas from the March 2017 Offering.

Foreign Currency Transaction Gain (Loss)

Foreign currency transaction loss totaled approximately $6,000 for the three months ended September 30, 2017 as compared to a foreign currency transaction loss of approximately $280 for the three months ended September 30, 2016.  The decrease of approximately $6,000 is related to fluctuations in the Euro exchange rate experienced during 2017 and the pricing of Altrazeal® to our international distributors being denominated in Euros.

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Comparison of the nine months ended September 30, 2017 and 2016

Total Revenues

Revenues were approximately $422,000 for the nine months ended September 30, 2017, as compared to revenues of approximately $379,000 for the nine months ended September 30, 2016, and were composed of, in approximate amounts, product sales of $418,000 for Altrazeal® and licensing fees of $4,000 from a OraDisc™ licensing agreement.

The increase of approximately $43,000 in revenues is primarily attributable to an increase of approximately $402,000 in international sales of Altrazeal®.  The revenue increase was partially offset by a decrease of approximately $359,000 in licensing fees due to the one-time recognition in 2016 of unamortized licensing fees related to the cancellation by the Company of licensing agreements with three distributors; Altrazeal AG, KunWha Pharmaceutical Co., and Jiangxi Aiqilin Pharmaceuticals Group.

Costs and Expenses

Cost of Goods Sold

Cost of goods sold for the nine months ended September 30, 2017 was approximately $147,000 and was composed of, in approximate amounts, $142,000 from the sale of Altrazeal® and $5,000 from the write-off of obsolete raw materials.  Cost of goods sold for the nine months ended September 30, 2016 was approximately $2,000 and was composed entirely of costs associated with the sale of Altrazeal®.

Research and Development

Research and development expenses totaled approximately $199,000 for the nine months ended September 30, 2017, including nil in share-based compensation, compared to approximately $391,000 for the nine months ended September 30, 2016, which included $6,000 in share-based compensation.  The decrease of approximately $192,000 in research and development expenses was primarily due to, in approximate numbers, a decrease of $170,000 in scientific compensation related to our restructuring of staffing and lower share-based compensation, a decrease of $69,000 direct research costs related to product development costs for Altrazeal®, and a decrease of $7,000 in other miscellaneous expenses. These expense decreases were partially offset by an increase of approximately $54,000 in regulatory consulting costs.

Selling, General and Administrative

Selling, general and administrative expenses totaled approximately $1,048,000 for the nine months ended September 30, 2017, including $8,000 in share-based compensation, compared to approximately $1,008,000 for the nine months ended September 30, 2016, which included $54,000 in share-based compensation.  The increase of approximately $40,000 in selling, general and administrative expenses was primarily due to, in approximate numbers, an increase of $51,000 in consulting and operating costs for product marketing, an increase of $45,000 in compensation related to an increase in head count, an increase of $35,000 in royalty expenses associated with product sales, an increase of $25,000 in bad debt expense as the prior year included a non-recurring credit adjustment, an increase of $11,000 in costs relating to the annual meeting of stockholders held in July 2017, and an increase of $7,000 in accounting fees.  These expense increases were partially offset by, in approximate numbers, a decrease of $65,000 in investor relations consulting, a decrease of $45,000 in share-based director fee compensation, a decrease of $14,000 in insurance costs, and a decrease of $10,000 in other miscellaneous expenses.

Amortization of Intangible Assets

Amortization of intangible assets expense totaled approximately $317,000 for the nine months ended September 30, 2017 as compared to approximately $600,000 for the nine months ended September 30, 2016.  The expense for each period consists primarily of amortization associated with our acquired patents and licensing rights.  The decrease of approximately $283,000 is attributable to the impairment in 2016 of two patents; “Amlexanox (OraDisc™ A)” and “OraDisc™”.  We purchased additional licensing rights of approximately $869,000 from Velocitas during the nine months ended September 30, 2017.

Depreciation

Depreciation expense totaled approximately $71,000 for the nine months ended September 30, 2017 as compared to approximately $100,000 for the nine months ended September 30, 2016.  The decrease of approximately $29,000 is attributable to certain equipment being fully depreciated.

Interest and Miscellaneous Income

Interest and miscellaneous income totaled approximately $50 for the nine months ended September 30, 2017 as compared to approximately $770 for the nine months ended September 30, 2016.

Interest Expense

Interest expense totaled approximately $289,000 for the nine months ended September 30, 2017 as compared to approximately $124,000 for the nine months ended September 30, 2016.  Interest expense typically includes financing costs for our insurance policies, interest costs related to regulatory fees, and interest costs and amortization of debt discount and debt issuance costs related to our promissory notes.  The increase of approximately $165,000 in interest expense is primarily attributable to costs associated with the two convertible promissory notes with Velocitas from the March 2017 Offering.

Foreign Currency Transaction Gain (Loss)

Foreign currency transaction loss totaled approximately $9,000 for the nine months ended September 30, 2017 as compared to a foreign currency transaction gain of approximately $1,000 for the nine months ended September 30, 2016.  The decrease of approximately $10,000 is related to fluctuations in the Euro exchange rate experienced during 2017 and the pricing of Altrazeal® to our international distributors being denominated in Euros.

Gain on Settlement of Liability

Gain on settlement of liability totaled approximately $114,000 for the nine months ended September 30, 2017 as compared to nil for the nine months ended September 30, 2016.  In June 2017, the Company was able settle certain liabilities for less than the original obligation recognized by the Company.

Accommodation fee due on promissory note

Accommodation fee due on promissory note was nil for the nine months ended September 30, 2017 as compared to $25,000 for the nine months ended September 30, 2016.  The fee was based on a January 2016 Waiver Agreement with Inter-Mountain Capital Corp (“Inter-Mountain”).  The Waiver Agreement relates to a convertible promissory note issued to Inter-Mountain in April 2015 (the “April 2015 Note”) and our failure to make the installment payment under the April 2015 Note due in November 2015 on a timely basis.  Under the terms of the Waiver Agreement, we agreed to remit the November 2015 installment payment of $45,000 in cash and to pay Inter-Mountain an accommodation fee of $25,000, with the accommodation fee being added to the outstanding loan balance.

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LIQUIDITY AND CAPITAL RESOURCES

We have funded our operations primarily through the public and private sales of convertible notes, rights to acquire Common Stock, Preferred Stock and Common Stock.  Product sales, royalty payments, licensing fees and milestone payments from our corporate alliances have also provided, and are expected in the future to provide, funding for operations.

Our principal source of liquidity is cash and cash equivalents.  As of September 30, 2017, our cash and cash equivalents were approximately $4,604,000, which is an increase of approximately $4,567,000 as compared to our cash and cash equivalents at December 31, 2016 of approximately $37,000.  Our working capital (current assets less current liabilities) was approximately $3,307,000 at September 30, 2017 as compared to our working capital at December 31, 2016 of approximately $(1,614,000).

Consolidated Cash Flow Data
	Nine months ended September 30,
Net Cash Provided by (Used in)	2017			2016
Operating activities	$	(1,308,000	)	$	(1,384,000	)
Investing activities		(4,000	)		(2,000	)
Financing activities		5,879,000			1,392,000
Net increase in cash and cash equivalents	$	4,567,000		$	6,000

Operating Activities

For the nine months ended September 30, 2017, net cash used in operating activities was approximately $1,308,000.  The principal components of net cash used for the nine months ended September 30, 2017 were, in approximate numbers, our net loss of $1,544,000, a decrease of $187,000 in accounts payable due to timing of vendor payments, a decrease of $155,000 in accrued liabilities due to payment of temporary compensation deferrals, a decrease of $15,000 in deferred revenues due to amortization of revenues, an increase of $102,000 in accounts receivable due to timing of customer remittances, and an increase of $9,000 in prepaid expenses related to insurance policy renewals.  Our net loss for the nine months ended September 30, 2017 included substantial non-cash charges of approximately $574,000 in the form of share-based compensation, amortization of patents and licensing rights, depreciation, amortization of debt discount, and amortization of debt issuance costs.  The aforementioned net cash used for the nine months ended September 30, 2017 was partially offset by, in approximate numbers, an increase of $68,000 in accrued interest and a decrease of $62,000 in inventories.

For the nine months ended September 30, 2016, net cash used in operating activities was approximately $1,384,000.  The principal components of net cash used for the nine months ended September 30, 2016 were, in approximate numbers, our net loss of $1,869,000, a decrease of $277,000 in deferred revenues due to amortization of revenues, a decrease of $98,000 in accrued liabilities due to repayment of temporary compensation deferrals, and an increase of $50,000 in inventory.  Our net loss for the nine months ended September 30, 2016 included substantial non-cash charges of approximately $815,000 in the form of share-based compensation, amortization of patents and licensing rights, depreciation, amortization of debt discount, and amortization of deferred financings costs.  The aforementioned net cash used for the nine months ended September 30, 2016 was partially offset by, in approximate numbers, a decrease of $45,000 in accounts receivable due to collection activities, a decrease of $30,000 in prepaid expenses related to insurance, listing fees, and consulting, and an increase of $20,000 in accounts payable due to timing of vendor payments.

Investing Activities

Net cash used in investing activities for the nine months ended September 30, 2017 was approximately $4,000 and relates to the purchase of computer equipment.

Net cash used in investing activities for the nine months ended September 30, 2016 was approximately $2,000 and relates to the purchase of computer equipment.

Financing Activities

Net cash provided by financing activities for the nine months ended September 30, 2017 was approximately $5,879,000 and was composed of, in approximate numbers, the net proceeds of $5,899,000 from the March 2017 Offering and the net proceeds of $120,000 from certain short-term promissory notes issued to Velocitas and Kirkwood.  The aforementioned net cash provided for the nine months ended September 30, 2017 was partially offset by the repayment of $140,000 of short-term promissory notes issued to Velocitas and Kirkwood.

Net cash provided by financing activities for the nine months ended September 30, 2016 was approximately $1,392,000 and was composed of, in approximate numbers, the net proceeds of $1,732,000 from the March 2016 Offering and $25,000 from additional principle due related to the accommodation fee with Inter-Mountain.  The aforementioned net cash provided for the nine months ended September 30, 2016 was partially offset by the repayment of $343,000 in principle due on the promissory note with Inter-Mountain, and offering costs of $22,000 incurred in 2016 that are associated with the acquisition of licensing rights by the Company in December 2015.

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Liquidity

As of September 30, 2017, we had cash and cash equivalents of approximately $4,604,000.  We expect to use our cash, cash equivalents, and investments on working capital, for general corporate purposes, on property and equipment, and for the payment of contractual obligations.  Our long-term liquidity will depend to a great extent on our ability to fully commercialize our Altrazeal® and OraDisc™ technologies; therefore, we are continuing to look both domestically and internationally for opportunities that will enable us to expand our business.  At this time, we cannot accurately predict the effect of certain developments on the rate of sales growth, if any, during 2017 and beyond, such as the speed and degree of market acceptance, the impact of competition, the effectiveness of the sales and marketing efforts of our distributors and sub-distributors, and the outcome of our current efforts to develop, receive approval for, and successfully launch our near-term product candidates.

As of September 30, 2017, our net working capital (current assets less current liabilities) was approximately $3,307,000 and we believe that our current liquidity will be sufficient to fund operations beyond 2017.

In the event that we need to raise capital in the future, due to our limited revenue, we may be unable to obtain the necessary financing on terms acceptable to us, or at all.  If we are unable to raise capital when needed, we would be unable to continue our operations.  Even if we are able to raise capital, we may raise capital by selling equity securities, which will be dilutive to existing stockholders.  If we incur additional indebtedness, costs of financing may be extremely high, and we will be subject to default risks associated with such indebtedness, which may harm our ability to continue our operations.  We have no commitments with respect to additional capital.

Our future capital requirements and adequacy of available funds will depend on many factors including:

§	our ability to successfully commercialize our wound management products and the market acceptance of these products;
§	our ability to establish and maintain collaborative arrangements with business partners for the development and commercialization of certain product opportunities;
§	scientific progress in our development programs;
§	the marketing and sales efforts of our distributors and sub-distributors;
§	the costs involved in filing, prosecuting and enforcing patent claims and our maintenance of patent rights;
§	competing product developments;
§	the trading volume and price of our capital stock;
§	the actions of parties whose consents, waivers or prompt responses are required for approval of a financing (such as parties with rights of first refusal or consent rights);
§	our general financial situation, including our revenues, liquidity, capitalization and other factors; and
§	the cost of manufacturing and production scale-up.

Contractual Obligations

The following table summarizes our outstanding contractual cash obligations as of September 30, 2017, which is composed of a lease agreement for office and laboratory space in Addison, Texas and a lease agreement for office equipment.  These obligations and commitments assume non-termination of agreements and represent expected payments based on current operating forecasts, which are subject to change:

	Payments Due By Period
Contractual Cash Obligations	Total		Less Than 1 Year		1-2 Years		3-5 Years		After 5 Years
Operating leases	$	59,499	$	59,499	$	---	$	---	$	---
Total contractual cash obligations	$	59,499	$	59,499	$	---	$	---	$	---

Capital Expenditures

For the nine months ended September 30, 2017 and 2016, our expenditures for property, equipment, and leasehold improvements were approximately $4,000 and $2,000, respectively, and consisted primarily of computer equipment.

Off-Balance Sheet Arrangements

As of September 30, 2017, we did not have any off-balance sheet arrangements.

Impact of Inflation

We have experienced only moderate price increases over the last three fiscal years under our agreements with third-party manufacturers as a result of raw material and labor price increases.  However, there can be no assurance that possible future inflation would not impact our operations.

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Concentrations of Credit Risk

Concentration of credit risk with respect to financial instruments, consisting primarily of cash and cash equivalents, potentially expose us to concentrations of credit risk due to the use of a limited number of banking institutions and due to maintaining cash balances in banks, which, at times, may exceed the limits of amounts insured by the Federal Deposit Insurance Corporation.  Currently, we utilized Bank of America, N.A. and South State Bank as our banking institutions.  At September 30, 2017 and December 31, 2016, our cash and cash equivalents totaled approximately $4,604,000 and $37,000, respectively.  We also invest cash in excess of immediate requirements in money market accounts, certificates of deposit, corporate commercial paper with high quality ratings, and U.S. government securities.  These investments are not held for trading or other speculative purposes.  We are exposed to credit risk in the event of default by these institutions.

Concentration of credit risk with respect to trade accounts receivable are customers with balances that exceed 5% of total consolidated trade accounts receivable at September 30, 2017 and at December 31, 2016.  As of September 30, 2017, one customer exceeded the 5% threshold, with 98% of total consolidated trade accounts receivable.  At December 31, 2016, one customer, being one of our international distributors, exceeded the 5% threshold with 95% of total consolidated trade accounts receivable.  We routinely assess the financial strength of our most significant customers and monitoring the amounts owed to us, taking appropriate action when necessary.  As a result, we believe that our prospective accounts receivable credit risk exposure is limited.

