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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Entia Biosciences Inc (CE) | USOTC:ERGO | OTCMarkets | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.0001 | 0.00 | 01:00:00 |
x
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ANNUAL REPORT PURSUANT SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the fiscal year ended December 31, 2015.
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OR
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|
o
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TRANSITION REPORT PURSUANT SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the transition period from _______ to _______.
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Nevada
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26-0561199
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(State or other jurisdiction
|
(IRS Employer
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of incorporation or organization)
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Identification No.)
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Page
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||||||
PART I
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5
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|||||
Item 1.
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5
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|||||
Item 1A.
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12
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|||||
Item 1B
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19
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|||||
Item 2.
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19
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|||||
Item 3.
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19
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Item 4.
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19
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PART II
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20
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|||||
Item 5.
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20
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|||||
Item 6.
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21
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Item 7.
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21
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|||||
Item 7A.
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25
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|||||
Item 8.
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26
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|||||
Item 9.
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45
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|||||
Item 9A.
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45
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|||||
Item 9B.
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46
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PART III
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47
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|||||
Item 10.
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47
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|||||
Item 11.
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49
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|||||
Item 12.
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53
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|||||
Item 13.
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54
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|||||
Item 14.
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55
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PART IV
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56
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|||||
Item 15.
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56
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|||||
58
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·
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U.S. patent application No. 61/277,150, filed September 21, 2009, entitled “Vitamin Fortified Mushrooms and Fungi for Increasing Survivability and Longevity."
|
|
·
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U.S. patent application No. 61/280,578, filed November 5, 2009, entitled “Vitamin Fortified Mushrooms and Fungi for Increasing Resistance to Oxidative Stress."
|
|
·
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U.S. patent application No. 61/335,394, filed January 6, 2010, entitled “Vitamin D Enriched Mushrooms and Fungi for Treating Alzheimer’s Disease, Taupathies, and Other Disease States Associated with Amyloid Precursor Protein.”
|
|
·
|
U.S. patent application No. 12/887,276, PCT US10/49684, filed on September 21, 2010, entitled: “Vitamin D2 Enriched Mushrooms and Fungi for Treatment of Oxidative Stress, Alzheimer’s Disease and Associated Disease States.”
|
|
·
|
U.S. patent application No. 61/496,321, filed on June 13, 2011, entitled “A Nutritional Approach to the Control of Anemia and Prevention of Associated Comorbid States with the Use of Ergothioneine.”
|
|
·
|
International application published on December 20,2012, PCT/US2012/042131; Entitled: “A Nutritional Approach to the Control of Anemia, Diabetes and Other Diseases or Conditions and Prevention of Associated Comorbid States with the Use of Ergothioneine.”
|
|
·
|
U.S. patent application No. 61/581,480, filed on December 29, 2011, entitled “A Nutritional Approach to the use of Ergothioneine for Hair and Nail Growth.”
|
|
·
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International application filed December 21,2012, PCT/U.S.12/71170; Entitled: “A Nutritional Approach to the Use of Ergothioneine and Vitamin D2 for Hair, Nail and Skin Growth.”
|
|
·
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PCT/U.S. 2008/056234, Serial number 12/529,859, entitled “Use of Ergothioneine as a Preservative in Foods and Beverages,” issued in Canada in 2011.
|
|
·
|
U.S. patent application No. 13/363,579, filed on February 1, 2012, entitled “Anti-inflammatory Approach to Prevention and Suppression of Post-Traumatic Stress Disorder, Traumatic Brain Injury, Depression, and Associated Disease States.”
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|
·
|
PCT/U.S. 13/47853, filed on June 26,2013, entitled “A Nutritional Approach to Improving Athletic Performance and Reducing Injury with L-Ergothioneine and/or Vitamin D2.”
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·
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proper new selection;
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·
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availability of raw materials;
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·
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pricing of raw materials;
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·
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timely delivery of new products;
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·
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regulatory allowance of the products; and
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·
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customer acceptance of new products
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§
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It is a specially formulated and processed product (as opposed to a naturally occurring foodstuff used in its natural state) for the partial or exclusive feeding of a patient by means of oral intake or enteral feeding by tube;
|
§
|
It is intended for the dietary management of a patient who, because of therapeutic or chronic medical needs, has limited or impaired capacity to ingest, digest, absorb, or metabolize ordinary foodstuffs or certain nutrients, or who has other special medically determined nutrient requirements, the dietary management of which cannot be achieved by the modification of the normal diet alone;
|
§
|
It provides nutritional support specifically modified for the management of the unique nutrient needs that result from the specific disease or condition, as determined by medical evaluation;
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§
|
It is intended to be used under medical supervision; and
|
§
|
It is intended only for a patient receiving active and ongoing medical supervision wherein the patient requires medical care on a recurring basis for, among other things, instructions on the use of the medical food.
