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5. STOCKHOLDERS' EQUITY

9 Months Ended

Sep. 30, 2017

Stockholders' Equity Note [Abstract]

STOCKHOLDERS' EQUITY

Preferred Stock

There are currently 5,000,000 shares of Series A Preferred Stock authorized, with no shares of Series A Preferred Stock currently issued or outstanding.

Effective June 24, 2010, the Company filed a Certificate of Designations, Number, Voting Power, Preferences and Rights of Series B Convertible Redeemable Preferred Stock (the “Certificate”) with the Texas Secretary of State, designating 7,500 shares of Series B Preferred Stock, par value $10.00 per share (the “Series B Shares”). The Series B Shares rank senior to shares of all other common and preferred stock with respect to dividends, distributions, and payments upon dissolution. Each of the Series B Shares is convertible at the option of the holder into shares of common stock as provided in the Certificate. There are currently no Series B Shares issued or outstanding.

On October 11, 2013, the Company filed a Certificate of Designations, Number, Voting Power, Preferences and Rights of Series C Convertible Preferred Stock (the “Certificate of Designations”), under which it designated 100,000 shares of Series C Preferred Stock, par value $10.00. The Series C Preferred Stock is entitled to accruing dividends (payable, at the Company’s options, in either cash or stock) of 5% per annum until October 10, 2016, and 3% per annum until October 10, 2018.

The Series C Preferred Stock is senior to the Company’s common stock and any other currently issued series of the Company’s preferred stock upon liquidation, and is entitled to a liquidation preference per share equal to the original issuance price of such shares of Series C Preferred Stock together with the amount of all accrued but unpaid dividends thereon. Each of the Series C Shares is convertible at the option of the holder into 1,000 shares of common stock as provided in the Certificate. Additionally, each holder of Series C Preferred Stock shall be entitled to vote on all matters submitted for a vote of the holders of Common Stock a number of votes equal to the number of full shares of Common Stock into which such holder’s Series C shares could then be converted. As of September 30, 2017, and December 31, 2016, there were 85,561 and 85,646 shares of Series C Preferred Stock issued and outstanding, respectively.

On November 13, 2013, the Company filed a Certificate of Designations, Number, Voting Power, Preferences and Rights of Series D Convertible Preferred Stock (the “Certificate of Designations”), under which it designated 25,000 shares of Series D Preferred Stock. Shares of Series D Preferred Stock are not entitled to any preference with respect to dividend or upon liquidation, and will automatically convert (at a ratio of 1,000-to-1) into shares of the Company’s common stock, par value $0.001 upon approval of the Company’s stockholders (and filing of) and amendment to the Company’s Certificate of Incorporation increasing the number of authorized shares of Common Stock from 100,000,000 to 250,000,000. As of September 30, 2017, and December 31, 2016, there are no shares of Series D Preferred Stock issued and outstanding.

On May 30, 2014, the Company filed a Certificate of Designations, Number, Voting Power, Preferences and Rights of Series E Convertible Preferred Stock (The “Certificate of Designations”), under which it designated 5,000 shares of Series E Preferred Stock. Shares of Series E Preferred Stock are not entitled to any preference with respect to dividends or upon liquidation, and will automatically convert (at a ratio of 1,000 shares of Common Stock for every one share of Series E Preferred Stock) into shares of the Company’s common stock, $0.001 par value upon approval of the Company’s stockholders (and filing of) and amendment to the Company’s Certificate of Incorporation increasing the number of authorized shares of Common Stock from 100,000,000 to 250,000,000. As of September 30, 2017, and December 31, 2016, there are no shares of Series E Preferred Stock issued and outstanding.

On March 7, 2017, the Company issued 715 shares of Series C Preferred Stock for cash proceeds of $50,050.

The Series C preferred stock earned dividends of $100,677 and $213,435 for the nine months ended September 30, 2017 and 2016, respectively. As of September 30, 2017, no Series C preferred stock dividends have been declared.

