CTTC Calmare Therapeutics Inc (CE)

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 OR 15(D) of The Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported):

June 24, 2015

 

Calmare Therapeutics Incorporated

(Exact name of registrant as specified in its charter)

 

Delaware	001-08696	36-2664428
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

 

1375 Kings Highway East, Fairfield, Connecticut	06824
(Address of principal executive offices)	(Zip Code)

 

Registrant's telephone number, including area code:

(203) 368-6044

 

N/A

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions

 

¨

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

Item 1.01 Entry into a Material Definitive Agreement.

 

On June 25, 2015, Calmare Therapeutics Incorporated (the “Company”) issued a press release announcing that it has been awarded a preliminary three-month extension of its General Services Administration (GSA) military contract (V797P-4300B). First awarded in 2010, the Company’s contract extension is designed to continue the streamlined procurement process for U.S. military personnel and their families and institutional customers across the globe who acquire Calmare^® Pain Therapy Devices and its consumables. The press release is attached hereto as Exhibit 99.1.

 

Item 2.02 Results of Operations and Financial Condition

 

On June 24, 2015, the Company issued a press release announcing its year-end and fourth quarter of fiscal year 2014 financial results. Also on July 1, 2015, the Company will hold an earnings call. The press release is attached hereto as Exhibit 99.2.

 

Item 9.01 Financial Statements and Exhibits

 

(d) Exhibits

 

The following is filed as an Exhibit to this Report.

 

Exhibit No.		Description of Exhibit
99.1		Press Release dated June 25, 2015 regarding the Company’s award of a GSA contract
99.2		Press Release dated June 24, 2015 regarding the Company’s year-end financial results

 

 

SIGNATURES

 

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

 

	Calmare Therapeutics Incorporated
Date: June 26, 2015	By:	/s/ Conrad Mir
		Name: Conrad Mir
		Title: Chief Executive Officer

 

 

Exhibit 99.1

 

DEFENSE NEWS

 

FOR IMMEDIATE RELEASE

 

CALMARE THERAPEUTICS AWARDED GSA CONTRACT EXTENSION

 

Simple Buying Process of Calmare^® Pain Therapy Devices and its Consumables for

U.S. Military Hospitals, Clinics and Medical Practitioners Extended

 

Fairfield, CT – June 25, 2015 – Calmare Therapeutics Incorporated, (OTCQB: CTTC) (CTI), the pain mitigation company, has been awarded a preliminary three-month extension of its General Services Administration (GSA) military contract (V797P-4300B). First awarded in 2010, CTI’s contract extension is designed to continue the streamlined procurement process for U.S. military personnel and their families and institutional customers across the globe who acquire Calmare^® Pain Therapy Devices and its consumables.

 

“This extension allows us to continue offering our Calmare^® Pain Therapy device to U.S. military personnel and their families through the U.S. Veterans Administration to reduce and/or eliminate chronic neuropathic pain,” said Calmare Therapeutics President & CEO Conrad Mir. “With this extension, we can broaden our military contract footprint and gain contracts with embedded device sales components that will drive revenues – the Company’s prime directive in pursuing U.S. government sales.”

 

Today, a large host of U.S. military hospitals and clinics rely on CTI’s Calmare Pain Mitigation Therapy™. Our pain mitigation solution offers comprehensive pain mitigation whereby pain may be eliminated for well over 3 to 4 months after the first full treatment regimen in those patients that are responders. With one or two booster treatments after the first course, a patient may have full pain elimination for a year of more without the toxic side effects or addictive qualities of prescriptions drugs and opiates.

 

About the Company

 

Calmare Therapeutics Inc., the pain mitigation company, develops and commercializes innovative wound and pain management products and technologies. CTI holds the 510k clearance on its flagship product, the non-invasive Calmare^® Pain Therapy Device, which grants it an exclusive right to sell, market, research and develop the medical device. The Company is the exclusive licensed global distributor of Calmare.

 

Forward-Looking Statement

 

Certain statements contained in this press release are forward-looking statements that involve risks and uncertainties. The statements contained herein that are not purely historical are forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements deal with the Company’s current plans, intentions, beliefs and expectations and statements of future economic performance. Forward-looking statements involve known and unknown risks and uncertainties that may cause the Company's actual results in future periods to differ materially from what is currently anticipated. Factors that could cause or contribute to such differences include those discussed from time to time in reports filed by the Company with the Securities and Exchange Commission. The Company cannot guarantee its future results, levels of activity, performance or achievements.