Concentrations of Foreign Currency Risk

Currently, a portion of our revenues and all of our expenses are denominated in U.S. dollars. We are experiencing an increase in revenues in international territories denominated in a foreign currency.  Certain of our licensing and distribution agreements in international territories are denominated in Euros.  Currently, we do not employ forward contracts or other financial instruments to mitigate foreign currency risk.  As our international operations continue to grow, we may engage in hedging activities to hedge our exposure to foreign currency risk.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Management’s Discussion and Analysis of Financial Condition and Results of Operations addresses our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information. The preparation of our financial statements requires that we make estimates and assumptions that affect the reported amounts of assets and liabilities and the 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. On an on-going basis, we evaluate these estimates and judgments. We base our estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.  Our critical accounting policies are summarized in our 2016 Form 10-K as filed with the Securities and Exchange Commission on April 17, 2017.  We had no significant changes in our critical accounting policies since our last annual report.

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk.

This item is not applicable to smaller reporting companies.

ITEM 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this Quarterly Report on Form 10-Q, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of our disclosure controls and procedures, (as defined in Rule 13a-15(e) under the Securities and Exchange Act of 1934, as amended, (the “Exchange Act”)).  Disclosure controls and procedures are controls and other procedures designed to reasonably assure that information required to be disclosed in our reports filed or submitted under the Exchange Act, such as this Quarterly Report on Form 10-Q, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures are also designed to reasonably assure that this information is accumulated and communicated to our management, including the Chief Executive Officer and the Chief Financial Officer, to allow timely decisions regarding required disclosure.

Based on this evaluation, our principal executive officer and principal financial officer concluded that as of September 30, 2017, our disclosure controls and procedures were not effective, at a reasonable assurance level, to ensure that information we are required to disclose in the reports we file or submit under the Exchange Act is (a) recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms and is (b) accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure primarily as a result of the lack of segregation of duties due to a limited number of employees.

Changes in Internal Controls Over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the period covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

- 24 -

PART II - OTHER INFORMATION

ITEM 1.  Legal Proceedings.

From time to time, we may be involved in litigation relating to claims arising out of our operations in the normal course of business. We are not currently a party to any legal proceedings, the adverse outcome of which, in management’s opinion, individually or in the aggregate, would have a material adverse effect on the results of our operations or financial position. There are no material proceedings to which any director, officer or any of our affiliates, any owner of record or beneficially of more than five percent of any class of our voting securities, or any associate of any such director, officer, our affiliates, or security holder, is a party adverse to us or our consolidated subsidiary or has a material interest adverse thereto; however, one or more events may lead to a formal dispute or proceeding in the future.

ITEM 1A.  Risk Factors.

This item is not applicable to smaller reporting companies.  Information about certain risks associated with an investment in our Common Stock is found in Part I, Item 1A of our 2016 Form 10-K, as filed with the SEC on April 17, 2017.

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds.

On August 1, 2017, all 1,250 outstanding shares of Series B Convertible Preferred Stock held by Velo LLC automatically converted in exchange for 125,000,000 shares of Common Stock as a result of the approval by the stockholders at the 2017 Annual Meeting of Stockholders held on July 25, 2017, and the filing in July 2017, of an amendment increasing our authorized shares of Common Stock from 200,000,000 shares to 750,000,000 shares.  The Company did not receive any cash proceeds as a result of the exchange of Series B Convertible Preferred Stock and Common Stock.  The shares of Common Stock were issued pursuant to the exemption set forth in Section 3(a)(9) under the Securities Act of 1933, as amended

ITEM 3. Defaults Upon Senior Securities.

None.

ITEM 4. Mine Safety Disclosures.

Not applicable.

- 25 -

ITEM 5. Other Information.

None.

ITEM 6. Exhibits.

Exhibit Number		Description
3.1		Restated Articles of Incorporation dated November 5, 2007, as amended by the Certificate of Designation for the Series B Convertible Preferred Stock and a Certificate of Amendment (1)
3.2		Amended and Restated Bylaws dated December 5, 2008. (2)
31.1	*	Certification of Principal Executive Officer of ULURU Inc. Pursuant to Rule 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Amended.
31.2	*	Certification of Principal Accounting Officer of ULURU Inc. Pursuant to Rule 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Amended.
32.1	**	Certification of Chief Executive Officer of ULURU Inc. Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	**	Certification of Chief Financial Officer of ULURU Inc. Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	***	XBRL Instance Document
101.SCH	***	XBRL Taxonomy Extension Schema Document
101.CAL	***	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	***	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	***	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	***	XBRL Taxonomy Extension Presentation Linkbase Document
---------------------------------------------------
(1)		Incorporated by reference to the Company’s Form 10-Q filed on August 14, 2017.
(2)		Incorporated by reference to the Company’s Form 8-K filed on December 11, 2008.
	*	Filed herewith.
	**	Filed herewith.  This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that Section nor shall it be deemed incorporated by reference in any filings under the Securities Act of 1933 or the Securities and Exchange Act of 1934.
	***	Pursuant to Rule 406T of Regulation S-T, the XBRL-related information in Exhibit 101 to this Quarterly Report on Form 10-Q is deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, and otherwise is not subject to liability under these sections.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	ULURU Inc.
Date:  November 13, 2017	By:	/s/ Vaidehi Shah
		Vaidehi Shah
		Chief Executive Officer
		(Principal Executive Officer)
Date:  November 13, 2017	By:	/s/ Terrance K. Wallberg
		Terrance K. Wallberg
		Chief Financial Officer and Vice President
		(Principal Financial and Accounting Officer)

- 26 -

EX-31.1

EXHIBIT 31.1

Certification of Principal Executive Officer of ULURU Inc.

Pursuant to Rule 13a-14(a) and 15d-14(a) under

the Securities Exchange Act of 1934, as Amended

I, Vaidehi Shah, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of ULURU Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:
	(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report, based on such evaluation; and
	(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
	(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
	(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 13, 2017	/s/ Vaidehi Shah
	Vaidehi Shah
	Chief Executive Officer
	(Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

Certification of Principal Accounting Officer of ULURU Inc.

Pursuant to Rule 13a-14(a) and 15d-14(a) under

the Securities Exchange Act of 1934, as Amended

I, Terrance K. Wallberg, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of ULURU Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:
	(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report, based on such evaluation; and
	(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
	(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
	(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 13, 2017	/s/ Terrance K. Wallberg
	Terrance K. Wallberg
	Vice President and Chief Financial Officer
	(Principal Financial and Accounting Officer)

EX-32.1

EXHIBIT 32.1

Certification of Chief Executive Officer of ULURU Inc.

Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant

to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of ULURU Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2017, as filed with the Securities and Exchange Commission and to which this Certification is an exhibit (the “Report”), the undersigned officer of ULURU Inc. does hereby certify, pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350), that to my knowledge:

(1.)	The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2.)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

A signed original of this written statement required by Section 906 or other document authenticating, acknowledging or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

Date: November 13, 2017	/s/ Vaidehi Shah
	Vaidehi Shah
	Chief Executive Officer
	(Principal Executive Officer)

EX-32.2

EXHIBIT 32.2

Certification of Chief Financial Officer of ULURU Inc.

Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant

to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of ULURU Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2017, as filed with the Securities and Exchange Commission and to which this Certification is an exhibit (the “Report”), the undersigned officer of ULURU Inc. does hereby certify, pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350), that to my knowledge:

(1.)	The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2.)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

A signed original of this written statement required by Section 906 or other document authenticating, acknowledging or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

Date: November 13, 2017	/s/ Terrance K. Wallberg
	Terrance K. Wallberg
	Vice President and Chief Financial Officer
	(Principal Financial and Accounting Officer)

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2017	Nov. 13, 2017
Entity Information [Line Items]
Entity Registrant Name	ULURU Inc.
Entity Central Index Key	0001168220
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Smaller Reporting Company
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q3
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2017
Common Stock [Member]
Entity Information [Line Items]
Entity Common Stock, Shares Outstanding		201,349,431
Series A Preferred Stock [Member]
Entity Information [Line Items]
Entity Common Stock, Shares Outstanding		0
Series B Preferred Stock [Member]
Entity Information [Line Items]
Entity Common Stock, Shares Outstanding		0

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Current Assets
Cash and cash equivalents	$ 4,604,005	$ 36,615
Accounts receivable, net	163,536	61,788
Inventory	498,100	559,600
Prepaid expenses and deferred charges	144,070	135,394
Total Current Assets	5,409,711	793,397
Property, Equipment and Leasehold Improvements, net	59,203	126,741
Other Assets
Intangible asset - patents, net	189,074	216,781
Intangible asset - licensing rights, net	3,761,567	3,181,087
Deposits	18,069	18,069
Total Other Assets	3,968,710	3,415,937
TOTAL ASSETS	9,437,624	4,336,075
Current Liabilities
Accounts payable	1,839,746	2,026,671
Accrued liabilities	159,875	315,300
Accrued interest	68,151	53
Promissory note payable, current portion	0	20,000
Deferred revenue, current portion	35,302	45,764
Total Current Liabilities	2,103,074	2,407,788
Long Term Liabilities
Convertible notes payable, net of unamortized debt discount and debt issuance costs	480,345	0
Deferred revenue, net of current portion	354,151	358,462
Total Long Term Liabilities	834,496	358,462
TOTAL LIABILITIES	2,937,570	2,766,250
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Common Stock - $0.001 par value; 750,000,000 shares authorized; 201,349,431 and 62,974,431 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively	201,349	62,974
Additional paid-in capital	68,556,734	62,220,850
Accumulated (deficit)	(62,258,029)	(60,713,999)
TOTAL STOCKHOLDERS' EQUITY	6,500,054	1,569,825
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	9,437,624	4,336,075
Series A Preferred Stock [Member]
STOCKHOLDERS' EQUITY
Preferred stock	0	0
Series B Preferred Stock [Member]
STOCKHOLDERS' EQUITY
Preferred stock	$ 0	$ 0

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares	Sep. 30, 2017	Dec. 31, 2016
STOCKHOLDERS' EQUITY
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	20,000	20,000
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	750,000,000	750,000,000
Common stock, shares issued (in shares)	201,349,431	62,974,431
Common stock, shares outstanding (in shares)	201,349,431	62,974,431
Series A Preferred Stock [Member]
STOCKHOLDERS' EQUITY
Shares designated (in shares)	1,000	1,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Series B Preferred Stock [Member]
STOCKHOLDERS' EQUITY
Shares designated (in shares)	1,250	1,250
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Revenues
License fees	$ 1,453	$ 1,453	$ 4,311	$ 362,542
Product sales, net	199,486	4,196	418,059	16,232
Total Revenues	200,939	5,649	422,370	378,774
Costs and Expenses
Cost of product sold	65,144	494	147,423	1,945
Research and development	90,294	119,011	198,615	390,501
Selling, general and administrative	323,915	304,612	1,048,445	1,008,313
Amortization of intangible assets	114,268	201,718	316,602	599,880
Depreciation	5,481	33,237	71,039	99,567
Total Costs and Expenses	599,102	659,072	1,782,124	2,100,206
Operating (Loss)	(398,163)	(653,423)	(1,359,754)	(1,721,432)
Other Income (Expense)
Interest and miscellaneous income	41	232	45	769
Interest expense	(133,972)	(32,509)	(289,113)	(123,712)
Foreign currency transaction gain (loss)	(6,151)	(282)	(9,222)	808
Gain on settlement of liability	0	0	114,013	0
Accommodation fee due on promissory note	0	0	0	(25,000)
(Loss) Before Income Taxes	(538,245)	(685,982)	(1,544,031)	(1,868,567)
Income taxes	0	0	0	0
Net (Loss)	$ (538,245)	$ (685,982)	$ (1,544,031)	$ (1,868,567)
Basic and diluted net (loss) per common share (in dollars per share)	$ 0	$ (0.01)	$ (0.02)	$ (0.03)
Weighted average number of common shares outstanding (in shares)	159,229,866	62,974,431	99,919,486	54,566,729

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
OPERATING ACTIVITIES :
Net loss	$ (1,544,031)	$ (1,868,567)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of intangible assets	316,602	599,880
Depreciation	71,039	99,567
Share-based compensation for stock and options issued to employees	7,923	15,554
Share-based compensation for options issued to non-employees	0	44,572
Amortization of debt discount on promissory note	174,577	32,015
Amortization of debt issuance costs	3,976	22,927
Change in operating assets and liabilities:
Accounts receivable	(101,748)	44,755
Inventory	61,500	(50,031)
Prepaid expenses and deferred charges	(8,676)	29,797
Deposits	0	0
Accounts payable	(186,925)	18,637
Accrued liabilities	(155,424)	(97,741)
Accrued interest	68,098	2,239
Deferred revenue	(14,773)	(277,583)
Total	236,169	484,588
Net Cash Used in Operating Activities	(1,307,862)	(1,383,979)
INVESTING ACTIVITIES :
Purchase of equipment	(3,501)	(2,165)
Net Cash Used in Investing Activities	(3,501)	(2,165)
FINANCING ACTIVITIES :
Proceeds from issuance of convertible notes and warrant, net	983,092	0
Proceeds from sale of preferred stock, net	4,915,661	0
Proceeds from sale of common stock and warrants, net	0	1,732,338
Offering costs associated with acquisition of licensing rights in 2015	0	(21,950)
Additional principle due on promissory note due to accommodation fee	0	25,000
Proceeds from issuance of promissory notes	120,000	0
Repayment of principle due on promissory notes	(140,000)	(343,526)
Net Cash Provided by Financing Activities	5,878,753	1,391,862
Net Increase in Cash	4,567,390	5,718
Cash, beginning of period	36,615	180,000
Cash, end of period	4,604,005	185,718
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Cash paid for interest	2,697	16,002
Non-cash investing and financing activities:
Issuance of common stock for acquisition of licensing rights	869,375	0
Issuance of common stock for conversion of preferred stock	0	0
Issuance of common stock for principle due on promissory note	0	51,474
Issuance of common stock for interest due on promissory note	0	2,239
Issuance of common stock for services	$ 0	$ 36,000

XML

COMPANY OVERVIEW AND BASIS OF PRESENTATION

9 Months Ended

Sep. 30, 2017

COMPANY OVERVIEW AND BASIS OF PRESENTATION [Abstract]

COMPANY OVERVIEW AND BASIS OF PRESENTATION

NOTE 1. COMPANY OVERVIEW AND BASIS OF PRESENTATION

Company Overview

ULURU Inc. (hereinafter “we”, “our”, “us”, “ULURU”, or the “Company”) is a Nevada corporation.  We are a specialty medical technology company committed to developing and commercializing a range of innovative wound care and mucoadhesive film products based on our patented Nanoflex® and OraDiscTM technologies, with the goal of improving outcomes for patients, health care professionals, and health care payers.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and include the accounts of ULURU Inc., a Nevada corporation, and its wholly-owned subsidiary, Uluru Delaware Inc., a Delaware corporation.  They do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. All adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the Company’s financial position as of September 30, 2017 and the results of its operations for the three and nine months ended September 30, 2017 and 2016 and cash flows for the nine months ended September 30, 2017 and 2016 have been made.

