Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Nov. 16, 2016 | |
Document and Entity Information: | ||
Entity Registrant Name | NEXEON MEDSYSTEMS INC | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2016 | |
Trading Symbol | nxmd | |
Amendment Flag | false | |
Entity Central Index Key | 1,416,172 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
Entity Well-known Seasoned Issuer | No | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 | |
Entity Common Stock, Shares Outstanding | 21,030,453 |
CONSOLIDATED BALANCE SHEETS (Un
CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 139,819 | $ 0 |
Pre-paid expenses | 5,000 | 0 |
Total Current Assets | 144,819 | 0 |
Property and equipment, net | 10,107 | 0 |
Investments | 322,360 | 0 |
Patents, net of accumulated amortization of 389, 710 | 5,730,290 | 0 |
Total Assets | 6,207,576 | 0 |
Current Liabilities | ||
Accounts payable | 258,258 | 0 |
Accrued liabilities | 18,419 | 0 |
Due to related party | 85,851 | 415 |
Credit facility | 15,052 | 0 |
Accrued interest payable - stockholder | 3,781 | 0 |
Total Current Liabilities | 381,361 | 415 |
Notes payable stockholders - long term | 20,000 | 0 |
Total Liabilities | 401,361 | 415 |
Stockholders' Equity | ||
Common Stock - 75,000,000 shares authorized, $.001 par value; 19,132,453 and 500,000 issued and outstanding at September 30, 2016 and December 31, 2015, respectively | 19,132 | 500 |
Additional paid-in capital | 6,608,333 | 0 |
Accumulated deficit | (821,250) | (915) |
Total Stockholders' Equity | 58,062,215 | (415) |
Total Liabilities and Stockholders' Equity | $ 6,207,576 | $ 0 |
CONSOLIDATED BALANCE SHEETS PAR
CONSOLIDATED BALANCE SHEETS PARENTHETICALS - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Parentheticals | ||
Common Stock, par value | $ 0.001 | $ 0.001 |
Common Stock, shares authorized | 75,000,000 | 75,000,000 |
Common Stock, shares issued | 19,132,453 | 500,000 |
Common Stock, shares outstanding | 19,132,453 | 500,000 |
Patents, net of accumulated amortization | $ 389,710 | $ 0 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2016 | Sep. 30, 2016 | |
Revenue: | ||
Revenues | $ 0 | $ 0 |
Depreciation and amortization | 156,452 | 390.970 |
General and administrative expenses | 237,430 | 361,477 |
Research and development expenses | 46,869 | 63,459 |
Loss from operations | (435,032) | (815,906) |
Other Income / Expense | ||
Interest expense - stockholders | (598) | (1,795) |
Interest expense - other | (1,313) | (2,634) |
Loss before provision for taxes | (436,943) | (820,335) |
Provision for taxes | 0 | 0 |
Net loss | $ (436,943) | $ (820,335) |
BASIC AND DILUTED PER SHARE DATA: | ||
Net Loss per common share, basic and diluted | $ (0.02) | $ (0.05) |
Weighted average common shares outstanding, basic and diluted | 18,825,985 | 18,212,552 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) | 9 Months Ended |
Sep. 30, 2016USD ($) | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |
Net Loss | $ (820,335) |
Adjustment to reconcile net loss to net cash used in operating activities: | |
Depreciation and amortization | 390,970 |
Stock-based compensation | 23,115 |
Change in operating liabilities: | |
Pre-paid expenses | (5,000) |
Accounts payable | 30,927 |
Accrued liabilities | 931 |
Accrued interest | 1,795 |
Net cash used in operating activities | (377,597) |
CASH FLOWS FROM INVESTING ACTIVITIES: | |
Acquisition of property & equipment | (986) |
Net cash used in investing activities | (986) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |
Proceeds from issuance of common stock | 432,966 |
Proceeds of loan from related party | 85,436 |
Net cash provided by financing activities | 518,402 |
Net increase in cash and cash equivalents | 139,819 |
Cash and cash equivalents at beginning of period | 0 |
Cash and cash equivalents at end of period | 139,819 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | |
Cash paid during period for interest | 2,634 |
Cash paid during period for taxes | 0 |
SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES: | |
Rescission of common stock issued for contribution of note receivable | (175,000) |
Common stock issued for acquisition | 4,357,903 |
Common stock issued for conversion of shareholder notes and accrued interest | 1,287,564 |
Common stock issued for investments | $ 322,360 |
Nature of Organization
Nature of Organization | 9 Months Ended |
Sep. 30, 2016 | |
NatureOfOrganizationAbstract | |
Nature of Operations | Note 1. Nature of Organization Operations Nexeon MedSystems Inc (the Company) was incorporated in the State of Nevada on December 7, 2015. The Companys primary purpose is to commercialize the drug-eluting balloon technology acquired in the acquisition of Nexeon MedSystems, Inc., a private Delaware corporation (NXDE) primarily engaged in the development and commercialization of a unique series of breakthrough therapies for people with cardiovascular disease, as further described in Note 4 Acquisition |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2016 | |
Basis of Presentation: | |
Basis of Presentation | Note 2. Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial statements and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the United States Securities and Exchange Commission (SEC). Accordingly, they do not contain all information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements. In the opinion of the Companys management, the accompanying unaudited financial statements contain all the adjustments necessary (consisting only of normal recurring accruals) to present the financial position of the Company as September 30, 2016 and the results of operations and cash flows for the periods presented. The results of operations for the three and nine months ended September 30, 2016 are not necessarily indicative of the operating results for the full fiscal year or any future period. These unaudited consolidated financial statements should be read in conjunction with the audited financial statements of the Company and NXDE, and related notes thereto, for the period ended December 31, 2015 included in the Form 10 Registration Statement of the Company filed with the Securities and Exchange Commission on October 5, 2016. |
Going Concern
Going Concern | 9 Months Ended |
Sep. 30, 2016 | |
Going Concern: | |
Going Concern | Note 3. Going Concern The accompanying financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company as a going concern. However, the Company has not commenced operations and has an accumulated a deficit of $821,250 as of September 30, 2016. The Company currently has limited liquidity, and has not completed its efforts to establish a source of revenues sufficient to cover operating costs over an extended period of time. These factors among others raise substantial doubt about the Companys ability to continue as a going concern. Management expects to seek potential business opportunities for merger or acquisition of existing companies. Management is not currently limiting their search for merger or acquisition candidates to any industry or locations. Management, while not especially experienced in matters relating to public company management, will rely upon their own efforts and, to a much lesser extent, the efforts of the Companys shareholders, in accomplishing the business purposes of the Company. |
Acquisition
Acquisition | 9 Months Ended |
Sep. 30, 2016 | |
Acquisition: | |