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|
·
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limited visibility into and difficulty predicting the level of activity in individual health care providers’ practices from quarter to quarter;
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|
·
|
weakness in consumer spending as a result of the slowdown in the United States economy and global economies;
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·
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changes in relationships with distributors;
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·
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changes in the timing of receipt of product orders during a given quarter which, given our cycle time and the delay between case receipts and case shipments, could have an impact on which quarter revenue can be recognized;
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·
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fluctuations in currency exchange rates against the U.S. dollar;
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·
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changes in product mix;
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·
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our inability to predict from period to period the number of healthcare professionals recommending or otherwise depending on our products as part of a treatment regimen, which may impact the timing of when revenue is recognized;
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|
·
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seasonal fluctuations in the number of doctors in their offices and their availability to take appointments;
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·
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success of or changes to our marketing programs from quarter to quarter;
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·
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timing of industry tradeshows;
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·
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changes in the timing of when revenue is recognized, including as a result of the introduction of new products or promotions or as a result of changes to critical accounting estimates or new accounting pronouncements;
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·
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changes to our effective tax rate;
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·
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unanticipated delays in production caused by insufficient capacity or availability of raw materials;
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·
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any disruptions in the manufacturing process (external to us), including unexpected turnover in the labor force or the introduction of new production processes, power outages or natural or other disasters beyond our control;
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·
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the development and marketing of directly competitive products by existing and new competitors;
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·
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major changes in available technology or the preferences of customers may cause our current product offerings to become less competitive or obsolete;
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|
·
|
aggressive price competition from competitors;
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·
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costs and expenditures in connection with litigation;
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|
·
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the timing of new product introductions by us and our competitors, as well as customer order deferrals in anticipation of enhancements or new products;
|
|
·
|
disruptions to our business due to political, economic or other social instability, including the impact of an epidemic any of which results in changes in consumer spending habits, consumers unable or unwilling to visit health care professionals, as well as any impact on workforce absenteeism;
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·
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inaccurate forecasting of net revenues, production and other operating costs; and
|
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·
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investments in research and development to develop new products and enhancements.
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·
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correctly identify customer needs and preferences and predict future needs and preferences;
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·
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include functionality and features that address customer requirements;
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·
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allocate our research and development funding to products with higher growth prospects;
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|
·
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anticipate and respond to our competitors’ development of new products and technological innovations;
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·
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effectively differentiate our product offerings from our competitors’ product offerings;
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·
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innovate and develop new technologies and applications;
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·
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if and when applicable, effectively communicate the availability of third-party reimbursement of procedures using our products;
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·
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obtain adequate intellectual property rights; and
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·
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encourage customers to adopt new product technologies.
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|
·
|
election of our board of directors;
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·
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removal of any of our directors;
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|
·
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significant corporate transactions;
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|
·
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amendment of our Articles of Incorporation or bylaws; and
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·
|
adoption of measures that could delay or prevent a change in control or impede a merger, takeover or other business combination involving us.
|
|
·
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Rights and privileges of the preferred class, including anti-dilution provisions; and
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·
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Existence of the class itself, in the case of mandatory or forced conversion to our common shares.
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·
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Periodic variations in our results of operations and liquidity;
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·
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Speculation in the press or investment community concerning our business and results of operations;
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·
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Strategic actions by our competitors, such as product announcements or acquisitions;
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·
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Announcements of technological innovations or new products by us, our customers or competitors; and
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·
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General economic market conditions.
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(a)
|
(b)
|
(c)
|
||||||||||
Plan Category
|
Number of securities to be issued upon exercise of outstanding options, warrants, and rights.
|
Weighted-average exercise price of outstanding options, warrants, and rights
|
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
|
|||||||||
Equity compensation plan
approved by security holders
|
2,898,220 | $ | 0.43 | 1,801,780 |
|
·
|
Issuance of bonuses in the form of 1,550,000 shares of restricted common stock to four officers or directors, effective April 17, 2015. These issuances were reported on Form 4. During 2015, 1,000,000 of these restricted common shares were surrendered back to the Company by three of the recipients, pending a future valuation study.
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|
·
|
Issuance of a bonus to an employee in the form of a seven-year warrant to purchase 60,000 shares of restricted common stock, effective April 17, 2015.
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|
·
|
Issuance of an $11,000, three-year, 8% convertible debenture with warrant in exchange for a maturing $10,000 note payable plus accrued interest of $1,000. Terms of the issuance were finalized in 2016 with an effective date of October 16, 2015.
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|
·
|
Issuance of a $15,000, three-year, 8% convertible debenture with warrant in exchange for a maturing $15,000 note payable, effective November 3, 2015. Terms of the issuance were finalized in 2016 with an effective date of November 3, 2015. The note holder in this exchange was a related party.
|
|
·
|
Issuance of a $55,000, one-year, 8% convertible debenture with warrants in exchange for a maturing $50,000 note payable plus accrued interest of approximately $10,000. Terms of the issuance were finalized in 2016 with an effective date of December 26, 2015.
|
|
·
|
Issuance of an $11,333, three-year, 8% convertible debenture with warrant in exchange for a maturing $10,000 note payable plus accrued interest of $1,333. Terms of the issuance were finalized in 2016 with an effective date of December 31, 2015.