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, as well as disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods.  Actual results may differ from those estimates and assumptions.  These differences are usually minor and are included in our consolidated financial statements as soon as they are known.  Our estimates, judgments, and assumptions are continually evaluated based on available information and experience. Because of the use of estimates inherent in the financial reporting process, actual results could differ from those estimates.

All intercompany transactions and balances have been eliminated in consolidation.

Operating results for the three and nine months ended September 30, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017.

These condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016, referred to as our 2016 Form 10-K as filed with the Securities and Exchange Commission on April 17, 2017, including the risk factors set forth therein.

XML

SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Sep. 30, 2017

SIGNIFICANT ACCOUNTING POLICIES [Abstract]

SIGNIFICANT ACCOUNTING POLICIES

NOTE 2. SIGNIFICANT ACCOUNTING POLICIES

The significant accounting policies used in preparation of these condensed consolidated financial statements for the three and nine months ended September 30, 2017 are consistent with those discussed in Note 2 to the consolidated financial statements in our 2016 Form 10-K, as filed with the Securities and Exchange Commission on April 17, 2017.

XML

THE EFFECT OF RECENTLY ISSUED ACCOUNTING STANDARDS

9 Months Ended

Sep. 30, 2017

THE EFFECT OF RECENTLY ISSUED ACCOUNTING STANDARDS [Abstract]

THE EFFECT OF RECENTLY ISSUED ACCOUNTING STANDARDS

NOTE 3. THE EFFECT OF RECENTLY ISSUED ACCOUNTING STANDARDS

There were no new accounting pronouncements adopted or enacted during the periods presented that had, or are expected to have, a material impact on our financial statements.

XML

SEGMENT INFORMATION

9 Months Ended

Sep. 30, 2017

SEGMENT INFORMATION [Abstract]

SEGMENT INFORMATION

NOTE 4. SEGMENT INFORMATION

Our entire business is managed by a single management team, which reports to the Chief Executive Officer.  Our corporate headquarters in the United States collects proceeds from product sales, licensing fees, and royalties from our arrangements with external customers and licensees.  Our revenues are currently derived primarily from distribution partners for international activities and our domestic sales activities for our products.

Revenues per geographic area for the three and nine months ended September 30 are summarized as follows:

	Three Months Ended September 30,										Nine Months Ended September 30,
Revenues	2017		%			2016		%			2017		%			2016		%
Domestic	$	3,012		2	%	$	1,453		26	%	$	8,427		2	%	$	16,232		4	%
International		197,927		98	%		4,196		74	%		413,943		98	%		362,542		96	%
Total	$	200,939		100	%	$	5,649		100	%	$	422,370		100	%	$	378,774		100	%

A significant portion of our revenues are derived from a few major customers.  For the three months ended September 30, 2017 and 2016, one customer and four customers, respectively, had greater than 10% of total revenues. The one customer for the three-month period ending in 2017 represented 98% of total revenues and the four customers for the three-month period ending in 2016 represented, in the aggregate, 71% of total revenues.  For the nine months ended September 30, 2017 and 2016, two customers and two customers, respectively, had greater than 10% of total revenues.  The two customers for the nine-month period ending in 2017 represented, in the aggregate, 97% of total revenues and the two customers for the nine-month period ending in 2016 represented, in the aggregate, 88% of total revenues.

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INVENTORY

9 Months Ended

Sep. 30, 2017

INVENTORY [Abstract]

INVENTORY

NOTE 5. INVENTORY

As of September 30, 2017, our inventory was comprised of Altrazeal® finished goods, manufacturing costs incurred in the production of Altrazeal®, and raw materials.  Inventories are stated at the lower of cost (first in, first out method) or net realizable value.  We regularly review inventories on hand and write down the carrying value of our inventories for excess and potentially obsolete inventories based on historical usage and estimated future usage.  In assessing the ultimate realization of our inventories, we are required to make judgments as to future demand requirements.  As actual future demand or market conditions may vary from those projected by us, adjustment to inventories may be required.

The components of inventory, at the different stages of production, consisted of the following at September 30, 2017 and December 31, 2016:

Inventory	September 30, 2017		December 31, 2016
Raw materials	$	26,666	$	35,800
Work-in-progress		372,825		424,741
Finished goods		98,609		99,059
Total	$	498,100	$	559,600

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PROPERTY, EQUIPMENT and LEASEHOLD IMPROVEMENTS

9 Months Ended

Sep. 30, 2017

PROPERTY, EQUIPMENT and LEASEHOLD IMPROVEMENTS [Abstract]

PROPERTY, EQUIPMENT and LEASEHOLD IMPROVEMENTS

NOTE 6. PROPERTY, EQUIPMENT and LEASEHOLD IMPROVEMENTS

Property, equipment and leasehold improvements, net, consisted of the following at September 30, 2017 and December 31, 2016:

Property, equipment and leasehold improvements	September 30, 2017			December 31, 2016
Laboratory equipment	$	424,888		$	424,888
Manufacturing equipment		1,604,894			1,604,894
Computers, office equipment, and furniture		154,781			151,280
Computer software		4,108			4,108
Leasehold improvements		95,841			95,841
		2,284,512			2,281,011
Less: accumulated depreciation and amortization		(2,225,309	)		(2,154,270	)
Property, equipment and leasehold improvements, net	$	59,203		$	126,741

Depreciation expense on property, equipment and leasehold improvements was $5,481 and $33,237 for the three months ended September 30, 2017 and 2016, respectively, and was $71,039 and $99,567 for the nine months ended September 30, 2017 and 2016, respectively.

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INTANGIBLE ASSETS

9 Months Ended

Sep. 30, 2017

INTANGIBLE ASSETS [Abstract]

INTANGIBLE ASSETS

NOTE 7. INTANGIBLE ASSETS

Patents

Intangible patent assets are comprised of patents acquired in October, 2005.  Intangible assets, net consisted of the following at September 30, 2017 and December 31, 2016:

Intangible assets – patents	September 30, 2017			December 31, 2016
Patent - Amlexanox (Aphthasol®)	$	2,090,000		$	2,090,000
Patent - Amlexanox (OraDisc™ A)		6,873,080			6,873,080
Patent - OraDisc™		73,000			73,000
Patent - Hydrogel wound dressing		589,858			589,858
		9,625,938			9,625,938
Less: accumulated amortization		(7,409,554	)		(7,381,847	)
Less: reserve for impairment		(2,027,310	)		(2,027,310	)
Intangible assets - patents, net	$	189,074		$	216,781

Amortization expense for intangible patents assets was $9,337 and $119,763 for the three months ended September 30, 2017 and 2016, respectively, and was $27,707 and $356,687 for the nine months ended September 30, 2017 and 2016, respectively.

The future aggregate amortization expense for intangible patent assets, remaining as of September 30, 2017, is as follows:

Calendar Years	Future Amortization Expense
2017 (Three months)	$	9,337
2018		37,044
2019		37,044
2020		37,145
2021		37,044
2022 & Beyond		31,460
Total	$	189,074

Licensing rights

Acquisition of Licensing Rights – 2017

On February 27, 2017, we entered into a Note, Warrant and Preferred Stock Purchase Agreement (the “Purchase Agreement”) with Velocitas Partners, LLC (“Velocitas") and Velocitas I LLC (“Velo LLC”), an entity controlled by Velocitas, with respect to an aggregate financing of up to $6,000,000.

Refer to a description in greater detail of the financing event with Velocitas and Velo LLC in Note 10. Convertible Debt.

At the second closing of the financing event with Velocitas and Velo LLC, which occurred on March 31, 2017, the Company acquired the Altrazeal® distributor agreements Velocitas had with its sub-distributors in exchange for the issuance of 13,375,000 shares of Common Stock.  The Company has valued the acquisition of the Altrazeal® distributor agreement from Velocitas at $869,375 based on the closing price of $0.065 per share of the Company’s Common Stock on March 31, 2017.

Licensing rights, net consisted of the following at September 30, 2017 and December 31, 2016:

Intangible assets - licensing rights	September 30, 2017			December 31, 2016
Intangible assets – licensing rights, gross	$	4,381,881		$	3,512,506
Less: accumulated amortization		(620,314	)		(331,419	)
Intangible assets - licensing rights, net	$	3,761,567		$	3,181,087

Amortization expense for intangible licensing rights assets was $104,931 and $81,955 for the three months ended September 30, 2017 and 2016, respectively, and was $288,895 and $243,193 for the nine months ended September 30, 2017 and 2016, respectively.

The future aggregate amortization expense for intangible licensing rights assets, remaining as of September 30, 2017, is as follows:

Calendar Years	Future Amortization Expense
2017 (Three months)	$	104,931
2018		416,303
2019		416,303
2020		416,303
2021		416,303
2022 & Beyond		1,991,424
Total	$	3,761,567

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ACCRUED LIABILITIES

9 Months Ended

Sep. 30, 2017

ACCRUED LIABILITIES [Abstract]

ACCRUED LIABILITIES

NOTE  8. ACCRUED LIABILITIES

Accrued liabilities consisted of the following at September 30, 2017 and December 31, 2016:

Accrued Liabilities	September 30, 2017		December 31, 2016
Accrued compensation/benefits	$	120,910	$	274,874
Accrued insurance payable		---		40,422
Accrued property taxes		4,215		---
Accrued royalties		34,744		---
Product rebates/returns		6		4
Total accrued liabilities	$	159,875	$	315,300

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PROMISSORY NOTES PAYABLE

9 Months Ended

Sep. 30, 2017

PROMISSORY NOTES PAYABLE [Abstract]

PROMISSORY NOTES PAYABLE

NOTE 9. PROMISSORY NOTES PAYABLE

On December 15, 2016, January 18, 2017, and February 16, 2017, we issued promissory notes to Velocitas with principal amounts and purchase prices of $20,000, $65,000, and $30,000, respectively.  Each of the promissory notes bore interest at the rate of 6.0% per annum with payment of principal and interest due on the earlier of (i) 180 days from the date of issuance, (ii) the date of closing of any debt or equity financing transaction by and between Uluru and Velocitas, or (iii) the payment to Uluru of certain invoices due from selected Company’s distributors.  Each of the promissory notes was secured by a pledge of certain product inventory, and there were no debt issuance costs incurred by the Company.  On February 27, 2017, each of the promissory notes was repaid in connection with the issuance of the Convertible Promissory Note, dated February 27, 2017, in the amount of $500,000 (the “Initial Note”) under the Purchase Agreement with Velocitas.

On February 21, 2017, we issued a promissory note to Kirkwood Investors, Inc. (“Kirkwood”) with a principal amount and purchase price of $25,000.  The promissory note bore interest at the rate of 6.0% per annum with payment of principal and interest due on the earlier of (i) 60 days from the date of issuance, (ii) the date of closing of any debt or equity financing transaction by Uluru, or (iii) no later than two days after receiving written request by Kirkwood.  The promissory note was secured by a pledge of certain product inventory and accounts receivables and there were no debt issuance costs incurred by the Company.  The Company’s Vice President and Chief Financial Officer, Terrance K. Wallberg, is President and sole shareholder of Kirkwood.  On February 27, 2017, the outstanding promissory note to Kirkwood was repaid in connection with the issuance of the Initial Note under the Purchase Agreement with Velocitas.

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CONVERTIBLE DEBT

9 Months Ended

Sep. 30, 2017

CONVERTIBLE DEBT [Abstract]

CONVERTIBLE DEBT

NOTE 10. CONVERTIBLE DEBT

Debt Financing – February and March 2017

On February 27, 2017, the Company entered into the Purchase Agreement with Velocitas and Velo LLC under which the Company received gross proceeds of $6,000,000, in two closing with the initial closing occurring on February 27, 2017 and the second closing occurring on March 31, 2017, which we refer to as the March 2017 Offering.

The first closing, which occurred on February 27, 2017, included the purchase by Velocitas at face value of the $500,000 Initial Note, with the Initial Note accruing interest at 12.5% per annum and having a term of two years (subject to acceleration under certain circumstances).

The second closing, which occurred on March 31, 2017, included the purchase by Velocitas at face value of an additional $500,000 Secured Convertible Note, dated March 31, 2017, (the “Second Note”) with the Second Note accruing interest at 12.5% per annum and having a term of two years (subject to acceleration under certain circumstances), and Velo LLC purchasing 1,250 shares of Series B Convertible Preferred Stock of the Company for gross proceeds of $5,000,000, at an as-converted-to-Common Stock purchase price of $0.04 per share.

The Initial Note and the Second Note are convertible into shares of Common Stock at a conversion price of $0.04 per share, subject to equitable adjustments, with mandatory conversion of all unpaid principal and interest required on the second anniversary of each such note, unless an event of default has occurred and is continuing.  The Initial Note and the Second Note are secured by all of the assets of the Company and its subsidiaries pursuant to a Security Agreement executed at the initial closing.

The Series B Convertible Preferred Stock that was issued in connection with the second closing, (a) voted together with the Common Stock as a single class (subject to standard protective provisions for the Series B Convertible Preferred Stock), (b) had the same dividend rights as the Common Stock, (c) had a liquidation preference equal to the greater of its purchase price and its as converted-to-Common Stock value, (d) automatically converted into Common Stock when the number of authorized shares of Common Stock is increased within 190 days of the second closing as necessary to permit all outstanding convertible or exercisable securities (including the Series B Convertible Preferred Stock) to convert to Common Stock, and (e) was convertible into Common Stock at the discretion of the holder, subject to the availability of authorized shares.

As a condition of the March 2017 Offering, the Company issued to Velocitas at the second closing a warrant to purchase up to 57,055,057 shares of Common Stock (the “Warrant”).  The Warrant has an exercise price of $0.04 per share, a 10-year term and is subject to cashless exercise. In addition, at the second closing, the Company acquired the Altrazeal distributor agreements Velocitas had with its sub-distributors in exchange for the issuance of 13,375,000 shares of Common Stock.

The Company, Velocitas, Velo LLC, and certain affiliates also signed a Voting Agreement (the “Voting Agreement”) pursuant to which the parties agreed to set the size of the Board of Directors at six directors, and agreed to vote for the election to the Board of Directors of four persons designated by Velocitas (initially to be Anish Shah, Oksana Tiedt, Vaidehi Shah and Arindam Bose), one director designated by Bradley J. Sacks and one additional director designated by a major investor or by the Board of Directors.  In addition, the parties to the Voting Agreement agreed to vote in favor of a proposal to amend the Company’s articles of incorporation to increase the authorized shares as required to permit the conversion of the Series B Convertible Preferred Stock.