Acquisition | Note 4. Acquisition On February 16, 2016, NXDE entered into an Agreement and Plan of Merger (Merger Agreement) with the Company, pursuant to which NXDE was acquired by the Company, with the Company continuing as the surviving entity. The transaction is being accounted for as a business combination. The primary reason for the acquisition of NXDE was to acquire unique intellectual property owned by NXDE and technical knowledge retained by NXDE and to further develop these technologies for potential commercialization. The foregoing transaction is referred to herein as the Merger. The effective date of the Merger was February 16, 2016 and 100% of the equity voting interest was acquired. In exchange for 100% of the issued and outstanding preferred stock of NXDE, immediately prior to the closing of the Merger, the Company issued 1,659,943 shares of common stock to the preferred stockholders of NXDE. As a result of the Merger, the stockholders of the NXDE acquired 9.67% of the Company's issued and outstanding common stock as of the effective date of the Merger. In addition, the Merger Agreement provides for the conversion of debt of NXDE under the provisions of the Private Placement of the Company. See Note 8, Equity The Merger Agreement further provides for the payment of a royalty to a limited liability company to be formed by the former preferred shareholders of NXDE (the Royalty). The Royalty payment is equal to 3% of net product sales made by the Company that directly result from the patent portfolio of NXDE and has a term coinciding with the term of the Companys patent portfolio. Pursuant to the Merger Agreement, the Company exchanged $645,000 in NXDE stockholder loans and $176,482 in accrued interest related to those loans for 821,482 Units in the Private Placement, each Unit consisting of one share of restricted common stock and one common stock purchase warrant. $202,825 in accrued interest related to those loans was cancelled. See Note 8, Equity The Company considered the consideration in accordance with ASC 845 Nonmonetary transaction whereby assets acquired in exchange for another nonmonetary asset is the fair value of the assets surrendered or received, whichever is more clearly evident. Due to the lack of trading activity of the Companys common stock surrendered in the acquisition, the Company has determined that the fair value of the assets acquired, less liabilities assumed of NXDE is a more clearly evident value of the consideration transferred in the acquisition. The aggregate fair market value of the consideration issued, $4,357,903, was determined based on the fair market value of the assets received in the acquisition less the liabilities assumed through the acquisition. 1,659,943 shares of the Company's par value $.001 common stock were transferred for all the issued and outstanding preferred stock of NXDE. The following table shows the allocation of the purchase price of the identified assets acquired and liabilities assumed. Cash and cash equivalents $ Property and equipment, net 10,381 Patents, net 6,120,000 Total identifiable assets 6,130,381 Accounts payable (242,614 ) Accrued liabilities (17,489 ) Accrued interest payable stockholders (542,375 ) Notes payable stockholders (970,000 ) Total liabilities assumed (1,772,478 ) Total Purchase Price $ 4,357,903 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2016 | |
Summary of Significant Accounting Policies: | |
Summary of Significant Accounting Policies | Note 5. Summary of Significant Accounting Policies Development Stage Company The Company is considered to be in the development stage as defined in ASC 915 Development Stage Entities. The Company is devoting substantially all of its efforts to the development of its business plans. The Company has elected to adopt early application of Accounting Standards Update No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Income Taxes The Company uses the asset and liability method of accounting for income taxes in accordance with ASC Topic 740, Income Taxes. ASC Topic 740.10.30 clarifies the accounting for uncertainty in income taxes recognized in an enterprises financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740.10.40 provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. The Company has no material uncertain tax positions for any of the reporting periods presented. All tax positions are first analyzed to determine if the weight of available evidence indicates that it is more likely than not that the position will be sustained under audit, including resolution of any related appeals or litigation processes. After the initial analysis, the tax benefit is measured as the largest amount that is more than 50% likely of being realized upon ultimate settlement. If the Company is required to pay interest on the underpayment of income taxes, the Company recognizes interest expense in the first period the interest becomes due according to the provisions of the relevant tax law. If the Company is subject to payment of penalties, the Company recognizes an expense for the amount of the statutory penalty in the period when the position is taken on the income tax return. If the penalty was not recognized in the period when the position was initially taken, the expense is recognized in the period when the Company changes its judgment about meeting minimum statutory thresholds related to the initial position taken. Fair Value Measurements The Company adopted the provisions of ASC Topic 820, Fair Value Measurements and Disclosures, The estimated fair value of certain financial instruments, including cash and cash equivalents are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments. ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value: Level 1 quoted prices in active markets for identical assets or liabilities Level 2 quoted prices for similar assets and liabilities in active markets or inputs that are observable Level 3 inputs that are unobservable (for example cash flow modeling inputs based on assumptions) The Company currently has no assets or liabilities valued at fair value on a recurring basis. Principals of Consolidation The consolidated financial statements include the accounts of the Company, and its wholly-owned subsidiary. All material inter-company accounts, transactions, and profits have been eliminated in consolidation Investments in Non-Consolidated Subsidiaries Investments in non-consolidated entities are accounted for using the equity method or cost basis depending upon the level of ownership and/or the Company's ability to exercise significant influence over the operating and financial policies of the investee. When the equity method is used, investments are recorded at original cost and adjusted periodically to recognize the Company's proportionate share of the investees' net income or losses after the date of investment. When net losses from an investment accounted for under the equity method exceed its carrying amount, the investment balance is reduced to zero and additional losses are not provided for. The Company resumes accounting for the investment under the equity method if the entity subsequently reports net income and the Company's share of that net income exceeds the share of net losses not recognized during the period the equity method was suspended. Investments are written down only when there is clear evidence that a decline in value that is other than temporary has occurred. The Company accounts for its investments in Nuviant Medical Inc., MicroTransponder, Inc., and Emeritus Clinical Solutions, Inc., formerly known as Telemend Medical, Inc. under the cost method due to the lack of significant influence ( Note 8, Equity). Long-lived Assets Long-lived assets such as property, equipment and identifiable intangibles are reviewed for impairment whenever facts and circumstances indicate that the carrying value may not be recoverable. When required impairment losses on assets to be held and used are recognized based on the fair value of the asset. The fair value is determined based on estimates of future cash flows, market value of similar assets, if available, or independent appraisals, if required. If the carrying amount of the long-lived asset is not