|
For the Years
Ended December 31,
|
Change
|
|||||||||||||||
2015
|
2014
|
$ | % | |||||||||||||
Revenues
|
$ | 346,910 | $ | 656,342 | $ | (309,432 | ) | -47.1 | % | |||||||
Cost of Goods Sold
|
131,007 | 245,471 | (114,464 | ) | -46.6 | % |
For the Years Ended
December 31,
|
Change
|
|||||||||||||||
2015
|
2014
|
$ | % | |||||||||||||
Advertising & promotion expenses
|
$ | 127,127 | $ | 125,728 | $ | 1,399 | 1.1 | % | ||||||||
Professional fees
|
231,125 | 156,561 | 74,564 | 47.6 | % | |||||||||||
Consulting fees
|
344,112 | 400,352 | (56,240 | ) | -14.0 | % | ||||||||||
General and Administrative expenses (including
impairment of intangible assets)
|
1,539,495 | 1,526,244 | 13,251 | 0.9 | % |
For the Years Ended,
December 31,
|
Change
|
|||||||||||||||
2015
|
2014
|
$ | % | |||||||||||||
Net cash provided by (used in)
|
||||||||||||||||
Operating activities
|
$ | (537 | ) | $ | (680 | ) | $ | 143 | -21.0 | % | ||||||
Investing activities
|
(21 | ) | (45 | ) | 24 | -53.3 | % | |||||||||
Financing activities
|
483 | 788 | (305 | ) | -38.7 | % |
Contents | Page(s) |
27 | |
28 | |
29 | |
30-31 | |
32 | |
33 |
December 31, 2015
|
December 31, 2014
|
|||||||
Assets
|
||||||||
Current Assets:
|
||||||||
Cash
|
$ | 24,133 | $ | 99,462 | ||||
Accounts receivable, net
|
7,098 | 243,782 | ||||||
Inventory, net
|
40,323 | 48,043 | ||||||
Prepaid expenses
|
56,782 | 46,107 | ||||||
Total Current Assets
|
128,336 | 437,394 | ||||||
Property and Equipment, net
|
32,686 | 43,147 | ||||||
Patents and licenses, net
|
232,584 | 342,834 | ||||||
Long-Term Inventory
|
55,000 | 47,333 | ||||||
Total Assets
|
$ | 448,606 | $ | 870,708 | ||||
Liabilities and Stockholders' Equity (Deficit)
|
||||||||
Current Liabilities:
|
||||||||
Accounts payable and accrued expenses
|
$ | 960,557 | $ | 552,990 | ||||
Line of credit
|
58,195 | 16,179 | ||||||
Short-term convertible notes payable, net of discount related-party
|
- | 9,399 | ||||||
Short-term convertible notes payable, net of discount
|
181,981 | 357,646 | ||||||
Notes payable
|
39,061 | 51,030 | ||||||
Total Current Liabilities
|
1,239,794 | 987,244 | ||||||
Total Liabilities
|
1,239,794 | 987,244 | ||||||
Stockholders' Equity (Deficit):
|
||||||||
Preferred stock, $0.001 par value, 5,000,000 shares authorized,
Series A preferred stock, 350,000 shares designated,
191,307 and 200,807 shares issued and outstanding,
respectively, aggregate liquidation value of $956,535
and $1,004,035 respectively
|
191 | 201 | ||||||
Common stock, $0.001 par value, 150,000,000 shares authorized,
28,107,337 and 15,512,927 shares issued and outstanding, respectively
|
28,108 | 15,514 | ||||||
Additional paid-in capital
|
12,309,450 | 10,771,035 | ||||||
Deferred compensation
|
(51,945 | ) | (86,344 | ) | ||||
Accumulated deficit
|
(13,076,992 | ) | (10,816,942 | ) | ||||
Total Stockholders' Equity (Deficit)
|
(791,188 | ) | (116,536 | ) | ||||
Total Liabilities and Stockholders' Equity (Deficit)
|
$ | 448,606 | $ | 870,708 |
For the Year
|
For the Year
|
|||||||
Ended
|
Ended
|
|||||||
December 31, 2015
|
December 31, 2014
|
|||||||
REVENUES
|
$ | 346,910 | $ | 656,342 | ||||
COST OF GOODS SOLD
|
131,007 | 245,471 | ||||||
GROSS PROFIT
|
215,903 | 410,871 | ||||||
OPERATING EXPENSES
|
||||||||
Advertising and promotion
|
127,127 | 125,728 | ||||||
Professional fees
|
231,125 | 156,561 | ||||||
Consulting fees
|
344,112 | 400,352 | ||||||
Impairment of licenses
|
110,000 | 27,080 | ||||||
General and administrative
|
1,429,495 | 1,499,164 | ||||||
Total Operating Expenses
|
2,241,859 | 2,208,885 | ||||||
LOSS FROM OPERATIONS
|
(2,025,956 | ) | (1,798,014 | ) | ||||
OTHER INCOME (EXPENSES)
|
||||||||
Interest expense
|
(149,284 | ) | (339,709 | ) | ||||
Other income (expense)
|
(35,895 | ) | 7,298 | |||||
Loss on write-off of debt discount
|
(23,321 | ) | (100,000 | ) | ||||
Loss on settlement/conversion of notes payable
|
(32,500 | ) | (169,187 | ) | ||||
Gain on settlement of accounts payable
|
6,906 | 103,021 | ||||||
NET LOSS
|
$ | (2,260,050 | ) | $ | (2,296,591 | ) | ||
NET LOSS PER COMMON SHARE
- BASIC AND DILUTED:
|
$ | (0.09 | ) | $ | (0.24 | ) | ||
Weighted common shares outstanding
- basic and diluted
|
24,289,381 | 9,442,352 |
Total | ||||||||||||||||||||||||||||||||
Additional
|
Stockholders'
|
|||||||||||||||||||||||||||||||
Preferred Stock
|
Common Stock
|
Paid
|
Deferred
|
Accumulated
|
Equity
|
|||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
In Capital
|
Compensation
|
Deficit
|
(Deficit)
|
|||||||||||||||||||||||||
Balance - December 31, 2013
|
281,969 | $ | 282 | 8,297,645 | $ | 8,298 | $ | 7,793,760 | $ | (182,576 | ) | $ | (8,520,351 | ) | $ | (949,587 | ) | |||||||||||||||
Issuance of warrants in connection with
convertible notes payable
|
- | - | - | - | 88,600 | - | - | 88,600 | ||||||||||||||||||||||||
Beneficial conversion feature in connection with
convertible notes payable
|
- | - | - | - | 188,300 | - | - | 188,300 | ||||||||||||||||||||||||
