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6. SHAREHOLDERS' EQUITY | 9 Months Ended
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Sep. 30, 2019
Shareholders' equity (deficit) |
SHAREHOLDERS' EQUITY | Preferred Stock 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 was entitled to accruing dividends (payable, at the Company’s option, in either cash or stock) of 5% per annum until October 10, 2016, and 3% per annum until October 10, 2018. In February and March 2018, the Company issued 1,005,677 shares of Common Stock for the conversion of 85,561 shares of Series C Convertible Preferred Stock and $1,050,468 of related Series C Preferred Stock dividends. As of September 30, 2019, there were no shares of Series C Preferred Stock outstanding and all accrued dividends were converted to Common Stock in the first quarter of 2018. Accrued Series C Preferred Stock dividends were $0 and $28,061 as of September 30, 2019 and September 30, 2018, respectively. As an inducement to encourage the Series C Preferred Stock shareholders to convert their Series C Preferred Stock to Common Stock prior to October 10, 2018, the Company offered to pay the full dividend, (accelerated to October 10, 2018) upon the shareholders exercise of their conversion. The fair value of the extra shares of Common Stock issued to Series C Preferred Stock shareholders was $103,197 for dividends that would have accrued from the date of their conversion through October 10, 2018. The Company evaluated the Series C Preferred Stock under FASB ASC 815 and determined that they do not qualify as derivative liabilities. The Company then evaluated the Series C Preferred Stock for beneficial conversion features under FASB ASC 470-30 and determined that none existed. On March 13, 2019, the Company established a new series of preferred stock consisting of 1,200,000 shares of Series F Convertible Preferred Stock, par value of $10.00 per share. Each share of Series F Convertible Preferred Stock may be converted at the option of the holder, at any time, into 2 shares of Common Stock. Additionally, each holder of Series F Convertible Preferred Stock is entitled to vote on all matters submitted for a vote of the Company’s shareholders with votes equal to the number of shares of Common Stock into which such holder’s Series F shares could then be converted. The Series F Convertible Preferred Stock is senior to the Company’s Common Stock as to the payment of dividends (if any) and the distribution of assets. Upon liquidation of the Company, holders of Series F Convertible Preferred Stock are entitled to a liquidation preference of $5 per share. As of September 30, 2019, there were 1,136,815 shares of the Series F Preferred stock issued and outstanding. Common Stock On March 6, 2018, the Company issued 226,514 shares of Common Stock for the conversion of $1,200,000 in Related Party convertible debt and $385,594 in accrued interest. In February and March 2018, the Company issued 1,005,677 shares of Common Stock for the conversion of 85,561 shares of Series C Convertible Preferred Stock and $1,050,468 of related Series C Preferred Stock dividends. On May 10, 2019 the Company effected a 1-for-100 reverse stock split of the Company's issued and outstanding shares of Common Stock. Concurrent with the reverse stock split, the Company changed its corporate name from Wound Management Technologies, Inc. to Sanara MedTech Inc. The reverse stock split was previously approved by a majority of shareholders of the Company’s outstanding voting stock on March 21, 2019. On May 10, 2019, the Company’s Common Stock began trading on the OTCQB market under the symbol “WNDMD” and traded under that symbol until June 6, 2019, at which time the Company changed its trading symbol to “SMTI”. The post-split Common Stock is traded under a new CUSIP number 79957L100. In connection with the reverse stock split, the Company also made a corresponding adjustment to the Company’s authorized capital stock to reduce the authorized Common Stock to 20,000,000 shares and the authorized preferred stock to 2,000,000 shares, effective May 10, 2019. The reverse stock split does not change a shareholder’s ownership percentage of the Company's Common Stock, except for the small effect where the reverse stock split would result in a shareholder owning a fractional share. No fractional shares were issued as a result of the reverse split. Shareholders otherwise entitled to receive a fractional share instead became entitled to receive a cash payment based on the market price of a share of the Common Stock on May 13, 2019. The conversion and voting provisions of the Company’s Series F Convertible Preferred Stock were proportionally adjusted by a factor of 100 to reflect the reverse stock split. All of the Company’s outstanding stock options were also proportionally adjusted to reflect the reverse split, in accordance with the terms of the plans, agreements or arrangements governing such securities. All share and per share amounts herein have been retroactively adjusted to reflect the reverse stock split. Stock Options A summary of the status of the stock options granted for the nine-month period ended September 30, 2019, and changes during the period then ended is presented below:
|  | For the Nine Months Ended September 30, 2019 |
|  | Options |  |  | Weighted Average Exercise Price |  |  | Weighted Average Remaining Contract Life |
Outstanding at beginning of period |  |  | 15,500 |  |  | $ | 6.00 |  |  |  |
Granted |  |  | - |  |  |  | - |  |  |  |
Exercised |  |  | - |  |  |  | - |  |  |  |
Forfeited |  |  | (2,000 | ) |  | $ | 6.00 |  |  |  |
Expired |  |  | - |  |  |  | - |  |  |  |
Outstanding at September 30, 2019 |  |  | 13,500 |  |  | $ | 6.00 |  |  |  | 3.39 |
Exercisable at September 30, 2019 |  |  | 13,500 |  |  | $ | 6.00 |  |  |  | 3.39 |
On December 31, 2017, the Company granted a total of 11,500 options to five employees. The aggregate fair value of the awards was determined to be $61,322 and was to be expensed over a three-year vesting period. On April 13, 2018, the Company granted a total of 2,000 options to one employee and one contractor. The aggregate fair value of the awards was determined to be $8,943 and was to be expensed over a three-year vesting period. On August 31, 2018 the Company granted a total of 2,000 options to one employee. The aggregate fair value of the awards was determined to be $16,405 and was to be expensed over a three-year vesting period. The Company’s stock option agreements include a provision whereby all outstanding options vest immediately if the Company consummates a transaction resulting in a change in control of the Company, as defined in the stock option agreements. The Cellerate Acquisition on March 15, 2019 (see Note 1 for more information) represented a change in control of the Company for purposes of the stock option agreements. Accordingly, all outstanding SMTI stock options fully vested on March 15, 2019. No option expense is reflected in the consolidated statements of operations in 2019.

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- Definition The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -URI http://asc.fasb.org/topic&trid=2208762 + Details
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