Delaware
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26-4333375
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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Large accelerated filer ☐
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Accelerated filer ☐
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Non-accelerated filer ☐
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Smaller reporting company ☒
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(Do not check if a smaller reporting company)
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PART I.
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FINANCIAL INFORMATION
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ITEM 1.
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3
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4
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5
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6
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7-22
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ITEM 2.
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23-31
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ITEM 3.
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32
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ITEM 4.
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32
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PART II.
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OTHER INFORMATION
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ITEM 1.
|
|
33
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ITEM 1A.
|
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33
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ITEM 2.
|
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33
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ITEM 3.
|
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33
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ITEM 4.
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33
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ITEM 5.
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33
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ITEM 6.
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34
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35
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BIOSIG TECHNOLOGIES, INC.
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||||||||
June 30,
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December 31,
|
|||||||
2016
|
2015
|
|||||||
(unaudited)
|
||||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash
|
$
|
705,341
|
$
|
953,234
|
||||
Prepaid expenses
|
141,543
|
31,308
|
||||||
Total current assets
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846,884
|
984,542
|
||||||
Property and equipment, net
|
18,722
|
18,408
|
||||||
Other assets:
|
||||||||
Deposits
|
27,612
|
27,612
|
||||||
Total assets
|
$
|
893,218
|
$
|
1,030,562
|
||||
LIABILITIES AND STOCKHOLDERS' DEFICIT
|
||||||||
Current liabilities:
|
||||||||
Accounts payable and accrued expenses, including $7,560 and $12,716 to related parties as of June 30, 2016 and December 31, 2015, respectively
|
$
|
271,042
|
$
|
223,546
|
||||
Dividends payable
|
316,676
|
340,291
|
||||||
Warrant liability
|
2,325,250
|
1,621,199
|
||||||
Derivative liability
|
308,067
|
285,157
|
||||||
Total current liabilities
|
3,221,035
|
2,470,193
|
||||||
Series C Preferred Stock, 1,090 and 1,471 shares issued and outstanding; liquidation preference of $1,090,000 and $1,471,000 as of June 30, 2016 and December 31, 2015, respectively
|
1,090,000
|
1,471,000
|
||||||
Stockholders' deficit
|
||||||||
Preferred stock, $0.001 par value, authorized 1,000,000 shares, designated 200 shares of Series A, 600 shares of Series B and 4,200 shares of Series C Preferred Stock
|
||||||||
Common stock, $0.001 par value, authorized 50,000,000 shares, 20,476,523 and 16,825,703 issued and outstanding as of June 30, 2016 and December 31, 2015, respectively
|
20,477
|
16,826
|
||||||
Additional paid in capital
|
37,478,817
|
29,314,399
|
||||||
Accumulated deficit
|
(40,917,111
|
)
|
(32,241,856
|
)
|
||||
Total stockholders' deficit
|
(3,417,817
|
)
|
(2,910,631
|
)
|
||||
Total liabilities and stockholders' deficit
|
$
|
893,218
|
$
|
1,030,562
|
||||
See the accompanying notes to the unaudited condensed financial statements
|
BIOSIG TECHNOLOGIES, INC.
|
||||||||||||||||
(unaudited)
|
||||||||||||||||
Three months ended June 30,
|
Six months ended June 30,
|
|||||||||||||||
2016
|
2015
|
2016
|
2015
|
|||||||||||||
Operating expenses:
|
||||||||||||||||
Research and development
|
$
|
1,153,043
|
$
|
489,563
|
$
|
1,579,157
|
$
|
791,642
|
||||||||
General and administrative
|
4,380,540
|
3,938,015
|
6,266,000
|
6,684,868
|
||||||||||||
Depreciation
|
2,333
|
2,481
|
5,241
|
5,341
|
||||||||||||
Total operating expenses
|
5,535,916
|
4,430,059
|
7,850,398
|
7,481,851
|
||||||||||||
Loss from operations
|
(5,535,916
|
)
|
(4,430,059
|
)
|
(7,850,398
|
)
|
(7,481,851
|
)
|
||||||||
Other income (expense):
|
||||||||||||||||
(Loss) gain on change in fair value of derivatives
|
(556,433
|
)
|
198,563
|
(824,858
|
)
|
198,563
|
||||||||||
Interest income (expense)
|
1
|
(184
|
)
|
1
|
(1,298
|
)
|
||||||||||
Financing costs
|
-
|
(529,704
|
)
|
-
|
(529,704
|
)
|
||||||||||
Total other income (expense)
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(556,432
|
)
|
(331,325
|
)
|
(824,857
|
)
|
(332,439
|
)
|
||||||||
Loss before income taxes
|
(6,092,348
|
)
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(4,761,384
|
)
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(8,675,255
|
)
|
(7,814,290
|
)
|
||||||||
Income taxes (benefit)
|
-
|
-
|
-
|
-
|
||||||||||||
Net loss
|
(6,092,348
|
)
|
(4,761,384
|
)
|
(8,675,255
|
)
|
(7,814,290
|
)
|
||||||||
Preferred stock dividend
|
(28,497
|
)
|
(112,073
|
)
|
(60,741
|
)
|
(191,468
|
)
|
||||||||
NET LOSS AVAILABLE TO COMMON STOCKHOLDERS
|
$
|
(6,120,845
|
)
|
$
|
(4,873,457
|
)
|
$
|
(8,735,996
|
)
|
$
|
(8,005,758
|
)
|
||||
Net loss per common share, basic and diluted
|
$
|
(0.32
|
)
|
$
|
(0.35
|
)
|
$
|
(0.49
|
)
|
$
|
(0.62
|
)
|
||||
Weighted average number of common shares outstanding, basic and diluted
|
18,875,819
|
13,852,955
|
17,971,228
|
13,010,754
|
||||||||||||
See the accompanying notes to the unaudited condensed financial statements
|
BIOSIG TECHNOLOGIES, INC.
|
||||||||||||||||||||||||||||
SIX MONTHS ENDED JUNE 30, 2016
|
||||||||||||||||||||||||||||
Additional
|
||||||||||||||||||||||||||||
Preferred stock
|
Common stock
|
Paid in
|
Accumulated
|
|||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Deficit
|
Total
|
||||||||||||||||||||||
Balance, January 1, 2016
|
-
|
$
|
-
|
16,825,703
|
$
|
16,826
|
$
|
29,314,399
|
$
|
(32,241,856
|
)
|
$
|
(2,910,631
|
)
|
||||||||||||||
Sale of common stock
|
-
|
-
|
1,833,488
|
1,834
|
2,521,953
|
-
|
2,523,787
|
|||||||||||||||||||||
Common stock issued for services
|
-
|
-
|
1,335,000
|
1,335
|
2,469,715
|
-
|
2,471,050
|
|||||||||||||||||||||
Common stock issued upon conversion of Series C Preferred Stock at $1.50 per share
|
-
|
-
|
254,001
|
254
|
380,746
|
-
|
381,000
|
|||||||||||||||||||||
Common stock issued settlement of Series C Preferred Stock accrued dividends at $1.58 per share
|
-
|
-
|
53,331
|
53
|
84,302
|
-
|
84,355
|
|||||||||||||||||||||
Reclassify fair value of derivative liability to equity upon conversion of Series C Preferred Stock to common shares
|
-
|
-
|
-
|
-
|
97,897
|
-
|
97,897
|
|||||||||||||||||||||
Stock based compensation
|
-
|
-
|
175,000
|
175
|
2,670,546
|
-
|
2,670,721
|
|||||||||||||||||||||
Preferred Stock dividend
|
-
|
-
|
-
|
-
|
(60,741
|
)
|
-
|
(60,741
|
)
|
|||||||||||||||||||
Net loss
|
-
|
-
|
-
|
-
|
-
|
(8,675,255
|
)
|
(8,675,255
|
)
|
|||||||||||||||||||
Balance, June 30, 2016 (unaudited)
|
-
|
$
|
-
|
20,476,523
|
$
|
20,477
|
$
|
37,478,817
|
$
|
(40,917,111
|
)
|
$
|
(3,417,817
|
)
|
||||||||||||||
See the accompanying notes to the unaudited condensed financial statements
|
BIOSIG TECHNOLOGIES, INC.
|
||||||||
(unaudited)
|
||||||||
Six months ended June 30,
|
||||||||
2016
|
2015
|
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net loss
|
$
|
(8,675,255
|
)
|
$
|
(7,814,290
|
)
|
||
Adjustments to reconcile net loss to cash used in operating activities:
|
||||||||
Depreciation
|
5,241
|
5,341
|
||||||
Amortization of debt discount
|
-
|
585,324
|
||||||
Change in derivative liabilities
|
824,858
|
(198,563
|
)
|
|||||
Equity based compensation
|
5,141,770
|
5,341,374
|
||||||
Changes in operating assets and liabilities:
|
||||||||
Prepaid expenses
|
(110,235
|
)
|
(107,122
|
)
|
||||
Accounts payable
|
46,963
|
(287,496
|
)
|
|||||
Stock based payable
|
-
|
(93,621
|
)
|
|||||
Deferred rent payable
|
533
|
-
|
||||||
Net cash used in operating activities
|
(2,766,125
|
)
|
(2,569,053
|
)
|
||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Purchase of property and equipment
|
(5,555
|
)
|
(8,971
|
)
|
||||
Payment of long term deposit
|
-
|
(2,612
|
)
|
|||||
Net cash used in investing activity
|
(5,555
|
)
|
(11,583
|
)
|
||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Proceeds from sale of common stock
|
2,523,787
|
3,042,213
|
||||||
Proceeds from sale of Series C preferred stock
|
-
|
450,000
|
||||||
Proceeds from exercise of options
|
-
|
20,900
|
||||||
Proceeds from exercise of warrants
|
-
|
24,981
|
||||||
Net cash provided by financing activities
|
2,523,787
|
3,538,094
|
||||||
Net (decrease) increase in cash and cash equivalents
|
(247,893
|
)
|
957,458
|
|||||
Cash and cash equivalents, beginning of the period
|
953,234
|
239,781
|
||||||
Cash and cash equivalents, end of the period
|
$
|
705,341
|
$
|
1,197,239
|
||||
Supplemental disclosures of cash flow information:
|
||||||||
Cash paid during the period for interest
|
$
|
-
|
$
|
1,298
|
||||
Cash paid during the period for income taxes
|
$
|
-
|
$
|
-
|
||||
Non-cash investing and financing activities:
|
||||||||
Common stock issued upon conversion of Series C Preferred Stock and accrued dividends
|
$
|
465,355
|
$
|
1,400,810
|
||||
See the accompanying notes to the unaudited condensed financial statements
|
|
June 30,
2016
|
June 30,
2015
|
||||||
Series C convertible preferred stock
|
726,667
|
1,372,000
|
||||||
Options to purchase common stock
|
8,450,190
|
7,330,190
|
||||||
Warrants to purchase common stock
|
8,145,722
|
7,772,277
|
||||||
Totals
|
17,322,579
|
16,474,467
|
|
June 30,
2016
|
December 31,
2015
|
||||||
Computer equipment
|
$
|
74,004
|
$
|
68,449
|
||||
Furniture and fixtures
|
10,117
|
10,117
|
||||||
Subtotal
|
84,121
|
78,566
|
||||||
Less accumulated depreciation
|
(65,399
|
)
|
(60,158
|
)
|
||||
Property and equipment, net
|
$
|
18,722
|
$
|
18,408
|
|
June 30,
2016
|
December 31,
2015
|
||||||
Accrued accounting and legal
|
$
|
149,457
|
$
|
112,723
|
||||
Accrued reimbursements
|
3,710
|
13,613
|
||||||
Accrued consulting
|
29,551
|
15,200
|
||||||
Accrued research and development expenses
|
34,894
|
34,179
|
||||||
Accrued office and other
|
713
|
31,482
|
||||||
Accrued payroll
|
35,835
|
-
|
||||||
Deferred rent
|
3,549
|
3,016
|
||||||
Accrued settlement related to arbitration
|
13,333
|
13,333
|
||||||
|
$
|
271,042
|
$
|
223,546
|
●
|
incur additional indebtedness;
|
●
|
permit liens on assets;
|
●
|
repay, repurchase or otherwise acquire more than a de minimis number of shares of capital stock;
|
●
|
pay cash dividends to our stockholders; and
|
●
|
engage in transactions with affiliates.