Issuance of common stock for cash
|
- | - | 525,000 | 525 | 224,475 | - | - | 225,000 | ||||||||||||||||||||||||
Issuance of common stock for conversion
of preferred stock
|
(81,162 | ) | (81 | ) | 811,620 | 812 | (731 | ) | - | - | - | |||||||||||||||||||||
Issuance of common stock and warrants for
conversion of convertible debt
|
- | - | 2,633,579 | 2,634 | 930,650 | - | - | 933,284 | ||||||||||||||||||||||||
Issuance of common stock for conversion
of accounts payable
|
- | - | 344,530 | 345 | 132,583 | - | - | 132,928 | ||||||||||||||||||||||||
Issuance of common stock for conversion of
accrued salary
|
- | - | 2,592,570 | 2,592 | 775,178 | - | - | 777,770 | ||||||||||||||||||||||||
Stock compensation
|
- | - | - | - | 227,570 | - | - | 227,570 | ||||||||||||||||||||||||
Issuance of common stock for future services
|
- | - | 68,283 | 68 | 44,182 | (44,250 | ) | - | - | |||||||||||||||||||||||
Issuance of common stock for services
|
- | - | 239,700 | 240 | 121,595 | - | - | 121,835 | ||||||||||||||||||||||||
Receipt of stock subscription receivable, less write-off
of $9,000
|
- | - | - | - | - | - | - | 49,000 | ||||||||||||||||||||||||
Issuance of warrants for conversion of accrued
salary
|
- | - | - | - | 91,863 | - | - | 91,863 | ||||||||||||||||||||||||
Issuance of warrants for services
|
- | - | - | - | 153,010 | (153,010 | ) | - | - | |||||||||||||||||||||||
Amortization of deferred compensation
|
- | - | - | - | - | 293,492 | - | 293,492 | ||||||||||||||||||||||||
Net loss
|
- | - | - | - | - | - | (2,296,591 | ) | (2,296,591 | ) | ||||||||||||||||||||||
Balance - December 31, 2014
|
200,807 | $ | 201 | 15,512,927 | $ | 15,514 | $ | 10,771,035 | $ | (86,344 | ) | $ | (10,816,942 | ) | $ | (116,536 | ) |
Total
|
||||||||||||||||||||||||||||||||
Additional
|
Stockholders'
|
|||||||||||||||||||||||||||||||
Preferred Stock
|
Common Stock
|
Paid
|
Deferred
|
Accumulated
|
Equity | |||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
In Capital
|
Compensation
|
Deficit
|
(Deficit)
|
|||||||||||||||||||||||||
Issuance of warrants in connection with
convertible notes payable
|
- | - | - | - | 10,000 | - | - | 10,000 | ||||||||||||||||||||||||
Issuance of common stock for cash
|
- | - | 5,347,901 | 5,348 | 554,825 | - | - | 560,173 | ||||||||||||||||||||||||
Issuance of common stock for conversion
of preferred stock
|
(9,500 | ) | (10 | ) | 95,000 | 95 | (85 | ) | - | - | - | |||||||||||||||||||||
Issuance of common stock for conversion
of convertible debt
|
- | - | 3,068,882 | 3,069 | 318,632 | - | - | 321,701 | ||||||||||||||||||||||||
Issuance of common stock for conversion
of accounts payable
|
- | - | 554,521 | 554 | 130,054 | - | - | 130,608 | ||||||||||||||||||||||||
Issuance of common stock for cashless
exercise of warrants
|
- | - | 2,050,923 | 2,051 | (2,051 | ) | - | - | - | |||||||||||||||||||||||
Stock compensation
|
- | - | 1,550,000 | 1,550 | 555,394 | - | - | 556,944 | ||||||||||||||||||||||||
Cancellation of shares issued to executives
as compensation
|
- | - | (1,000,000 | ) | (1,000 | ) | (199,000 | ) | (200,000 | ) | ||||||||||||||||||||||
Issuance of common stock for services
|
- | - | 927,183 | 927 | 121,566 | - | - | 122,493 | ||||||||||||||||||||||||
Issuance of warrants for services in connection with
sales agreement
|
- | - | - | - | 7,891 | - | - | 7,891 | ||||||||||||||||||||||||
Amortization of deferred compensation
|
- | - | - | - | - | 102,288 | - | 102,288 | ||||||||||||||||||||||||
Deferral of offering fees
|
(26,700 | ) | (26,700 | ) | ||||||||||||||||||||||||||||
Net loss
|
- | - | - | - | - | - | (2,260,050 | ) | (2,260,050 | ) | ||||||||||||||||||||||
Balance - December 31, 2015
|
191,307 | $ | 191 | 28,107,337 | $ | 28,108 | $ | 12,309,450 | $ | (51,945 | ) | $ | (13,076,992 | ) | $ | (791,188 | ) |
For the Years
|
For the Years
|
|||||||
Ended
|
Ended
|
|||||||
December 31, 2015
|
December 31, 2014
|
|||||||
CASH FLOWS USED IN OPERATING ACTIVITIES:
|
||||||||
Net loss
|
$ | (2,260,050 | ) | $ | (2,296,591 | ) | ||
Adjustments to reconcile net loss to net cash
used in operating activities:
|
||||||||
Bad debt expense
|
- | 30,022 | ||||||
Depreciation/amortization
|
31,996 | 38,047 | ||||||
Gain on settlement of accounts payable
|
(6,906 | ) | (103,021 | ) | ||||
Impairment of licenses
|
110,000 | 27,080 | ||||||
Loss on write-off of debt discount
|
23,321 | 100,000 | ||||||
Amortization of discount on convertible notes
|
113,937 | 120,387 | ||||||
Loss on conversion of notes payable
|
32,500 | 169,187 | ||||||
Stock-based compensation
|
589,616 | 642,897 | ||||||
Loss on sale of stock subscription receivable
|
- | 12,965 | ||||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable
|
236,684 | (262,607 | ) | |||||
Inventory
|
53 | 43,565 | ||||||
Prepaid expenses
|
38,507 | 31,668 | ||||||
Accounts payable and accrued expenses
|
553,777 | 766,117 | ||||||
NET CASH USED IN OPERATING ACTIVITIES
|
(536,565 | ) | (680,284 | ) | ||||
