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Stockholders' Deficit
3 Months Ended
Mar. 31, 2017
Stockholders' Equity Note [Abstract]  
Stockholders' Deficit

NOTE 4 – Stockholders’ Deficit


Preferred Stock


The Company has authorized 5,000,000 shares of preferred stock, par value $0.001 per share with such rights, preferences and limitation as may be set from time to time by resolution of the board of directors and the filing of a certificate of designation as required by Delaware General Corporation Law.


Common Stock


On August 12, 2015, GelTech signed a $10 million Purchase Agreement with Lincoln Park. The Company also entered into a Registration Rights Agreement with Lincoln Park whereby we agreed to file a registration statement related to the transaction with the SEC covering the shares that may be issued to Lincoln Park under the Purchase Agreement.

 

Under the terms and subject to the conditions of the Purchase Agreement, GelTech has the right to sell, and Lincoln Park is obligated to purchase, up to $10 million in shares of the Company’s common stock, subject to certain limitations, from time to time, over the 30-month period commencing on October 16, 2015.


During the three months ended March 31, 2017, the Company issued 504,843 shares of common stock in exchange for $123,620 in connection with the Lincoln Park Purchase Agreement.


During the three months ended March 31, 2017, the Company issued 2,081,637 shares of common stock to three accredited investors in exchange for $500,000, including the issuance of 384,616 shares of commons stock to the Company’s chairman and principal shareholder in exchange for $100,000.


Stock-Based Compensation


Stock-based compensation expense recognized under ASC 718-10 for the period January 1, 2017 to March 31, 2017, was $63,254 for stock options granted to employees and directors. This expense is included in selling, general and administrative expenses in the unaudited consolidated statements of operations. Stock-based compensation expense recognized during the period is based on the value of the portion of share-based payment awards that is ultimately expected to vest during the period. At March 31, 2017, the total compensation cost for stock options not yet recognized was approximately $135,019.  This cost will be recognized over the remaining vesting term of the options of approximately two years.


Stock-based awards granted to non-employees, in the form of warrants to purchase the Company’s common stock, are valued at fair value in accordance with the measurement and recognition criteria of ASC 505-50 "Equity Based payments to Non-Employees.” Stock based compensation to non-employees recognized for the three months ended March 31, 2017 was $684.


During the three months ended March 31, 2017 the Company granted five year options to purchase 150,000 shares of common stock at an exercise price of $0.275 per share in exchange for legal services.  The options were valued with the Black-Scholes option pricing model using a volatility of 99.06% based upon the historical price of the company’s stock, a term of five years, the term of the warrants and a risk-free rate of 1.88%.  The calculated fair value, $30,703 was recorded as prepaid expense and will be amortized over twelve months.  For the three months ended March 31, 2017, $5,118 was amortized to expense.


Warrants to Purchase Common Stock


Warrants Issued as Settlements


During the three months ended March 31, 2017, there were no warrants granted for settlements.


Warrants Issued for Cash or Services


During the three months ended March 31, 2017, the Company issued two year warrants to purchase 396,925 shares of common stock at an exercise price of $2.00 per share in connection with advances of $200,000 from its chairman and principal shareholder related to the convertible line of credit agreement.


During the three months ended March 31, 2017, the Company issued two year warrants to purchase 1,040,818 shares of common stock at an exercise price of $2.00 per share in connection with private placements with 3 accredited investors including warrants to purchase 192,308 to the Company’s chairman and principal shareholder