GTHP 10-Q

Guided Therapeutics Inc (GTHP)

10-Q 2022-05-16 For: 2022-03-31

View Original

Added on April 06, 2026

Delaware		58-2029543
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

Large Accelerated filer	☐	Accelerated filer	☐
Non-accelerated Filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

		Page
Item 1.	Financial Statements	3
	Consolidated Balance Sheets as of March 31, 2022 (Unaudited) and December 31, 2021	3
	Consolidated Statements of Operations for the Three Months Ended March 31, 2022 and 2021 (Unaudited)	4
	Consolidated Statements of Stockholders' Deficit for the Three Months Ended March 31, 2022 and 2021 (Unaudited)	5
	Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2022 and 2021 (Unaudited)	7
	Notes to Unaudited Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	33
	Company Overview	34
	Results of Operations	36
	Disclosure About Off-Balance Sheet Arrangements	38
	Critical Accounting Policies and Estimates	35
	Liquidity and Capital Resources	37

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	39

Item 4.	Controls and Procedures	39

PART II — OTHER INFORMATION

Item 1.	Legal Proceedings	40

Item 1A.	Risk Factors	40

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	40

Item 3.	Defaults Upon Senior Securities	40

Item 4.	Mine Safety Disclosures	40

Item 5.	Other Information	40

Item 6.	Exhibits	40

Signatures		41

	March 31,			December 31,
	2022			2021
	(unaudited)
ASSETS

Current Assets:
Cash and cash equivalents	$	725		$	643
Accounts receivable, net of allowance for doubtful accounts of $126 at March 31, 2022 and December 31, 2021		39			46
Inventory, net of reserves of $785 at March 31, 2022 and December 31, 2021		570			571
Other current assets		453			377
Total current assets		1,787			1,637

Non-Current Assets:
Property and equipment, net		28			14
Operating lease right-of-use assets, net of amortization		355			372
Other assets		17			17
Total non-current assets		400			403

TOTAL ASSETS	$	2,187		$	2,040

LIABILITIES AND STOCKHOLDERS’ DEFICIT

Current Liabilities:
Accounts payable	$	2,476		$	2,362
Accounts payable, related parties		80			87
Accrued liabilities		1,228			1,768
Deferred revenue		514			337
Current portion of lease liability		70			67
Current portion of long-term debt		67			88
Current portion of long-term debt, related parties		27			-
Short-term notes payable		12			48
Short-term notes payable, related parties		31			40
Convertible notes payable in default		161			161
Short-term convertible notes payable		745			736
Derivative liability		38			-
Total current liabilities		5,449			5,694

Long-Term Liabilities
Long-term lease liabilities		307			325
Derivative liability		-			32
Long-term convertible debt		852			820
Long-term debt		-			22
Long-term debt, related parties		568			592
Total long-term liabilities		1,727			1,791

Total liabilities		7,176			7,485

COMMITMENTS AND CONTINGENCIES (Note 7)

STOCKHOLDERS’ DEFICIT:

Series C convertible preferred stock, $0.001 par value; 9.0 shares authorized, 0.3 shares issued and outstanding as of March 31, 2022 and December 31, 2021. Liquidation preference of $286 at March 31, 2022 and December 31, 2021.		105			105
Series C1 convertible preferred stock, $0.001 par value; 20.3 shares authorized, 1.0 shares issued and outstanding as of March 31, 2022 and December 31, 2021. Liquidation preference of $1,049 at March 31, 2022 and December 31, 2021.		170			170
Series C2 convertible preferred stock, $0.001 par value; 5,000 shares authorized, 3.3 shares issued and outstanding as of March 31, 2022 and December 31, 2021. Liquidation preference of $3,263 at March 31, 2022 and December 31, 2021.		531			531
Series D convertible preferred stock, $0.001 par value; 6.0 shares authorized, 0.8 shares issued and outstanding as of March 31, 2022 and December 31, 2021. Liquidation preference of $763 at March 31, 2022 and December 31, 2021, respectively.		276			276
Series E convertible preferred stock, $0.001 par value; 5.0 shares authorized, 1.0 and 1.7 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively. Liquidation preference of $968 and $1,736 at March 31, 2022 and December 31, 2021, respectively.		914			1,639
Series F convertible preferred stock, $0.001 par value; 1.5 shares authorized, 1.4 shares issued and outstanding as of March 31, 2022 and December 31, 2021. Liquidation preference of $1,411 and $1,426 at March 31, 2022 and December 31, 2021, respectively.		1,174			1,187
Series F-2 convertible preferred stock, $0.001 par value; 5.0 shares authorized, 3.2 shares issued and outstanding as of March 31, 2022 and December 31, 2021. Liquidation preference of $3,237 at March 31, 2022 and December 31, 2021.		2,963			2,963
Series G convertible preferred stock, $0.001 par value; 1,000 shares authorized, nil shares issued and outstanding as of March 31, 2022 and December 31, 2021. Liquidation preference was nil at March 31, 2022 and December 31, 2021.		-			-
Common stock, $0.001 par value; 500,000 shares authorized, 22,316 and 13,673 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively		3,410			3,403
Additional paid-in capital		129,042			126,800
Treasury stock at cost		(132	)		(132	)
Accumulated deficit		(143,442	)		(142,387	)

Total stockholders’ deficit		(4,989	)		(5,445	)

TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	2,187		$	2,040

	Three Months Ended
	March 31,
	2022			2021

Sales - devices and disposables	$	5		$	-
Cost of goods sold		1			-
Gross profit		4			-

Operating expenses:
Research and development		21			16
Sales and marketing		40			36
General and administrative		386			771
Total operating expenses		447			823

Loss from operations		(443	)		(823	)

Other income (expenses):
Interest expense		(101	)		(141	)
Change in fair value of derivative liability		(6	)		(88	)
Gain from extinguishment of debt		41			87
Change in fair value of warrants		-			448
Other expenses		2			-
Total other income (expense)		(64	)		306

Loss before income taxes		(507	)		(517	)
Provision for income taxes		-			-

Net loss		(507	)		(517	)
Preferred stock dividends		(548	)		(55	)

NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	(1,055	)	$	(572	)

NET LOSS PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS
Basic	$	(0.05	)	$	(0.04	)
Diluted	$	(0.05	)	$	(0.04	)

Weighted average shares outstanding
Basic		20,683			13,172
Diluted		20,683			13,172

	Preferred Stock				Preferred Stock				Preferred Stock				Preferred Stock
	Series C				Series C1				Series C2				Series D
	Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount
Balance at December 31, 2021		-	$	105		1	$	170		3	$	531		1	$	276
Common stock warrants exercised		-		-		-		-		-		-		-		-
Issuance of common stock for payment of Series D preferred dividends		-		-		-		-		-		-		-		-
Issuance of common stock for payment of Series E preferred dividends		-		-		-		-		-		-		-		-
Issuance of common stock for payment of Series F preferred dividends		-		-		-		-		-		-		-		-
Issuance of common stock for payment of Series F-2 preferred dividends		-		-		-		-		-		-		-		-
Issuance of common stock for payment of interest		-		-		-		-		-		-		-		-
Issuance of common stock for Series F and Series F-2 one-time 15% dividends		-		-		-		-		-		-		-		-
Conversion of Series E preferred stock to common stock		-		-		-		-		-		-		-		-
Conversion of Series F preferred stock to common stock		-		-		-		-		-		-		-		-
Stock-based compensation		-		-		-		-		-		-		-		-
Expense for warrants issued to consultants		-		-		-		-		-		-		-		-
Accrued preferred dividends		-		-		-		-		-		-		-		-
Net loss		-		-		-		-		-		-		-		-
Balance at March 31, 2022		-	$	105		1	$	170		3	$	531		1	$	276