CASH FLOWS USED IN INVESTING ACTIVITIES:
|
||||||||
Purchase of property and equipment
|
(8,051 | ) | (4,607 | ) | ||||
Acquisition of patents and patents pending (net)
|
(13,235 | ) | (40,857 | ) | ||||
NET CASH USED IN INVESTING ACTIVITIES
|
(21,286 | ) | (45,464 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Proceeds from issuance of common stock
|
560,173 | 225,000 | ||||||
Proceeds from convertible notes payable and notes payable
|
100,000 | 591,500 | ||||||
Payment on notes payable
|
(177,651 | ) | (43,176 | ) | ||||
Payment on convertible note payable - related party
|
- | (40,000 | ) | |||||
Proceeds from sale of stock subscription receivable
|
- | 40,000 | ||||||
Proceeds from convertible note payable-related party
|
- | 15,000 | ||||||
NET CASH PROVIDED BY FINANCING ACTIVITIES
|
482,522 | 788,324 | ||||||
NET CHANGE IN CASH
|
(75,329 | ) | 62,576 | |||||
Cash at beginning of period
|
99,462 | 36,886 | ||||||
Cash at end of period
|
$ | 24,133 | $ | 99,462 | ||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION:
|
||||||||
Interest paid
|
$ | 37,834 | $ | 843 | ||||
SUPPLEMENTAL DISCLOSURE OF NONCASH FLOWS FINANCING
AND INVESTING ACTIVITIES:
|
||||||||
Stock issued for accounts payable
|
$ | 130,608 | 132,928 | |||||
Conversion of convertible notes payable, accounts
payable and accrued interest to preferred and common stock
|
$ | 321,701 | $ | 1,711,054 | ||||
Stock issued for services
|
$ | 122,493 | $ | - | ||||
Issuance of note payable for insurance
|
$ | - | $ | 43,313 | ||||
Issuance of warrants for accrued salary
|
$ | - | $ | 91,863 |
Office equipment
|
3 years
|
Production equipment
|
5 to 7 years
|
Leasehold improvements
|
Lesser of lease term or useful life of improvement
|
Level 1
|
Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.
|
|
Level 2
|
Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.
|
|
Level 3
|
Unobservable inputs where there is little or no market data, which require the reporting entity to develop its own assumptions.
|
-
|
The expected life of warrants issued represents the period of time the warrants are expected to be outstanding.
|
-
|
The expected volatility is generally based on the historical volatility of comparable companies’ stock over the contractual life of the warrant.
|
-
|
The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods within the contractual life of the warrant.
|
-
|
The expected dividend yield is based on our current dividend yield as the best estimate of projected dividend yield for periods within the contractual life of the warrant.
|
For the Years Ended
|
||||||||
2015
|
2014
|
|||||||
Numerator:
|
||||||||
Net loss allocable to common stockholders
|
$ | (2,260,050 | ) | $ | (2,296,591 | ) | ||
Denominator:
|
||||||||
Weighted-average common shares outstanding
|
24,289,381 | 9,442,352 | ||||||
Basic and diluted net loss per share
|
$ | (0.09 | ) | $ | (0.24 | ) | ||
Common stock warrants
|
18,925,825 | 7,110,701 | ||||||
Series A convertible preferred stock
|
1,913,070 | 2,008,070 | ||||||
Stock options
|
2,898,220 | 2,866,470 | ||||||
Convertible debt including interest
|
601,775 | 1,317,604 | ||||||
Excluded dilutive securities
|
24,338,890 | 13,302,845 |
December 31, 2015
|
December 31, 2014
|
|||||||
Raw materials
|
$ | 27,313 | $ | 202,591 | ||||
Finished goods
|
219,074 | 43,849 | ||||||
246,387 | 246,440 | |||||||
Less reserve for excess and obsolete inventory
|
(151,064 | ) | (151,064 | ) | ||||
95,323 | 95,376 | |||||||
Less current portion
|
(40,323 | ) | (48,043 | ) | ||||
$ | 55,000 | $ | 47,333 |
December 31, 2015
|
December 31, 2014
|
|||||||
Office equipment
|
$ | 31,658 | $ | 27,507 | ||||
Production equipment
|
90,899 | 86,999 | ||||||
Leasehold improvements
|
16,328 | 16,328 | ||||||
138,885 | 130,834 | |||||||
Less: accumulated depreciation
|
(106,199 | ) | (87,687 | ) | ||||
$ | 32,686 | $ | 43,147 |
December 31, 2015
|
December 31, 2014
|
|||||||
Licenses and amortizable patents
|
$ | 97,244 | $ | 207,244 | ||||
Unamortized patents
|
179,393 | 166,159 | ||||||
Accumulated amortization
|
(44,053 | ) | (30,569 | ) | ||||
Patents and Licenses, net
|
$ | 232,584 | $ | 342,834 |
December 31, 2015
|
December 31, 2014
|
|||||||
Executive compensation
|
$ | 327,285 | $ | 153,432 | ||||
Other accruals
|
38,022 | 19,725 | ||||||
$ | 365,307 | $ | 173,157 |
December 31, 2015
|
December 31, 2014
|
|||||||
Notes payable - current
|
||||||||
7.85% unsecured, $473 due monthly
|
$ | - | $ | 2,304 | ||||
5.86% unsecured, $781 due monthly
|
2,687 | - | ||||||
4.15% unsecured, $3,436 due monthly
|
36,374 | - | ||||||
4.15% unsecured, $3,436 due monthly
|
- | 23,726 | ||||||
10.00% unsecured, interest only, due on demand. Note was settled on May 29, 2015 in exchange for 250,000 shares of common stock. In addition, 500,000 3-year warrants were granted and vested with an exercise price ranging from $0.125 - $0.15. We calculated and posted a loss on the settlement in the amount of $32,500.