Common Stock

On March 9, 2017, the Company issued 150,000 shares of common stock to each of the Company’s four Board Directors, (a total of 600,000 shares valued at $42,000).

On March 10, 2017, the Company issued 250,000 shares of common stock valued at $18,250 to a contract consultant upon achievement of specified revenue targets.

On July 31, 2017, the Company issued 937,556 shares of common stock for the conversion of 800 shares of Series C Convertible Preferred Stock and $9,629 of related Series C dividends.

Warrants

During the nine months ended September 30, 2017, 61,326,300 of the 67,246,300 warrants outstanding at the beginning of the period were either forfeited or expired, leaving a balance of 5,920,000 outstanding on September 30, 2017. A summary of the status of the warrants granted for the nine months ended September 30, 2017, and changes during the period then ended is presented below:

		For the Nine Months Ended September 30, 2017
		Shares				Weighted Average Exercise Price
Outstanding at beginning of period			67,246,300			$	0.12
Granted			-				-
Exercised			-				-
Forfeited			(60,051,300	)			-
Expired			(1,275,000	)
Outstanding at end of period			5, 920,000			$	0.07

					As of September 30, 2017											As of September 30, 2017
					Warrants Outstanding											Warrants Exercisable
	Range of Exercise Prices				Number Outstanding				Weighted-Average Remaining Contract Life				Weighted- Average Exercise Price			Number Exercisable				Weighted-Average Exercise Price
	$	0.06				4,500,000				1.00			$	0.06			4,500,000			$	0.06
		0.08				550,000				0.43				0.08			550,000				0.08
		0.09				625,000				0.54				0.09			625,000				0.09
		0.15				245,000				0. 05				0.15			245,000				0.15
	$	0.06 -.15				5,920,000				.86			$	0.07			5,920,000			$	0.07

The aggregate intrinsic value of the exercisable warrants as of September 30, 2017, was $45,000.

On October 10, 2017, Wound Management Technologies, Inc. (the “Company”) and Evolution Venture Partners LLC (“EVP”) entered into a termination agreement (the “Termination Agreement”) terminating, effective as of September 29, 2017, that certain letter agreement dated April 26, 2016, (the “Agreement”), by and between the Company, EVP, and Middlebury Securities, LLC (“Middlebury”). Middlebury terminated its charter on or about July 27, 2016, and therefore is not a party to the Termination Agreement. Pursuant to the Termination Agreement, EVP has agreed to cancel a warrant for the purchase of 60,000,000 shares of the Company’s common stock in exchange for the Company’s issuance to EVP of 750,000 shares of Common Stock (the “Shares”). As the fair value of the surrendered warrants exceeded the fair value of the Shares, there is no expense associated with this transaction.

Stock Options

During the nine months ended September 30, 2017, 943,500 of the 1,093,500 options outstanding at the beginning of the period expired. A summary of the status of the stock options granted for the nine-month period ended September 30, 2017, and changes during the period then ended is presented below:

	For the Nine Months Ended September 30, 2017
		Options				Weighted Average Exercise Price
Outstanding at beginning of period			1,093,500			$	0.15
Granted			-
Exercised			-				-
Forfeited			-				-
Expired			(943,500	)		$	0.15
Outstanding at end of period			150,000			(a)

As of September 30, 2017

As of September 30, 2017

Stock Options Outstanding

Stock Options Exercisable

Exercise Price

Number Outstanding

Weighted-Average

Remaining Contract Life

Weighted- Average

Exercise Price

Number Exercisable

Weighted-Average

Exercise Price

(a)

150,000

-

-

-

(a)

(a)

On January 1, 2015, the company granted three tranches of options, 25,000, 25,000, and 100,000 which vest upon meeting specific performance measures agreed upon. The measures include achieving three specific sales targets per month for 3 consecutive months. The exercise price and expiration date of each tranche will be set upon achieving the targets. As of the date of this filing the performance measures have not been met. As a result, the exercise price is undetermined and these options are excluded from the calculation of weighted average remaining life.

The aggregate intrinsic value of the exercisable options as of September 30, 2017 was $0.