					Additional
	Common Stock				Paid-In		Treasury			Accumulated
	Shares		Amount		Capital		Stock			Deficit			Total
Balance at December 31, 2021		13,673	$	3,403	$	126,800	$	(132	)	$	(142,387	)	$	(5,445	)
Common stock warrants exercised		4,478		4		712		-			-			716
Issuance of common stock for payment of Series D preferred dividends		23		-		15		-			-			15
Issuance of common stock for payment of Series E preferred dividends		13		-		8		-			-			8
Issuance of common stock for payment of Series F preferred dividends		158		-		105		-			-			105
Issuance of common stock for payment of Series F-2 preferred dividends		96		-		64		-			-			64
Issuance of common stock for payment of interest		121		-		81		-			-			81
Issuance of common stock for Series F and Series F-2 one-time 15% dividends		624		-		399		-			-			399
Conversion of Series E preferred stock to common stock		3,070		3		722		-			-			-
Conversion of Series F preferred stock to common stock		60		-		13		-			-			-
Stock-based compensation		-		-		44		-			-			44
Expense for warrants issued to consultants		-		-		79		-			-			79
Accrued preferred dividends		-		-		-		-			(548	)		(548	)
Net loss		-		-		-		-			(507	)		(507	)
Balance at March 31, 2022		22,316	$	3,410	$	129,042	$	(132	)	$	(143,442	)	$	(4,989	)

	(in thousands)
	March 31, 2022			December 31, 2021

Raw materials	$	1,254		$	1,255
Work-in-progress		69			69
Finished goods		32			32
Inventory reserve		(785	)		(785	)

Total inventory	$	570		$	571

	·	Step 1 – Identify the contract with a customer: a contract is defined as an agreement (including oral and implied), between two or more parties, that creates enforceable rights and obligations and sets out the criteria for each of those rights and obligations. The contract needs to have commercial substance and it is probable that the entity will collect the consideration to which it will be entitled.

	·	Step 2 – Identify the performance obligations in the contract: a performance obligation in a contract is a promise (including implicit) to transfer a good or service to the customer. Each performance obligation should be capable of being distinct and is separately identifiable in the contract.

	·	Step 3 – Determine the transaction price: transaction price is the amount of consideration that the entity can be entitled to, in exchange for transferring the promised goods and services to a customer, excluding amounts collected on behalf of third parties.

	·	Step 4 – Allocate the transaction price to the performance obligations in the contract: for a contract that has more than one performance obligation, the entity will allocate the transaction price to each performance obligation separately, in exchange for satisfying each performance obligation. The acceptable methods of allocating the transaction price include adjusted market assessment approach, expected cost plus a margin approach, and the residual approach in limited circumstances. Discounts given should be allocated proportionately to all performance obligations unless certain criteria are met and reallocation of changes in standalone selling prices after inception is not permitted.

	·	Step 5 – Recognize revenue as and when the entity satisfies a performance obligation: the entity should recognize revenue at a point in time, except if it meets any of the three criteria, which will require recognition of revenue over time: the entity’s performance creates or enhances an asset controlled by the customer, the customer simultaneously receives and consumes the benefit of the entity’s performance as the entity performs, and the entity does not create an asset that has an alternative use to the entity and the entity has the right to be paid for performance to date.

	·	Level 1–Quoted market prices in active markets for identical assets and liabilities;
	·	Level 2–Inputs, other than level 1 inputs, either directly or indirectly observable; and
	·	Level 3–Unobservable inputs developed using internal estimates and assumptions (there is little or no market date) which reflect those that market participants would use.