 

  

Contacts:
Calmare Therapeutics Incorporated	JV Public Relations
Conrad Mir	Janet Vasquez
President and CEO	Managing Director
cmir@calmaretherapeutics.com	jvasquez@jvprny.com
203.368.6044	212.645.5498

 

www.calmaretherapeutics.com

 

 

Exhibit 99.2

 

EARNINGS NEWS

 

FOR IMMEDIATE RELEASE

 

CALMARE THERAPEUTICS REPORTS YEAR END;

FOURTH QUARTER 2014 RESULTS

 

Year-on-year: revenues up 60%; Device sales up 88%; G&A Down 22%

FOURTH QUARTER: REVENUES DOWN 52%; device sales down 33%; G&A Down 14%

 

Conference Call

CTI will host an earnings conference call on Wednesday, July 1, 2015 at 10:00 A.M. EDT. To participate in the conference call, please dial the appropriate telephone number a few minutes before the start time and use the call-in term: “CALMARE.”

 

Dial-in: 877-876-9177 | Call Code: 785-424-1666

 

As participation is limited, please RSVP via email to: IR@calmaretherapeutics.com or FAX: (203) 368-5399 by 5:00 P.M. EDT, Tuesday, June 30, 2015 with “Earnings Call 2014” in the subject line.

 

Fairfield, CT – June 24, 2015 – Calmare Therapeutics Incorporated, (OTC: CTTC) (CTI), the pain mitigation company, reported results for the year and quarter ended December 31, 2014.

 

Year Ended December 31, 2014

 

Revenue from the sale and shipment of the Calmare^® pain therapy devices (Devices) for the year ended December 31, 2014 increased 60% or $392,000 to $1,045,000 as compared with $653,000 for the year-ended December 31, 2013.

 

Device sales for the year ended December 31, 2014 increased 88% or 8 Devices to 17 Devices as compared with 9 Devices for the year ended December 31, 2013. Due to the relatively long sales cycle for a Device, Device sales can and will vary significantly from period to period.

 

Total expenses for the year ended December 31, 2014 increased 30% or $963,000 to $4,134,000 as compared with $3,171,000. Total expenses include approximately $620,000 of additional interest expense related to the Company’s 90 day Convertible Notes for the year ended December 31, 2014.

 

General and administrative expenses for the year ended December 31, 2014 decreased 22% or $390,000 to $1,371,000 as compared with $1,761,000 for the year ended December 31, 2013.

 

Total assets at December 31, 2014 decreased $136,000 to $4,430,000 as compared with $4,566,000 at December 31, 2013.

 

Total liabilities at December 31, 2014 increased $1,658,000 to $12,169,000 as compared with $10,511,000 at December 31, 2013.

 

Net loss for the year ended December 31, 2014 increased to $3,411,000 or $0.15 per basic and diluted share as compared with a net loss of $2,672,000 or $0.16 for the year ended December 31, 2013.

 

Total capital raised over the past five quarters was $1,494,000 and consisted of: $466,000 of hybrid debt and $1,028,000 of equity.

 

 

Quarter Ended December 31, 2014

 

Revenue from the sale and shipment of the Calmare^® pain therapy devices (Devices) for the quarter ended December 31, 2014 decreased 52% or $119,000 to $108,000 as compared with $227,000 for the quarter ended December 31, 2013. This is largely attributable to the cyclicality and historically sales slow-down the Company has witnessed over the last four years with respect to Device sales and its related consumables in the fourth quarter.

 

Device sales for the quarter ended December 31, 2014 decreased 33% to two (2) Devices as compared with three (3) Devices for the comparable quarter ended December 31, 2013 and as compared with eight (8) for the sequential quarter ended September 30, 2014. Due to the relatively long sales cycle for a Device, Device sales can and will vary significantly from quarter to quarter.

 

Total expenses for the quarter ended December 31, 2014 increased 7% or $54,000 to $810,000 as compared with $756,000 for the quarter ended December 31, 2013.

 

General and administrative expenses for the quarter ended December 31, 2014 decreased 14% or $69,000 to $427,000 as compared with $496,000 for the quarter ended December 31, 2013.

 

Total assets at December 31, 2014 decreased $109,000 to $4,430,000 as compared with $4,539,000 at September 30, 2014.

 

Total liabilities at December 31, 2014 increased $371,000 to $12,169,000 as compared with $11,798,000 at September 30, 2014.

 

Net loss for the quarter ended December 31, 2014 increased to $645,000 or $0.03 per basic and diluted share as compared with a net loss of $611,000 or $0.03 per basic and diluted share for the quarter ended December 31, 2013,

 

Cash-on-hand at December 31, 2014 decreased $51,000 to $6,000 from $57,000 at December 31, 2013.