|
- | 25,000 | ||||||
$ | 39,061 | $ | 51,030 |
|
·
|
Marvin Hausman, former CEO and director, 600,000 shares valued at $120,000
|
|
·
|
Devin Andres, former COO, 550,000 shares valued at $110,000
|
|
·
|
Philip Sobol, former director, 200,000 shares valued at $40,000, and
|
|
·
|
Elliott Shelton, director, 200,000 shares valued at $40,000.
|
December 31, 2015
|
December 31, 2014
|
|||||||
Expected dividend yield
|
-
|
-
|
||||||
Expected stock price volatility
|
187.7% - 201.79
|
%
|
182.94% - 216.96
|
%
|
||||
Risk-free interest rate
|
1.47% - 1.68
|
%
|
0.28% - 1.91
|
%
|
||||
Expected term (in years)
|
5 years
|
3 - 7 years
|
||||||
Weighted-average granted date fair value
|
$
|
0.16
|
$
|
0.45
|
Weighted
|
||||||||||||||||||||
Weighted
|
Average
|
|||||||||||||||||||
Average
|
Remaining
|
Aggregate
|
||||||||||||||||||
Number of
|
Exercise Price
|
Exercise
|
Contractual Term
|
Intrinsic
|
||||||||||||||||
Shares
|
Range
|
Price
|
(Years)
|
Value
|
||||||||||||||||
Outstanding, December 31, 2013
|
2,352,099 | $ | 0.38 - $1.00 | $ | 0.51 | 7.90 | 199,505 | |||||||||||||
Exercisable, December 31, 2013
|
1,810,344 | $ | 0.38 - $1.00 | $ | 0.52 | 7.88 | 138,707 | |||||||||||||
Granted
|
624,571 | $ | 0.40-$0.75 | $ | 0.52 | 6.49 | - | |||||||||||||
Exercised
|
- | - | $ | - | - | - | ||||||||||||||
Expired/Forfeited
|
110,200 | $ | 0.40-$0.50 | $ | 0.48 | 9.51 | - | |||||||||||||
Outstanding, December 31, 2014
|
2,866,470 | $ | 0.30 - $1.00 | $ | 0.48 | 8.96 | - | |||||||||||||
Exercisable, December 31, 2014
|
2,321,001 | $ | 0.38 - $1.00 | $ | 0.47 | 9.50 | - | |||||||||||||
Granted
|
50,000 | $ | 0.09 - $0.20 | $ | 0.16 | 5.00 | - | |||||||||||||
Exercised
|
- | - | $ | - | - | - | ||||||||||||||
Expired/Forfeited
|
18,250 | $ | 0.40 - $0.50 | $ | 0.49 | 8.73 | - | |||||||||||||
Outstanding, December 31, 2015
|
2,898,220 | $ | .0.20 - $1.00 | $ | 0.43 | 11.25 | - | |||||||||||||
Exercisable, December 31, 2015
|
2,661,493 | $ | 0.096 - $1.00 | $ | 0.42 | 11.66 | - |
Number of
|
Exercise
|
|||||
shares
|
Price
|
|||||
20,000 | $ | 0.09 | ||||
190,000 | $ | 0.20 | ||||
300,000 | $ | 0.30 | ||||
55,000 | $ | 0.38 | ||||
1,386,670 | $ | 0.40 | ||||
10,000 | $ | 0.45 | ||||
613,550 | $ | 0.50 | ||||
160,000 | $ | 0.60 | ||||
15,000 | $ | 0.62 | ||||
100,000 | $ | 0.75 | ||||
10,000 | $ | 0.81 | ||||
38,000 | $ | 1.00 | ||||
2,898,220 |
Date of Issue
|
Number of
Warrants
|
Exercise Price
|
Expiration
|
||||||||
As of December 2014
|
4,653,325
|
$ | 0.36 - $10.00 |
09/2016 - 10/2024
|
|||||||
January-15
|
70,000 | $ | 0.30 - $0.50 | 01/2020 | |||||||
March-15
|
137,500 | $ | 0.10 - $0.75 |
03/2018 - 03/2022
|
|||||||
April-15
|
6,160,000 | $ | 0.01 - $0.15 |
04/2018 - 04/2027
|
|||||||
May-15
|
6,160,000 | $ | 0.125 - $0.23 |
05/2018 - 05/2022
|
|||||||
June-15
|
300,000 | $ | 0.125 - $0.15 | 06/2018 | |||||||
July-15
|
1,445,000 | $ | 0.125 - $0.15 | 07/2018 | |||||||
Total as of December 31, 2015
|
18,925,825 |
December 31, 2015
|
December 31, 2014
|
|||||||
Risk-Free interest rate
|
0.28% - 1.72 | % | 0.28% - 2.97 | % | ||||
Expected dividend yield
|
0 | % | 0 | % | ||||
Volatility
|
166.10% - 204.66 | % | 182.81% - 222.30 | % | ||||
Expected life
|
3 - 7 years
|
3 - 10 years
|
2015
|
2014
|
|||||||
Deferred tax assets:
|
||||||||
Reserves and accruals
|
$ | 168,000 | $ | 114,000 | ||||
Net operating loss carryforwards
|
1,943,000 | 1,472,000 | ||||||
Total deferred tax assets:
|
2,111,000 | 1,586,000 | ||||||
Deferred tax liabilities:
|
||||||||
Depreciation and amortization
|
6,000 | 8,000 | ||||||
Net deferred tax assets before valuation allowance
|
2,105,000 | 1,578,000 | ||||||
Less: Valuation allowance
|
(2,105,000 | ) | (1,578,000 | ) | ||||
Net deferred tax assets
|
$ | - | $ | - |
2015
|
2014
|
|||||||
|
||||||||
Federal Statutory Rate
|
$ | (768,000 | ) | $ | (781,000 | ) | ||
Nondeductible expenses
|
241,000 | 529,000 | ||||||
Change in allowance on deferred tax assets
|
(527,000 | ) | (252,000 | ) | ||||
$ | - | $ | - |
|
·
|
Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company;
|
|
·
|
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and
|
|
·
|
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company's assets that could have a material effect on the financial statements.