At the 2017 Annual Meeting of Stockholders, held on July 25, 2017, a proposal to increase the number of authorized shares of Common Stock from 200,000,000 shares to 750,000,000 shares was approved by a majority vote of the stockholders, and the Company filed with the State of Nevada an amendment to its articles of incorporation implementing such increase.  On August 1, 2017, the Company received notice from Velo LLC for the conversion of all 1,250 outstanding shares of Series B Convertible Preferred Stock held by Velo LLC in exchange for 125,000,000 shares of Common Stock.

In addition, the Company, Velocitas, Velo LLC, and certain affiliates entered into an Investor Rights Agreement (the “Investor Rights Agreement”) that provides the parties thereto with demand Form S-3 and piggy back registration rights, Rule 144 information rights, and a right of first offer (or preemptive rights) in connection with future sales of securities by the Company (subject to standard exceptions).  The Investor Rights Agreement includes indemnification obligations associated with the registration rights.  Michael I. Sacks and Bradley Sacks and affiliates are parties to the Investor Rights Agreement, in part in exchange for the termination by certain of such persons and The Punch Trust of a Registration Rights Agreement dated as of January 31, 2014.

As required by the Purchase Agreement, at the initial closing, the Company appointed Ms. Vaidehi Shah to serve as the Company’s Chief Executive Officer and to also serve as a member of the Company’s Board of Directors.  Concurrent with the initial closing and as a condition of the March 2017 Offering, the Company received resignation notices from Helmut Kerschbaumer, the Company’s Interim President, Chief Executive and Director, and Klaus Kuehne, a member of the Company’s Board of Directors.

As required by the Purchase Agreement, at the second closing, the Company appointed Mr. Anish Shah and Ms. Oksana Tiedt to join the Company and to serve as part of the Company’s executive management team and together with Mr. Arindam Bose to join the Company’s Board of Directors.

Concurrent with the second closing and as a condition of the second closing, the Company received resignation notices from Robert F. Goldrich and Terrance K. Wallberg, each being a member of the Company’s Board of Directors.  Mr. Wallberg continues to serve as the Company’s Vice President, Chief Financial Officer, Secretary, and Treasurer.  Also occurring at the second closing, Mr. Bradley J. Sacks stepped down as Chairman of the Board of Directors and Ms. Vaidehi Shah, the Company’s Chief Executive Officer and Director, assumed such duties.  Mr. Sacks continues to serve as a Director of the Company.

Using specific guidelines in accordance with U.S. GAAP, we allocated the value of the proceeds received to the promissory note and to the Warrant on a relative fair value basis.  We calculated the fair value of the Warrant issued with the debt instrument using the Black-Scholes valuation method, using the same assumptions used for valuing employee stock options, except the contractual life of the Warrant was used. Using the effective interest method, the allocated fair value of the Warrant was recorded as a debt discount and is being amortized over the expected term of the promissory note to interest expense.

Information relating to the Initial Note and Second Note is as follows:

											As of September 30, 2017
Transaction	Initial Principal Amount		Interest Rate			Maturity Date	Conversion Price		Principal Balance		Unamortized Debt Discount		Unamortized Debt Issuance Costs		Carrying Value
Initial Note	$	500,000		12.5	%	02/27/2019	$	0.04	$	500,000	$	251,470	$	6,466	$	242,064
Second Note	$	500,000		12.5	%	03/31/2019	$	0.04	$	500,000	$	255,253	$	6,466	$	238,281
Total	$	1,000,000							$	1,000,000	$	506,723	$	12,932	$	480,345

As part of the Initial Note and the Second Note, at the holder’s option, all unpaid principle and interest due under each convertible promissory note may be converted into shares of Common Stock based on a conversion price of $0.04 per share.  The Initial Note and the Second Note mature on February 27, 2019 and March 31, 2019, respectively, and on each maturity date each convertible promissory note, and accrued interest thereon, is subject to mandatory conversion based on a conversion price of $0.04 per share, unless an event of default has occurred and is continuing.

The amount of interest cost recognized from our promissory notes and our convertible debt was $31,507 and $1,106 for the three months ended September 30, 2017 and 2016, respectively, and $68,848 and $14,079 for the nine months ended September 30, 2017 and 2016, respectively.

The amount of debt discount amortized from our promissory notes and our convertible debt was $87,571 and $6,003 for the three months ended September 30, 2017 and 2016, respectively, and $174,577 and $32,015 for the nine months ended September 30, 2017 and 2016, respectively.

The amount of debt issuance costs amortized from our promissory notes was $2,060 and $4,269 for the three months ended September 30, 2017 and 2016, respectively, and $3,976 and $22,927 for the nine months ended September 30, 2017 and 2016, respectively.

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EQUITY TRANSACTIONS

9 Months Ended

Sep. 30, 2017

EQUITY TRANSACTIONS [Abstract]

EQUITY TRANSACTIONS

NOTE 11. EQUITY TRANSACTIONS

Preferred Stock Transaction

March 2017 Offering

On February 27, 2017, the Company entered into a Note, Warrant and Preferred Stock Purchase Agreement (the “Purchase Agreement”) with Velocitas and Velo LLC under which the Company received gross proceeds of $6,000,000, in two closing with the initial closing occurring on February 27, 2017 and the second closing occurring on March 31, 2017 (the “March 2017 Offering”).

The second closing included, among other transaction components, the purchase by Velo LLC of 1,250 shares of Series B Convertible Preferred Stock of the Company for $5,000,000.

On August 1, 2017, the Company received notice from Velo LLC for the conversion of all 1,250 outstanding shares of Series B Convertible Preferred Stock held by Velo LLC in exchange for 125,000,000 shares of Common Stock.

Refer to a description in greater detail of the financing event with Velocitas and Velo LLC in Note 10. Convertible Debt.

Common Stock Transaction

March 2016 Offering

On March 29, 2016, we entered into a Stock Purchase Agreement with fifteen investors for the offer and sale of 25,245,442 shares of Common Stock and warrants to purchase an additional 25,245,442 shares of Common Stock at a purchase price of $0.0713 per unit, with each unit consisting of one share and one warrant to purchase Common Stock, for an aggregate purchase price of $1,800,000 (the “March 2016 Offering).  The issue price of the shares sold was based on a 10% discount to the average closing price between March 7, 2016 and March 11, 2016 and the warrant exercise price was based on a 10% premium to the same average closing price.  The warrants have an exercise price of $0.0871 per share and a five-year term.  The warrants also include cashless exercise provisions and a “full ratchet” anti-dilution provision under which the exercise price of such warrants resets to any lower sales price at which the Company offers or sells Common Stock or Common Stock equivalents during the one year following the date of issuance (subject to standard exceptions).

The March 2016 Offering resulted in gross proceeds of $1,800,000, of which $1,439,000 was received in March 2016 and $361,000 was received in April 2016.  As part of the offering expenses, we paid to a European placement agent a referral fee of $26,000 which is equal to 10% of the gross proceeds, provided that the investors referred by such placement agent are not U.S. Persons and were solicited outside the United States.

Purchasers in the March 2016 Offering include Michael I. Sacks ($1,000,000), the father of Bradley J. Sacks, the former Chairman of our Board of Directors, Centric Capital Ventures, LLC ($19,000), an investment entity controlled by Bradley J. Sacks, Terrance K. Wallberg ($50,000), our Vice President and Chief Financial Officer, and Daniel G. Moro ($10,000), our former Vice President of Polymer Drug Delivery.

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STOCKHOLDERS' EQUITY

9 Months Ended

Sep. 30, 2017

STOCKHOLDERS' EQUITY [Abstract]

STOCKHOLDERS' EQUITY

NOTE 12. STOCKHOLDERS’ EQUITY

Common Stock

As of September 30, 2017, we had 201,349,431 shares of Common Stock issued and outstanding.  For the nine months ended September 30, 2017, we issued 138,375,000 shares of Common Stock which is composed of 13,375,000 shares of Common Stock issued to Velocitas for the acquisition of licensing rights and 125,000,000 shares of Common Stock issued to Velo LLC for the conversion and exchange of all 1,250 outstanding shares of Series B Convertible Preferred Stock held by Velo LLC.

At the 2017 Annual Meeting of Stockholders, held on July 25, 2017, a proposal to increase the number of authorized shares of Common Stock from 200,000,000 shares to 750,000,000 shares was approved by a majority vote of the stockholders and the Company filed with the State of Nevada an amendment to its articles of incorporation implementing such increase.

Preferred Stock

As of September 30, 2017, we had no shares of Series A Preferred Stock issued and outstanding.  For the nine months ended September 30, 2017, we did not issue or redeem any Series A Preferred Stock.

As of September 30, 2017, we had no shares of Series B Convertible Preferred Stock issued and outstanding.  For the nine months ended September 30, 2017, we issued 1,250 Series B Shares to Velo LLC, and on August 1, 2017, all outstanding shares of Series B Convertible Preferred Stock held by Velo LLC were mandatorily converted into an aggregate of 125,000,000 shares of Common Stock.

Warrants

The following table summarizes the warrants outstanding and the number of shares of Common Stock subject to exercise as of September 30, 2017 and the changes therein during the nine months then ended:

	Number of Shares of Common Stock Subject to Exercise		Weighted – Average Exercise Price
Balance as of December 31, 2016		26,179,560	$	0.11
Warrants issued		57,055,057	$	0.04
Warrants exercised		---		---
Warrants cancelled		---		---
Balance as of September 30, 2017		83,234,617	$	0.06

For the nine months ended September 30, 2017, we have issued a warrant to purchase up to an aggregate of 57,055,057 shares of our Common Stock at an exercise price of $0.04 per share pursuant to the March 2017 Offering.

Of the warrant shares subject to exercise as of September 30, 2017, expiration of the right to exercise is as follows:

Date of Expiration	Number of Warrant Shares of Common Stock Subject to Expiration
March 14, 2018		660,000
January 15, 2019		80,000
April 30, 2020		194,118
March 30, 2021		25,245,442
March 31, 2027		57,055,057
Total		83,234,617

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EARNINGS PER SHARE

9 Months Ended

Sep. 30, 2017

EARNINGS PER SHARE [Abstract]

EARNINGS PER SHARE

NOTE 13. EARNINGS PER SHARE

Basic and Diluted Net Loss Per Share

In accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 260, Earnings per Share, basic earnings (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period.  Diluted earnings (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period, increased to include potential dilutive common shares.  The effect of outstanding stock options, restricted vesting Common Stock, convertible debt, convertible preferred stock, and warrants, when dilutive, is reflected in diluted earnings (loss) per common share by application of the treasury stock method.  We have excluded all outstanding stock options, restricted vesting Common Stock, convertible debt, convertible preferred stock, and warrants from the calculation of diluted net loss per common share because all such securities are antidilutive for all periods presented.

Shares used in calculating basic and diluted net loss per common share exclude these potential common shares as of September 30, 2017 and December 31, 2016:

	September 30, 2017		December 31, 2016
Warrants to purchase Common Stock		83,234,617		26,179,560
Stock options to purchase Common Stock		152,403		691,237
Common stock issuable upon the assumed conversion of our convertible promissory notes (1)		31,250,000		---
Common stock issuable upon the assumed conversion of our Series B Convertible Preferred Stock (2)		---		---
Total		114,637,020		26,870,797

(1)

As part of the Initial Note and the Second Note, at the holder’s option, all unpaid principle and interest due under each convertible promissory note may be converted into shares of Common Stock based on a conversion price of $0.04 per share.  The Initial Note and the Second Note mature on February 27, 2019 and March 31, 2019, respectively, and on each maturity date each convertible promissory note, and accrued interest thereon, is subject to mandatory conversion based on a conversion price of $0.04 per share, unless an event of default has occurred and is continuing.  For the purposes of this Table, we have assumed that all outstanding principal and interest will be converted on each applicable maturity date.

(2)

Pursuant to the March 2017 Offering, Velo LLC purchased 1,250 shares of Series B Convertible Preferred Stock of the Company for $5,000,000.  The Series B Convertible Preferred Stock that was issued in the March 2017 Offering, (a) voted together with the Common Stock as a single class (subject to standard protective provisions for the Series B Convertible Preferred Stock), (b) had the same dividend rights as the Common Stock, (c) had a liquidation preference equal to the greater of its purchase price and its as converted-to-Common Stock value, (d) automatically converted into Common Stock when the number of authorized shares of Common Stock was increased within 190 days of the second closing as necessary to permit all outstanding convertible or exercisable securities (including the Series B Convertible Preferred Stock) to convert to Common Stock, and (e) was convertible into Common Stock  at the discretion of the holder, subject to the availability of authorized shares, at an as-converted-to-Common Stock purchase price of $0.04 per share.   On August 1, 2017, all 1,250 outstanding shares of Series B Convertible Preferred Stock converted in exchange for 125,000,000 shares of Common Stock as a result of the approval by the stockholders at the 2017 Annual Meeting of Stockholders held on July 25, 2017, and the filing in July 2017, of an amendment increasing our authorized shares of Common Stock from 200,000,000 shares to 750,000,000 shares.

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SHARE BASED COMPENSATION

9 Months Ended

Sep. 30, 2017

SHARE BASED COMPENSATION [Abstract]

SHARE BASED COMPENSATION

NOTE 14. SHARE BASED COMPENSATION

The Company’s share-based compensation plan, the 2006 Equity Incentive Plan, as amended (“Equity Incentive Plan”), is administered by the Board of Directors (“Board”), which selects persons to receive awards and determines the number of shares subject to each award and the terms, conditions, performance measures and other provisions of the award.

Our Board did not grant any incentive stock option awards to executives or employees or any non-statutory stock option awards to directors or non-employees for the three and nine months ended September 30, 2017 and 2016, respectively.

We account for share-based compensation under FASB ASC Topic 718, Stock Compensation, which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees, consultants, and directors based on estimated fair values of the award on the grant date.  We use the Black-Scholes option-pricing model to estimate the fair value of share-based awards.

Stock Options (Incentive and Nonstatutory)

The following table summarizes share-based compensation related to stock options for the three and nine months ended September 30:

	Three Months Ended September 30,						Nine months Ended September 30,
	2017			2016			2017		2016
Research and development	$	(3,345	)	$	(3,079	)	$	---	$	5,914
Selling, general and administrative		2,571			17,190			7,923		54,212
Total share-based compensation expense	$	(774	)	$	14,111		$	7,923	$	60,126

As of September 30, 2017, the balance of unearned share-based compensation to be expensed in future periods related to unvested stock option awards, as adjusted for expected forfeitures, is zero.