recoverable from its undiscounted cash flows, an impairment loss is recognized for the difference between the carrying amount and fair value of the asset. When fair values are not available, the Company estimates fair value using the expected future cash flows discounted at a rate commensurate with the risk associated with the recovery of the assets. The Company did not recognize any impairment losses during the three and nine months ended September 30, 2016. Common Stock Purchase Warrants and Other Derivative Financial Instruments The Company classifies as equity any contracts that require physical settlement or net-share settlement or provide us a choice of net-cash settlement or settlement in our own shares (physical settlement or netshare settlement) provided that such contracts are indexed to our own stock as defined in ASC 815-40 "Contracts in Entity's Own Equity." Property and Equipment Property and equipment are stated at cost. Equipment is depreciated using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are amortized based upon the lesser of the term of the lease or the useful life of the asset and such expense is included in depreciation expense. Repair and maintenance costs are expensed as incurred. The Company capitalizes all furniture and equipment with cost greater than $500 and benefiting more than one accounting period in the period purchased. Research and Development The Company expenses all research and development costs as incurred. Research and development expenses include, but are not limited to, product development, clinical and regulatory expenses, payroll and other personnel expenses, materials, supplies, and consulting costs. Stock-Based Compensation The Company recognized stock-based administrative compensation aggregating $169,867 for common stock options and common stock issued to administrative personnel and consultants during the nine months ended September 30, 2016. Recently Issued Accounting Pronouncements The Company has considered recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the AICPA, and the SEC during the current reporting period, and management believes that such pronouncements did not, or are not to have a material impact on the Companys present or future consolidated financial statements. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2016 | |
IncomeTaxesAbstract | |
Income Taxes | Note 6. Income Taxes The Company has approximately $821,250 of net operating losses (NOL) carryovers to offset taxable income, if any, in future years which expire in fiscal 2035. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based on the assessment, management has established a full valuation allowance against all of the deferred tax asset relating to NOLs period because it is more likely than not that all of the deferred tax asset will not be realized. |
Notes Payable - Related Parties
Notes Payable - Related Parties | 9 Months Ended |
Sep. 30, 2016 | |
Notes Payable - Related Parties | |
Notes Payable - Related Parties | Note 7. Notes Payable - Related Parties As of September 30, 2016, the Company's Chief Operating Officer loaned $415 to the Company. The loan is non-interest bearing with no set terms of repayment. As of September 30, 2016, $85,436 is due and payable to Rosellini Scientific, LLC, the Companys largest shareholder. The loan is non-interest bearing with no set terms of repayment. As of September 30, 2016, the Company has notes payable with two stockholders in the amount of $10,000 each, which bear interest at the rate of 12% per annum and mature March 31, 2018. |
Equity
Equity | 9 Months Ended |
Sep. 30, 2016 | |
Equity: | |
Equity | Note 8. Equity Common and Preferred Stock The Companys Articles of Incorporation authorize 75,000,000 shares of Common Stock, $0.001 par value, and 25,000,000 shares of Preferred Stock, $0.001 par value. The Articles of Incorporation were amended on February 22, 2016 to cancel the authorization of Preferred Stock. Common Stock Issuances On December 15, 2015, the Company issued 500,000 shares of its common stock to its Chief Operating Officer for the sum of $500 at the par value of $0.001. 212,000 shares of the 500,000 shares became vested upon issue and the remaining 288,000 shares shall vest over a 36 month period at the rate of 8,000 shares per month. Vesting began on January 1, 2016. During the nine months ended September 30, 2016, the Company: (i) Issued to its Interim Chief Financial Officer 252,000 shares of restricted Common Stock of the Company for certain accounting and budget-related services rendered as well as serving as Interim CFO until such time as a permanent CFO is hired. The shares vest at the rate of 7,000 shares per month over a term of 36 months from the grant date. The shares were valued at $252. (ii) Issued to Rosellini Scientific, LLC 13,200,000 shares of Common Stock in exchange for 1,675,000 shares of common stock in Nuviant Medical Inc., a Nevada corporation, 175 shares of common stock in Emeritus Clinical Solutions, Inc., a Delaware corporation, 167 shares of common stock in MicroTransponder, Inc., a Delaware corporation, the assignment of one Federal NIH Grant in the amount of $218,377 and one State of Kentucky Matching Funds Grant in the amount of $150,000. Mr. Rosellini, the CEO of the Company, is the sole Member and Manager of Rosellini Scientific, LLC. The shares had a fair value of $272,686 on the date of issuance and were valued based on the value of the contributed assets as the Companys shares had no ascertainable value as of the date of issuance of the shares. This was in accordance with ASC 845, Nonmonetary Transactions, (iii) Issued 1,800,000 shares of restricted common stock to its Vice President of Clinical Affairs in return for 214 shares of common stock of Emeritus Clinical Solutions, Inc., a Delaware corporation, and 60,000 shares of common stock of Nuviant Medical, Inc., a Nevada corporation. The shares had a fair value of $49,673 on the date of issuance and were valued based on the value of the contributed assets as the Companys shares had no ascertainable value as of the date of issuance of the shares. This was in accordance with ASC 845, Nonmonetary Transactions, (iv) Issued 1,659,943 shares of common stock to the stockholders of NXDE, pursuant to the terms of the Merger Agreement see Note 4, Acquisition (v) Pursuant to the Merger Agreement and subsequent to the Merger, the Company exchanged $950,000 in NXDE stockholder loans and $337,564 in accrued interest related to those loans for 1,287,564 Units in the Private Placement at $1.00 per Unit, each Unit consisting of one share of restricted common stock and one warrant to purchase one additional share of restricted common stock. The warrants have an exercise price of $2.00 per share and expire 36 months from the expiration date of the Private Placement. For information regarding the Private Placement, see Note 8, Equity Warrants (vi) Issued to an existing stockholder and director of the Company 175,000 shares of restricted common stock of the Company, as part of the Private Placement, in exchange for a note receivable in the amount of $175,000 issued by Emeritus Clinical Solutions, Inc. This transaction was rescinded as of June 30, 2016 and the shares were returned. (vii) As of September 30, 2016, $286,446 in Units have been issued in the Private Placement, resulting in 286,446 shares of restricted Common Stock being issued. (viii) As of September 30, 2016 146,500 shares of restricted Common Stock of the Company have been issued for certain legal services rendered to third-party consultants The shares were valued at $146,500. Option Grants The Company may, from time to time, issue certain equity awards pursuant to our 2016 Omnibus Incentive Plan (the 2016 Plan). The 2016 Plan was adopted by our Board of Directors on January 2, 2016 