|
(i)
|
we fail to, or announce our intention not to, deliver common stock share certificates upon conversion of our Series C Preferred Stock prior to the seventh trading day after such shares are required to be delivered,
|
(ii)
|
we fail for any reason to pay in full the amount of cash due pursuant to our failure to deliver common stock share certificates upon conversion of our Series C Preferred Stock within five calendar days after notice therefor is delivered,
|
(iii)
|
we fail to have available a sufficient number of authorized and unreserved shares of common stock to issue upon a conversion of our Series C Preferred Stock,
|
(iv)
|
we fail to observe or perform any other covenant, agreement or warranty contained in, or otherwise commit any breach of our obligations under, the securities purchase agreement, the registration rights agreement, the certificate of designation or the warrants entered into pursuant to the private placement transaction for our Series C Preferred Stock, which failure or breach could have a material adverse effect, and such failure or breach is not cured within 30 calendar days after written notice was delivered,
|
(v)
|
we are party to a change of control transaction,
|
(vi)
|
we file for bankruptcy or a similar arrangement or are adjudicated insolvent,
|
(vii)
|
we are subject to a judgment, including an arbitration award against us, of greater than $100,000, and such judgment remains unvacated, unbonded or unstayed for a period of 45 calendar days,
|
Options Outstanding
|
Options Exercisable
|
||||||||||||||
Weighted
|
|||||||||||||||
Average
|
Exercisable
|
||||||||||||||
Exercise
|
Number of
|
Remaining Life
|
Number of
|
||||||||||||
Price
|
Options
|
In Years
|
Options
|
||||||||||||
$
|
1.01-2.00
|
2,229,642
|
7.0
|
1,681,809
|
|||||||||||
2.01-3.00
|
5,920,548
|
5.8
|
5,018,591
|
||||||||||||
3.01-4.00
|
300,000
|
8.8
|
300,000
|
||||||||||||
8,450,190
|
6.2
|
7,000,400
|
|
Weighted-Average
|
|||||||||||||||
|
Weighted-Average
|
Remaining
|
Aggregate
|
|||||||||||||
|
Shares
|
Exercise Price
|
Contractual Term
|
Intrinsic Value
|
||||||||||||
Outstanding at January 1, 2016
|
7,780,190
|
$
|
2.30
|
6.4
|
$
|
-
|
||||||||||
Grants
|
685,000
|
1.84
|
10.0
|
-
|
||||||||||||
Exercised
|
-
|
|||||||||||||||
Expired
|
(15,000
|
)
|
$
|
2.50
|
-
|
-
|
||||||||||
Outstanding at June 30, 2016
|
8,450,190
|
$
|
2.26
|
6.2
|
$
|
-
|
||||||||||
Exercisable at June 30, 2016
|
7,000,400
|
$
|
2.31
|
6.0
|
$
|
-
|
|
June 30,
2016
|
June 30,
2015
|
||||||
Risk-free interest rate
|
1.08% - 1.69
|
%
|
1.19% - 2.37
|
%
|
||||
Dividend yield
|
0
|
%
|
0
|
%
|
||||
Stock price volatility
|
122.82
|
%
|
129.54% -130.30
|
%
|
||||
Expected life
|
5 – 10 years
|
7-10 years
|
||||||
Weighted average grant date fair value
|
$
|
1.58
|
$
|
2.14
|
Restricted shares issued as of January 1, 2016
|
175,000
|
|||
Granted
|
-
|
|||
Vested
|
(175,000
|
)
|
||
Total restricted shares issued as of June 30, 2016
|
-
|
|||
Vested restricted shares as of June 30, 2016
|
-
|
|||
Unvested restricted shares as of June 30, 2016
|
-
|
Exercise
|
Number
|
Expiration
|
|||||
Price
|
Outstanding
|
Date
|
|||||
$
|
0.001
|
383,320
|
January 2020
|
||||
$
|
1.50
|
4,173,017
|
February 2018 to April 2019
|
||||
$
|
1.84
|
35,076
|
January 2020
|
||||
$
|
1.95
|
1,501,513
|
October 2018 to April 2019
|
||||
$
|
2.00
|
100,000
|
August 2018
|
||||
$
|
2.02
|
30,755
|
January 2020
|
||||
$
|
2.10
|
38,572
|
June 2019
|
||||
$
|
2.50
|
100,000
|
August 2018
|
||||
$
|
2.75
|
228,720
|
August 2019 to September 2019
|
||||
$
|
3.67
|
214,193
|
December 2018 to January 2019
|
||||
$
|
3.75
|
1,340,556
|
April 2019 to March 2020
|
||||
8,145,722
|
|
|
Weighted-Average
|
|||||||||||||||
|
Weighted-Average
|
Remaining
|
Aggregate
|
|||||||||||||
|
Shares
|
Exercise Price
|
Contractual Term
|
Intrinsic Value
|
||||||||||||
Outstanding at January 1, 2016
|
7,078,685
|
$
|
2.02
|
3.0
|
497,933
|
|||||||||||
Grants
|
1,067,037
|
1.89
|
2.8
|
-
|
||||||||||||
Exercised
|
-
|
|||||||||||||||
Canceled
|
-
|
|||||||||||||||
Outstanding at June 30, 2016
|
8,145,722
|
$
|
2.00
|
2.6
|
$
|
711,287
|
||||||||||
|
||||||||||||||||
Vested and expected to vest at June 30, 2016
|
8,145,722
|
$
|
2.00
|
2.6
|
$
|
711,287
|
||||||||||
Exercisable at June 30, 2016
|
8,112,390
|
$
|
2.00
|
2.6
|
$
|
711,287
|
|
Warrant
Liability
|
Derivative
|
||||||
Balance, December 31, 2015
|
$
|
1,621,199
|
$
|
285,157
|
||||
Total (gains) losses
|
||||||||
Transfers out due to conversion of Series C Preferred Stock
|
-
|
(97,897
|
)
|
|||||
Mark to market to June 30, 2016
|
704,051
|
120,807
|
||||||
Balance, June 30, 2016
|
$
|
2,325,250
|
$
|
308,067
|
||||
Loss on change in warrant and derivative liabilities for the six months ended June 30, 2016
|
$
|
(704,051
|
)
|
$
|
(120,807
|
)
|
·
|
Higher quality cardiac signal acquisition for accurate and more efficient electrophysiology studies;
|
·
|
Precise, uninterrupted, real time evaluations of electrograms;
|
·
|
Reliable cardiac recordings to better determine precise ablation targets, strategy and end point of procedures; and
|
·
|
A portable device that can be fully integrated into existing electrophysiology lab environments.
|
·
|
Initial system concept validation has been performed in collaboration with physicians at the Texas Cardiac Arrhythmia Institute at St. David’s Medical Center in Austin, Texas in June 2011. The Texas Cardiac Arrhythmia Institute provided challenging recordings obtained with electrophysiology recording systems presently in use at the institute during various electrophysiology studies. Our technology team successfully imported the data into the PURE EP System software and using proprietary signal processing, the PURE EP System software was able to reduce baseline wander, noise, and artifacts from the data and therefore provide better diagnostic quality signals.
|
·
|
We have established clinical and/or advisory relationships for both technology development and validation studies with physicians and researchers affiliated with the following medical centers: Texas Cardiac Arrhythmia Institute, Austin, TX; Cardiac Arrhythmia Center at the University of California at Los Angeles, Los Angeles, CA; Mount Sinai Medical Center, New York, NY; Beaumont Medical Center, Detroit, MI; University Hospitals Case Medical Center, Cleveland, OH; The Heart Rhythm Institute, University of Oklahoma Health Sciences Center, Oklahoma City, OK; and Mayo Clinic, Rochester, MN.
|
·
|
The Cardiac Arrhythmia Center at the University of California at Los Angeles and Dr. Kalyanam Shivkumar, a former member of our board of directors, have played a significant role in the initial functional testing of our hardware. Dr. Shivkumar and his team have enabled us to learn the connectivity of the lab and its devices that pertain to where our PURE EP System will fit in. In June 2013, we commenced our first proof of concept pre-clinical study with the assistance of Dr. Shivkumar in order to further test the components of the PURE EP System hardware, as further explained below.
|
·
|
We are developing signal processing tools within the PURE EP System that will assist electrophysiologists in further differentiating true signals from noise, which may potentially provide guidance in identifying ablation targets. The signal processing tools are expected to be an integral part of the software of the PURE EP System, which we believe will significantly facilitate the locating of ablation targets.
|
·
|
In the second and third quarters of 2013, we performed and finalized testing of our proof of concept unit by initially using an electrocardiogram/intracardiac simulator at our lab, and subsequently by obtaining pre-clinical recordings from the lab at the University of California at Los Angeles. As part of the testing, we simultaneously recorded electrocardiogram and intracardiac signals on our proof of concept unit and GE’s CardioLab recording system. An identical signal was applied to the input of both systems and the monitor of our proof of concept unit was positioned next to the monitor of GE’s CardioLab recording system to allow for visual comparison. We believe that our proof of concept unit performed well as compared to GE’s CardioLab recording system, in that the electrocardiogram and intracardiac signals displayed on our proof of concept unit showed less baseline wander, noise and artifacts compared to signals displayed on GE’s CardioLab recording system. However, because this was a proof of concept test, without any clearly established protocols, we cannot present this data for publication and we do not have any independent verification or peer review of these findings.
|
·
|
In the third quarter of 2013, we analyzed the results of our proof of concept unit to determine the final design of the PURE EP System prototype, which has since been completed.
|
·
|
In September 2014, we performed additional tests on the PURE EP System prototype at the University of California at Los Angeles.
|
·
|
In the fourth quarter of 2014, we appointed Dr. Samuel J. Asirvatham from the Mayo Clinic as a member of our Scientific Advisory Board and initiated plans for pre-clinical studies at the Mayo Clinic.
|
·
|
In the first quarter of 2015, we appointed Dr. K. L. Venkatachalam from the Mayo Clinic as a member of our Scientific Advisory Board. On March 31, 2015 Drs. Asirvatham and Venkatachalam performed our first pre-clinical study at the Mayo Clinic in Rochester, MN.
|
·
|
On June 10, 2015, Dr. Asirvatham performed our second pre-clinical study at the Mayo Clinic in Rochester, Minnesota.
|
·
|
On November 17, 2015, Dr. Asirvatham performed our third pre-clinical study at the Mayo Clinic in Rochester, Minnesota.
|
·
|
On February 22, 2016, we signed an agreement to initiate development of its PURE EP System with Minnetronix and are taking steps toward its 510(k) submission.
|
·
|
On March 28, 2016, we announced an Advanced Research Program with Dr. Asirvatham at the Mayo Clinic beginning June 2016.
|
·
|
On June 2, 2016, Dr. Asirvatham performed our fourth pre-clinical study at the Mayo Clinic in Rochester, Minnesota which launched the Advanced Research Program.
|
·
|
On June 23, 2016, Dr. Vivek Reddy performed an initial pre-clinical study at The Mount Sinai Hospital in New York, New York.
|
31.01
|
|
|
|
31.02
|
|
|
|
32.01
|
|
|
|
101 INS
|
XBRL Instance Document
|
|
|
101 SCH
|
XBRL Taxonomy Extension Schema Document
|
|
|
101 CAL
|
XBRL Taxonomy Calculation Linkbase Document
|
101 LAB
|
XBRL Taxonomy Labels Linkbase Document
|
101 PRE
|
XBRL Taxonomy Presentation Linkbase Document
|
101 DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
BIOSIG TECHNOLOGIES, INC.