The following table summarizes the stock options outstanding and the number of shares of Common Stock subject to exercise as of September 30, 2017 and the changes therein during the nine months then ended:

	Stock Options			Weighted Average Exercise Price per Share
Outstanding as of December 31, 2016		691,237		$	1.94
Granted		---			---
Forfeited/cancelled		(538,834	)	$	1.08
Exercised		---			---
Outstanding as of September 30, 2017		152,403		$	4.98

The following table presents the stock option grants outstanding and exercisable as of September 30, 2017:

Options Outstanding						Options Exercisable
Stock Options Outstanding		Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Life in Years		Stock Options Exercisable		Weighted Average Exercise Price per Share
	90,000	$	0.33		5.5		90,000	$	0.33
	40,000		1.15		7.0		40,000		1.15
	22,403		30.48		0.5		22,403		30.48
	152,403	$	4.98		5.1		152,403	$	4.98

Summary of Plans

2006 Equity Incentive Plan

In March 2006, our Board adopted and our stockholders approved our Equity Incentive Plan, which initially provided for the issuance of up to 133,333 shares of our Common Stock pursuant to stock option and other equity awards.  At the annual meetings of the stockholders held on May 8, 2007, December 17, 2009, June 15, 2010, June 14, 2012, June 13, 2013, and on June 5, 2014, our stockholders approved amendments to the Equity Incentive Plan to increase the total number of shares of Common Stock issuable under the Equity Incentive Plan pursuant to stock options and other equity awards by 266,667 shares, 200,000 shares, 200,000 shares, 400,000 shares, 600,000 shares, and 1,000,000 shares, respectively, to a total of 2,800,000 shares.

In December 2006, we began issuing stock options to employees, consultants, and directors.  The stock options issued generally vest over a period of one to four years and have a maximum contractual term of ten years.  In January 2007, we began issuing restricted stock awards to our employees.  Restricted stock awards generally vest over a period of six months to five years after the date of grant.  Prior to vesting, restricted stock awards do not have dividend equivalent rights, do not have voting rights and the shares underlying the restricted stock awards are not considered issued and outstanding.  Shares of Common Stock are issued on the date the restricted stock awards vest.

As of September 30, 2017, we had granted options to purchase 2,061,167 shares of Common Stock since the inception of the Equity Incentive Plan, of which 152,403 were outstanding at a weighted average exercise price of $4.98 per share, and we had granted awards for 68,616 shares of restricted stock since the inception of the Equity Incentive Plan, of which none were outstanding.  As of September 30, 2017, there were 2,578,151 shares that remained available for future grants under our Equity Incentive Plan.

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FAIR VALUE MEASUREMENTS

9 Months Ended

Sep. 30, 2017

FAIR VALUE MEASUREMENTS [Abstract]

FAIR VALUE MEASUREMENTS

NOTE 15. FAIR VALUE MEASUREMENTS

In accordance with FASB ASC Topic 820, Fair Value Measurements, (“ASC Topic 820”) certain assets and liabilities of the Company are required to be recorded at fair value.  Fair value is determined based on the exchange price that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants.  The guidance in ASC Topic 820 also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimized the use of unobservable inputs by requiring that the most observable inputs be used when available.

Observable inputs are based on market data obtained from independent sources, while unobservable inputs are based on our market assumptions.  Unobservable inputs require significant management judgment or estimation.  In some cases, the inputs used to measure an asset or liability may fall into different levels of the fair value hierarchy.  In those instances, the fair value measurement is required to be classified using the lowest level of input that is significant to the fair value measurement.  Such determination requires significant management judgment.

The three-tier value hierarchy, which prioritizes the inputs used in the valuation methodologies, is as follows:

Level 1 — Valuations based on quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 — Valuations based on observable inputs other than quoted prices in Level 1, such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, and other inputs that are observable or can be corroborated by observable market data.

Level 3 — Valuations based on unobservable inputs reflecting the Company’s own assumptions, consistent with reasonably available assumptions made by other market participants.

Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurements.  We review the fair value hierarchy classification on a quarterly basis.  Changes in the observability of valuation inputs may result in a reclassification of levels for certain securities within the fair value hierarchy.

Our financial instruments, including cash, cash equivalents, accounts receivable, and accounts payable are carried at cost, which approximates their fair value because of the short-term maturity of these instruments.  We believe that the carrying value of our promissory note payable balances approximates fair value based on a valuation methodology using the income approach and a discounted cash flow model.

The following table summarizes the fair value of our financial instruments at September 30, 2017 and December 31, 2016.

Description	September 30, 2017		December 31, 2016
Liabilities:
Convertible promissory note – March 2017	$	500,000		---
Convertible promissory note – February 2017	$	500,000		---
Promissory note – December 2016		---	$	20,000
Total	$	1,000,000	$	20,000

Our financial instruments, including cash, cash equivalents, accounts receivable, and accounts payable are carried at cost, which approximates their fair value because of the short-term maturity of these instruments.  We believe that the carrying value of our promissory notes and our convertible promissory note balances approximates fair value based on a valuation methodology using the income approach and a discounted cash flow model.

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INCOME TAXES

9 Months Ended

Sep. 30, 2017

INCOME TAXES [Abstract]

INCOME TAXES

NOTE 16. INCOME TAXES

For the nine months ended September 30, 2017, the Company incurred a consolidated tax loss of approximately $1,843,000.

As of September 30, 2017, the Company has consolidated net operating loss carryforwards and research credit carryforwards for income tax purposes of approximately $58,295,000 and $555,000 respectively. The Company has provided a full valuation allowance for all of its deferred tax assets. As a result, the effective tax rate is zero and the net deferred tax assets are zero.

The Tax Reform Act of 1986 contains provisions, which limit the amount of NOL and tax credit carryforwards that companies may utilize in any one year in the event of cumulative changes in ownership over a three-year period in excess of 50%.  Since the effective date of the Tax Reform Act of 1986, the Company has completed significant share issuances in 2003, 2016, and 2017 which may significantly limit our ability to utilize our NOL and tax credit carryforwards against taxable earnings in future periods.

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COMMITMENTS AND CONTINGENCIES

9 Months Ended

Sep. 30, 2017

COMMITMENTS AND CONTINGENCIES [Abstract]

COMMITMENTS AND CONTINGENCIES

NOTE 17. COMMITMENTS AND CONTINGENCIES

Operating Leases

On January 31, 2006, we entered into a lease agreement for office and laboratory space in Addison, Texas.  The lease commenced on April 1, 2006 and originally continued until April 1, 2013.  The lease required a minimum monthly lease obligation of $9,330, which was inclusive of monthly operating expenses, until April 1, 2011 and at such time increased to $9,776, which was inclusive of monthly operating expenses.  On February 22, 2013, we executed an Amendment to Lease Agreement (the “Lease Amendment”) that renewed and extended our lease until March 31, 2015.  The Lease Amendment required a minimum monthly lease obligation of $9,193, which was inclusive of monthly operating expenses, until March 31, 2014 and at such time, increased to $9,379, which was inclusive of monthly operating expenses.  On March 17, 2015, we executed a Second Amendment to Lease Agreement (the “Second Amendment”) that renewed and extended our lease until March 31, 2018.  The Second Amendment requires a minimum monthly lease obligation of $9,436, which is inclusive of monthly operating expenses.

On January 16, 2015, we entered into a lease agreement for certain office equipment.  The office equipment lease, that commenced on February 1, 2015 and continues until February 1, 2018, requires a minimum lease obligation of $551 per month.

The future minimum lease payments under the 2015 office lease and the 2015 equipment lease are as follows as of September 30, 2017:

Calendar Years	Future Lease Expense
2017 (Three months)	$	30,300
2018		29,199
2019		---
2020		---
Total	$	59,499

Rent expense for our operating leases amounted to $30,301 and $36,709 for the three months ended September 30, 2017 and 2016, respectively, and $96,245 and $97,241 for the nine months ended September 30, 2017 and 2016, respectively.

Indemnification

In accordance with our restated articles of incorporation and our amended and restated bylaws, we have indemnification obligations to our officers and directors for certain events or occurrences, subject to certain limits, while they are serving at our request in their respective capacities.  We have a director and officer insurance policy that enables us to recover a portion of any amounts paid for future potential claims.  We have also entered into contractual indemnification agreements with each of our officers and directors.

Related Party Transactions and Concentration

Note, Warrant and Preferred Stock Purchase Agreement

On February 27, 2017, we entered into the Purchase Agreement with Velocitas and Velo LLC, an entity controlled by Velocitas, with respect to an aggregate financing of up to $6,000,000.

Refer to a description in greater detail of the financing event with Velocitas and Velo LLC in Note 10. Convertible Debt.

On March 31, 2017, the second closing of the Purchase Agreement included, amongst other transaction components, the Company acquiring the Altrazeal distributor agreements Velocitas had with its sub-distributors in exchange for the issuance of 13,375,000 shares of Common Stock.  The Company has valued the acquisition of the Altrazeal distributor agreement from Velocitas at $869,375 based on the closing price of $0.065 per share of the Company’s Common Stock on March 31, 2017.

For the three months ended September 30, 2017 and 2016, the Company did not record any revenues with Velocitas GmbH, an affiliated entity of Velocitas.  For the nine months ended September 30, 2017 and 2016, the Company recorded revenues, in approximate numbers, of $214,000 and nil, respectively, with Velocitas GmbH which represented 51% and 0% of our total revenues, respectively.  As of September 30, 2017 and December 31, 2016, Velocitas GmbH did not have any outstanding net accounts receivable.

Consulting Agreement – Velocitas GmbH

On April 1, 2017, the Company entered into a Consulting Agreement with Velocitas GmbH to provide the Company with operational support services in the fields of regulatory administration, finance, international customer account management, manufacturing, supply chain logistics, and other services required by the Company. Velocitas GmbH will receive a monthly payment of $25,833 for providing such services to the Company.

Temporary Advances

On December 15, 2016, January 18, 2017, and February 16, 2017, we issued promissory notes to Velocitas with purchase prices of $20,000, $65,000, and $30,000, respectively.  Each of the promissory notes bore interest at the rate of 6.0% per annum with payment of principal and interest due on the earlier of (i) 180 days from the date of issuance, (ii) the date of closing of any debt or equity financing transaction by and between Uluru and Velocitas, or (iii) the payment to Uluru of certain invoices due from selected Company’s distributors.  Each of the promissory notes was secured by a pledge of certain product inventory and there were no debt issuance costs incurred by the Company.  On February 27, 2017, each of the promissory notes was repaid in connection with the issuance of the Initial Note under the Purchase Agreement with Velocitas.

On February 21, 2017, we issued a promissory note to Kirkwood with a purchase price of $25,000.  The promissory note bore interest at the rate of 6.0% per annum with payment of principal and interest due on the earlier of (i) 60 days from the date of issuance, (ii) the date of closing of any debt or equity financing transaction by the Company, or (iii) no later than two days after receiving written request by Kirkwood.  The promissory note was secured by a pledge of certain product inventory and accounts receivables and there were no debt issuance costs incurred by the Company.  The Company’s Vice President and Chief Financial Officer, Terrance K. Wallberg, is President and sole shareholder of Kirkwood.  On February 27, 2017, the outstanding promissory note to Kirkwood was repaid in connection with the issuance of the Initial Note under the Purchase Agreement with Velocitas.

Related Party Obligations

Since 2011, our named executive officers and certain key executives have temporarily deferred portions of their compensation as part of a plan to conserve and manage the Company’s cash and financial resources.

As of September 30, 2017, the Company’s obligation to these executives for temporarily deferred compensation was approximately $72,000 of which approximately $72,000 was included in accrued liabilities.

As of December 31, 2016, the Company’s obligation to these executives for temporarily deferred compensation was approximately $473,000 of which approximately $200,000 was included in accrued liabilities and approximately $273,000 was included in accounts payable.

Contingent Milestone Obligations

We are subject to paying Access Pharmaceuticals, Inc. (“Access”) for certain milestones based on our achievement of certain annual net sales, cumulative net sales, and/or our having reached certain defined technology milestones including licensing agreements and advancing products to clinical development.  As of September 30, 2017, the future milestone obligations that we are subject to paying Access, if the milestones related thereto are achieved, total $4,750,000.  Such milestones are based on total annual sales of 20 and 40 million dollars of certain products, annual sales of 20 million dollars of any one certain product, and cumulative sales of such products of 50 and 100 million dollars.  As of September 30, 2017, the Company has accrued approximately $35,000 of expense relating to future milestone payments to Access.

On March 7, 2008, we terminated the license agreement with ProStrakan Ltd. for Amlexanox-related products in the United Kingdom and Ireland.  As part of the termination, we agreed to pay ProStrakan Ltd. a royalty of 30% on any future payments received by us from a new licensee in the United Kingdom and Ireland territories, up to a maximum of $1,400,000.  On November 17, 2008, we entered into a licensing agreement for Amlexanox-related product rights to the United Kingdom and Ireland territories with MEDA AB.

Prescription Drug User Fee Obligation

The Company was assessed prescription drug user fees (“PDUFA”) by the United States Department of Health and Human Services (the “DHHS”) for the sale and manufacture of Aphthasol®.  The Company had contested the assessments as it believed such fees should be waived because the Company should qualify for abatement of the PDUFA fees.  However, the Company’s challenge has been denied by the DHHS.  As of September 30, 2017, the Company has recognized amounts due, to include potential penalties and interest, of approximately $1,067,000 related to the unpaid PDUFA fees.  The PDUFA fees remain unpaid as of the date of this Quarterly Report on Form 10-Q.  Since the Company has not yet reached a settlement with the DHHS, it is possible that the Company may be subject to additional collection costs.

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LEGAL PROCEEDINGS

9 Months Ended

Sep. 30, 2017

LEGAL PROCEEDINGS [Abstract]

LEGAL PROCEEDINGS

NOTE 18. LEGAL PROCEEDINGS

From time to time, we may be involved in litigation relating to claims arising out of our operations in the normal course of business. We are not currently a party to any legal proceedings, the adverse outcome of which, in management’s opinion, individually or in the aggregate, would have a material adverse effect on the results of our operations or financial position. There are no material proceedings to which any director, officer or any of our affiliates, any owner of record or beneficially of more than five percent of any class of our voting securities, or any associate of any such director, officer, our affiliates, or security holder, is a party adverse to us or our consolidated subsidiary or has a material interest adverse thereto; however, one or more events may lead to a formal dispute or proceeding in the future.

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SUBSEQUENT EVENTS

9 Months Ended

Sep. 30, 2017

SUBSEQUENT EVENTS [Abstract]

SUBSEQUENT EVENTS

NOTE 19. SUBSEQUENT EVENTS

None.

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COMPANY OVERVIEW AND BASIS OF PRESENTATION (Policies)

9 Months Ended

Sep. 30, 2017

COMPANY OVERVIEW AND BASIS OF PRESENTATION [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and include the accounts of ULURU Inc., a Nevada corporation, and its wholly-owned subsidiary, Uluru Delaware Inc., a Delaware corporation.  They do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. All adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the Company’s financial position as of September 30, 2017 and the results of its operations for the three and nine months ended September 30, 2017 and 2016 and cash flows for the nine months ended September 30, 2017 and 2016 have been made.