|
Name
|
Age
|
Position
|
||
Marvin S. Hausman, MD
|
74 |
Chief Science and Technology Officer as of August 12, 2015 and former Chief Executive Officer and Chief Financial Officer from August 28, 2008 through August 12, 2015.
|
||
Elliot L. Shelton, Esq.
|
66 |
Secretary, Director since August 28, 2008.
|
||
Timothy A. Timmins
|
59 |
Executive Vice Present, Chief Operating and Financial Officer since October 1, 2015.
|
||
Carl J Johnson
|
67 |
President, Chief Executive Officer, Director since August 12, 2015.
|
1.
|
any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;
|
|
2.
|
any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);
|
|
3.
|
being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; or
|
|
4.
|
being found by a court of competent jurisdiction (in a civil action), the Securities and Exchange Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.
|
Non-
|
||||||||||||||||||||||||||||||||||||||
Qualified
|
||||||||||||||||||||||||||||||||||||||
Non-Equity
|
Deferred
|
|||||||||||||||||||||||||||||||||||||
Name and
|
Stock
|
Option
|
Incentive Plan
|
Compensation
|
All other
|
|||||||||||||||||||||||||||||||||
Principal
|
Salary
|
Bonus
|
Awards
|
Awards
|
Compensation
|
Earnings
|
Compensation
|
|||||||||||||||||||||||||||||||
Position
|
Year
|
($)
|
($)
|
($)
|
($)
|
($)
|
($)
|
($)
|
($)
|
|||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||
Marvin
Hausman
CSO, Dir
|
2015
|
$ | 272,746 | 1 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | 23,100 | 2 | $ | 295,846 | |||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||
Marvin
Hausman
CEO, Dir
|
2014
|
$ | 350,000 | 3 | $ | - | $ | 70,817 | $ | - | $ | - | $ | 25,428 | 4 | $ | 446,245 | |||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||
Devin
Andres
COO, Pres
|
2015
|
$ | 122,193 | 5 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | 25,349 | 6 | $ | 147,542 | |||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||
Devin
Andres
COO, Pres
|
2014
|
$ | 175,000 | 7 | $ | - | $ | - | $ | 19,424 | $ | - | $ | - | $ | 49,990 | 8 | $ | 244,414 | |||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||
Carl
Johnson
CEO, Dir
|
2015
|
$ | - | 9 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | 16,500 | 10 | $ | 16,500 | |||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||
Timothy
Timmins
CFO, COO
|
2015
|
$ | 11,250 | 11 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | 26,461 | 12 | $ | 37,711 |
Options Awards
|
Stock Awards
|
||||||||||||||||||||||||||||||||
Name
|
Number of
Securities
Underlying
Exercisable
Unexercised
Options (#)
|
Number of
Securities
Underlying
Unexercisable
Unexercised
Options (#)
|
Equity
Incentive
Plan Awards
Options (#)
Number of
Securities
Underlying
Unexercised
Unearned
|
Option
Exercise
Price$
|
Option
Expiration
Date
|
Number of
Shares or
Units
Not Vested
Stock
That Have
|
Market
Value
of Shares
Or Units that
Have Not Vested (#)
|
Equity
Incentive
Plan
Not Vested (#)
Awards:
Number of
Unearned Shares,
Units or
Other Rights
That Have
|
Equity
Incentive
Plan
Vested ($)
Awards: Market
or Payout Value
of Unearned
Shares, Units,
Or Other Rights
That Have Not
|
||||||||||||||||||||||||
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
(i)
|
(j)
|
||||||||||||||||||||||||
Dr. Marvin
S. Hausman
|
138,900 | - | - | $ | 0.40 |
10/27/2029
|
- | - | - | - | |||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||
Dr. Marvin
S. Hausman
|
200,000 | - | - | $ | 0.40 |
6/20/2028
|
- | - | - | - | |||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||
Dr. Marvin
S Hausman
|
175,000 | - | - | $ | 0.40 |
9/28/2026
|
- | - | - | - | |||||||||||||||||||||||
Devin Andres
|
25,000 | - | - | $ | 0.38 |
2/20/2021
|
- | - | - | - | |||||||||||||||||||||||
Devin Andres
|
150,000 | - | - | $ | 0.40 |
6/20/2023
|
- | - | - | - | |||||||||||||||||||||||
- | |||||||||||||||||||||||||||||||||
Devin Andres
|
47,999 | - | - | $ | 0.40 |
9/28/2021
|
- | - | - | - | |||||||||||||||||||||||
Devin Andres
|
108,342 | - | - | $ | 0.40 |
10/27/2029
|
- | - | - | - | |||||||||||||||||||||||
Devin Andres
|
5,000 | - | - | $ | 0.40 |
6/29/2025
|
- | - | - | - |
Non-Equity
|
||||||||||||||||||||||||||
Fees earned
|
Incentive
|
All
|
||||||||||||||||||||||||
or Paid in
|
Stock
|
Option
|
Plan
|
Other
|
||||||||||||||||||||||
Cash
|
Awards
|
Awards
|
Compensation
|
Compensation
|
Total
|
|||||||||||||||||||||
Name
|
Year
|
($)
|