|
||
|
|
|
|
Date: August 12, 2016
|
By:
|
/s/ GREGORY D. CASH
|
|
|
|
Gregory D. Cash
|
|
|
|
Chief Executive Officer (Principal Executive Officer)
|
|
|
|
|
|
|
|
|
|
Date: August 12, 2016
|
By:
|
/s/ STEVEN CHAUSSY
|
|
|
|
Steven Chaussy
|
|
|
|
Chief Financial Officer (Principal Financial Officer
|
|
|
|
and Principal Accounting Officer)
|
1.
|
I have reviewed this quarterly report on Form 10-Q of BioSig Technologies, 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 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 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 reasonable 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 controls over financial reporting.
|
1.
|
I have reviewed this quarterly report on Form 10-Q of BioSig Technologies, 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 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 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 reasonable 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 controls over financial reporting.
|
|
|
|
|
|
|
|
By:
|
|
/s/ GREGORY D. CASH
|
Date: August 12, 2016
|
|
Name:
|
|
Gregory D. Cash
|
|
|
Title:
|
|
Chief Executive Officer
|
|
|
|
|
|
|
|
By:
|
|
/s/ STEVEN CHAUSSY
|
Date: August 12, 2016
|
|
Name:
|
|
Steven Chaussy
|
|
|
Title:
|
|
Chief Financial Officer
|
Document And Entity Information - shares |
6 Months Ended | |
---|---|---|
Jun. 30, 2016 |
Aug. 12, 2016 |
|
Document and Entity Information [Abstract] | ||
Entity Registrant Name | BIOSIG TECHNOLOGIES, INC. | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 20,476,523 | |
Amendment Flag | false | |
Entity Central Index Key | 0001530766 | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
Entity Filer Category | Smaller Reporting Company | |
Entity Well-known Seasoned Issuer | No | |
Document Period End Date | Jun. 30, 2016 | |
Document Fiscal Year Focus | 2016 | |
Document Fiscal Period Focus | Q2 |
CONDENSED BALANCE SHEETS (Parentheticals) - USD ($) |
Jun. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Accounts payable and accrued expenses, related parties (in Dollars) | $ 7,560 | $ 12,716 |
Preferred stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Common stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 20,476,523 | 16,825,703 |
Common stock, shares outstanding | 20,476,523 | 16,825,703 |
Series C Preferred Stock [Member] | ||
Preferred stock, shares issued | 1,090 | 1,471 |
Preferred stock, shares outstanding | 1,090 | 1,471 |
Preferred stock, liquidation preference (in Dollars) | $ 1,090,000 | $ 1,471,000 |
Preferred stock, shares authorized | 4,200 | 4,200 |
Series A Preferred Stock [Member] | ||
Preferred stock, shares authorized | 200 | 200 |
Series B Preferred Stock [Member] | ||
Preferred stock, shares authorized | 600 | 600 |
CONDENSED STATEMENTS OF OPERATIONS (unaudited) - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Operating expenses: | ||||
Research and development | $ 1,153,043 | $ 489,563 | $ 1,579,157 | $ 791,642 |
General and administrative | 4,380,540 | 3,938,015 | 6,266,000 | 6,684,868 |
Depreciation | 2,333 | 2,481 | 5,241 | 5,341 |
Total operating expenses | 5,535,916 | 4,430,059 | 7,850,398 | 7,481,851 |
Loss from operations | (5,535,916) | (4,430,059) | (7,850,398) | (7,481,851) |
Other income (expense): | ||||
(Loss) gain on change in fair value of derivatives | (556,433) | 198,563 | (824,858) | 198,563 |
Interest income (expense) | 1 | (184) | 1 | (1,298) |
Financing costs | 0 | (529,704) | 0 | (529,704) |
Total other income (expense) | (556,432) | (331,325) | (824,857) | (332,439) |
Loss before income taxes | (6,092,348) | (4,761,384) | (8,675,255) | (7,814,290) |
Income taxes (benefit) | 0 | 0 | 0 | 0 |
Net loss | (6,092,348) | (4,761,384) | (8,675,255) | (7,814,290) |
Preferred stock dividend | (28,497) | (112,073) | (60,741) | (191,468) |
NET LOSS AVAILABLE TO COMMON STOCKHOLDERS | $ (6,120,845) | $ (4,873,457) | $ (8,735,996) | $ (8,005,758) |
Net loss per common share, basic and diluted (in Dollars per share) | $ (0.32) | $ (0.35) | $ (0.49) | $ (0.62) |
Weighted average number of common shares outstanding, basic and diluted (in Shares) | 18,875,819 | 13,852,955 | 17,971,228 | 13,010,754 |
CONDENSED STATEMENT OF STOCKHOLDERS' DEFICIT - 6 months ended Jun. 30, 2016 - USD ($) |
Settlement of Series C Preferred Stock and Accrued Dividends [Member[
Series C Preferred Stock [Member]
Common Stock [Member]
|
Settlement of Series C Preferred Stock and Accrued Dividends [Member[
Series C Preferred Stock [Member]
Additional Paid-in Capital [Member]
|
Settlement of Series C Preferred Stock and Accrued Dividends [Member[
Series C Preferred Stock [Member]
|
Embedded Derivative Financial Instruments [Member]
Series C Preferred Stock [Member]
Additional Paid-in Capital [Member]
|
Embedded Derivative Financial Instruments [Member]
Series C Preferred Stock [Member]
|
Series C Preferred Stock [Member]
Common Stock [Member]
|
Series C Preferred Stock [Member]
Additional Paid-in Capital [Member]
|
Series C Preferred Stock [Member] |
Preferred Stock [Member] |
Common Stock [Member] |
Additional Paid-in Capital [Member] |
Retained Earnings [Member] |
Total |
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Balance at Dec. 31, 2015 | $ 0 | $ 16,825,703 | $ 29,314,399 | $ (32,241,856) | $ (2,910,631) | ||||||||
Balance (in Shares) at Dec. 31, 2015 | 0 | 16,826 | 16,825,703 | ||||||||||
Sale of common stock | $ 1,833,488 | 2,521,953 | $ 2,523,787 | ||||||||||
Sale of common stock (in Shares) | 1,834 | 1,833,488 | |||||||||||
Common stock issued for services | $ 1,335,000 | 2,469,715 | $ 2,471,050 | ||||||||||
Common stock issued for services (in Shares) | 1,335 | ||||||||||||
Common stock issued upon conversion of preferred stock and accrued dividends | $ 53,331 | $ 84,302 | $ 84,355 | $ 254,001 | $ 380,746 | $ 381,000 | |||||||
Common stock issued upon conversion of preferred stock and accrued dividends (in Shares) | 53 | 254 | |||||||||||
Reclassify fair value of derivative liability to equity upon conversion of Series C Preferred Stock to common shares | $ 97,897 | $ 97,897 | 97,897 | ||||||||||
Stock based compensation | $ 175,000 | 2,670,546 | 2,670,721 | ||||||||||
Stock based compensation (in Shares) | 175 | ||||||||||||
Preferred Stock dividend | (60,741) | (60,741) | |||||||||||
Net loss | (8,675,255) | (8,675,255) | |||||||||||
Balance at Jun. 30, 2016 | $ 20,476,523 | $ 37,478,817 | $ (40,917,111) | $ (3,417,817) | |||||||||
Balance (in Shares) at Jun. 30, 2016 | 20,477 | 20,476,523 |
CONDENSED STATEMENT OF STOCKHOLDERS' DEFICIT (Parentheticals) - Series C Preferred Stock [Member] - Common Stock [Member] |
Jun. 30, 2016
$ / shares
|
---|---|
Preferred stock issued | $ 1.50 |
Settlement of Series C Preferred Stock and Accrued Dividends [Member[ | |
Preferred stock issued | $ 1.58 |
NOTE 1 - NATURE OF OPERATIONS AND BASIS OF PRESENTATION |
6 Months Ended |
---|---|
Jun. 30, 2016 | |
Disclosure Text Block [Abstract] | |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | NOTE 1 – NATURE OF OPERATIONS AND BASIS OF PRESENTATION BioSig Technologies Inc. (the “Company”) was initially incorporated on February 24, 2009 under the laws of the State of Nevada and subsequently re-incorporated in the state of Delaware in 2011. The Company is principally devoted to improving the quality of cardiac recordings obtained during EP studies and catheter ablation procedures. The Company has not generated any revenue to date and consequently its operations are subject to all risks inherent in the establishment of a new business enterprise. The unaudited condensed interim financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and the instructions to Form 10-Q and Rule 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The condensed balance sheet as of December 31, 2015 has been derived from audited financial statements. Operating results for the three and six months ended June 30, 2016 are not necessarily indicative of results that may be expected for the year ending December 31, 2016. These condensed financial statements should be read in conjunction with the audited financial statements for the year ended December 31, 2015 filed with the Company’s Form 10-K with the Securities and Exchange Commission on March 14, 2016. |
NOTE 2 - GOING CONCERN AND MANAGEMENT'S LIQUIDITY PLANS |
6 Months Ended |
---|---|
Jun. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Substantial Doubt about Going Concern [Text Block] | NOTE 2 –GOING CONCERN AND MANAGEMENT’S LIQUIDITY PLANS As of June 30, 2016, the Company had cash of $705,341 and working capital deficit (current liabilities in excess of current assets) of $2,374,151 principally due to the inclusion of non-cash derivative and warrant liabilities recorded in current liabilities. Excluding the derivative and warrant liabilities, the Company’s working capital would have been $259,166. During the six months ended June 30, 2016, the Company used net cash in operating activities of $2,766,125. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management believes that the Company has sufficient funds to meet its research and development and other funding requirements for at least the next 2 months. The Company's primary source of operating funds since inception has been cash proceeds from private placements of common and preferred stock. The Company has experienced net losses and negative cash flows from operations since inception and expects these conditions to continue for the foreseeable future. The Company has stockholders' deficiencies at June 30, 2016 and requires additional financing to fund future operations. Further, the Company does not have any commercial products available for sale and there is no assurance that if approval of their products is received that the Company will be able to generate cash flow to fund operations. In addition, there can be no assurance that the Company's research and development will be successfully completed or that any product will be approved or commercially viable. Accordingly, the accompanying condensed financial statements have been prepared in conformity with U.S. GAAP, which contemplates continuation of the Company as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business. The carrying amounts of assets and liabilities presented in the financial statements do not necessarily purport to represent realizable or settlement values. The condensed financial statements do not include any adjustment that might result from the outcome of this uncertainty. |
NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
Significant Accounting Policies [Text Block] | NOTE 3 –SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Use of estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, 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. Significant estimates include the recoverability and useful lives of long-lived assets, the fair value of the Company’s stock, stock-based compensation, fair values relating to warrant and other derivative liabilities and the valuation allowance related to deferred tax assets. Actual results may differ from these estimates. Fair Value of Financial Instruments Accounting Standards Codification subtopic 825-10, Financial Instruments (“ASC 825-10”) requires disclosure of the fair value of certain financial instruments. The carrying value of cash and cash equivalents, accounts payable and accrued liabilities as reflected in the balance sheets, approximate fair value because of the short-term maturity of these instruments. All other significant financial assets, financial liabilities and equity instruments of the Company are either recognized or disclosed in the financial statements together with other information relevant for making a reasonable assessment of future cash flows, interest rate risk and credit risk. Where practicable the fair values of financial assets and financial liabilities have been determined and disclosed; otherwise only available information pertinent to fair value has been disclosed. The Company follows Accounting Standards Codification subtopic 820-10, Fair Value Measurements and Disclosures (“ASC 820-10”) and Accounting Standards Codification subtopic 825-10, Financial Instruments (“ASC 825-10”), which permits entities to choose to measure many financial instruments and certain other items at fair value. Derivative Instrument Liability The Company accounts for derivative instruments in accordance with ASC 815, which establishes accounting and reporting standards for derivative instruments and hedging activities, including certain derivative instruments embedded in other financial instruments or contracts and requires recognition of all derivatives on the balance sheet at fair value, regardless of hedging relationship designation. Accounting for changes in fair value of the derivative instruments depends on whether the derivatives qualify as hedge relationships and the types of relationships designated are based on the exposures hedged. At June 30, 2016 and December 31, 2015, the Company did not have any derivative instruments that were designated as hedges. At June 30, 2016 and December 31, 2015, the Company had outstanding preferred stock and warrants that contained embedded derivatives. These embedded derivatives include certain conversion features and reset provisions. (See Note 6 and Note 7). Research and development costs The Company accounts for research and development costs in accordance with the Accounting Standards Codification subtopic 730-10, Research and Development (“ASC 730-10”). Under ASC 730-10, all research and development costs must be charged to expense as incurred. Accordingly, internal research and development costs are expensed as incurred. Third-party research and developments costs are expensed when the contracted work has been performed or as milestone results have been achieved. Company-sponsored research and development costs related to both present and future products are expensed in the period incurred. The Company incurred research and development expenses of $1,153,043 and $1,579,157 for the three and six months ended June 30, 2016; and $489,563 and $791,642 for the three and six months ended June 30, 2015, respectively. Net Loss Per Common Share The Company computes earnings (loss) per share under Accounting Standards Codification subtopic 260-10, Earnings Per Share (“ASC 260-10”). Net loss per common share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per share, if presented, would include the dilution that would occur upon the exercise or conversion of all potentially dilutive securities into common stock using the “treasury stock” and/or “if converted” methods as applicable. The computation of basic and diluted loss per share as of June 30, 2016 and 2015 excludes potentially dilutive securities when their inclusion would be anti-dilutive, or if their exercise prices were greater than the average market price of the common stock during the period. Potentially dilutive securities excluded from the computation of basic and diluted net loss per share are as follows:
Stock Based Compensation The Company measures the cost of services received in exchange for an award of equity instruments based on the fair value of the award. For employees and directors, the fair value of the award is measured on the grant date and for non-employees, the fair value of the award is generally re-measured on vesting dates and interim financial reporting dates until the service period is complete. The fair value amount is then recognized over the period during which services are required to be provided in exchange for the award, usually the vesting period. As of June 30, 2016, the Company had 8,450,190 options outstanding to purchase shares of common stock, of which 7,000,400 were vested. As of December 31, 2015, the Company had 7,780,190 options outstanding to purchase shares of common stock, of which 5,613,501 were vested. Income Taxes The Company follows Accounting Standards Codification subtopic 740-10, Income Taxes (“ASC 740-10”) for recording the provision for income taxes. Deferred tax assets and liabilities are computed based upon the difference between the financial statement and income tax basis of assets and liabilities using the enacted marginal tax rate applicable when the related asset or liability is expected to be realized or settled. Deferred income tax expenses or benefits are based on the changes in the asset or liability during each period. If available evidence suggests that it is more likely than not that some portion or all of the deferred tax assets will not be realized, a valuation allowance is required to reduce the deferred tax assets to the amount that is more likely than not to be realized. Future changes in such valuation allowance are included in the provision for deferred income taxes in the period of change. Deferred income taxes may arise from temporary differences resulting from income and expense items reported for financial accounting and tax purposes in different periods. Deferred taxes are classified as current or non-current, depending on the classification of assets and liabilities to which they relate. Deferred taxes arising from temporary differences that are not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary differences are expected to reverse and are considered immaterial. Registration Rights The Company accounts for registration rights agreements in accordance with the Accounting Standards Codification subtopic 825-20, Registration Payment Arraignments (“ASC 825-20”). Under ASC 825-20, the Company is required to disclose the nature and terms of the arraignment, the maximum potential amount and to assess each reporting period the probable liability under these arraignments and, if exists, to record or adjust the liability to current period operations. On June 23, 2014, the Company filed Form S-1/A became effective with the Securities and Exchange Commission. As such, the Company determined that payments were due under its registration rights agreement and therefore accrued $55,620 as interest expense during the year ended December 31, 2014 for the liability under the registration rights agreements. During the year ended December 31, 2015, the Company estimated the liability at $-0- and therefore recorded the change to current period operations. Beginning on October 23, 2015, the Company entered into subscription agreements with certain accredited investors pursuant to which the Company sold to the investors units, which each unit consisting of one share of the Company’s common stock and a warrant to purchase one half of one share of common stock (the “Private Placement”). In connection with the Private Placement, the Company also entered into a registration rights agreements with the investors, pursuant to which the Company agreed to provide certain registration rights with respect to the common stock and warrants issued under the Private Placement. The registration rights agreements require the Company to file a registration statement within 45 calendar days upon the final closing under the Private Placement and to be effective 120 calendar days thereafter. The final closing under the Private Placement occurred on April 29, 2016. The Company has estimated the liability under the registration rights agreement at $-0- as of June 30, 2016. Reclassification Certain reclassifications have been made to prior periods’ data to conform with the current year’s presentation. These reclassifications had no effect on reported income or losses. Recent Accounting Pronouncements In March 2016, the FASB issued ASU No. 2016-09, Compensation – Stock Compensation, or ASU No. 2016-09. The areas for simplification in this Update involve several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. For public entities, the amendments in this Update are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted in any interim or annual period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. An entity that elects early adoption must adopt all of the amendments in the same period. Amendments related to the timing of when excess tax benefits are recognized, minimum statutory withholding requirements, forfeitures, and intrinsic value should be applied using a modified retrospective transition method by means of a cumulative-effect adjustment to equity as of the beginning of the period in which the guidance is adopted. Amendments related to the presentation of employee taxes paid on the statement of cash flows when an employer withholds shares to meet the minimum statutory withholding requirement should be applied retrospectively. Amendments requiring recognition of excess tax benefits and tax deficiencies in the income statement and the practical expedient for estimating expected term should be applied prospectively. An entity may elect to apply the amendments related to the presentation of excess tax benefits on the statement of cash flows using either a prospective transition method or a retrospective transition method. The Company is currently evaluating the impact of adopting ASU No. 2016-09 on financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. Topic 842 affects any entity that enters into a lease, with some specified scope exemptions. The guidance in this Update supersedes Topic 840, Leases. The core principle of Topic 842 is that a lessee should recognize the assets and liabilities that arise from leases. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For public companies, the amendments in this Update are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently evaluating the impact of adopting ASU No. 2016-02 on our financial statements. There are various other updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on the Company's financial position, results of operations or cash flows. Subsequent Events The Company evaluates events that have occurred after the balance sheet date but before the financial statements are issued. Based upon the evaluation, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the condensed consolidated financial statements, except as disclosed. |
NOTE 4 - PROPERTY AND EQUIPMENT |
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment Disclosure [Text Block] | NOTE 4 – PROPERTY AND EQUIPMENT Property and equipment as of June 30, 2016 and December 31, 2015 is summarized as follows:
Property and equipment are stated at cost and depreciated using the straight-line method over their estimated useful lives of 3 to 5 years. When retired or otherwise disposed, the related carrying value and accumulated depreciation are removed from the respective accounts and the net difference less any amount realized from disposition, is reflected in earnings. Depreciation expense was $2,333 and $5,241 for the three and six months ended June 30, 2016, respectively; and $2,481 and $5,341 for the three and six months ended June 30, 2015, respectively. |
NOTE 5 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES |
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Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Payable and Accrued Liabilities Disclosure [Text Block] | NOTE 5 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses at June 30, 2016 and December 31, 2015 consist of the following:
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NOTE 6 - SERIES C 9% CONVERTIBLE PREFERRED STOCK |
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Disclosure Text Block Supplement [Abstract] | |||||||||||||||||||||||||
Preferred Stock [Text Block] | NOTE 6 – SERIES C 9% CONVERTIBLE PREFERRED STOCK On January 9, 2013, the Board of Directors authorized the issuance of up to 4,200 shares of 9% Series C Convertible Preferred Stock (the “Series C Preferred Stock”). The Series C Preferred Stock is entitled to preference over holders of junior stock upon liquidation in the amount of $1,000 plus any accrued and unpaid dividends; entitled to dividends as a preference to holders of junior stock at a rate of 9% per annum of the stated value of $1,000 per share, payable quarterly beginning on September 30, 2013 and are cumulative. The holders of the Series C Preferred Stock vote together with the holders of our common stock on an as-converted basis, but may not vote the Series C Preferred Stock in excess of the beneficial ownership limitation of the Series C Preferred Stock. The beneficial ownership limitation is 4.99% of our then outstanding shares of common stock following such conversion or exercise, which may be increased to up to 9.99% of our then outstanding shares of common stock following such conversion or exercise upon the request of an individual holder. The beneficial ownership limitation is determined on an individual holder basis, such that the as-converted number of shares of one holder is not included in the shares outstanding when calculating the limitation for a different holder. In addition, absent the approval of holders representing at least 67% of the outstanding shares of the Series C Preferred Stock, we may not (i) increase the number of authorized shares of preferred stock, (ii) amend our charter documents, including the terms of the Series C Preferred Stock, in any manner adverse to the holders of the Series C Preferred Stock, including authorizing or creating any class of stock ranking senior to, or otherwise pari passu with, the shares of Series C Preferred Stock as to dividends, redemption or distribution of assets upon a liquidation, or (iii) perform certain covenants, including:
Any holder of Series C Preferred Stock is entitled at any time to convert any whole or partial number of shares of Series C Preferred Stock into shares of our common stock at a price of $1.50 per share. The Series C Preferred Stock is subject to full ratchet anti-dilution price protection upon the issuance of equity or equity-linked securities at an effective common stock purchase price of less than $1.50 per share as well as other customary anti-dilution protection. In the event that
the holders of the Series C Preferred Stock are entitled, among other rights, to redeem their shares of Series C Preferred Stock at any time for greater than their stated value or increase the dividend rate on their shares of Series C Preferred Stock to 18%. The Company determined that certain of the defined triggering events were outside the Company’s control and therefore classified the Series C Preferred Stock outside of equity. In connection with the sale of the Series C preferred stock, the Company issued an aggregate of 1,330,627 warrants to purchase the Company’s common stock at $2.61 per share expiring five years from the initial exercise date. The warrants contain full ratchet anti-dilution price protection upon the issuance of equity or equity-linked securities at an effective common stock purchase price of less than $2.61 per share as well as other customary anti-dilution protection. The warrants are exercisable for cash; or if at any time after six months from the issuance date, there is no effective registration statement registering the resale, or no current prospectus available for the resale, of the shares of common stock underlying the warrants, the warrants may be exercised by means of a “cashless exercise”. As a result of an amendment to the conversion price of our Series C Preferred Stock, the full-ratchet anti-dilution protection provision of the warrants decreased the exercise price of the warrants from $2.61 per share to $1.50 per share and increased the aggregate number of shares issuable under the warrants to 2,315,301. In accordance with ASC 470-20, at issuance, the Company recognized an embedded beneficial conversion feature present in the Series C Preferred Stock when it was issued. The Company allocated the net proceeds between the intrinsic value of the conversion option ($1,303,671) and the warrants ($1,064,739) to additional paid-in capital. The aggregate debt discount, comprised of the relative intrinsic value of the conversion option ($1,303,671), the relative fair value of the warrants ($1,064,739), and the issuance costs ($412,590), for a total of $2,781,000, is amortized over an estimated one year as interest expense. During the month of February 2013, the holders of previously issued convertible bridge notes converted into 600 shares of the Company’s Series C Preferred Stock. During the months of February, March, May, and July 2013, the Company sold an aggregate of 2,181 shares of the Company’s Series C Preferred Stock for net proceeds of $1,814,910. At the time of issuance and until March 31, 2015, the Company determined that the anti-dilutive provisions embedded in the Series C Preferred Stock and related issued warrants did not meet the defined criteria of a derivative in such that the net settlement requirement of delivery of common shares does not meet the “readily convertible to cash” as described in Accounting Standards Codification 815 and therefore bifurcation is not required. There was no established market for the Company’s common stock. As described in Note 8, as of March 31, 2015, the Company determined a market had been established for the Company’s common stock and accordingly, reclassified the fair value of the embedded reset provisions of the Series C Preferred Stock and warrants of $1,242,590 and $4,097,444, respectively, from equity to liabilities. At March 31, 2015, the Company valued the reset provisions of the Series C Preferred Stock and warrants in accordance with ASC 470-20 using the Multinomial Lattice pricing model