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, as well as disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods.  Actual results may differ from those estimates and assumptions.  These differences are usually minor and are included in our consolidated financial statements as soon as they are known.  Our estimates, judgments, and assumptions are continually evaluated based on available information and experience. Because of the use of estimates inherent in the financial reporting process, actual results could differ from those estimates.

All intercompany transactions and balances have been eliminated in consolidation.

Operating results for the three and nine months ended September 30, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017.

These condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016, referred to as our 2016 Form 10-K as filed with the Securities and Exchange Commission on April 17, 2017, including the risk factors set forth therein.

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SEGMENT INFORMATION (Tables)

9 Months Ended

Sep. 30, 2017

SEGMENT INFORMATION [Abstract]

Revenues per geographic area

Revenues per geographic area for the three and nine months ended September 30 are summarized as follows:

	Three Months Ended September 30,										Nine Months Ended September 30,
Revenues	2017		%			2016		%			2017		%			2016		%
Domestic	$	3,012		2	%	$	1,453		26	%	$	8,427		2	%	$	16,232		4	%
International		197,927		98	%		4,196		74	%		413,943		98	%		362,542		96	%
Total	$	200,939		100	%	$	5,649		100	%	$	422,370		100	%	$	378,774		100	%

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INVENTORY (Tables)

9 Months Ended

Sep. 30, 2017

INVENTORY [Abstract]

Components of inventory

The components of inventory, at the different stages of production, consisted of the following at September 30, 2017 and December 31, 2016:

Inventory	September 30, 2017		December 31, 2016
Raw materials	$	26,666	$	35,800
Work-in-progress		372,825		424,741
Finished goods		98,609		99,059
Total	$	498,100	$	559,600

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PROPERTY, EQUIPMENT and LEASEHOLD IMPROVEMENTS (Tables)

9 Months Ended

Sep. 30, 2017

PROPERTY, EQUIPMENT and LEASEHOLD IMPROVEMENTS [Abstract]

Property, equipment and leasehold improvements

Property, equipment and leasehold improvements, net, consisted of the following at September 30, 2017 and December 31, 2016:

Property, equipment and leasehold improvements	September 30, 2017			December 31, 2016
Laboratory equipment	$	424,888		$	424,888
Manufacturing equipment		1,604,894			1,604,894
Computers, office equipment, and furniture		154,781			151,280
Computer software		4,108			4,108
Leasehold improvements		95,841			95,841
		2,284,512			2,281,011
Less: accumulated depreciation and amortization		(2,225,309	)		(2,154,270	)
Property, equipment and leasehold improvements, net	$	59,203		$	126,741

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INTANGIBLE ASSETS (Tables)

9 Months Ended

Sep. 30, 2017

Patents [Member]

Finite-Lived Intangible Assets [Line Items]

Intangible assets

Intangible assets, net consisted of the following at September 30, 2017 and December 31, 2016:

Intangible assets – patents	September 30, 2017			December 31, 2016
Patent - Amlexanox (Aphthasol®)	$	2,090,000		$	2,090,000
Patent - Amlexanox (OraDisc™ A)		6,873,080			6,873,080
Patent - OraDisc™		73,000			73,000
Patent - Hydrogel wound dressing		589,858			589,858
		9,625,938			9,625,938
Less: accumulated amortization		(7,409,554	)		(7,381,847	)
Less: reserve for impairment		(2,027,310	)		(2,027,310	)
Intangible assets - patents, net	$	189,074		$	216,781

Future aggregate amortization expense for intangible assets

The future aggregate amortization expense for intangible patent assets, remaining as of September 30, 2017, is as follows:

Calendar Years	Future Amortization Expense
2017 (Three months)	$	9,337
2018		37,044
2019		37,044
2020		37,145
2021		37,044
2022 & Beyond		31,460
Total	$	189,074

Licensing Rights [Member]

Finite-Lived Intangible Assets [Line Items]

Intangible assets

Licensing rights, net consisted of the following at September 30, 2017 and December 31, 2016:

Intangible assets - licensing rights	September 30, 2017			December 31, 2016
Intangible assets – licensing rights, gross	$	4,381,881		$	3,512,506
Less: accumulated amortization		(620,314	)		(331,419	)
Intangible assets - licensing rights, net	$	3,761,567		$	3,181,087

Future aggregate amortization expense for intangible assets

The future aggregate amortization expense for intangible licensing rights assets, remaining as of September 30, 2017, is as follows:

Calendar Years	Future Amortization Expense
2017 (Three months)	$	104,931
2018		416,303
2019		416,303
2020		416,303
2021		416,303
2022 & Beyond		1,991,424
Total	$	3,761,567

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ACCRUED LIABILITIES (Tables)

9 Months Ended

Sep. 30, 2017

ACCRUED LIABILITIES [Abstract]

Accrued liabilities

Accrued liabilities consisted of the following at September 30, 2017 and December 31, 2016:

Accrued Liabilities	September 30, 2017		December 31, 2016
Accrued compensation/benefits	$	120,910	$	274,874
Accrued insurance payable		---		40,422
Accrued property taxes		4,215		---
Accrued royalties		34,744		---
Product rebates/returns		6		4
Total accrued liabilities	$	159,875	$	315,300

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CONVERTIBLE DEBT (Tables)

9 Months Ended

Sep. 30, 2017

CONVERTIBLE DEBT [Abstract]

Information relating to convertible debt

Information relating to the Initial Note and Second Note is as follows:

											As of September 30, 2017
Transaction	Initial Principal Amount		Interest Rate			Maturity Date	Conversion Price		Principal Balance		Unamortized Debt Discount		Unamortized Debt Issuance Costs		Carrying Value
Initial Note	$	500,000		12.5	%	02/27/2019	$	0.04	$	500,000	$	251,470	$	6,466	$	242,064
Second Note	$	500,000		12.5	%	03/31/2019	$	0.04	$	500,000	$	255,253	$	6,466	$	238,281
Total	$	1,000,000							$	1,000,000	$	506,723	$	12,932	$	480,345

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STOCKHOLDERS' EQUITY (Tables)

9 Months Ended

Sep. 30, 2017

STOCKHOLDERS' EQUITY [Abstract]

Warrants outstanding and number of shares of common stock subject to exercise

The following table summarizes the warrants outstanding and the number of shares of Common Stock subject to exercise as of September 30, 2017 and the changes therein during the nine months then ended:

	Number of Shares of Common Stock Subject to Exercise		Weighted – Average Exercise Price
Balance as of December 31, 2016		26,179,560	$	0.11
Warrants issued		57,055,057	$	0.04
Warrants exercised		---		---
Warrants cancelled		---		---
Balance as of September 30, 2017		83,234,617	$	0.06

Expiration dates for warrants subject to exercise

Of the warrant shares subject to exercise as of September 30, 2017, expiration of the right to exercise is as follows:

Date of Expiration	Number of Warrant Shares of Common Stock Subject to Expiration
March 14, 2018		660,000
January 15, 2019		80,000
April 30, 2020		194,118
March 30, 2021		25,245,442
March 31, 2027		57,055,057
Total		83,234,617

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EARNINGS PER SHARE (Tables)

9 Months Ended

Sep. 30, 2017

EARNINGS PER SHARE [Abstract]

Common shares excluded from calculating basic and diluted net loss per common share

Shares used in calculating basic and diluted net loss per common share exclude these potential common shares as of September 30, 2017 and December 31, 2016:

	September 30, 2017		December 31, 2016
Warrants to purchase Common Stock		83,234,617		26,179,560
Stock options to purchase Common Stock		152,403		691,237
Common stock issuable upon the assumed conversion of our convertible promissory notes (1)		31,250,000		---
Common stock issuable upon the assumed conversion of our Series B Convertible Preferred Stock (2)		---		---
Total		114,637,020		26,870,797

(1)

As part of the Initial Note and the Second Note, at the holder’s option, all unpaid principle and interest due under each convertible promissory note may be converted into shares of Common Stock based on a conversion price of $0.04 per share.  The Initial Note and the Second Note mature on February 27, 2019 and March 31, 2019, respectively, and on each maturity date each convertible promissory note, and accrued interest thereon, is subject to mandatory conversion based on a conversion price of $0.04 per share, unless an event of default has occurred and is continuing.  For the purposes of this Table, we have assumed that all outstanding principal and interest will be converted on each applicable maturity date.

(2)

Pursuant to the March 2017 Offering, Velo LLC purchased 1,250 shares of Series B Convertible Preferred Stock of the Company for $5,000,000.  The Series B Convertible Preferred Stock that was issued in the March 2017 Offering, (a) voted together with the Common Stock as a single class (subject to standard protective provisions for the Series B Convertible Preferred Stock), (b) had the same dividend rights as the Common Stock, (c) had a liquidation preference equal to the greater of its purchase price and its as converted-to-Common Stock value, (d) automatically converted into Common Stock when the number of authorized shares of Common Stock was increased within 190 days of the second closing as necessary to permit all outstanding convertible or exercisable securities (including the Series B Convertible Preferred Stock) to convert to Common Stock, and (e) was convertible into Common Stock  at the discretion of the holder, subject to the availability of authorized shares, at an as-converted-to-Common Stock purchase price of $0.04 per share.   On August 1, 2017, all 1,250 outstanding shares of Series B Convertible Preferred Stock converted in exchange for 125,000,000 shares of Common Stock as a result of the approval by the stockholders at the 2017 Annual Meeting of Stockholders held on July 25, 2017, and the filing in July 2017, of an amendment increasing our authorized shares of Common Stock from 200,000,000 shares to 750,000,000 shares.

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SHARE BASED COMPENSATION (Tables)

9 Months Ended

Sep. 30, 2017

SHARE BASED COMPENSATION [Abstract]

Allocated share-based compensation expense

The following table summarizes share-based compensation related to stock options for the three and nine months ended September 30:

	Three Months Ended September 30,						Nine months Ended September 30,
	2017			2016			2017		2016
Research and development	$	(3,345	)	$	(3,079	)	$	---	$	5,914
Selling, general and administrative		2,571			17,190			7,923		54,212
Total share-based compensation expense	$	(774	)	$	14,111		$	7,923	$	60,126

Stock option activity

The following table summarizes the stock options outstanding and the number of shares of Common Stock subject to exercise as of September 30, 2017 and the changes therein during the nine months then ended:

	Stock Options			Weighted Average Exercise Price per Share
Outstanding as of December 31, 2016		691,237		$	1.94
Granted		---			---
Forfeited/cancelled		(538,834	)	$	1.08
Exercised		---			---
Outstanding as of September 30, 2017		152,403		$	4.98

Stock option grants outstanding and exercisable

The following table presents the stock option grants outstanding and exercisable as of September 30, 2017:

Options Outstanding						Options Exercisable
Stock Options Outstanding		Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Life in Years		Stock Options Exercisable		Weighted Average Exercise Price per Share
	90,000	$	0.33		5.5		90,000	$	0.33
	40,000		1.15		7.0		40,000		1.15
	22,403		30.48		0.5		22,403		30.48
	152,403	$	4.98		5.1		152,403	$	4.98

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FAIR VALUE MEASUREMENTS (Tables)

9 Months Ended

Sep. 30, 2017

FAIR VALUE MEASUREMENTS [Abstract]

Fair value of our financial instruments

The following table summarizes the fair value of our financial instruments at September 30, 2017 and December 31, 2016.

Description	September 30, 2017		December 31, 2016
Liabilities:
Convertible promissory note – March 2017	$	500,000		---
Convertible promissory note – February 2017	$	500,000		---
Promissory note – December 2016		---	$	20,000
Total	$	1,000,000	$	20,000

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COMMITMENTS AND CONTINGENCIES (Tables)

9 Months Ended

Sep. 30, 2017

COMMITMENTS AND CONTINGENCIES [Abstract]

Future minimum lease payments

The future minimum lease payments under the 2015 office lease and the 2015 equipment lease are as follows as of September 30, 2017:

Calendar Years	Future Lease Expense
2017 (Three months)	$	30,300
2018		29,199
2019		---
2020		---
Total	$	59,499

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SEGMENT INFORMATION (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2017 USD ($) Customer	Sep. 30, 2016 USD ($) Customer	Sep. 30, 2017 USD ($) Customer	Sep. 30, 2016 USD ($) Customer
Revenues per geographic area [Abstract]
Total revenues	$ 200,939	$ 5,649	$ 422,370	$ 378,774
Total revenue, percentage	100.00%	100.00%	100.00%	100.00%
Revenue [Member] | Customer Concentration Risk [Member]
Revenues per geographic area [Abstract]
Total revenue, percentage	98.00%	71.00%	97.00%	88.00%
Number of major customers | Customer	1	4	2	2
Reportable Geographical Components [Member] | Domestic [Member]
Revenues per geographic area [Abstract]
Total revenues	$ 3,012	$ 1,453	$ 8,427	$ 16,232
Total revenue, percentage	2.00%	26.00%	2.00%	4.00%
Reportable Geographical Components [Member] | International [Member]
Revenues per geographic area [Abstract]
Total revenues	$ 197,927	$ 4,196	$ 413,943	$ 362,542
Total revenue, percentage	98.00%	74.00%	98.00%	96.00%

XML

INVENTORY (Details) - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Components of inventory [Abstract]
Raw materials	$ 26,666	$ 35,800
Work-in-progress	372,825	424,741
Finished goods	98,609	99,059
Total	$ 498,100	$ 559,600

XML

PROPERTY, EQUIPMENT and LEASEHOLD IMPROVEMENTS (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2016
Property, equipment and leasehold improvements, net [Abstract]
Property, equipment and leasehold improvements, gross	$ 2,284,512		$ 2,284,512		$ 2,281,011
Less: accumulated depreciation and amortization	(2,225,309)		(2,225,309)		(2,154,270)
Property, equipment and leasehold improvements, net	59,203		59,203		126,741
Depreciation expense	5,481	$ 33,237	71,039	$ 99,567
Laboratory Equipment [Member]
Property, equipment and leasehold improvements, net [Abstract]
Property, equipment and leasehold improvements, gross	424,888		424,888		424,888
Manufacturing Equipment [Member]
Property, equipment and leasehold improvements, net [Abstract]
Property, equipment and leasehold improvements, gross	1,604,894		1,604,894		1,604,894
Computers, Office Equipment, and Furniture [Member]
Property, equipment and leasehold improvements, net [Abstract]
Property, equipment and leasehold improvements, gross	154,781		154,781		151,280
Computer Software [Member]
Property, equipment and leasehold improvements, net [Abstract]
Property, equipment and leasehold improvements, gross	4,108		4,108		4,108
Leasehold Improvements [Member]
Property, equipment and leasehold improvements, net [Abstract]
Property, equipment and leasehold improvements, gross	$ 95,841		$ 95,841		$ 95,841