and was subsequently approved by our shareholders on January 2, 2016. The Company reserved 2,500,000 shares of common stock for issuance pursuant option grants under the 2016 Plan. During the nine months ended September 30, 2016, the Company issued stock options to purchase a total of 1,008,000 shares of the Companys common stock under the 2016 Plan, all with an exercise price of $1.00 per share, as follows: (i) Granted to the Companys Chief Innovation Officer 252,000 three-year nonqualified options to purchase 252,000 shares of common stock, with an exercise price of $1.00 per share. The options vest in monthly increments of 7,000 shares, with the three-year term for each option beginning upon each date of vesting. The fair value of the options was determined to be $47,056 using the Black-Scholes Option Pricing Model. (ii) Granted to the Companys Vice President Clinical Affairs 252,000 three-year nonqualified options to purchase 252,000 shares of common stock, with an exercise price of $1.00 per share. The options vest in monthly increments of 7,000 shares, with the three-year term for each option beginning upon each date of vesting. The fair value of the options was determined to be $47,056 using the Black-Scholes Option Pricing Model. (iii) Granted to a consultant of the Company, for services rendered to the Company since inception as well as ongoing services to be provided from time to time, 252,000 three-year nonqualified options to purchase 252,000 shares of common stock, with an exercise price of $1.00 per share. The options vest in monthly increments of 7,000 shares, with the three-year term for each option beginning upon each date of vesting. The fair value of the options was determined to be $47,056 using the Black-Scholes Option Pricing Model. (iv) Granted to the Vice President of Emerging Therapies 252,000 three-year nonqualified options to purchase 252,000 shares of common stock, with an exercise price of $1.00 per share. The options vest in monthly increments of 7,000 shares, with the three-year term for each option beginning upon each date of vesting. The fair value of the options was determined to be $42,113 using the Black-Scholes Option Pricing Model. The options were valued at $183,281 using the Black-Scholes option pricing model with the following assumptions: Risk-free interest rate 0.94% Expected life 3 years Expected dividends 0.00% Expected volatility 38.14% Fair value of Company's common stock $1.00 Aggregate options expense recognized for the nine months ended September 30, 2016 was $23,115. As of September 30, 2016, there were 1,492,000 shares available for grant under the 2016 Plan, excluding the 1,008,000 options outstanding. Warrants On February 1, 2016, the Company initiated a private placement for the sale of up to 5,500,000 units (the Units) at $1.00 per Unit (the Private Placement). Each Unit consists of one share of restricted common stock and one warrant to purchase one additional share of restricted common stock. The expiration date of the Private Placement is December 31, 2016. The warrants have an exercise price of $2.00 per share and expire 36 months from the expiration date of the Private Placement. The warrants have limited transferability to an affiliate of the holder only, cannot be sold as a warrant and do not contain cashless exercise provisions. The warrants do not include any terms or contracts to issue additional shares and have no liquidation preferences or participation rights. During the nine months ended September 30, 2016, the Company issued a total of 1,574,010 warrants to purchase shares of the Companys common stock pursuant to the Private Placement, as follows: (i) Pursuant to the Merger Agreement, the Company exchanged $645,000 in NXDE stockholder loans and $176,482 in accrued interest related to those loans for 821,482 Units in the Private Placement at $1.00 per Unit, each Unit consisting of one share of restricted common stock and one warrant to purchase one additional share of restricted common stock, resulting in 821,482 warrants being issued. (ii) Subsequent to the Merger the Company exchanged $305,000 in NXDE stockholder loans and $161,082 in accrued interest related to those loans for 466,082 Units in the Private Placement at $1.00 per Unit, each Unit consisting of one share of restricted common stock and one warrant to purchase one additional share of restricted common stock, resulting in 466,082 warrants being issued. (iii) As of September 30, 2016, $286,446 in Units have been issued in the Private Placement associated with cash subscriptions, resulting in 286,446 warrants being issued. During the nine months ended September 30, 2016, amortization expense of $0 was recognized. As of the September 30, 2016, no warrants have been exercised. As of September 30, 2016, a total of 1,574,010 shares of Common Stock of the Company have been reserved for issuance upon exercise of the warrants. Stock option activity, both within and outside the Plan, and warrant activity for the nine months ended September 30, 2016, are as follows: Stock Options Stock Warrants Weighted Weighted Average Exercise Shares Price Shares Price Outstanding at January 2, 2016 $ $ Granted 1,008,000 1.00 1,574,010 2.00 Canceled Expired Exercised Outstanding at September 30, 2016 1,008,000 $ 1.00 1,574,010 $ 2.00 Exercisable at September 30, 2016 140,000 $ 1.00 1,574,010 $ 2.00 The range of exercise prices and remaining weighted average life of the options outstanding at September 30, 2016 were $1.00 to $1.00 and 2.97 years, respectively. The aggregate intrinsic value of the outstanding options at September 30, 2016 was $183,281. The range of exercise prices and remaining weighted average life of the warrants outstanding at September 30, 2016 were $2.00 to $2.00 and 2.45 years, respectively. The aggregate intrinsic value of the outstanding warrants at September 30, 2016 was $1,574,010. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2016 | |
Related Party Transactions: | |
Related Party Transactions | Note 9. Related Party Transactions During the nine months ended September 30, 2016, the Company had the following transactions with related parties: On January 1, 2016, the Company granted to Christopher Miller, the Companys Interim Chief Financial Officer, 252,000 shares of restricted Common Stock of the Company for certain accounting and budget-related services rendered as well as serving as Interim CFO until such time as a permanent CFO is hired. The shares vest at the rate of 7,000 shares per month over a term of 36 months from the grant date. On January 2, 2016, the Company entered into a Contribution Agreement with Rosellini Scientific, LLC a company controlled by our CEO, William Rosellini and its wholly-owned subsidiary Belltower Associates, LLC (collectively, Rosellini Scientific, LLC and Belltower Associates, LLC are hereinafter referred to as RS). Under this agreement, the Company issued 13,200,000 shares of its common stock in return for, among other consideration: i. RSs agreement to an assignment (subject to regulatory transfer approval) to the Company of Phase II, should it be granted of the Federal NIH/SBIR awarded Grant #1R44HL129870-01; ii. 1,675,000 shares of common stock of Nuviant Medical, Inc., a Nevada corporation; iii. 167 shares of common stock of MicroTransponder, Inc., a Delaware corporation; and iv. 175 shares of common stock of Emeritus Clinical Solutions, Inc., a Delaware corporation. These transactions were valued based on the value of the contributed assets as the Companys shares had no ascertainable value as of the date of issuance of the shares. This was in accordance with ASC 845 Non-monetary transactions whereby non-monetary assets acquired in exchange for another non-monetary asset is the fair value of the asset surrendered or received, whichever is