and the following assumptions: contractual terms of 2.78 to 3.50 years, a risk free interest rate of 0.56% to 0.89%, a dividend yield of 0%, and volatility of 141.00%. In February 2016, the Company issued an aggregate of 54,859 shares of its common stock in exchange for 75 shares of the Company’s Series C Preferred Stock and accrued dividends. In May 2016, the Company issued an aggregate of 197,714 shares of its common stock in exchange for 236 shares of the Company’s Series C Preferred Stock and accrued dividends. In June 2016, the Company issued an aggregate of 54,759 shares of its common stock in exchange for 70 shares of the Company’s Series C Preferred Stock and accrued dividends. For the six months ended June 30, 2016, at the time of conversions, the Company reclassified the fair value of the embedded beneficial conversion feature of the Series C Preferred Stock of $97,897 from liability to equity. The fair values were determined using a Multinomial Lattice pricing model and the following assumptions: estimated contractual terms of 2.00 years, a risk free interest rate of 0.23% to 0.59%, a dividend yield of 0%, and volatility of 141% to 150%. Series C Preferred Stock issued and outstanding totaled 1,090 and 1,471 as of June 30, 2016 and December 31, 2015, respectively. As of June 30, 2016 and December 31, 2015, the Company has accrued $316,676 and $340,291 dividends payable on the Series C Preferred Stock. Registration Rights Agreement In connection with the Company’s private placement of Series C Preferred Stock and warrants, the Company entered into a registration rights agreement with the purchasers pursuant to which the Company agreed to provide certain registration rights with respect to the common stock issuable upon conversion of Series C Preferred Stock and exercise of the warrants issued to holders of Series C Preferred Stock. Specifically, the Company agreed to file a registration statement with the Securities and Exchange Commission covering the resale of the common stock issuable upon conversion of the Series C Preferred Stock and exercise of the warrants on or before July 22, 2013 and to cause such registration statement to be declared effective by the Securities and Exchange Commission, in the event that the registration statement is not reviewed by the Securities and Exchange Commission, within five trading days after the Company is notified that registration statement is not being reviewed by the Securities and Exchange Commission, and by November 22, 2013 in the event that the registration statement is reviewed by the Securities and Exchange Commission and the Securities and Exchange Commission issues comments. If (i) the registration statement is not filed by July 22, 2013, (ii) the registration statement is not declared effective by the Securities and Exchange Commission within five trading days after the Company is notified that the registration statement is not being reviewed by the Securities and Exchange Commission, in the case of a no review, (iii) the registration statement is not declared effective by the Securities and Exchange Commission by November 22, 2013 in the case of a review by the Securities and Exchange Commission pursuant to which the Securities and Exchange Commission issues comments or (iv) the registration statement ceases to remain continuously effective for more than 20 consecutive calendar days or more than an aggregate of 45 calendar days during any 12-month period after its first effective date, then the Company is subject to liquidated damage payments to the holders of the shares sold in the private placement in an amount equal to 0.25% of the aggregate purchase price paid by such purchasers per month of delinquency. Notwithstanding the foregoing, (i) the maximum aggregate liquidated damages due under the registration rights agreement shall be 3% of the aggregate purchase price paid by the purchasers, and (ii) if any partial amount of liquidated damages remains unpaid for more than seven days, the Company shall pay interest of 18% per annum, accruing daily, on such unpaid amount. Pursuant to the registration rights agreement, the Company must maintain the effectiveness of the registration statement from the effective date until the date on which all securities registered under the registration statement have been sold, or are otherwise able to be sold pursuant to Rule 144 without volume or manner-of-sale restrictions, subject to the right to suspend or defer the use of the registration statement in certain events. The Company filed a registration statement on July 22, 2013, which was originally declared effective on June 23, 2014. As a result, the Company accrued $55,620 as interest expense for liquidating damages due under the registration rights agreement as of December 31, 2014. At December 31, 2015, the Company estimated the liability at $-0- and therefore recorded the change to current period operations. |
NOTE 7 - WARRANT AND DERIVATIVE LIABILITIES |
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Disclosure Text Block [Abstract] | |
Derivatives and Fair Value [Text Block] | NOTE 7 – WARRANT AND DERIVATIVE LIABILITIES At the time of issuance and until March 31, 2015, the Company determined that the anti-dilutive provisions embedded in the Series C Preferred Stock and related warrants (see Note 6) did not meet the defined criteria of a derivative in such that the net settlement requirement of delivery of common shares does not meet the “readily convertible to cash” as described in Accounting Standards Codification 815 and therefore bifurcation was not required. There was no established market for the Company’s common stock. As of March 31, 2015, the Company determined a market had been established for the Company’s common stock and accordingly, reclassified from equity to liability treatment the fair value of the embedded reset provisions of the Series C Preferred Stock and warrants of $1,242,590 and $4,097,444, respectively. The Company valued the reset provisions of the Series C Preferred Stock and warrants in accordance with ASC 470-20 using the Multinomial Lattice pricing model and the following assumptions: estimated contractual terms, a risk free interest rate of 0.56% to 0.89, a dividend yield of 0%, and volatility of 141.00%. At June 30, 2016, the Company marked to market the fair value of the reset provisions of the Series C Preferred Stock and warrants and determined fair values of $308,067 and $2,325,250, respectively. The Company recorded a loss from change in fair value of derivatives of $556,433 and $824,858 for the three and six months ended June 30, 2016. The fair values of the embedded derivatives were determined using the Multinomial Lattice pricing model and the following assumptions: estimated contractual term of 0.89 to 3.86 years, a risk free interest rate of 0.39% to 1.01%, a dividend yield of 0%, and volatility of 143.00% to 150.00%. |
NOTE 8 - STOCKHOLDER EQUITY |
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Stockholders' Equity Note [Abstract] | |
Stockholders' Equity Note Disclosure [Text Block] | NOTE 8 – STOCKHOLDER EQUITY Preferred stock The Company is authorized to issue 1,000,000 shares of $0.001 par value preferred stock. As of June 30, 2016 and December 31, 2015, the Company has authorized 200 shares of Series A preferred stock, 600 shares of Series B preferred stock and 4,200 shares of Series C Preferred Stock. As of June 30, 2016 and December 31, 2015, there were no outstanding shares of Series A and Series B preferred stock. In February 2016, the Company issued 54,859 shares of its common stock in exchange for 75 shares of the Company’s Series C Preferred Stock and accrued dividends. In May 2016, the Company issued an aggregate of 197,714 shares of its common stock in exchange for 236 shares of the Company’s Series C Preferred Stock and accrued dividends. In June 2016, the Company issued an aggregate of 54,759 shares of its common stock in exchange for 70 shares of the Company’s Series C Preferred Stock and accrued dividends. As of June 30, 2016 and December 31, 2015, the Company has 1,090 and 1,471 Series C Preferred Stock issued and outstanding. Common stock The Company is authorized to issue 50,000,000 shares of $0.001 par value common stock. As of June 30, 2016 and December 31, 2015, the Company had 20,476,523 and 16,825,703 shares issued and outstanding, respectively. During the six months ended June 30, 2016, the Company issued an aggregate of 790,000 shares of common stock under the terms of its 2012 Equity Plan for services rendered totaling $1,419,200 ($1.80 average per share). During the six months ended June 30, 2016, the Company issued an aggregate of 545,000 shares of common stock for services rendered totaling $1,051,850 ($1.93 average per share). During the six months ended June 30, 2016, the Company entered into securities purchase agreements with investors pursuant to which the Company issued 1,833,488 shares of common stock and 1,067,037 warrants for aggregate proceeds of $2,523,787, net of $245,731 in expenses. During the six months ended June 30, 2016, the Company issued 175,000 shares of common stock as vested previously issued restricted stock units Beginning on October 23, 2015, the Company entered into subscription agreements with certain accredited investors pursuant to which the Company sold to the investors units, which each unit consisting of one share of the Company’s common stock and a warrant to purchase one half of one share of common stock (the “Private Placement”). In connection with the Private Placement, the Company also entered into a registration rights agreements with the investors, pursuant to which the Company agreed to provide certain registration rights with respect to the common stock and warrants issued under the Private Placement. The registration rights agreements require the Company to file a registration statement within 45 calendar days of the final closing under the Private Placement and to be effective 120 calendar days thereafter. The final closing under the Private Placement occurred on April 29, 2016. The Company has estimated the liability under the registration rights agreement at $-0- as of June 30, 2016. |
NOTE 9 - OPTIONS, RESTRICTED STOCK UNITS AND WARRANTS |
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Disclosure Text Block Supplement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shareholders' Equity and Share-based Payments [Text Block] | NOTE 9 – OPTIONS, RESTRICTED STOCK UNITS AND WARRANTS Options On October 19, 2012, the Company’s Board of Directors approved the 2012 Equity Incentive Plan (“the “Plan) and terminated the Long-Term Incentive Plan (the “2011 Plan”). The Plan provides for the issuance of options to purchase up to 11,686,123 (as amended) shares of the Company’s common stock to officers, directors, employees and consultants of the Company (as amended). Under the terms of the Plan the Company may issue Incentive Stock Options as defined by the Internal Revenue Code to employees of the Company only and nonstatutory options. The Board of Directors of the Company or a committee thereof administers the Plan and determines the exercise price, vesting and expiration period of the grants under the Plan. However, the exercise price of an Incentive Stock Option should not be less than 110% of fair value of the common stock at the date of the grant for a 10% or more stockholder and 100% of fair value for a grantee who is not 10% stockholder. The fair value of the common stock is determined based on the quoted market price or in absence of such quoted market price, by the administrator in good faith. Additionally, the vesting period of the grants under the Plan will be determined by the administrator, in its sole discretion, with an expiration period of not more than ten years. The Company reserved 130,933 shares of its common stock for future issuance under the terms of the Plan. During the six months ended June 30, 2016, the Company granted an aggregate of 685,000 options to officers, directors and key consultants. During the six months ended June 30, 2016, the Company granted an aggregate of 790,000 stock grants to officers, employees and key consultants under the plan. See Note 8. The following table presents information related to stock options at June 30, 2016:
A summary of the stock option activity and related information for the Plan for the six months ended June 30, 2016 is as follows:
The aggregate intrinsic value in the preceding tables represents the total pretax intrinsic value, based on options with an exercise price less than the Company’s stock price of $1.53 as of June 30, 2016, which would have been received by the option holders had those option holders exercised their options as of that date. Option valuation models require the input of highly subjective assumptions. The fair value of stock-based payment awards was estimated using the Black-Scholes option model with a volatility figure derived from using the Company’s historical stock prices for 2016. Prior to 2016, the Company derived the volatility figure from an index of historical stock prices for comparable entities. Management determined this assumption to be a more accurate indicator of value. The Company accounts for the expected life of options based on the contractual life of options for non-employees. For employees, the Company accounts for the expected life of options in accordance with the “simplified” method, which is used for “plain-vanilla" options, as defined in the accounting standards codification. The risk-free interest rate was determined from the implied yields of U.S. Treasury zero-coupon bonds with a remaining life consistent with the expected term of the options. In addition, the Company is required to estimate the expected forfeiture rate and only recognize expense for those shares expected to vest. In estimating the Company’s forfeiture rate, the Company analyzed its historical forfeiture rate, the remaining lives of unvested options, and the number of vested options as a percentage of total options outstanding. If the Company’s actual forfeiture rate is materially different from its estimate, or if the Company reevaluates the forfeiture rate in the future, the stock-based compensation expense could be significantly different from what the Company has recorded in the current period. The Company estimated forfeitures related to option grants at a weighted average annual rate of 0% per year, as the Company does not yet have adequate historical data, for options granted during the six months ended June 30, 2016 and 2015. The following assumptions were used in determining the fair value of employee and vesting non-employee options during the six months ended June 30, 2016 and 2015:
During the six months ended June 30, 2016, the Company granted an aggregate of 685,000 options to purchase the Company stock in connection with the services rendered at the exercise price of $1.84 per share for a term of ten years, vesting immediately. The fair value of all options vesting during the three and six months ended June 30, 2016 of $1,597,152 and $2,294,801, respectively, and during the three and six months ended June 30, 2015 of $2,157,938 and $2,956,727, respectively, was charged to current period operations. Unrecognized compensation expense of $568,043 at June 30, 2016 will be expensed in future periods. Restricted Stock The following table summarizes the restricted stock activity for the six months ended June 30, 2016:
Stock based compensation expense related to restricted stock grants was $3,302 and $53,386 for the three and six months ended June 30, 2016; $137,630 for the three and six months ended June 30, 2016. As of June 30, 2016, the stock-based compensation relating to restricted stock of $-0- remains unamortized. Warrants The following table summarizes information with respect to outstanding warrants to purchase common stock of the Company at June 30, 2016:
On February 9, 2016, the Company issued 25,000 warrants to purchase the Company’s common stock at $1.95 per share, expiring on February 9, 2019, in connection with the sale of the Company’s common stock. In addition, the Company issued 6,000 warrants to purchase the Company’s common stock at $1.50 per share, expiring February 9, 2019 for placement agent services. On March 9, 2016, the Company issued an aggregate of 100,000 warrants to purchase the Company’s common stock at $1.95 per share, expiring on March 9, 2019, in connection with the sale of the Company’s common stock. In addition, the Company issued 12,000 warrants to purchase the Company’s common stock at $1.50 per share, expiring March 9, 2019 for placement agent services. On April 1, 2016, the Company issued an aggregate of 100,327 warrants to purchase the Company’s common stock at $1.95 per share, expiring on April 1, 2019, in connection with the sale of the Company’s common stock. In addition, the Company issued 18,040 warrants to purchase the Company’s common stock at $1.50 per share, expiring April 1, 2019 for placement agent services. On April 19, 2016, the Company issued an aggregate of 84,980 warrants to purchase the Company’s common stock at $1.95 per share, expiring on April 19, 2019, in connection with the sale of the Company’s common stock. In addition, the Company issued 17,996 warrants to purchase the Company’s common stock at $1.50 per share, expiring April 19, 2019 for placement agent services. On April 29, 2016, the Company issued an aggregate of 567,866 warrants to purchase the Company’s common stock at $1.95 per share, expiring on April 29, 2019, in connection with the sale of the Company’s common stock. In addition, the Company issued an aggregate of 96,256 warrants to purchase the Company’s common stock at $1.50 per share, expiring between October 23, 2018 through April 29, 2019 for placement agent services. On June 1, 2016, the Company issued an aggregate of 38,572 warrants to purchase the Company’s common stock at $2.10 per share, expiring on June 1, 2019, in connection with the sale of the Company’s common stock. Stock based compensation related to warrants issued for services was $19,883 and $56,288 for the three and six months ended June 30, 2016 and 2015, respectively. A summary of the warrant activity for the six months ended June 30, 2016 is as follows:
The aggregate intrinsic value in the preceding tables represents the total pretax intrinsic value, based on warrants with an exercise price less than the Company’s stock price of $1.53 as of June 30, 2016, which would have been received by the warrant holders had those warrant holders exercised their warrants as of that date. |
NOTE 10 - FAIR VALUE MEASUREMENT |
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Fair Value Disclosures [Text Block] | NOTE 10 – FAIR VALUE MEASUREMENT The Company adopted the provisions of Accounting Standards Codification subtopic 825-10, Financial Instruments (“ASC 825-10”). ASC 825-10 defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance. ASC 825-10 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 825-10 establishes three levels of inputs that may be used to measure fair value: Level 1 – Quoted prices in active markets for identical assets or liabilities. Level 2 – Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 – Unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities. All items required to be recorded or measured on a recurring basis are based upon level 3 inputs. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement is disclosed and is determined based on the lowest level input that is significant to the fair value measurement. Upon adoption of ASC 825-10, there was no cumulative effect adjustment to beginning retained earnings and no impact on the financial statements. The carrying value of the Company’s cash and cash equivalents, accounts payable and other current assets and liabilities approximate fair value because of their short-term maturity. As of June 30, 2016 and December 31, 2015, the Company did not have any items that would be classified as level 1 or 2 disclosures. The Company recognizes its derivative and warrant liabilities as level 3 and values its derivatives using the methods discussed in Note 7. While the Company believes that its valuation methods are appropriate and consistent with other market participants, it recognizes that the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. The primary assumptions that would significantly affect the fair values using the methods discussed in Note 5 are that of volatility and market price of the underlying common stock of the Company. As of June 30, 2016 and December 31, 2015, the Company did not have any derivative instruments that were designated as hedges. The derivative and warrant liability as of June 30, 2016, in the amount of $308,067 and $2,325,250, respectively, has a level 3 classification. The following table provides a summary of changes in fair value of the Company’s level 3 financial liabilities as of June 30, 2016:
Fluctuations in the Company’s stock price are a primary driver for the changes in the derivative valuations during each reporting period. As the stock price decreases for each of the related derivative instruments, the value to the holder of the instrument generally decreases, therefore decreasing the liability on the Company’s balance sheet. Additionally, stock price volatility is one of the significant unobservable inputs used in the fair value measurement of each of the Company’s derivative instruments. |
NOTE 11 - SUBSEQUENT EVENTS |
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Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | NOTE 11 – SUBSEQUENT EVENTS In July and August 2016, the Company entered into a securities purchase agreements with investors, pursuant to which we the Company received from subscriptions for the purchase of 221,167 shares of the Company’s common stock and warrants expiring three years from issuance to purchase 110,584 shares of our common stock at $1.95 for aggregate cash proceeds of $332,500. |
Accounting Policies, by Policy (Policies) |
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Use of Estimates, Policy [Policy Text Block] | Use of estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, 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. Significant estimates include the recoverability and useful lives of long-lived assets, the fair value of the Company’s stock, stock-based compensation, fair values relating to warrant and other derivative liabilities and the valuation allowance related to deferred tax assets. Actual results may differ from these estimates.
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Fair Value of Financial Instruments, Policy [Policy Text Block] | Fair Value of Financial Instruments Accounting Standards Codification subtopic 825-10, Financial Instruments (“ASC 825-10”) requires disclosure of the fair value of certain financial instruments. The carrying value of cash and cash equivalents, accounts payable and accrued liabilities as reflected in the balance sheets, approximate fair value because of the short-term maturity of these instruments. All other significant financial assets, financial liabilities and equity instruments of the Company are either recognized or disclosed in the financial statements together with other information relevant for making a reasonable assessment of future cash flows, interest rate risk and credit risk. Where practicable the fair values of financial assets and financial liabilities have been determined and disclosed; otherwise only available information pertinent to fair value has been disclosed. The Company follows Accounting Standards Codification subtopic 820-10, Fair Value Measurements and Disclosures (“ASC 820-10”) and Accounting Standards Codification subtopic 825-10, Financial Instruments (“ASC 825-10”), which permits entities to choose to measure many financial instruments and certain other items at fair value.
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Derivatives, Policy [Policy Text Block] | Derivative Instrument Liability The Company accounts for derivative instruments in accordance with ASC 815, which establishes accounting and reporting standards for derivative instruments and hedging activities, including certain derivative instruments embedded in other financial instruments or contracts and requires recognition of all derivatives on the balance sheet at fair value, regardless of hedging relationship designation. Accounting for changes in fair value of the derivative instruments depends on whether the derivatives qualify as hedge relationships and the types of relationships designated are based on the exposures hedged. At June 30, 2016 and December 31, 2015, the Company did not have any derivative instruments that were designated as hedges. At June 30, 2016 and December 31, 2015, the Company had outstanding preferred stock and warrants that contained embedded derivatives. These embedded derivatives include certain conversion features and reset provisions. (See Note 6 and Note 7).
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Research and Development Expense, Policy [Policy Text Block] | Research and development costs The Company accounts for research and development costs in accordance with the Accounting Standards Codification subtopic 730-10, Research and Development (“ASC 730-10”). Under ASC 730-10, all research and development costs must be charged to expense as incurred. Accordingly, internal research and development costs are expensed as incurred. Third-party research and developments costs are expensed when the contracted work has been performed or as milestone results have been achieved. Company-sponsored research and development costs related to both present and future products are expensed in the period incurred. The Company incurred research and development expenses of $1,153,043 and $1,579,157 for the three and six months ended June 30, 2016; and $489,563 and $791,642 for the three and six months ended June 30, 2015, respectively.
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Earnings Per Share, Policy [Policy Text Block] | Net Loss Per Common Share The Company computes earnings (loss) per share under Accounting Standards Codification subtopic 260-10, Earnings Per Share (“ASC 260-10”). Net loss per common share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per share, if presented, would include the dilution that would occur upon the exercise or conversion of all potentially dilutive securities into common stock using the “treasury stock” and/or “if converted” methods as applicable. The computation of basic and diluted loss per share as of June 30, 2016 and 2015 excludes potentially dilutive securities when their inclusion would be anti-dilutive, or if their exercise prices were greater than the average market price of the common stock during the period. Potentially dilutive securities excluded from the computation of basic and diluted net loss per share are as follows:
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Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] | Stock Based Compensation The Company measures the cost of services received in exchange for an award of equity instruments based on the fair value of the award. For employees and directors, the fair value of the award is measured on the grant date and for non-employees, the fair value of the award is generally re-measured on vesting dates and interim financial reporting dates until the service period is complete. The fair value amount is then recognized over the period during which services are required to be provided in exchange for the award, usually the vesting period. As of June 30, 2016, the Company had 8,450,190 options outstanding to purchase shares of common stock, of which 7,000,400 were vested. As of December 31, 2015, the Company had 7,780,190 options outstanding to purchase shares of common stock, of which 5,613,501 were vested.
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Income Tax, Policy [Policy Text Block] | Income Taxes The Company follows Accounting Standards Codification subtopic 740-10, Income Taxes (“ASC 740-10”) for recording the provision for income taxes. Deferred tax assets and liabilities are computed based upon the difference between the financial statement and income tax basis of assets and liabilities using the enacted marginal tax rate applicable when the related asset or liability is expected to be realized or settled. Deferred income tax expenses or benefits are based on the changes in the asset or liability during each period. If available evidence suggests that it is more likely than not that some portion or all of the deferred tax assets will not be realized, a valuation allowance is required to reduce the deferred tax assets to the amount that is more likely than not to be realized. Future changes in such valuation allowance are included in the provision for deferred income taxes in the period of change. Deferred income taxes may arise from temporary differences resulting from income and expense items reported for financial accounting and tax purposes in different periods. Deferred taxes are classified as current or non-current, depending on the classification of assets and liabilities to which they relate. Deferred taxes arising from temporary differences that are not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary differences are expected to reverse and are considered immaterial.