($)
|
($)
|
($)
|
($)
|
($)
|
|||||||||||||||||||
Elliot Shelton
|
2015
|
$ | - | $ | - | $ | - | $ | - | $ | - | $ | - | |||||||||||||
Philip Sobol
|
2015
|
$ | - | $ | - | $ | - | $ | - | $ | - | $ | - | |||||||||||||
Elliot Shelton
|
2014
|
$ | - | $ | - | $ | - | $ | - | $ | - | $ | - | |||||||||||||
Philip Sobol
|
2014
|
$ | - | $ | - | $ | - | $ | - | $ | 13,009 | $ | 13,009 |
Name and Address of
Beneficial Owner
|
Amount and Nature of
Beneficial Ownership
|
Percentage
of Class (1)
|
||||
Marvin S. Hausman, M.D., CSO & Dir. (2)(8)
|
6,392,730 shares | 21.3 | % | |||
Carl J. Johnson, President, CEO, Dir. (3)
|
- shares | 0.0 | % | |||
Timothy A. Timmins, EVP, COO, CFO (3)
|
- shares | 0.0 | % | |||
Devin Andres, former COO (4)
|
2,121,354 shares | 7.3 | % | |||
Philip A. Sobol, M.D., former director (5)
|
1,057,216 shares | 3.6 | % | |||
Elliot L. Shelton, Esq. Secretary, Director (6)(8)
|
526,250 shares | 1.8 | % | |||
DGI (7)
|
3,042,455 shares | 10.8 | % | |||
Total officers and directors
|
10,097,550 shares | 31.3 | % |
For the Years Ended
December 31,
|
||||||||
2015
|
2014
|
|||||||
Fee Category
|
||||||||
Audit fees
|
$ | 50,906 | $ | 41,339 | ||||
Tax Fees
|
- | - | ||||||
All other fees
|
- | - | ||||||
Total Fees
|
$ | 50,906 | $ | 41,339 |
Consolidated Balance Sheets at December 31, 2015 and December 31, 2014
|
28
|
Consolidated Statements of Operations for the Years ended December 31, 2015 and 2014
|
29
|
Consolidated Statement of Stockholders’ Equity (Deficit) for the Years ended December 31, 2015 and 2014
|
30-31
|
Consolidated Statements of Cash Flows for the for the Year ended December 31, 2015 and 2014
|
32
|
Exhibit Number
|
Description of Exhibit
|
Filed Herewith
|
Form
|
Exhibit
|
Filing Date
|
|
3.1
|
X
|
|||||
3.2
|
Amended and Restated Bylaws of Registrant
|
8-K
|
3.2
|
09/22/2010
|
||
3.3
|
Amended Articles of Merger Incorporation as currently in effect
|
8-K
|
3.3
|
10/13/2008
|
||
10.1
|
Exclusive Option Agreement dated May 1, 2006, between The Penn State Research Foundation and Northwest Medical Research Inc.
|
8-K
|
10.1
|
09/04/2008
|
||
10.2
|
Assignment Agreement to the Option Agreement, dated July 31, 2008, among The Penn State Research Foundation, Northwest Medical Research Inc. and Generic Marketing Services, Inc.
|
8-K
|
10.2
|
09/04/2008
|
||
10.3
|
Assignment and Assumption Agreement, dated July 31, 2008, between Northwest Medical Research Inc. and Generic Marketing Services, Inc.
|
8-K
|
10.3
|
09/04/2008
|
||
10.4
|
Form of Common Stock and Warrant Purchase Agreement
|
8-K
|
10.1
|
06/12/2009
|
||
10.5
|
Form of Securities Purchase Agreement
|
8-K
|
10.1
|
09/21/2009
|
||
10.6
|
$50,000 Promissory Note between Entia and Marvin S. Hausman, M.D. and Philip Sobol dated December 30, 2009
|
8-K
|
10.1
|
12/31/2010
|
||
10.9
|
$50,000 Promissory Note between Entia and Mark C. Wolf dated February 18, 2010
|
10-K
|
10.9
|
4/15/2010
|
||
10.10
|
Profit Sharing Agreement between Entia, American Charter & Marketing LLC, and Delta Group Investments, Limited dated March 26, 2010
|
10-K
|
10.10
|
4/15/2010
|
||
10.11
|
Form of Common Stock and Warrant Agreement 2010
|
8-K
|
10.1
|
12/20/2010
|
||
10.12
|
$312,500 Promissory Note between Entia and Delta Group Investments Limited dated January 21, 2011
|
8-K
|
10.2
|
2/22/2010
|
||
10.13
|
Termination of Profit Sharing Agreement dated February 21, 2011
|
8-K
|
10.1
|
2/22/2011
|
||
10.14
|
Lease Agreement between Entia and Sherwood Venture LLC dated March 15, 2011
|
8-K
|
10.1
|
4/6/2011
|
||
10.15
|
Form of Warrant A Agreement 2010
|
8-K
|
10.2
|
12/22/2010
|
||
10.16
|
Form of Warrant B Agreement 2010
|
8-K
|
10.3
|
12/22/2010
|
||
31.1
|
X
|
|||||
31.2
|
X
|
|||||
32.1
|
X
|
|||||
32.2
|
X
|
ENTIA BIOSCIENCES, INC.
|
||
By:
|
/s/ Carl J. Johnson
|
|
Carl J. Johnson
President
Chief Executive Officer,
(Principal Executive Officer)
|
||
By:
|
/s/ Timothy A. Timmins
|
|
Timothy A. Timmins
Executive Vice President
Chief Operating and Financial Officer,
(Principal Finance and Accounting Officer)
|
Signature
|
Title
|
|
/s/ Marvin S. Hausman, M.D.
|
Chairman of the Board, Director
|
|
Marvin Hausman, M.D.
|
||
/s/ Carl J. Johnson
|
Director
|
|
Carl J. Johnson
|
||
/s/ Elliot L. Shelton, Esq.
|
Director
|
|
Elliot A. Shelton, Esq.
|
1 Year Entia Biosciences (CE) Chart |
1 Month Entia Biosciences (CE) Chart |
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