more clearly evident. In this case the value of the contributed assets were more ascertainable than the value of the shares issued. Prior to the contribution William Rosellini was not a related party of the Company, but became a related party on January 2, 2016 through the issuance of the 13,200,000 shares and a controlling interest in the Company. Mr. Rosellini, the CEO of the Company, is the sole Member and Manager of Rosellini Scientific, LLC. On January 2, 2016, the Company issued 1,800,000 shares of its common stock to its Vice President of Clinical Affairs, Dr. Elizabeth Rosellini DDS (the sister of our CEO), in return for 214 shares of common stock of Emeritus Clinical Solutions, Inc., a Delaware corporation, and 60,000 shares of common stock of Nuviant Medical, Inc., a Nevada corporation. On April 1, 2016, pursuant to the 2016 Omnibus Incentive Plan, the Company issued non-qualified options to purchase 252,000 shares of common stock, with an exercise price of $1.00 per share, with a term of three years to each of the following: Dr. Mark C. Bates MD, Chief Innovation Officer; Dr. Elizabeth Rosellini DDS, Vice President of Clinical Affairs; and Sheneka Rains, a consultant, for services rendered to the Company since inception as well as ongoing services to be provided from time to time. The options vest in monthly increments of 7,000, with a three-year term for each option beginning upon each date of vesting. As part of the Merger Agreement with NXDE, Dr. Mark Bates, M.D, the Companys Chief Innovation Officer, and Director, received a total of 386,212 shares of the Companys Common Stock upon conversion of the NXDE preferred shares, and converted $370,000 of debt owed to him by NXDE into 370,000 shares of our common stock and warrants to purchase 370,000 additional shares of common stock at a strike price of $2.00 per share and with a term of 36 months. In addition, Dr. Bates contributed $202,825 of accrued interest on his debt, which has been reflected as additional paid in capital to the Company during the first quarter of 2016. Dr. Bates, beginning May 1, 2016, will receive a monthly consulting fee of $3,500. As part of the Merger Agreement with NXDE, Mr. Ralph Ballard, who was a co-founder and Director of NXDE, received a total of 123,759 shares of the Companys Common Stock upon conversion of the NXDE preferred shares, which were divided as follows: 1,398 shares to Mr. Ballard personally, 7,691 shares to a Custodial IRA FBO Ralph Ballard, and 114,670 shares to Ballard Investments. In addition, as part of the Merger Agreement with NXDE, Mr. Ballard converted $451,482 of debt owed to him by NXDE and received 451,482 shares of our common stock and warrants to purchase 451,482 shares at a strike price of $2.00 per share with a term of 36 months, which shares and warrants were issued to Ballard Investments. Mr. Ballard has the power to vote and dispose of the shares held by his IRA and Ballard Investments. In addition, three trusts representing three of Mr. Ballards children converted a total of $431,821 of debt and received 431,821 shares of our common stock and warrants to purchase 431,821 shares of common stock at a strike price of $2.00 per share with a term of 36 months, divided between and issued to the three trusts. The three trusts are irrevocable trusts managed by an arms-length third party professional fiduciary. Mr. Ballard disclaims any beneficial ownership in the common stock and warrants issued to the three trusts. On June 1, 2016, pursuant to the 2016 Omnibus Incentive Plan, the Company issued to Dr. Melanie McWade PhD, Vice President of Emerging Therapies, non-qualified stock options to purchase 252,000 shares of common stock, with an exercise price of $1.00 per share, with a term of three years. The options vest in monthly increments of 7,000 with a three-year term for each option beginning upon each date of vesting. As of September 30, 2016, the Company's Chief Operating Officer loaned $415 to the Company. The loan is non-interest bearing with no set terms of repayment. As of September 30, 2016, $85,436 is due and payable to Rosellini Scientific, LLC, the largest shareholder in the Company. The loan is non-interest bearing with no set terms of repayment. As of September 30, 2016, the Company has notes payable with two stockholders in the amount of $10,000 each, which bear interest at the rate of 12% per annum and mature March 31, 2018. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2016 | |
Subsequent Events: | |
Subsequent Events | 10. Subsequent Events The Company has evaluated subsequent events occurring through the date that the financial statements were issued, for events requiring recording or disclosure. An additional $1,873,000 in Units have been issued in the Private Placement, resulting in an additional 1,873,000 shares of restricted Common Stock being subscribed for in cash. At total of $2,159,446 in Units have been issued in the Private Placement as of the time of this filing. Each Unit consisting of one share of restricted common stock and one warrant to purchase one additional share of restricted common stock, resulting in 2,159,446 shares of common stock and 2,159,446 warrants being issued. Subsequent to September 30, 2016, 25,000 shares of restricted Common Stock of the Company have been issued for research and development services rendered to third-party consultants. |
Accounting Policies (Policies)
Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies: | |
Development Stage Company | Development Stage Company The Company is considered to be in the development stage as defined in ASC 915 Development Stage Entities. Development Stage Entities Elimination of Certain Financial Reporting Requirements |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Income Taxes, Policy | Income Taxes The Company uses the asset and liability method of accounting for income taxes in accordance with ASC Topic 740, Income Taxes. ASC Topic 740.10.30 clarifies the accounting for uncertainty in income taxes recognized in an enterprises financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740.10.40 provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. The Company has no material uncertain tax positions for any of the reporting periods presented. All tax positions are first analyzed to determine if the weight of available evidence indicates that it is more likely than not that the position will be sustained under audit, including resolution of any related appeals or litigation processes. After the initial analysis, the tax benefit is measured as the largest amount that is more than 50% likely of being realized upon ultimate settlement. If the Company is required to pay interest on the underpayment of income taxes, the Company recognizes interest expense in the first period the interest becomes due according to the provisions of the relevant tax law. If the Company is subject to payment of penalties, the Company recognizes an expense for the amount of the statutory penalty in the period when the position is taken on the income tax return. If the penalty was not recognized in the period when the position was initially taken, the expense is recognized in the period when the Company changes its judgment about meeting minimum statutory thresholds related to the initial position taken. |
Fair Value Measurements | Fair Value Measurements The Company adopted the provisions of ASC Topic 820, Fair Value Measurements and Disclosures, The estimated fair value of certain financial instruments, including cash and cash equivalents are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments. ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value: Level 1 quoted prices in active markets for identical assets or liabilities Level 2 quoted prices for similar assets and liabilities in active markets or inputs that are observable Level 3 inputs that are unobservable (for example cash flow modeling inputs based on assumptions) The Company currently has no assets or liabilities valued at fair value on a recurring basis. |
