Stockholders' Equity

12 Months Ended

Dec. 31, 2015

Equity [Abstract]

Stockholders' Equity

In February 2015, the Company received approval for and affected a 1:100 reverse split of its common stock. These financial statements reflect the reverse split since inception of the Company.

 Loss per share

A reconciliation of the numerator and the denominator used in the calculation of loss per share is as follows:

	For the Years Ended December 31,
	2015			2014
Basic and Diluted:
Reported net loss (in thousands)	$	(859	)	$	(699	)
Less unpaid and undeclared preferred stock dividends		(78	)		(109	)
Net loss applicable to common stockholder	$	(937	)	$	(808	)
Weighted average common shares outstanding		20,194,732			18,116,000
Net loss per common share	$	(0.05	)	$	(0.04	)

Because the following instruments would be anti-dilutive at all times presented, the potentially issuable common stock from warrants to purchase 400,808 and 143,308 shares in 2015 and 2014, respectively and preferred stock convertible into shares for the years ended December 31, 2015 and 2014, of 1,110 and 4,991 common shares respectively, were not included in the computation of diluted loss per share applicable to common stockholders.

Preferred Stock

A summary of the Company’s preferred stock as of December 31 is as follows. All calculations reflect the post-split calculations of 1 share for every 100 common shares which became effective March 2015 for all common stock and common stock equivalents.

			Shares Issued and				Preferred Stock Dividends
	Shares		Outstanding				Undeclared and Unpaid
Offering	Authorized		2015		2014		2015		2014
Series A convertible		590,197		47,250		47,250	$	—	$	—
Series B convertible, 10% cumulative		1,500,000		93,750		93,750		558,162		520,663
Series C convertible, 10% cumulative		1,666,666		38,333		38,333		162,913		151,413
Series D convertible, 10% cumulative		300,000		-		175,000		-		656,250
Series E convertible, 10% cumulative		800,000		19,022		19,022		599,563		558,173
Undesignated Preferred Series		5,143,137		—		—		—		—
Total Preferred Stock		10,000,000		198,355		373,355	$	1,320,638	$	1,886,499

The undeclared and unpaid preferred stock dividends were calculated from the date of the merger through December 31, 2015. 

 Summary of Preferred Stock Terms

Series A Convertible Preferred Stock

Liquidation Value:	$4.50 per share, $212,625
Conversion Price:	$10,303 per share
Conversion Rate:	0.00044—Liquidation Value divided by Conversion Price ($4.50/$10,303)
Voting Rights:	None
Dividends:	None
Conversion Period:	Any time

Series B Convertible Preferred Stock

Liquidation Value:	$4.00 per share, $375,000
Conversion Price:	$1,000 per share
Conversion Rate:	0.0040—Liquidation Value divided by Conversion Price ($4.00/$1,000)
Voting Rights:	None
Dividends:	10%—Quarterly—Commencing March 31, 2001
Conversion Period:	Any time
Cumulative dividends in arrears at December 31, 2015 were $558,162

Series C Convertible Preferred Stock

Liquidation Value:	$3.00 per share, $115,000
Conversion Price:	$600 per share
Conversion Rate:	0.0050—Liquidation Value divided by Conversion Price ($3.00/$600)
Voting Rights:	None
Dividends:	10%—Quarterly—Commencing March 31, 2002
Conversion Period:	Any time
Cumulative dividends in arrears at December 31, 2015 were $162,913

Series D Convertible Preferred Stock

Liquidation Value:	$10.00 per share, $525,000
Conversion Price:	$1,000 per share
Conversion Rate:	.01—Liquidation Value divided by Conversion Price ($10.00/$1,000)
Voting Rights:	None
Dividends:	10%—Quarterly—Commencing April 30, 2002
Conversion Period:	Any time
Cumulative dividends in arrears at December 31, 2015 were $0

As part of an agreement discussed in Note 6, Ventana Medical Systems, Inc. converted 175,000 Series D preferred stock with a stated value of $1.75 million and all outstanding accrued dividends of $656,250 for 12,100 shares of the Company’s common stock during the year ended December 31, 2015.

Series E Convertible Preferred Stock

Liquidation Value:	$22.00 per share, $418,488
Conversion Price:	$800.00 per share
Conversion Rate:	.0275—Liquidation Value divided by Conversion Price ($22.00/$800)
Voting Rights:	Equal in all respects to holders of common shares
Dividends:	10%—Quarterly—Commencing May 31, 2002
Conversion Period:	Any time
Cumulative dividends in arrears at December 31, 2015 were $599,563

Issuance of Securities

Common Stock  

Issuance of Common Stock for Cash

During 2015, the company issued 1,626,875 shares for $2,123,000 in equity proceeds emanating from the sale of unregistered stock at $1.60 per share including 240,625 shares issued for $385,000 associated with the PIPE described below.

During 2014, the Company issued 1,237,125 for $1,979,400 in equity proceeds emanating from the sale of unregistered stock associated with two private placements (PIPE) (Private Placement in Public Entity” at $1.60 per shares.

At December 31, 2015, our officers and directors own an aggregate 16,974,115 shares of common stock which is approximately 80.6% of our outstanding common stock.  

The Company does not have any outstanding stock options.

Warrants outstanding

							Weighted
			Weighted				Average
			Average		Aggregate		Remaining
	Options and		Exercise		Intrinsic		Contractual
	Warrants		Price		Value		Life (Years)
Outstanding at December 31, 2013		—	$	—		—		—
Outstanding as result of the merger		62,140	$	4.00		—		9.00
Granted		81,298		1.60		—		4.50
Expired		(130)		(4.00)		—		—
Outstanding at December 31, 2014		143,308	$	2.64		—		6.46
Granted		257,500		1.60		—		5.00
Outstanding at December 31. 2015		400,808	$	2.29				5.18

In connection with the secured promissory notes issued on December 31, 2015, as discussed in Note 6, the Company issued an aggregate of 250,000 warrants to purchase shares of common stock with a par value of $0.001 for $1.60 per shares.  The exercise price and number of warrants are subject to a change as defined in the agreement.  The warrants are exercisable for a period of five (5) years.  On March 15, 2016, the Board of Directors approved renegotiated terms with the warrant holders to increase the total warrants issued from 250,000 to 500,000 upon the removal of the anti-dilution clause in the warrant agreement and the exercise price being changed for $1.60 to $0.80.  See Subsequent Events Note 13.

The Company determined the fair value of the warrants using the Black Scholes model, at an interest free rate of 1.75%, volatility of 50% and a remaining term of 5 years. Based on information known at December 31, 2015, the Company priced the warrants with an assumed stock and exercised price of $0.80.  The fair value of the warrants were determined to be $90 which has been recorded as a discount on the related secured promissory notes and a liability which is included in accounts payable and accrued expenses on the consolidated balance sheets.  See also Notes 6 and 7.  The Company also issued 7,500 warrants as consideration for services provided in connection with the issuance of the secured promissory notes.  The warrants have the same terms as those described above and were determined to have an insignificant fair value.