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Registration Rights Policy [Policy Text Block] | Registration Rights The Company accounts for registration rights agreements in accordance with the Accounting Standards Codification subtopic 825-20, Registration Payment Arraignments (“ASC 825-20”). Under ASC 825-20, the Company is required to disclose the nature and terms of the arraignment, the maximum potential amount and to assess each reporting period the probable liability under these arraignments and, if exists, to record or adjust the liability to current period operations. On June 23, 2014, the Company filed Form S-1/A became effective with the Securities and Exchange Commission. As such, the Company determined that payments were due under its registration rights agreement and therefore accrued $55,620 as interest expense during the year ended December 31, 2014 for the liability under the registration rights agreements. During the year ended December 31, 2015, the Company estimated the liability at $-0- and therefore recorded the change to current period operations. Beginning on October 23, 2015, the Company entered into subscription agreements with certain accredited investors pursuant to which the Company sold to the investors units, which each unit consisting of one share of the Company’s common stock and a warrant to purchase one half of one share of common stock (the “Private Placement”). In connection with the Private Placement, the Company also entered into a registration rights agreements with the investors, pursuant to which the Company agreed to provide certain registration rights with respect to the common stock and warrants issued under the Private Placement. The registration rights agreements require the Company to file a registration statement within 45 calendar days upon the final closing under the Private Placement and to be effective 120 calendar days thereafter. The final closing under the Private Placement occurred on April 29, 2016. The Company has estimated the liability under the registration rights agreement at $-0- as of June 30, 2016.
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Reclassification, Policy [Policy Text Block] | Reclassification Certain reclassifications have been made to prior periods’ data to conform with the current year’s presentation. These reclassifications had no effect on reported income or losses.
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New Accounting Pronouncements, Policy [Policy Text Block] | Recent Accounting Pronouncements In March 2016, the FASB issued ASU No. 2016-09, Compensation – Stock Compensation, or ASU No. 2016-09. The areas for simplification in this Update involve several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. For public entities, the amendments in this Update are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted in any interim or annual period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. An entity that elects early adoption must adopt all of the amendments in the same period. Amendments related to the timing of when excess tax benefits are recognized, minimum statutory withholding requirements, forfeitures, and intrinsic value should be applied using a modified retrospective transition method by means of a cumulative-effect adjustment to equity as of the beginning of the period in which the guidance is adopted. Amendments related to the presentation of employee taxes paid on the statement of cash flows when an employer withholds shares to meet the minimum statutory withholding requirement should be applied retrospectively. Amendments requiring recognition of excess tax benefits and tax deficiencies in the income statement and the practical expedient for estimating expected term should be applied prospectively. An entity may elect to apply the amendments related to the presentation of excess tax benefits on the statement of cash flows using either a prospective transition method or a retrospective transition method. The Company is currently evaluating the impact of adopting ASU No. 2016-09 on financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. Topic 842 affects any entity that enters into a lease, with some specified scope exemptions. The guidance in this Update supersedes Topic 840, Leases. The core principle of Topic 842 is that a lessee should recognize the assets and liabilities that arise from leases. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For public companies, the amendments in this Update are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently evaluating the impact of adopting ASU No. 2016-02 on our financial statements. There are various other updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on the Company's financial position, results of operations or cash flows.
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Subsequent Events, Policy [Policy Text Block] | Subsequent Events The Company evaluates events that have occurred after the balance sheet date but before the financial statements are issued. Based upon the evaluation, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the condensed consolidated financial statements, except as disclosed.
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NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) |
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Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block] | Potentially dilutive securities excluded from the computation of basic and diluted net loss per share are as follows:
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NOTE 4 - PROPERTY AND EQUIPMENT (Tables) |
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Property, Plant and Equipment [Table Text Block] | Property and equipment as of June 30, 2016 and December 31, 2015 is summarized as follows:
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NOTE 5 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) |
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Schedule of Accounts Payable and Accrued Liabilities [Table Text Block] | Accounts payable and accrued expenses at June 30, 2016 and December 31, 2015 consist of the following:
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NOTE 9 - OPTIONS, RESTRICTED STOCK UNITS AND WARRANTS (Tables) |
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Jun. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure Text Block Supplement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Share-based Compensation, Shares Authorized under Stock Option Plans, by Exercise Price Range [Table Text Block] | The following table presents information related to stock options at June 30, 2016:
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Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block] | A summary of the stock option activity and related information for the Plan for the six months ended June 30, 2016 is as follows:
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Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | The following assumptions were used in determining the fair value of employee and vesting non-employee options during the six months ended June 30, 2016 and 2015:
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Nonvested Restricted Stock Shares Activity [Table Text Block] | The following table summarizes the restricted stock activity for the six months ended June 30, 2016:
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Schedule of Warrants or Rights, Shares Authorized, by Exercise Price Range [Table Text Block] | The following table summarizes information with respect to outstanding warrants to purchase common stock of the Company at June 30, 2016:
|
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Schedule of Stockholders' Equity Note, Warrants or Rights [Table Text Block] | A summary of the warrant activity for the six months ended June 30, 2016 is as follows:
|
NOTE 10 - FAIR VALUE MEASUREMENT (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block] | The following table provides a summary of changes in fair value of the Company’s level 3 financial liabilities as of June 30, 2016:
|
NOTE 2 - GOING CONCERN AND MANAGEMENT'S LIQUIDITY PLANS (Details) - USD ($) |
6 Months Ended | |||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
NOTE 2 - GOING CONCERN AND MANAGEMENT'S LIQUIDITY PLANS (Details) [Line Items] | ||||
Cash and Cash Equivalents, at Carrying Value | $ 705,341 | $ 1,197,239 | $ 953,234 | $ 239,781 |
Working Capital (Deficit) | (2,374,151) | |||
Net Cash Provided by (Used in) Operating Activities | (2,766,125) | $ (2,569,053) | ||
Working Captial, Excluding Derivative and Warrant Liabilties [Member] | ||||
NOTE 2 - GOING CONCERN AND MANAGEMENT'S LIQUIDITY PLANS (Details) [Line Items] | ||||
Working Capital (Deficit) | $ 259,166 |
NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share - shares |
6 Months Ended | |
---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities | 17,322,579 | 16,474,467 |
Employee Stock Option [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities | 8,450,190 | 7,330,190 |
Warrant [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities | 8,145,722 | 7,772,277 |
Series C Preferred Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities | 726,667 | 1,372,000 |
NOTE 4 - PROPERTY AND EQUIPMENT (Details) - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|
NOTE 4 - PROPERTY AND EQUIPMENT (Details) [Line Items] | ||||
Depreciation | $ 2,333 | $ 2,481 | $ 5,241 | $ 5,341 |
Minimum [Member] | ||||
NOTE 4 - PROPERTY AND EQUIPMENT (Details) [Line Items] | ||||
Property, Plant and Equipment, Useful Life | 3 years | |||
Maximum [Member] | ||||
NOTE 4 - PROPERTY AND EQUIPMENT (Details) [Line Items] | ||||
Property, Plant and Equipment, Useful Life | 5 years |
NOTE 4 - PROPERTY AND EQUIPMENT (Details) - Schedule of Property, Plant and Equipment - USD ($) |
Jun. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 84,121 | $ 78,566 |
Less accumulated depreciation | (65,399) | (60,158) |
Property and equipment, net | 18,722 | 18,408 |
Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 74,004 | 68,449 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 10,117 | $ 10,117 |
NOTE 5 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - Schedule of Accounts Payable and Accrued Liabilities - USD ($) |
Jun. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Schedule of Accounts Payable and Accrued Liabilities [Abstract] | ||
Accrued accounting and legal | $ 149,457 | $ 112,723 |
Accrued reimbursements | 3,710 | 13,613 |
Accrued consulting | 29,551 | 15,200 |
Accrued research and development expenses | 34,894 | 34,179 |
Accrued office and other | 713 | 31,482 |
Accrued payroll | 35,835 | 0 |
Deferred rent | 3,549 | 3,016 |
Accrued settlement related to arbitration | 13,333 | 13,333 |
$ 271,042 | $ 223,546 |
NOTE 6 - SERIES C 9% CONVERTIBLE PREFERRED STOCK (Details) - USD ($) |
1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 06, 2013 |
Jan. 09, 2013 |
Jun. 30, 2016 |
May 31, 2016 |
Feb. 29, 2016 |
Mar. 31, 2015 |
Jun. 30, 2016 |
Jul. 31, 2013 |
Dec. 31, 2014 |
Dec. 31, 2013 |
Dec. 31, 2013 |
Dec. 31, 2015 |
|
NOTE 6 - SERIES C 9% CONVERTIBLE PREFERRED STOCK (Details) [Line Items] | ||||||||||||
Class of Warrant or Rights, Granted (in Shares) | 1,067,037 | |||||||||||
Class of Warrant or Right, Outstanding (in Shares) | 8,145,722 | 8,145,722 | 7,078,685 | |||||||||
Temporary Equity, Amortization Period | 1 year | |||||||||||
Stock Issued During Period, Shares, New Issues (in Shares) | 1,833,488 | |||||||||||
Embedded Derivative, Fair Value of Embedded Derivative Liability | $ 308,067 | $ 1,242,590 | $ 308,067 | $ 285,157 | ||||||||
Fair Value Assumptions, Expected Term | 2 years | |||||||||||
Fair Value Assumptions, Expected Dividend Rate | 0.00% | 0.00% | ||||||||||
Fair Value Assumptions, Expected Volatility Rate | 141.00% | |||||||||||
Conversion of Stock, Shares Issued (in Shares) | 54,859 | |||||||||||
Conversion of Stock, Shares Converted (in Shares) | 54,759 | 197,714 | ||||||||||
Embedded Derivative, No Longer Bifurcated, Amount Reclassified to Stockholders' Equity | $ 97,897 | |||||||||||
Dividends Payable, Current | $ 316,676 | 316,676 | 340,291 | |||||||||