Principals of Consolidation | Principals of Consolidation The consolidated financial statements include the accounts of the Company, and its wholly-owned subsidiary. All material inter-company accounts, transactions, and profits have been eliminated in consolidation |
Investments in Non-Consolidated Subsidiaries | Investments in Non-Consolidated Subsidiaries Investments in non-consolidated entities are accounted for using the equity method or cost basis depending upon the level of ownership and/or the Company's ability to exercise significant influence over the operating and financial policies of the investee. When the equity method is used, investments are recorded at original cost and adjusted periodically to recognize the Company's proportionate share of the investees' net income or losses after the date of investment. When net losses from an investment accounted for under the equity method exceed its carrying amount, the investment balance is reduced to zero and additional losses are not provided for. The Company resumes accounting for the investment under the equity method if the entity subsequently reports net income and the Company's share of that net income exceeds the share of net losses not recognized during the period the equity method was suspended. Investments are written down only when there is clear evidence that a decline in value that is other than temporary has occurred. The Company accounts for its investments in Nuviant Medical Inc., MicroTransponder, Inc., and Emeritus Clinical Solutions, Inc., formerly known as Telemend Medical, Inc. under the cost method due to the lack of significant influence (see Note 8, Equity |
Long-lived Assets | Long-lived Assets Long-lived assets such as property, equipment and identifiable intangibles are reviewed for impairment whenever facts and circumstances indicate that the carrying value may not be recoverable. When required impairment losses on assets to be held and used are recognized based on the fair value of the asset. The fair value is determined based on estimates of future cash flows, market value of similar assets, if available, or independent appraisals, if required. If the carrying amount of the long-lived asset is not recoverable from its undiscounted cash flows, an impairment loss is recognized for the difference between the carrying amount and fair value of the asset. When fair values are not available, the Company estimates fair value using the expected future cash flows discounted at a rate commensurate with the risk associated with the recovery of the assets. The Company did not recognize any impairment losses during the three and nine months ended September 30, 2016. |
Common Stock Purchase Warrants and Other Derivative Financial Instruments | Common Stock Purchase Warrants and Other Derivative Financial Instruments The Company classifies as equity any contracts that require physical settlement or net-share settlement or provide us a choice of net-cash settlement or settlement in our own shares (physical settlement or net-share settlement) provided that such contracts are indexed to our own stock as defined in ASC 815-40 "Contracts in Entity's Own Equity." . |
Property and Equipment, Policy | Property and Equipment Property and equipment are stated at cost. Equipment is depreciated using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are amortized based upon the lesser of the term of the lease or the useful life of the asset and such expense is included in depreciation expense. Repair and maintenance costs are expensed as incurred. The Company capitalizes all furniture and equipment with cost greater than $500 and benefiting more than one accounting period in the period purchased. |
Research and Development | Research and Development The Company expenses all research and development costs as incurred. |
Share-based Compensation, Option and Incentive Plans Policy | Stock-Based Compensation The Company recognized stock-based administrative compensation aggregating $169,867 for common stock options and common stock issued to administrative personnel and consultants during the nine months ended September 30, 2016. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements The Company has considered recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the AICPA, and the SEC during the current reporting period, and management believes that such pronouncements did not, or are not to have a material impact on the Companys present or future consolidated financial statements. |
Schedule of allocation of the p
Schedule of allocation of the purchase price of the identified assets acquired and liabilities assumed (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Schedule of allocation of the purchase price of the identified assets acquired and liabilities assumed: | |
Schedule of allocation of the purchase price of the identified assets acquired and liabilities assumed | The following table shows the allocation of the purchase price of the identified assets acquired and liabilities assumed. Cash and cash equivalents Property and equipment, net 10,381 Patents, net 6,120,000 Total identifiable assets 6,130,381 Accounts payable (242,614 ) Accrued liabilities (17,489 ) Accrued interest payable stockholders (542,375 ) Notes payable stockholders (970,000 ) Total liabilities assumed (1,772,478 ) Total Purchase Price $ 4,357,903 |
Schedule of Equity (Tables)
Schedule of Equity (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Schedule of Equity: | |
Schedule of assumptions used to value options | The options were valued at $183,281 using the Black-Scholes option pricing model with the following assumptions: Risk-free interest rate 0.94% Expected life 3 years Expected dividends 0.00% Expected volatility 38.14% Fair value of Company's common stock $1.00 |
Schedule of Stock option activity, both within and outside the Plan, and warrant activity | Stock option activity, both within and outside the Plan, and warrant activity for the nine months ended September 30, 2016, are as follows: Stock Options Stock Warrants Weighted Weighted Average Exercise Shares Price Shares Price Outstanding at January 2, 2016 $ $ Granted 1,008,000 1.00 1,574,010 2.00 Canceled Expired Exercised Outstanding at September 30, 2016 1,008,000 $ 1.00 1,574,010 $ 2.00 Exercisable at September 30, 2016 140,000 $ 1.00 1,574,010 $ 2.00 |
Going Concern (Details)
Going Concern (Details) | Sep. 30, 2016USD ($) |
Going Concern Details | |
Accumulated Deficit | $ 821,250 |
Acquisition (Details)
Acquisition (Details) | Feb. 16, 2016USD ($)shares |
Acquisition (Narrative) | |
NXDE entered into an Agreement and Plan of Merger (the "Merger Agreement") pursuant to which on the effective date of the Merger percentage of the equity voting interest was acquired | 100.00% |
In exchange for 100% of the issued and outstanding preferred stock of NXDE, Company issued shares of common stock to the preferred stockholders of NXDE | shares | 1,659,943 |
Stockholders of the NXDE acquired percentage of the Company's issued and outstanding common stock as of the effective date of the Merger | 9.67% |
Merger Agreement provides for payment of royalty equal to percentage of product sales that directly result from the patent portfolio of NXDE | 3.00% |
Pursuant to the Merger Agreement, Company exchanged dollar amount in NXDE stockholder loans for Units in the Company's private placement | $ 645,000 |
Pursuant to the Merger Agreement, Company exchanged dollar amount of accrued interest related to NXDE stockholder loans for Units in the Company's private placement | $ 176,482 |