	Fair Value at March 31, 2022 (in thousands)
	Level 1		Level 2		Level 3			Total

Derivative liability/bifurcated conversion option in connection with Auctus $400,000 loan on December 17, 2019	$	-	$	-	$	(38	)	$	(38	)

Total short-term liabilities at fair value	$	-	$	-	$	(38	)	$	(38	)

	Fair Value at December 31, 2021 (in thousands)
	Level 1		Level 2		Level 3			Total

Derivative liability/bifurcated conversion option in connection with Auctus $400,000 loan on December 17, 2019		-		-		(32	)		(32	)

Total long-term liabilities at fair value	$	-	$	-	$	(32	)	$	(32	)

	(in thousands)
	Senior Secured Debt		Derivative			Total

Balance, December 31, 2021	$	-	$	(32	)	$	(32	)
Change in fair value during the period		-		(6	)		(6	)

Balance, March 31, 2022	$	-	$	(38	)	$	(38	)

	Number of Shares

Common stock warrants exercised		4,477,923
Issuance of common stock for payment of Series D preferred dividends		23,109
Issuance of common stock for payment of Series E preferred dividends		12,432
Issuance of common stock for payment of Series F preferred dividends		158,662
Issuance of common stock for payment of Series F-2 preferred dividends		95,535
Issuance of common stock for payment of interest		121,262
Issuance of common stock for Series F one-time 15% dividend		255,401
Issuance of common stock for Series F-2 one-time 15% dividend		368,505
Conversion of Series E preferred stock to common stock		3,070,000
Conversion of Series F preferred stock to common stock		60,000
Issued during the three months ended March 31, 2022		8,642,829

Summary table of common stock share transactions:
Balance at December 31, 2021		13,673,583
Issued in 2022		8,642,829
Balance at March 31, 2022		22,316,412

	Warrants (Underlying Shares)			Weighted-Average Exercise Price Per Share

Outstanding, December 31, 2021		27,669,634		$	0.29
Warrants exercised		(2,284,324	)	$	0.16
Outstanding, March 31, 2022		25,385,310		$	0.30

	(in thousands)
	March 31, 2022			December 31, 2021

Equipment	$	1,049		$	1,048
Software		652			652
Furniture and fixtures		41			41
Leasehold improvements		12			12
Construction in progress		21			8

Subtotal		1,775			1,761
Less accumulated depreciation		(1,747	)		(1,747	)

Property, equipment and leasehold improvements, net	$	28		$	14

	(in thousands)
	March 31, 2022		December 31, 2021

Compensation	$	573	$	621
Professional fees		41		98
Stock Subscription Payable		-		351
Interest		232		261
Vacation		42		39
Preferred dividends		299		349
Other accrued expenses		41		49

Total	$	1,228	$	1,768

	Number of Shares		Weighted-Average Exercise Price Per Share		Weighted-Average Remaining Contractual Life	Aggregate Intrinsic Value of In-the-Money Options (in thousands)

Options outstanding as of March 31, 2022		1,500,000	$	0.49	8.3 years	$	240
Options exercisable as of March 31, 2022		1,045,227	$	0.49	8.3 years	$	167

	March 31,
	2021
Expected term (years)		10 years
Volatility		153.12	%
Risk-free interest rate		0.98	%
Dividend yield		0.00	%

	(in thousands)
	Three Months Ended March 31,
	2022
Operating lease right-of-use assets	$	355
Operating lease liabilities	$	377

	(in thousands)
	Operating
	Leases
2022 (remaining)	$	82
2023		112
2024		115
2025		118
2026		50
Total future lease payments		477
Less: discount		(100	)
Total lease liabilities	$	377

	Three Months Ended March 31,
	2022
Weighted average remaining lease term (years)		4.2
Weighted average discount rate		11.4	%

	Short-term notes payable, including related parties
	March 31, 2022		December 31, 2021

Dr. Cartwright	$	31	$	34
Mr. Fowler		-		6
Premium Finance (insurance)		12		48
Short-term notes payable	$	43	$	88