XML

INTANGIBLE ASSETS, Patents (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2016
Finite-Lived Intangible Assets [Line Items]
Total	$ 189,074		$ 189,074		$ 216,781
Amortization expense	114,268	$ 201,718	316,602	$ 599,880
Future aggregate amortization expense for intangible assets [Abstract]
Total	189,074		189,074		216,781
Patents [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	9,625,938		9,625,938		9,625,938
Less: accumulated amortization	(7,409,554)		(7,409,554)		(7,381,847)
Less: reserve for impairment	(2,027,310)		(2,027,310)		(2,027,310)
Total	189,074		189,074		216,781
Amortization expense	9,337	$ 119,763	27,707	$ 356,687
Future aggregate amortization expense for intangible assets [Abstract]
2017 (Three months)	9,337		9,337
2018	37,044		37,044
2019	37,044		37,044
2020	37,145		37,145
2021	37,044		37,044
2022 & Beyond	31,460		31,460
Total	189,074		189,074		216,781
Patents [Member] | Amlexanox (Aphthasol) [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	2,090,000		2,090,000		2,090,000
Patents [Member] | Amlexanox (OraDiscA) [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	6,873,080		6,873,080		6,873,080
Patents [Member] | OraDisc [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	73,000		73,000		73,000
Patents [Member] | Hydrogel Wound Dressing [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	$ 589,858		$ 589,858		$ 589,858

XML

INTANGIBLE ASSETS, Licensing Rights (Details) - USD ($)			3 Months Ended		9 Months Ended
	Mar. 31, 2017	Feb. 27, 2017	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2016
Finite-Lived Intangible Assets [Line Items]
Total			$ 189,074		$ 189,074		$ 216,781
Amortization expense			114,268	$ 201,718	316,602	$ 599,880
Future aggregate amortization expense for intangible assets [Abstract]
Total			189,074		189,074		216,781
Licensing Rights [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible assets - licensing rights, gross			4,381,881		4,381,881		3,512,506
Less: accumulated amortization			(620,314)		(620,314)		(331,419)
Total			3,761,567		3,761,567		3,181,087
Amortization expense			104,931	$ 81,955	288,895	$ 243,193
Future aggregate amortization expense for intangible assets [Abstract]
2017 (Three months)			104,931		104,931
2018			416,303		416,303
2019			416,303		416,303
2020			416,303		416,303
2021			416,303		416,303
2022 & Beyond			1,991,424		1,991,424
Total			$ 3,761,567		$ 3,761,567		$ 3,181,087
Altrazeal Trading GmbH [Member] | Second Closing [Member]
Finite-Lived Intangible Assets [Line Items]
Warrants to purchase shares of common stock (in shares)	13,375,000
Acquisition value	$ 869,375
Closing price of common stock (in dollars per share)	$ 0.065
Velocitas Partners, LLC [Member]
Finite-Lived Intangible Assets [Line Items]
Expected gross proceeds		$ 6,000,000
Velocitas Partners, LLC [Member] | Maximum [Member]
Finite-Lived Intangible Assets [Line Items]
Expected gross proceeds		$ 6,000,000

XML

ACCRUED LIABILITIES (Details) - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Accrued liabilities [Abstract]
Accrued compensation/benefits	$ 120,910	$ 274,874
Accrued insurance payable	0	40,422
Accrued property taxes	4,215	0
Accrued royalties	34,744	0
Product rebates/returns	6	4
Total accrued liabilities	$ 159,875	$ 315,300

XML

PROMISSORY NOTES PAYABLE (Details) - USD ($)				9 Months Ended
	Feb. 16, 2017	Jan. 18, 2017	Dec. 15, 2016	Sep. 30, 2017	Feb. 27, 2017	Feb. 21, 2017
Debt Instrument [Line Items]
Initial principal amount and purchase price				$ 1,000,000
Initial Note [Member]
Debt Instrument [Line Items]
Initial principal amount and purchase price				$ 500,000
Interest rate				12.50%
Velocitas Partners, LLC [Member]
Debt Instrument [Line Items]
Initial principal amount and purchase price	$ 30,000	$ 65,000	$ 20,000
Interest rate	6.00%	6.00%	6.00%
Monthly installment payments commencing period	180 days	180 days	180 days
Velocitas Partners, LLC [Member] | Initial Note [Member]
Debt Instrument [Line Items]
Initial principal amount and purchase price					$ 500,000
Kirkwood Investors, Inc [Member]
Debt Instrument [Line Items]
Initial principal amount and purchase price						$ 25,000
Interest rate						6.00%
Monthly installment payments commencing period				60 days
Number of days for registration effective for a period				2 days

XML

CONVERTIBLE DEBT (Details)		3 Months Ended			9 Months Ended
	Feb. 27, 2017 USD ($) Closing	Sep. 30, 2017 USD ($) $ / shares shares	Mar. 31, 2017 USD ($) Director $ / shares shares	Sep. 30, 2016 USD ($)	Sep. 30, 2017 USD ($) $ / shares shares	Sep. 30, 2016 USD ($)	Aug. 01, 2017 shares	Jul. 25, 2017 shares	Jun. 30, 2017 shares	Feb. 16, 2017 USD ($)	Jan. 18, 2017 USD ($)	Dec. 31, 2016 shares	Dec. 15, 2016 USD ($)
Debt Instrument [Line Items]
Authorized shares of common stock (in shares) | shares		750,000,000			750,000,000			750,000,000	200,000,000			750,000,000
Information relating to convertible notes payable [Abstract]
Initial principal amount		$ 1,000,000			$ 1,000,000
Principal balance		1,000,000			1,000,000
Unamortized debt discount		506,723			506,723
Unamortized debt issuance costs		12,932			12,932
Carrying value		480,345			480,345
Interest cost recognized for promissory note and convertible debt		31,507		$ 1,106	68,848	$ 14,079
Amortization of debt discount for promissory note and convertible debt		87,571		6,003	174,577	32,015
Amortization of debt issuance costs for promissory note		$ 2,060		$ 4,269	$ 3,976	$ 22,927
Common Stock [Member]
Debt Instrument [Line Items]
Convertible preferred stock shares issued upon conversion (in shares) | shares							125,000,000
Series B Convertible Preferred Stock [Member]
Debt Instrument [Line Items]
Preferred stock, shares outstanding (in shares) | shares							1,250
Second Closing [Member]
Debt Instrument [Line Items]
Number of board of directors | Director			6
Second Closing [Member] | Bradley J. Sacks [Member]
Debt Instrument [Line Items]
Number of board of directors | Director			1
Second Closing [Member] | Major Investor or Board of Directors [Member]
Debt Instrument [Line Items]
Number of board of directors | Director			1
Velocitas Partners, LLC [Member]
Debt Instrument [Line Items]
Gross proceeds	$ 6,000,000
Number of closings | Closing	2
Information relating to convertible notes payable [Abstract]
Initial principal amount										$ 30,000	$ 65,000		$ 20,000
Interest rate										6.00%	6.00%		6.00%
Velocitas Partners, LLC [Member] | Common Stock [Member]
Debt Instrument [Line Items]
Convertible preferred stock shares issued upon conversion (in shares) | shares							125,000,000
Velocitas Partners, LLC [Member] | Series B Convertible Preferred Stock [Member]
Debt Instrument [Line Items]
Preferred stock, shares outstanding (in shares) | shares		1,250			1,250
Velocitas Partners, LLC [Member] | First Closing [Member]
Debt Instrument [Line Items]
Debt instrument term					2 years
Velocitas Partners, LLC [Member] | Second Closing [Member]
Debt Instrument [Line Items]
Debt instrument term					2 years
Proceeds from issuance of preferred stock			$ 5,000,000
Purchase price (in dollars per share) | $ / shares			$ 0.04
Number of days taken to automatically convert to common stock					190 days
Warrants to purchase shares of common stock (in shares) | shares			13,375,000
Warrants exercise price (in dollars per share) | $ / shares			$ 0.04
Term of warrants					10 years
Number of board of directors | Director			4
Velocitas Partners, LLC [Member] | Second Closing [Member] | Maximum [Member]
Debt Instrument [Line Items]
Warrants to purchase shares of common stock (in shares) | shares			57,055,057
Velocitas Partners, LLC [Member] | Second Closing [Member] | Series B Convertible Preferred Stock [Member]
Debt Instrument [Line Items]
Number of shares issued (in shares) | shares			1,250
Initial Note [Member]
Information relating to convertible notes payable [Abstract]
Initial principal amount		$ 500,000			$ 500,000
Interest rate		12.50%			12.50%
Maturity date					Feb. 27, 2019
Conversion price (in dollars per share) | $ / shares		$ 0.04			$ 0.04
Principal balance		$ 500,000			$ 500,000
Unamortized debt discount		251,470			251,470
Unamortized debt issuance costs		6,466			6,466
Carrying value		242,064			242,064
Initial Note [Member] | Velocitas Partners, LLC [Member]
Information relating to convertible notes payable [Abstract]
Initial principal amount	$ 500,000
Second Note [Member]
Information relating to convertible notes payable [Abstract]
Initial principal amount		$ 500,000			$ 500,000
Interest rate		12.50%			12.50%
Maturity date					Mar. 31, 2019
Conversion price (in dollars per share) | $ / shares		$ 0.04			$ 0.04
Principal balance		$ 500,000			$ 500,000
Unamortized debt discount		255,253			255,253
Unamortized debt issuance costs		6,466			6,466
Carrying value		$ 238,281			$ 238,281

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EQUITY TRANSACTIONS (Details)			1 Months Ended		9 Months Ended
	Feb. 27, 2017 USD ($) Closing	Mar. 29, 2016 USD ($) Investor $ / shares shares	Apr. 30, 2016 USD ($)	Mar. 31, 2016 USD ($)	Sep. 30, 2017 USD ($) shares	Aug. 01, 2017 shares
Velocitas Partners, LLC [Member]
Class of Stock [Line Items]
Expected gross proceeds	$ 6,000,000
Number of closings | Closing	2
Proceeds from issuance or sale of equity	$ 6,000,000
Common Stock [Member]
Class of Stock [Line Items]
Convertible preferred stock shares issued upon conversion (in shares) | shares						125,000,000
Common stock issued during period (in shares) | shares					138,375,000
Common Stock [Member] | Velocitas Partners, LLC [Member]
Class of Stock [Line Items]
Convertible preferred stock shares issued upon conversion (in shares) | shares						125,000,000
Common stock issued during period (in shares) | shares					13,375,000
Series B Convertible Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock, shares outstanding (in shares) | shares						1,250
Series B Convertible Preferred Stock [Member] | Velocitas Partners, LLC [Member]
Class of Stock [Line Items]
Preferred stock, shares outstanding (in shares) | shares					1,250
Common stock issued during period (in shares) | shares					1,250
March 2016 Offering [Member]
Class of Stock [Line Items]
Expected gross proceeds		$ 1,800,000
Number of investors entered into stock purchase | Investor		15
Common stock issued during period (in shares) | shares		25,245,442
Aggregate shares of common stock issued upon exercise of warrants (in shares) | shares		25,245,442
Purchase price (in dollars per share) | $ / shares		$ 0.0713
Proceeds from issuance or sale of equity		$ 1,800,000
Percentage of discount on average closing price for share issue price		10.00%
Percentage of premium on average closing price for warrant exercise price		10.00%
Exercise price of warrants (in dollars per share) | $ / shares		$ 0.0871
Term of warrants					5 years
Proceeds from offering			$ 361,000	$ 1,439,000	$ 1,800,000
Referral fee paid to European placement agent					$ 26,000
Percentage of referral fee to European placement agent					10.00%
March 2016 Offering [Member] | Michael I. Sacks [Member]
Class of Stock [Line Items]
Proceeds from offering					$ 1,000,000
March 2016 Offering [Member] | Bradley J. Sacks [Member]
Class of Stock [Line Items]
Proceeds from offering					19,000
March 2016 Offering [Member] | Terrance K. Wallberg [Member]
Class of Stock [Line Items]
Proceeds from offering					50,000
March 2016 Offering [Member] | Daniel G. Moro [Member]
Class of Stock [Line Items]
Proceeds from offering					10,000
March 2017 Offering [Member] | Velocitas Partners, LLC [Member]
Class of Stock [Line Items]
Expected gross proceeds	$ 6,000,000
Number of closings | Closing	2
Proceeds from issuance of preferred stock					$ 5,000,000
Proceeds from issuance or sale of equity	$ 6,000,000
March 2017 Offering [Member] | Series B Convertible Preferred Stock [Member] | Velocitas Partners, LLC [Member]
Class of Stock [Line Items]
Number of shares issued (in shares) | shares					1,250

XML

STOCKHOLDERS' EQUITY (Details) - shares	9 Months Ended
	Sep. 30, 2017	Aug. 01, 2017	Jul. 25, 2017	Jun. 30, 2017	Dec. 31, 2016
Common Stock [Abstract]
Common stock, shares issued (in shares)	201,349,431				62,974,431
Common stock, shares outstanding (in shares)	201,349,431				62,974,431
Authorized shares of common stock (in shares)	750,000,000		750,000,000	200,000,000	750,000,000
Series A Preferred Stock [Member]
Preferred Stock [Abstract]
Preferred stock, shares issued (in shares)	0				0
Preferred stock, shares outstanding (in shares)	0				0
Series B Preferred Stock [Member]
Preferred Stock [Abstract]
Preferred stock, shares issued (in shares)	0				0
Preferred stock, shares outstanding (in shares)	0				0
Series B Convertible Preferred Stock [Member]
Preferred Stock [Abstract]
Preferred stock, shares outstanding (in shares)		1,250
Series B Convertible Preferred Stock [Member] | Velocitas Partners, LLC [Member]
Common Stock [Abstract]
Stock issued during period (in shares)	1,250
Preferred Stock [Abstract]
Preferred stock, shares outstanding (in shares)	1,250
Common Stock [Member]
Common Stock [Abstract]
Stock issued during period (in shares)	138,375,000
Convertible preferred stock shares issued upon conversion (in shares)		125,000,000
Common Stock [Member] | Velocitas Partners, LLC [Member]
Common Stock [Abstract]
Stock issued during period (in shares)	13,375,000
Convertible preferred stock shares issued upon conversion (in shares)		125,000,000

XML

STOCKHOLDERS' EQUITY, Warrants (Details)	9 Months Ended
	Sep. 30, 2017 $ / shares shares
Number of Shares of Common Stock Subject to Exercise [Roll Forward]
Balance (in shares)	26,179,560
Warrants issued (in shares)	57,055,057
Warrants exercised (in shares)	0
Warrants cancelled (in shares)	0
Balance (in shares)	83,234,617
Weighted-Average Exercise Price [Abstract]
Balance (in dollars per share) | $ / shares	0.11
Warrants issued (in dollars per share) | $ / shares	0.04
Warrants exercised (in dollars per share) | $ / shares	0
Warrants cancelled (in dollars per share) | $ / shares	0
Balance (in dollars per share) | $ / shares	0.06
March 14, 2018 [Member]
Number of Shares of Common Stock Subject to Exercise [Roll Forward]
Balance (in shares)	660,000
January 15, 2019 [Member]
Number of Shares of Common Stock Subject to Exercise [Roll Forward]
Balance (in shares)	80,000
April 30, 2020 [Member]
Number of Shares of Common Stock Subject to Exercise [Roll Forward]
Balance (in shares)	194,118
March 30, 2021 [Member]
Number of Shares of Common Stock Subject to Exercise [Roll Forward]
Balance (in shares)	25,245,442
March 31, 2027 [Member]
Number of Shares of Common Stock Subject to Exercise [Roll Forward]
Balance (in shares)	57,055,057