Pursuant to the Merger Agreement, Company issued Units in the Company's private placement in exchange for the dollar amount of NXDE stockholder loans and accrued interest related to the stockholder loans (Units) | shares | 821,482 |
Pursuant to the Merger Agreement, dollar amount of accrued interest related to NXDE stockholder loans was cancelled | $ 202,825 |
Aggregate fair market value of the consideration issued was determined based on the fair market value of the assets received in the acquisition less the liabilities assumed through the acquisition | $ 4,357,903 |
Shares of the Company's par value $.001 common stock was transferred for all the issued and outstanding preferred stock of NXDE | shares | 1,659,943 |
Identified assets acquired and
Identified assets acquired and liabilities assumed (Details) | Sep. 30, 2016USD ($) |
Identified assets acquired and liabilities assumed details | |
Cash and cash equivalents | $ 0 |
Property and equipment, net | 10,381 |
Patents, net | 6,120,000 |
Total identifiable assets | 6,130,381 |
Accounts payable | (242,614) |
Accrued liabilities | (17,489) |
Accrued interest payable - stockholders | (542,375) |
Notes payable - stockholders | (970,000) |
Total liabilities assumed | (1,772,478) |
Total Purchase Price | $ 4,357,903 |
Significant Accounting Policies
Significant Accounting Policies (Narrative) (Details) | Sep. 30, 2016USD ($) |
Significant Accounting Policies (Narrative) | |
Company capitalizes all furniture and equipment with cost greater than amount and benefitting more than one accounting period purchased | $ 500 |
Stock - based administrative compensation aggregating | $ 169,867 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) | Sep. 30, 2016USD ($) |
Income Taxes (Narrative) | |
Operating Loss Carryforwards | $ 821,250 |
Notes Payable (Narrative) (Deta
Notes Payable (Narrative) (Details) | Sep. 30, 2016USD ($) |
Notes Payable (Narrative) | |
Due to Chief Operating Officer | $ 415 |
Due and payable to Rosellini Scientific, LLC, | 85,436 |
Notes payable to two stockholders | $ 20,000 |
Interest rate per annum on notes payable to two stockholders | 12.00% |
Common and Preferred Stock (Nar
Common and Preferred Stock (Narrative) (Details) | Sep. 30, 2016$ / sharesshares |
Common and Preferred Stock (Narrative) | |
Authorized shares of Common Stock | shares | 75,000,000 |
Shares of Common Stock, par value | $ / shares | $ 0.001 |
Authorized shares of Preferred Stock (authorization of preferred stock cancelled on Feb. 22, 2016) | shares | 25,000,000 |
Shares of Preferred Stock, par value | $ / shares | $ 0.001 |
Common Stock Issuances (Details
Common Stock Issuances (Details) | Dec. 15, 2015USD ($)shares |
Common Stock Issuances Details | |
Issued shares of common stock to Chief Operating Officer | 500,000 |
Purchase price of shares issued to Chief Operating Officer at par value of $0.001 | $ | $ 500 |
Number of shares issued to Chief Operating Officer that became vested upon issuance | 212,000 |
Number of shares issued to Chief Operating Officer that vest over a 36 month period, beginning January 1, 2016 | 288,000 |
Shares issued to Chief Operating Officer vest at the rate of shares per month | 8,000 |
Common Stock Issuances (Narrati
Common Stock Issuances (Narrative) (Details) | Sep. 30, 2016USD ($)$ / sharesshares |
Common Stock Issuances (Narrative) | |
Issued shares of restricted Common Stock to Interim Chief Financial Officer | 252,000 |
Shares issued to Interim Chief Financial Officer vest over a period of 36 mos. at the rate of shares per month | 7,000 |
Shares issued to Interim Chief Financial Officer valued at | $ | $ 252 |
Issued shares of restricted Common Stock to Rosellini Scientific, LLC in exchange for shares of other entities and grants | 13,200,000 |
Shares of common stock in Nuviant Medical Inc. received in exchange for shares of Common Stock issued to Rosellini Scientific, LLC | 1,675,000 |
Shares of common stock in Emeritus Clinical Solutions, Inc. received in exchange for shares of Common Stock issued to Rosellini Scientific, LLC | 175 |
Shares of common stock in MicroTransponder, Inc. received in exchange for shares of Common Stock issued to Rosellini Scientific, LLC | 167 |
Assignment of one Federal NIH Grant in exchange for shares of Common Stock issued to Rosellini Scientific, LLC | $ | $ 218,377 |
Assignment of one State of Kentucky Matching Funds Grant in exchange for shares of Common Stock issued to Rosellini Scientific, LLC | $ | 150,000 |
Fair value of shares of Common Stock issued to Rosellini Scientific, LLC on the date of issuance | $ | $ 272,686 |
Issued shares of restricted Common Stock to the Vice President of Clinical Affairs in exchange for shares of Emeritus Clinical Solutions, Inc. and Nuviant Medical Inc. | 1,800,000 |
Shares of common stock in Emeritus Clinical Solutions, Inc. received in exchange for shares of Common Stock issued to the Vice President of Clinical Affairs | 214 |
Shares of common stock in Nuviant Medical, Inc. received in exchange for shares of Common Stock issued to the Vice President of Clinical Affairs | 60,000 |
Fair value of shares of Common Stock issued to the Vice President of Clinical Affairs on the date of issuance | $ | $ 49,673 |
Pursuant to the Merger Agreement, issued shares of Common Stock to stockholders of NXDE in exchange for 100% of the issued and outstanding shares of preferred stock of NXDE | 1,659,943 |
Shares of NXDE Series A Preferred Stock exchanged for shares of Common Stock of the Company | 10,222,137 |
Shares of NXDE Series B Preferred Stock exchanged for shares of Common Stock of the Company | 832,034 |
Fair value of shares of Common Stock issued to stockholders of NXDE in exchange for 100% of the issued and outstanding shares of preferred stock of NXDE on the date of issuance | $ | $ 4,357,903 |
Pursuant to the Merger Agreement, and subsequent to the Merger, Company exchanged dollar amount in NXDE stockholder loans for Units in the Company's private placement | $ | 950,000 |
Pursuant to the Merger Agreement, and subsequent to the Merger, Company exchanged dollar amount of accrued interest related to NXDE stockholder loans for Units in the Company's private placement | $ | $ 337,564 |
Pursuant to the Merger Agreement, and subsequent to the Merger, Company issued Units in the Company's private placement in exchange for the dollar amount of NXDE stockholder loans and accrued interest related to the stockholder loans (Units) | 1,287,564 |
Units issued in the Private Placement at per Unit | $ / shares | $ 1 |
Each Unit consisting of one share of restricted common stock and one warrant to purchase an additional share of restricted common stock, at an exercise price per share | $ / shares | $ 2 |
Warrants expire from the expiration date of the Private Placement (in months) | 36 |
Fair value of shares of Common Stock issued to stockholders of NXDE in exchange for the dollar amount of NXDE stockholder loans and accrued interest related to the stockholder loans on the date of issuance | $ | $ 1,287,564 |
Issued to an existing stockholder and director of the Company shares of restricted common stock | 175,000 |
Shares of restricted common stock issued to the existing stockholder and director in exchange for a note receivable issued by Emeritus Clinical Solutions, Inc. in the amount | 175,000 |
Transaction with existing stockholder and director rescinded as of June 30, 2016 and shares returned | 175,000 |
Dollar amount of Units issued in the Private Placement during the period | $ | $ 286,446 |
Shares of restricted Common Stock issued during the period as part of the Units issued in the Private Placement | 286,446 |
Shares of restricted Common Stock issued for research and development services rendered to third-party consultants | 146,500 |