	March 31, 2022			December 31, 2021

Auctus Tranche 2	$	400		$	400
Auctus prepayment penalty		350			350
Auctus (March 31, 2020 Note)		161			161
Debt discount and issuance costs to be amortizaed		(5	)		(14	)
Convertible notes payable - short-term	$	906		$	897

For Dr. Faupel:

Salary	$	134
Bonus		20
Vacation		95
Interest on compensation		67
Loans to Company		196
Interest on loans		149
Total outstanding prior to exchange		661

Amount forgiven in prior years		(454	)
Amount exchanged for Series F-2 Preferred Stock		(85	)
Total interest accrued through December 31, 2021		39
Balance outstanding at December 31, 2021	$	161

Interest accrued through March 31, 2022		2
Balance outstanding at March 31, 2022	$	163

For Dr.Cartwright

Salary	$	337
Bonus		675
Loans to Company		528
Interest on loans		81
Total outstanding prior to exchange		1,621

Amount forgiven in prior years		(1,302	)
Amount exchanged for Series F-2 Preferred Stock		(100	)
Total interest accrued through December 31, 2021		62
Balance outstanding at December 31, 2021	$	281

Interest accrued through March 31, 2022		4
Balance outstanding at March 31, 2022	$	285

Year	Amount
2022	$	27
2023		485
2024		39
2025		41
2026		3
Thereafter		-
Total	$	595

	March 31, 2022			December 31, 2021
10% Senior Unsecured Convertible Debentures	$	1,130		$	1,130
Debt Issuance costs to be amortized		(62	)		(69	)
Debt Discount		(216	)		(241	)
Long-term convertible debt	$	852		$	820

	·	access to sufficient debt or equity capital to meet our operating and financial needs;
	·	the extent of dilution of the holdings of our existing stockholders upon the issuance, conversion or exercise of securities issued as part of our capital raising efforts;
	·	the extent to which certain debt holders may call the notes to be paid;
	·	the effectiveness and ultimate market acceptance of our products and our ability to generate sufficient sales revenues to sustain our growth and strategy plans;
	·	whether our products in development will prove safe, feasible and effective;
	·	whether and when we or any potential strategic partners will obtain required regulatory approvals in the markets in which we plan to operate;
	·	our need to achieve manufacturing scale-up in a timely manner, and our need to provide for the efficient manufacturing of sufficient quantities of our products;
	·	the lack of immediate alternate sources of supply for some critical components of our products;
	·	our ability to establish and protect the proprietary information on which we base our products, including our patent and intellectual property position;
	·	the current outbreak of the Coronavirus SARS-CoV-2, the pathogen responsible for COVID-19, which has already had an impact on financial markets, could result in additional repercussions in our operating business, including but not limited to, the sourcing of materials for product candidates, manufacture of supplies for preclinical and/or clinical studies, delays in clinical operations, which may include the availability or the continued availability of patients for trials due to such things as quarantines, conduct of patient monitoring and clinical trial data retrieval at investigational study sites;
	·	The future impact of the outbreak is highly uncertain and cannot be predicted, and we cannot provide any assurance that the outbreak will not have a material adverse impact on our operations or future results or filings with regulatory health authorities. The extent of the impact, if any, we will depend on future developments, including actions taken to contain the coronavirus;
	·	The impact of the conflict between Russia and Ukraine on economic conditions in general and on our business and operations;
	·	the need to fully develop the marketing, distribution, customer service and technical support and other functions critical to the success of our product lines;
	·	the dependence on potential strategic partners or outside investors for funding, development assistance, clinical trials, distribution and marketing of some of our products; and
	·	other risks and uncertainties described from time to time in our reports filed with the SEC.

Exhibit Number		Exhibit Description

31*		Rule 13a-14(a)/15d-14(a) Certification
32*		Section 1350 Certification
101.1*		XBRL

GUIDED THERAPEUTICS, INC.

By:	/s/ Gene S. Cartwright
	Gene S. Cartwright
	President, Chief Executive Officer and Acting Chief Financial Officer