Registration Payment Arrangement, Term | the Company entered into a registration rights agreement with the purchasers pursuant to which the Company agreed to provide certain registration rights with respect to the common stock issuable upon conversion of Series C Preferred Stock and exercise of the warrants issued to holders of Series C Preferred Stock. Specifically, the Company agreed to file a registration statement with the Securities and Exchange Commission covering the resale of the common stock issuable upon conversion of the Series C Preferred Stock and exercise of the warrants on or before July 22, 2013 and to cause such registration statement to be declared effective by the Securities and Exchange Commission, in the event that the registration statement is not reviewed by the Securities and Exchange Commission, within five trading days after the Company is notified that registration statement is not being reviewed by the Securities and Exchange Commission, and by November 22, 2013 in the event that the registration statement is reviewed by the Securities and Exchange Commission and the Securities and Exchange Commission issues comments.If (i) the registration statement is not filed by July 22, 2013, (ii) the registration statement is not declared effective by the Securities and Exchange Commission within five trading days after the Company is notified that the registration statement is not being reviewed by the Securities and Exchange Commission, in the case of a no review, (iii) the registration statement is not declared effective by the Securities and Exchange Commission by November 22, 2013 in the case of a review by the Securities and Exchange Commission pursuant to which the Securities and Exchange Commission issues comments or (iv) the registration statement ceases to remain continuously effective for more than 20 consecutive calendar days or more than an aggregate of 45 calendar days during any 12-month period after its first effective date, then the Company is subject to liquidated damage payments to the holders of the shares sold in the private placement in an amount equal to 0.25% of the aggregate purchase price paid by such purchasers per month of delinquency.Notwithstanding the foregoing, (i) the maximum aggregate liquidated damages due under the registration rights agreement shall be 3% of the aggregate purchase price paid by the purchasers, and (ii) if any partial amount of liquidated damages remains unpaid for more than seven days, the Company shall pay interest of 18% per annum, accruing daily, on such unpaid amount.Pursuant to the registration rights agreement, the Company must maintain the effectiveness of the registration statement from the effective date until the date on which all securities registered under the registration statement have been sold, or are otherwise able to be sold pursuant to Rule 144 without volume or manner-of-sale restrictions, subject to the right to suspend or defer the use of the registration statement in certain events. | |||||||||||
Registration Payment Arrangement, Accrual Carrying Value | 0 | 0 | $ 55,620 | 0 | ||||||||
Series C Preferred Stock [Member] | ||||||||||||
NOTE 6 - SERIES C 9% CONVERTIBLE PREFERRED STOCK (Details) [Line Items] | ||||||||||||
Temporary Equity, Shares Authorized (in Shares) | 4,200 | |||||||||||
Preferred Stock, Dividend Rate, Percentage | 9.00% | |||||||||||
Temporary Equity, Par Value | $ 1,000 | |||||||||||
Preferred Stock, Dividend Payment Terms | payable quarterly | |||||||||||
Preferred Stock, Voting Rights | The holders of the Series C Preferred Stock vote together with the holders of our common stock on an as-converted basis, but may not vote the Series C Preferred Stock in excess of the beneficial ownership limitation of the Series C Preferred Stock. The beneficial ownership limitation is 4.99% of our then outstanding shares of common stock following such conversion or exercise, which may be increased to up to 9.99% of our then outstanding shares of common stock following such conversion or exercise upon the request of an individual holder. | |||||||||||
Preferred Stock, Beneficial Ownership Limitation and Covenant, Description | The beneficial ownership limitation is determined on an individual holder basis, such that the as-converted number of shares of one holder is not included in the shares outstanding when calculating the limitation for a different holder.In addition, absent the approval of holders representing at least 67% of the outstanding shares of the Series C Preferred Stock, we may not (i) increase the number of authorized shares of preferred stock, (ii) amend our charter documents, including the terms of the Series C Preferred Stock, in any manner adverse to the holders of the Series C Preferred Stock, including authorizing or creating any class of stock ranking senior to, or otherwise pari passu with, the shares of Series C Preferred Stock as to dividends, redemption or distribution of assets upon a liquidation, or (iii) perform certain covenants, including:●incur additional indebtedness;●permit liens on assets;●repay, repurchase or otherwise acquire more than a de minimis number of shares of capital stock;●pay cash dividends to our stockholders; and●engage in transactions with affiliates. | |||||||||||
Convertible Preferred Stock, Terms of Conversion | Any holder of Series C Preferred Stock is entitled at any time to convert any whole or partial number of shares of Series C Preferred Stock into shares of our common stock at a price of $1.50 per share. The Series C Preferred Stock is subject to full ratchet anti-dilution price protection upon the issuance of equity or equity-linked securities at an effective common stock purchase price of less than $1.50 per share as well as other customary anti-dilution protection.In the event that(i) we fail to, or announce our intention not to, deliver common stock share certificates upon conversion of our Series C Preferred Stock prior to the seventh trading day after such shares are required to be delivered,(ii) we fail for any reason to pay in full the amount of cash due pursuant to our failure to deliver common stock share certificates upon conversion of our Series C Preferred Stock within five calendar days after notice therefor is delivered,(iii) we fail to have available a sufficient number of authorized and unreserved shares of common stock to issue upon a conversion of our Series C Preferred Stock, (iv) we fail to observe or perform any other covenant, agreement or warranty contained in, or otherwise commit any breach of our obligations under, the securities purchase agreement, the registration rights agreement, the certificate of designation or the warrants entered into pursuant to the private placement transaction for our Series C Preferred Stock, which failure or breach could have a material adverse effect, and such failure or breach is not cured within 30 calendar days after written notice was delivered,(v) we are party to a change of control transaction,(vi) we file for bankruptcy or a similar arrangement or are adjudicated insolvent,(vii) we are subject to a judgment, including an arbitration award against us, of greater than $100,000, and such judgment remains unvacated, unbonded or unstayed for a period of 45 calendar days,the holders of the Series C Preferred Stock are entitled, among other rights, to redeem their shares of Series C Preferred Stock at any time for greater than their stated value or increase the dividend rate on their shares of Series C Preferred Stock to 18%. | |||||||||||
Temporary Equity, Redemption Price Per Share (in Dollars per share) | $ 1.50 | |||||||||||
Class of Warrant or Rights, Granted (in Shares) | 1,330,627 | |||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share) | $ 2.61 | |||||||||||
Warrants, Term of Warrants | 5 years | |||||||||||
Warrant, Description of Warrant | after six months from the issuance date, there is no effective registration statement registering the resale, or no current prospectus available for the resale, of the shares of common stock underlying the warrants, the warrants may be exercised by means of a “cashless exercise”. | |||||||||||
Temporary Equity, Liquidation Preference | $ 1,090,000 | $ 1,090,000 | $ 2,781,000 | $ 2,781,000 | $ 1,471,000 | |||||||
Stock Issued During Period, Shares, New Issues (in Shares) | 2,181 | |||||||||||
Proceeds from Issuance of Redeemable Preferred Stock | $ 1,814,910 | |||||||||||
Conversion of Stock, Shares Converted (in Shares) | 70 | 236 | 75 | |||||||||
Temporary Equity, Shares Outstanding (in Shares) | 1,090 | 1,090 | 1,471 | |||||||||
Series C Preferred Stock [Member] | Full-Ratchet Anti-Dilution Protection Provision [Member] | ||||||||||||
NOTE 6 - SERIES C 9% CONVERTIBLE PREFERRED STOCK (Details) [Line Items] | ||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share) | $ 1.50 | |||||||||||
Class of Warrant or Right, Outstanding (in Shares) | 2,315,301 | |||||||||||
Bridge Loan [Member] | Series C Preferred Stock [Member] | ||||||||||||
NOTE 6 - SERIES C 9% CONVERTIBLE PREFERRED STOCK (Details) [Line Items] | ||||||||||||
Debt Conversion, Converted Instrument, Shares Issued (in Shares) | 600 | |||||||||||
Embedded Beneficial Conversion Feature [Member] | Series C Preferred Stock [Member] | ||||||||||||
NOTE 6 - SERIES C 9% CONVERTIBLE PREFERRED STOCK (Details) [Line Items] | ||||||||||||
Adjustments to Additional Paid in Capital, Other | 1,303,671 | |||||||||||
Temporary Equity, Liquidation Preference | 1,303,671 | 1,303,671 | ||||||||||
Warrant [Member] | ||||||||||||
NOTE 6 - SERIES C 9% CONVERTIBLE PREFERRED STOCK (Details) [Line Items] | ||||||||||||
Embedded Derivative, Fair Value of Embedded Derivative Liability | $ 4,097,444 | |||||||||||
Warrant [Member] | Series C Preferred Stock [Member] | ||||||||||||
NOTE 6 - SERIES C 9% CONVERTIBLE PREFERRED STOCK (Details) [Line Items] | ||||||||||||
Adjustments to Additional Paid in Capital, Warrant Issued | 1,064,739 | |||||||||||
Temporary Equity, Liquidation Preference | 1,064,739 | 1,064,739 | ||||||||||
Issuance Costs [Member] | Series C Preferred Stock [Member] | ||||||||||||
NOTE 6 - SERIES C 9% CONVERTIBLE PREFERRED STOCK (Details) [Line Items] | ||||||||||||
Temporary Equity, Liquidation Preference | $ 412,590 | $ 412,590 | ||||||||||
Minimum [Member] | ||||||||||||
NOTE 6 - SERIES C 9% CONVERTIBLE PREFERRED STOCK (Details) [Line Items] | ||||||||||||
Fair Value Assumptions, Expected Term | 2 years 284 days | |||||||||||
Fair Value Assumptions, Risk Free Interest Rate | 0.56% | |||||||||||
Fair Value Assumptions, Expected Volatility Rate | 141.00% | |||||||||||
Minimum [Member] | Series C Preferred Stock [Member] | ||||||||||||
NOTE 6 - SERIES C 9% CONVERTIBLE PREFERRED STOCK (Details) [Line Items] | ||||||||||||
Fair Value Assumptions, Risk Free Interest Rate | 0.23% | |||||||||||
Maximum [Member] | ||||||||||||
NOTE 6 - SERIES C 9% CONVERTIBLE PREFERRED STOCK (Details) [Line Items] | ||||||||||||
Fair Value Assumptions, Expected Term | 3 years 6 months | |||||||||||
Fair Value Assumptions, Risk Free Interest Rate | 0.89% | |||||||||||
Fair Value Assumptions, Expected Volatility Rate | 150.00% | |||||||||||
Maximum [Member] | Series C Preferred Stock [Member] | ||||||||||||
NOTE 6 - SERIES C 9% CONVERTIBLE PREFERRED STOCK (Details) [Line Items] | ||||||||||||
Fair Value Assumptions, Risk Free Interest Rate | 0.59% |
NOTE 9 - OPTIONS, RESTRICTED STOCK UNITS AND WARRANTS (Details) - Schedule of Share-based Compensation, Stock Options, Activity - USD ($) |
6 Months Ended | 12 Months Ended |
---|---|---|
Jun. 30, 2016 |
Dec. 31, 2015 |
|
Schedule of Share-based Compensation, Stock Options, Activity [Abstract] | ||
Options Outstanding, Shares | 8,450,190 | 7,780,190 |
Options Outstanding, Weighted-Average Exercise Price (in Dollars per share) | $ 2.26 | $ 2.30 |
Options Outstanding, Weighted-Average Remaining Contractual Term | 6 years 73 days | 6 years 146 days |
Options Outstanding, Aggregate Intrinsic Value (in Dollars) | $ 0 | $ 0 |
Exercisable at June 30, 2016 | 7,000,400 | |
Exercisable at June 30, 2016 (in Dollars per share) | $ 2.31 | |
Exercisable at June 30, 2016 | 6 years | |
Exercisable at June 30, 2016 (in Dollars) | $ 0 | |
Grants | 685,000 | |
Grants (in Dollars per share) | $ 1.84 | |
Grants | 10 years | |
Exercised | 0 | |
Expired | (15,000) | |
Expired (in Dollars per share) | $ 2.50 |
NOTE 9 - OPTIONS, RESTRICTED STOCK UNITS AND WARRANTS (Details) - Nonvested Restricted Stock Shares Activity - Restricted Stock [Member] |
6 Months Ended |
---|---|
Jun. 30, 2016
shares
| |
NOTE 9 - OPTIONS, RESTRICTED STOCK UNITS AND WARRANTS (Details) - Nonvested Restricted Stock Shares Activity [Line Items] | |
Restricted shares issued as of January 1, 2016 | 175,000 |
Granted | 0 |
Vested | (175,000) |
Total restricted shares issued as of June 30, 2016 | 0 |
Vested restricted shares as of June 30, 2016 | 0 |
Unvested restricted shares as of June 30, 2016 | 0 |
NOTE 10 - FAIR VALUE MEASUREMENT (Details) - USD ($) |
Jun. 30, 2016 |
Dec. 31, 2015 |
Mar. 31, 2015 |
---|---|---|---|
Fair Value Disclosures [Abstract] | |||
Embedded Derivative, Fair Value of Embedded Derivative Liability | $ 308,067 | $ 285,157 | $ 1,242,590 |
Derivative Liability, Current | $ 2,325,250 | $ 1,621,199 | $ 4,097,444 |
NOTE 11 - SUBSEQUENT EVENTS (Details) - USD ($) |
1 Months Ended | 6 Months Ended |
---|---|---|
Aug. 12, 2016 |
Jun. 30, 2016 |
|
NOTE 11 - SUBSEQUENT EVENTS (Details) [Line Items] | ||
Stock Issued During Period, Shares, New Issues | 1,833,488 | |
Class of Warrant or Rights, Granted | 1,067,037 | |
Proceeds from Issuance or Sale of Equity (in Dollars) | $ 2,523,787 | |
Subsequent Event [Member] | ||
NOTE 11 - SUBSEQUENT EVENTS (Details) [Line Items] | ||
Stock Issued During Period, Shares, New Issues | 221,167 | |
Warrants, Term of Warrants | 3 years | |
Class of Warrant or Rights, Granted | 110,584 | |
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share) | $ 1.95 | |
Proceeds from Issuance or Sale of Equity (in Dollars) | $ 332,500 |
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