 

“Our year-end numbers exceeded our projections and is a good starting point for 2015” said CTI President & CEO Conrad Mir. “Although there is much work ahead, we look forward to the promise 2015 holds with a careful vigilance on the second half of the year.”

 

About the Company

Calmare Therapeutics Incorporated, the pain mitigation company, develops and commercializes innovative wound and pain management products and technologies. CTI holds the 510k clearance on its flagship product, the non-invasive Calmare^® Pain Therapy Device, which grants it an exclusive right to sell, market, research and develop the medical device. The Company is the exclusive licensed global distributor of Calmare.

 

Forward-Looking Statement

Certain statements contained in this press release are forward-looking statements that involve risks and uncertainties. The statements contained herein that are not purely historical are forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements deal with the Company’s current plans, intentions, beliefs and expectations and statements of future economic performance. Forward-looking statements involve known and unknown risks and uncertainties that may cause the Company's actual results in future periods to differ materially from what is currently anticipated. Factors that could cause or contribute to such differences include those discussed from time to time in reports filed by the Company with the Securities and Exchange Commission. The Company cannot guarantee its future results, levels of activity, performance or achievements.

 

  

Contacts:
Calmare Therapeutics Incorporated	JV Public Relations
Conrad Mir	Janet Vasquez
President and CEO	Managing Director
cmir@calmaretherapeutics.com	jvasquez@jvprny.com
973.798.8882	212.645.5498

 

www.calmaretherapeutics.com

 

 

CALMARE THERAPEUTICS INCORPORATED AND SUBSIDIARY

 

Consolidated Balance Sheets

 

		December 31, 2014				December 31, 2013
ASSETS
Current Assets:
Cash		$	5,745			$	57,009
Receivables, net of allowance of $317,659 and $101,154 at December 31, 2014 and 2013			2,319				143,330
Inventory			4,118,220				4,278,220
Prepaid expenses and other current assets			253,102				65,167
Total current assets			4,379,386				4,543,726
Security deposits			15,000				15,000
Property and equipment, net			35,640				7,606
TOTAL ASSETS		$	4,430,026			$	4,566,332
LIABILITIES AND SHAREHOLDERS' DEFICIT
Current Liabilities:
Accounts payable		$	1,346,138			$	692,251
Liabilities under claims purchase agreement			1,995,320				2,093,303
Accounts payable, GEOMC			4,182,380				4,183,535
Accrued expenses and other liabilities			1,590,182				582,987
Deferred revenue			19,686				6,400
Notes payable			2,536,830				2,488,691
Warrant liability			-				8,227
Series C convertible preferred stock liability			375,000				375,000
Series C convertible preferred stock derivative liability			66,177				80,408
Total current liabilities			12,111,713				10,510,802
Long term notes payable			56,659				-
Commitments and contingencies
Shareholders' deficit:
5% preferred stock, $25 par value, 35,920 shares authorized, 2,427 shares issued and outstanding			60,675				60,675
Series B preferred stock, $0.001 par value, 20,000 shares authorized, no shares issued and outstanding			-				-
Series C convertible preferred stock, $1,000 par value, 750 shares authorized, 375 shares issued and outstanding			-				-
Common stock, $.01 par value, 40,000,000 shares authorized, 25,908,978 shares issued and outstanding at December 31, 2014 and 19,952,907 shares issued and outstanding at December 31, 2013			259,089				199,529
Capital in excess of par value			47,634,857				46,077,394
Accumulated deficit			(55,692,967	)			(52,282,068	)
Total shareholders’ deficit			(7,738,346	)			(5,944,470	)
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT		$	4,430,026			$	4,566,332

 

 

CALMARE THERAPEUTICS INCORPORATED AND SUBSIDIARY

 

Consolidated Statements of Operations

 

		Year ended December 31, 2014				Year ended December 31, 2013
Revenue
Product sales		$	1,045,080			$	652,792
Cost of product sales			440,668				272,736
Gross profit from product sales			604,412				380,056
Other Revenue
Retained royalties			27,782				37,007
Other income			90,776				82,069
Total other revenue			118,558				119,076
Operating expenses
Selling expenses			213,419				159,245
Personnel and consulting expenses			1,368,299				1,100,041
General and administrative expenses			1,371,035				1,760,585
Total operating expenses			2,952,753				3,019,871
Operating loss			(2,229,783	)			(2,520,739	)
Other expense (income)
Interest expense			964,070				209,953
Interest expense – accelerated upon conversion of OID notes			35,109				-
Loss on conversion of notes			63,867				-
Loss on settlement of note and warrant			132,301				-
Unrealized gain on derivative instruments			(14,231	)			(58,538	)
Total other expense			1,181,116				151,415
Loss before income taxes			(3,410,899	)			(2,672,154	)
Provision (benefit) for income taxes			-				-
Net loss		$	(3,410,899	)		$	(2,672,154	)
Basic and diluted loss per share		$	(0.15	)		$	(0.16	)
Basic and diluted weighted average number of common shares outstanding:			23,513,870				16,977,027