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EARNINGS PER SHARE (Details) - USD ($)		3 Months Ended	9 Months Ended	12 Months Ended
		Mar. 31, 2017	Sep. 30, 2017	Dec. 31, 2016	Aug. 01, 2017	Jul. 25, 2017	Jun. 30, 2017
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from calculating basic and diluted net loss per common share (in shares)			114,637,020	26,870,797
Authorized shares of common stock (in shares)			750,000,000	750,000,000		750,000,000	200,000,000
Common Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Convertible preferred stock shares issued upon conversion (in shares)					125,000,000
Series B Preferred Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Number of shares issued (in shares)			0	0
Preferred stock, shares outstanding (in shares)			0	0
Series B Convertible Preferred Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Preferred stock, shares outstanding (in shares)					1,250
Initial Note [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Conversion price (in dollars per share)			$ 0.04
Maturity date			Feb. 27, 2019
Second Note [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Conversion price (in dollars per share)			$ 0.04
Maturity date			Mar. 31, 2019
Warrants to Purchase Common Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from calculating basic and diluted net loss per common share (in shares)			83,234,617	26,179,560
Stock Options to Purchase Common Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from calculating basic and diluted net loss per common share (in shares)			152,403	691,237
Common Stock Issuable Upon the Assumed Conversion of Our Convertible Promissory Notes [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from calculating basic and diluted net loss per common share (in shares)	[1]		31,250,000	0
Conversion price (in dollars per share)			$ 0.04
Common Stock Issuable Upon the Assumed Conversion of Our Series B Convertible Preferred Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from calculating basic and diluted net loss per common share (in shares)	[2]		0	0
Common Stock Issuable Upon the Assumed Conversion of Our Series B Convertible Preferred Stock [Member] | Second Closing [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Number of shares issued (in shares)		1,250
Proceeds from issuance of preferred stock		$ 5,000,000
Number of days taken to automatically convert to common stock			190 days
Purchase price (in dollars per share)		$ 0.04

[1] As part of the Initial Note and the Second Note, at the holder's option, all unpaid principle and interest due under each convertible promissory note may be converted into shares of Common Stock based on a conversion price of $0.04 per share. The Initial Note and the Second Note mature on February 27, 2019 and March 31, 2019, respectively, and on each maturity date each convertible promissory note, and accrued interest thereon, is subject to mandatory conversion based on a conversion price of $0.04 per share, unless an event of default has occurred and is continuing. For the purposes of this Table, we have assumed that all outstanding principal and interest will be converted on each applicable maturity date.

[2] Pursuant to the March 2017 Offering, Velo LLC purchased 1,250 shares of Series B Convertible Preferred Stock of the Company for $5,000,000. The Series B Convertible Preferred Stock that was issued in the March 2017 Offering, (a) voted together with the Common Stock as a single class (subject to standard protective provisions for the Series B Convertible Preferred Stock), (b) had the same dividend rights as the Common Stock, (c) had a liquidation preference equal to the greater of its purchase price and its as converted-to-Common Stock value, (d) automatically converted into Common Stock when the number of authorized shares of Common Stock was increased within 190 days of the second closing as necessary to permit all outstanding convertible or exercisable securities (including the Series B Convertible Preferred Stock) to convert to Common Stock, and (e) was convertible into Common Stock at the discretion of the holder, subject to the availability of authorized shares, at an as-converted-to-Common Stock purchase price of $0.04 per share. On August 1, 2017, all 1,250 outstanding shares of Series B Convertible Preferred Stock converted in exchange for 125,000,000 shares of Common Stock as a result of the approval by the stockholders at the 2017 Annual Meeting of Stockholders held on July 25, 2017, and the filing in July 2017, of an amendment increasing our authorized shares of Common Stock from 200,000,000 shares to 750,000,000 shares.

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SHARE BASED COMPENSATION, Allocated compensation expense (Details) - Stock Options [Member] - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense	$ (774)	$ 14,111	$ 7,923	$ 60,126
Research and Development [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense	(3,345)	(3,079)	0	5,914
Selling, General and Administrative [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense	$ 2,571	$ 17,190	$ 7,923	$ 54,212

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SHARE BASED COMPENSATION, Stock option, restricted stock and summary of plans (Details) - USD ($)							9 Months Ended
	Jun. 05, 2014	Jun. 13, 2013	Jun. 14, 2012	Jun. 15, 2010	Dec. 17, 2009	May 08, 2007	Sep. 30, 2017	Mar. 31, 2006
Stock Options [Member]
Options, Outstanding [Roll Forward]
Outstanding, beginning of period (in shares)							691,237
Granted (in shares)							0
Forfeited/cancelled (in shares)							(538,834)
Exercised (in shares)							0
Outstanding, end of period (in shares)							152,403
Outstanding, Weighted Average Exercise Price [Roll Forward]
Outstanding, beginning of period (in dollars per share)							$ 1.94
Granted (in dollars per share)							0
Forfeited/cancelled (in dollars per share)							1.08
Exercised (in dollars per share)							0
Outstanding, end of period (in dollars per share)							$ 4.98
Nonvested Awards, unearned share-based compensation [Abstract]
Unearned share-based compensation expense							$ 0
2006 Equity Incentive Plan [Member]
Additional disclosures [Abstract]
Number of shares authorized (in shares)							2,800,000	133,333
Number of additional shares authorized (in shares)	1,000,000	600,000	400,000	200,000	200,000	266,667
Number of shares available for grant (in shares)							2,578,151
2006 Equity Incentive Plan [Member] | Stock Options [Member]
Additional disclosures [Abstract]
Number of options granted to date (in shares)							2,061,167
2006 Equity Incentive Plan [Member] | Stock Options [Member] | Minimum [Member]
Additional disclosures [Abstract]
Vesting period							1 year
2006 Equity Incentive Plan [Member] | Stock Options [Member] | Maximum [Member]
Additional disclosures [Abstract]
Vesting period							4 years
Contractual term							10 years
2006 Equity Incentive Plan [Member] | Restricted Stock [Member]
Additional disclosures [Abstract]
Number of restricted shares granted to date (in shares)							68,616
2006 Equity Incentive Plan [Member] | Restricted Stock [Member] | Minimum [Member]
Additional disclosures [Abstract]
Vesting period							6 months
2006 Equity Incentive Plan [Member] | Restricted Stock [Member] | Maximum [Member]
Additional disclosures [Abstract]
Vesting period							5 years

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SHARE BASED COMPENSATION, Stock options grant outstanding and exercisable (Details)	9 Months Ended
	Sep. 30, 2017 $ / shares shares
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Stock Options Outstanding (in shares) | shares	152,403
Options Outstanding, Weighted Average Exercise Price per Share (in dollars per share) | $ / shares	$ 4.98
Options Outstanding, Weighted Average Remaining Contractual Life	5 years 1 month 6 days
Stock Options Exercisable (in shares) | shares	152,403
Options Exercisable, Weighted Average Exercise Price per Share (in dollars per share) | $ / shares	$ 4.98
Exercise Price Range 1 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Stock Options Outstanding (in shares) | shares	90,000
Options Outstanding, Weighted Average Exercise Price per Share (in dollars per share) | $ / shares	$ 0.33
Options Outstanding, Weighted Average Remaining Contractual Life	5 years 6 months
Stock Options Exercisable (in shares) | shares	90,000
Options Exercisable, Weighted Average Exercise Price per Share (in dollars per share) | $ / shares	$ 0.33
Exercise Price Range 2 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Stock Options Outstanding (in shares) | shares	40,000
Options Outstanding, Weighted Average Exercise Price per Share (in dollars per share) | $ / shares	$ 1.15
Options Outstanding, Weighted Average Remaining Contractual Life	7 years
Stock Options Exercisable (in shares) | shares	40,000
Options Exercisable, Weighted Average Exercise Price per Share (in dollars per share) | $ / shares	$ 1.15
Exercise Price Range 3 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Stock Options Outstanding (in shares) | shares	22,403
Options Outstanding, Weighted Average Exercise Price per Share (in dollars per share) | $ / shares	$ 30.48
Options Outstanding, Weighted Average Remaining Contractual Life	6 months
Stock Options Exercisable (in shares) | shares	22,403
Options Exercisable, Weighted Average Exercise Price per Share (in dollars per share) | $ / shares	$ 30.48

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FAIR VALUE MEASUREMENTS (Details) - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Liabilities [Abstract]
Note payable	$ 1,000,000	$ 20,000
Convertible Promissory Note - March 2017 [Member]
Liabilities [Abstract]
Note payable	500,000	0
Convertible Promissory Note - February 2017 [Member]
Liabilities [Abstract]
Note payable	500,000	0
Promissory Note - December 2016 [Member]
Liabilities [Abstract]
Note payable	$ 0	$ 20,000

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INCOME TAXES (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2017 USD ($)
INCOME TAXES [Abstract]
Increase in net operating loss	$ 1,843
Consolidated operating loss carryforwards	58,295
Research credit carryforwards	$ 555
Effective tax rate	0.00%
Deferred tax assets	$ 0

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COMMITMENTS AND CONTINGENCIES (Details) - USD ($)	3 Months Ended		9 Months Ended		12 Months Ended	13 Months Ended	23 Months Ended	30 Months Ended	32 Months Ended	60 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Mar. 16, 2015	Mar. 31, 2014	Feb. 22, 2013	Sep. 30, 2017	Sep. 30, 2017	Mar. 31, 2011
Future minimum lease payments [Abstract]
2017 (Three months)	$ 30,300		$ 30,300					$ 30,300	$ 30,300
2018	29,199		29,199					29,199	29,199
2019	0		0					0	0
2020	0		0					0	0
Total	59,499		59,499					59,499	59,499
Rent expense for operating lease	$ 30,301	$ 36,709	$ 96,245	$ 97,241
Office and Laboratory Space [Member]
Operating Leased Assets [Line Items]
Minimum monthly lease obligation					$ 9,379	$ 9,193	$ 9,776	$ 9,436		$ 9,330
Office Equipment [Member]
Operating Leased Assets [Line Items]
Minimum monthly lease obligation									$ 551

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COMMITMENTS AND CONTINGENCIES, Related Party (Details) - USD ($)							3 Months Ended			9 Months Ended
	Mar. 31, 2017	Feb. 27, 2017	Feb. 21, 2017	Feb. 16, 2017	Jan. 18, 2017	Dec. 15, 2016	Sep. 30, 2017	Mar. 31, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Apr. 02, 2017	Dec. 31, 2016
Related Party Obligations [Abstract]
Concentration risk, percentage							100.00%		100.00%	100.00%	100.00%
Initial principal amount							$ 1,000,000			$ 1,000,000
Summary of compensation earned, compensation paid in cash, and compensation temporarily deferred [Abstract]
Deferred compensation							72,000			72,000			$ 473,000
Compensation accrued liabilities							72,000			72,000			200,000
Compensation accounts payable													273,000
Velocitas Partners, LLC [Member]
Related Party Obligations [Abstract]
Expected gross proceeds		$ 6,000,000
Initial principal amount				$ 30,000	$ 65,000	$ 20,000
Interest rate				6.00%	6.00%	6.00%
Monthly installment payments commencing period				180 days	180 days	180 days
Velocitas Partners, LLC [Member] | Maximum [Member]
Related Party Obligations [Abstract]
Expected gross proceeds		$ 6,000,000
Kirkwood Investors, Inc [Member]
Related Party Obligations [Abstract]
Initial principal amount			$ 25,000
Interest rate			6.00%
Monthly installment payments commencing period			60 days
Number of days after receiving interest rate			2 days
Altrazeal Trading GmbH [Member] | Second Closing [Member]
Related Party Obligations [Abstract]
Warrants to purchase shares of common stock (in shares)	13,375,000							13,375,000
Acquisition value	$ 869,375
Altrazeal Distributors [Member] | Second Closing [Member]
Related Party Obligations [Abstract]
Warrants to purchase shares of common stock (in shares)	13,375,000							13,375,000
Acquisition value								$ 869,375
Closing price of common stock (in dollars per share)	$ 0.065							$ 0.065
Velocitas GmbH [Member]
Related Party Obligations [Abstract]
Monthly payment												$ 25,833
Velocitas GmbH [Member] | Revenue [Member]
Related Party Obligations [Abstract]
Related party sales							0		$ 0	$ 214,000	$ 0
Concentration risk, percentage										51.00%	0.00%
Velocitas GmbH [Member] | Accounts Receivable [Member]
Related Party Obligations [Abstract]
Outstanding accounts receivable							$ 0			$ 0			$ 0

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COMMITMENTS AND CONTINGENCIES, Contingent Milestone Obligations (Details) - USD ($)	9 Months Ended
	Sep. 30, 2017	Mar. 07, 2008
Access Pharmaceuticals [Member]
Milestone payments [Line Items]
Future milestone obligations	$ 4,750,000
Accrued expenses related to future milestone payments	35,000
Access Pharmaceuticals [Member] | Annual Sales, Certain Products [Member] | Minimum [Member]
Milestone payments [Line Items]
Milestone for payment	20,000,000
Access Pharmaceuticals [Member] | Annual Sales, Certain Products [Member] | Maximum [Member]
Milestone payments [Line Items]
Milestone for payment	40,000,000
Access Pharmaceuticals [Member] | Annual Sales, Any One Certain Product [Member]
Milestone payments [Line Items]
Milestone for payment	20,000,000
Access Pharmaceuticals [Member] | Cumulative Sales, Certain Products [Member] | Minimum [Member]
Milestone payments [Line Items]
Milestone for payment	50,000,000
Access Pharmaceuticals [Member] | Cumulative Sales, Certain Products [Member] | Maximum [Member]
Milestone payments [Line Items]
Milestone for payment	$ 100,000,000
ProStrakan Ltd [Member]
Milestone payments [Line Items]
Royalty percentage		30.00%
ProStrakan Ltd [Member] | Maximum [Member]
Milestone payments [Line Items]
Future milestone obligations		$ 1,400,000

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COMMITMENTS AND CONTINGENCIES, Prescription Drug User Fee Obligation (Details)	Sep. 30, 2017 USD ($)
Assessed Prescription Drug User Fee [Member]
Loss Contingencies [Line Items]
Potential penalties and interest amounts due	$ 1,067,000

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LEGAL PROCEEDINGS (Details)	9 Months Ended
	Sep. 30, 2017
LEGAL PROCEEDINGS [Abstract]
Maximum percentage of material proceedings/interest	5.00%