 

 

CALMARE THERAPEUTICS INCORPORATED AND SUBSIDIARY

 

Consolidated Statements of Changes in Shareholders' Deficit

 

		Preferred Stock								Common Stock
		Shares outstanding				Amount				Shares outstanding				Amount				Capital in excess of par value				Accumulated deficit				Total Shareholders’ Deficit
Balance – January 1, 2013			2,427			$	60,675				15,237,304			$	152,373			$	45,367,796			$	(49,609,914	)		$	(4,029,070	)
Net loss			-				-				-				-				-				(2,672,154	)			(2,672,154	)
Stock option compensation expense			-				-				-				-				116,365				-				116,365
Common shares issued for legal services			-				-				1,300,000				13,000				250,000				-				263,000
Common stock issued in accordance with escrow agreement			-				-				1,000,000				10,000				(10,000	)			-				-
Common stock issued in accordance with liability purchase agreement			-				-				1,618,235				16,182				(16,182	)			-				-
Common stock issued as part of equity purchase agreement and/or liability purchase agreement			-				-				710,000				7,100				215,400				-				222,500
Common stock issued to directors			-				-				87,368				874				33,228				-				34,102
Warrants and beneficial conversion feature on notes payable			-				-				-				-				120,787				-				120,787
Balance – December 31, 2013			2,427				60,675				19,952,907				199,529				46,077,394				(52,282,068	)			(5,944,470	)
Net loss			-				-				-				-				-				(3,410,899	)			(3,410,899	)
Common shares and warrants issued for consulting services			-				-				60,000				600				84,600				-				85,200
Common stock issued to directors			-				-				10,625				106				3,932				-				4,038
Stock option compensation expense			-				-				-				-				57,291				-				57,291
Common stock issued upon conversion of notes			-				-				1,732,946				17,329				394,280				-				411,609
Private offering of common stock and warrants			-				-				4,152,500				41,525				788,975				-				830,500
Warrant and beneficial conversion feature on notes payable			-				-				-				-				121,741				-				121,741
Liabilities settled under Liability Purchase Agreement			-				-				-				-				106,644				-				106,644
Balance – December 31, 2014			2,427			$	60,675				25,908,978			$	259,089			$	47,634,857			$	(55,692,967	)		$	(7,738,346	)

 

 

CALMARE THERAPEUTICS INCORPORATED AND SUBSIDIARY

 

Consolidated Statements of Cash Flows

 

		Year ended December 31, 2014				Year ended December 31, 2013
Cash flows from operating activities:
Net loss		$	(3,410,899	)		$	(2,672,154	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization			17,547				11,147
Stock option compensation expense			57,291				116,365
Share-based compensation – common stock			4,038				7,655
Common stock and warrants issued to consultants			85,200				-
Bad debt expense			216,505				8,588
Unrealized gain on derivative instrument			(14,231	)			(58,538	)
Debt discount amortization			217,323				63,480
Noncash finance charges			17,591				216,650
Loss on conversion of notes			63,867				-
Loss on settlement of note and warrant			132,301				-
Changes in assets and liabilities:
Receivables			(75,494	)			64,447
Prepaid expenses and other current assets			(187,935	)			276,560
Inventory			160,000				90,000
Accounts payable, accrued expenses and other liabilities			1,641,927				312,587
Deferred revenue			13,286				(3,200	)
Net cash used in operating activities			(1,061,683	)			(1,566,413	)
Cash flows from investing activities:
Purchases of property and equipment			(45,581	)			-
Cash used in investing activities			(45,581	)			-
Cash flows from financing activities:
Proceeds from notes payable			467,500				1,549,100
Repayment of note and warrant settlement			(242,000	)			-
Proceeds from common stock and warrants			830,500				-
Net cash provided by financing activities			1,056,000				1,549,100
Net increase (decrease) in cash			(51,264	)			(17,313	)
Cash at beginning of year			57,009				74,322
Cash at end of year		$	5,745			$	57,009
Supplemental Cash Flow Information
Cash Paid for interest		$	-			$	15,304