Value of shares of restricted Common Stock issued for research and development services rendered to third-party consultants | $ | $ 146,500 |
Option Grants (Narrative) (Deta
Option Grants (Narrative) (Details) | Sep. 30, 2016USD ($)$ / sharesshares |
Option Grants (Narrative) | |
On January 2, 2016, the Company adopted the 2016 Omnibus Incentive Plan (the "Plan") and reserved shares for issuance pursuant to stock and option grants under the Plan | 2,500,000 |
Total options granted to purchase shares of common stock under the Plan during the period (Options) | 1,008,000 |
Exercise price per share for Options granted under the Plan | $ / shares | $ 1 |
Three-year nonqualified options to purchase shares of common stock with an exercise price of $1.00 per share granted to Chief Innovation Officer under the Plan | 252,000 |
Options granted to Chief Innovation Officer vest in monthly increments of shares, with the three-year term for each option beginning upon each date of vesting | 7,000 |
Fair value of options granted to Chief Innovation Officer | $ | $ 47,056 |
Three-year nonqualified options to purchase shares of common stock with an exercise price of $1.00 per share granted to Vice President of Clinical Affairs under the Plan | 252,000 |
Options granted to Vice President of Clinical Affairs vest in monthly increments of shares, with the three-year term for each option beginning upon each date of vesting | 7,000 |
Fair value of options granted to Vice President of Clinical Affairs | $ | $ 47,056 |
Three-year nonqualified options to purchase shares of common stock with an exercise price of $1.00 per share granted to a consultant of the Company under the Plan | 252,000 |
Options granted to a consultant of the Company vest in monthly increments of shares, with the three-year term for each option beginning upon each date of vesting | 7,000 |
Fair value of options granted to a consultant of the Company | $ | $ 47,056 |
Three-year nonqualified options to purchase shares of common stock with an exercise price of $1.00 per share granted to Vice President of Emerging Therapies under the Plan | 252,000 |
Options granted to Vice President of Emerging Therapies vest in monthly increments of shares, with the three-year term for each option beginning upon each date of vesting | 7,000 |
Fair value of options granted to Vice President of Emerging Therapies | $ | $ 42,113 |
At the end of the period there were shares available for grant under the Plan, excluding the 1,008,000 options outstanding | 1,492,000 |
Black-Scholes option pricing mo
Black-Scholes option pricing model with the following assumptions (Details) | 9 Months Ended |
Sep. 30, 2016USD ($)$ / shares | |
Black-Scholes option pricing model with the following assumptions | |
Fair Value Assumptions, Risk Free Interest Rate | 0.94% |
Expected life (in years) | 3 |
Expected dividends | 0.00% |
Fair Value Assumptions, Expected Volatility Rate | 38.14% |
Fair value of Company's common stock | $ / shares | $ 1 |
Options were valued at using the Black-Scholes option pricing model | $ 183,281 |
Options expense | $ 23,115 |
Warrants (Narrative) (Details)
Warrants (Narrative) (Details) | Sep. 30, 2016USD ($)$ / sharesshares |
Warrants (Narrative) | |
On February 1, 2016, the Company initiated a private placement for the sale of Units, each Unit consisting of one share of restricted common stock and one warrant to purchase one additional share of restricted common stock (Units) | 5,500,000 |
Price per Unit | $ / shares | $ 1 |
Warrants exercise price per share | $ / shares | $ 2 |
Warrants expire from the expiration date of the Private Placement (in months) | 36 |
Company issued a total of warrants to purchase shares of common stock pursuant to the Private Placement during the period | 1,574,010 |
Pursuant to the Merger Agreement, Company exchanged dollar amount in NXDE stockholder loans for Units, at $1.00 per Unit, in the Company's private placement | $ | $ 645,000 |
Pursuant to the Merger Agreement, Company exchanged dollar amount of accrued interest related to NXDE stockholder loans for Units, at $1.00 per Unit, in the Company's private placement | $ | $ 176,482 |
Pursuant to the Merger Agreement, Company issued Units, at $1.00 per Unit, in the Company's private placement in exchange for the dollar amount of NXDE stockholder loans and accrued interest related to the stockholder loans (Units) | 821,482 |
Upon the issuance of the Units in the Company's private placement in exchange for the dollar amount of NXDE stockholder loans and accrued interest related to the stockholder loans, warrants were issued as part of the Units (Warrants) | 821,482 |
Pursuant to the Merger Agreement, and subsequent to the Merger, Company exchanged dollar amount in NXDE stockholder loans for Units, at $1.00 per Unit, in the Company's private placement | $ | $ 305,000 |
Pursuant to the Merger Agreement, and subsequent to the Merger, Company exchanged dollar amount of accrued interest related to NXDE stockholder loans for Units in the Company's private placement | $ | $ 161,082 |
Pursuant to the Merger Agreement, and subsequent to the Merger, Company issued Units in the Company's private placement in exchange for the dollar amount of in NXDE stockholder loans and accrued interest related to the stockholder loans (Units) | 466,082 |
Upon the issuance of the Units in the Company's private placement in exchange for the dollar amount of in NXDE stockholder loans and accrued interest related to the stockholder loans, warrants were issued as part of the Units (Warrants) | 466,082 |
Units have been issued in the Private Placement during the period | $ | $ 286,446 |
Units issued in the Private Placement resulting in warrants being issued during the period (Warrants) | 286,446 |
Total shares of Common Stock of the Company reserved for issuance upon exercise of the warrants issued during the period | 1,574,010 |
Amortization expense recognized during the period | $ | $ 0 |
Warrants exercised during the period | 0 |
Stock option activity (Details)
Stock option activity (Details) | 9 Months Ended |
Sep. 30, 2016USD ($)$ / sharesshares | |
Shares | |
Stock Options Outstanding at January 2, 2016 | shares | 0 |
Stock Options Granted | shares | 1,008,000 |
Stock Options Canceled | shares | 0 |
Stock Options Expired | shares | 0 |
Stock Options Exercised | shares | 0 |
Stock Options Outstanding at September 30, 2016 | shares | 1,008,000 |
Stock Options Exercisable at September 30, 2016 | shares | 140,000 |
Weighted Average Price (Options) | |
Stock Options Outstanding at January 2, 2016 | $ 0 |
Stock Options Granted | 1 |
Stock Options Canceled | 0 |
Stock Options Expired | 0 |
Stock Options Exercised | $ 0 |
Aggregate intrinsic value options | $ | $ 183,281 |
Stock Options Outstanding at September 30, 2016 | $ 1 |
Stock Options Exercisable at September 30, 2016 | 1 |
Range of exercise prices options minimum | 1 |
Range of exercise prices options maximum | $ 1 |
Remaining weighted average life of the options outstanding (in years) | 2.97 |
Stock Warrants activity (Detail
Stock Warrants activity (Details) | 9 Months Ended |
Sep. 30, 2016$ / sharesshares | |
Shares (Warrants) | |
Stock Warrants Outstanding at January 2, 2016 | shares | 0 |
Stock Warrants Granted | shares | 1,574,010 |
Stock Warrants Canceled | shares | 0 |
Stock Warrants Expired | shares | 0 |
Stock Warrants Exercised | shares | 0 |
Stock Warrants Outstanding at September 30, 2016 | shares | 1,574,010 |
Stock Warrants Exercisable at September 30, 2016 | shares | 1,574,010 |
Weighted Average Price (Warrants) | |
Stock Warrants Outstanding at January 2, 2016 | $ 0 |
Stock Warrants Granted | 2 |
Stock Warrants Canceled | 0 |
Stock Warrants Expired | 0 |
Stock Warrants Exercised | 0 |
Stock Warrants Outstanding at September 30, 2016 | 2 |
Stock Warrants Exercisable at September 30, 2016 | 2 |
Range of exercise prices warrants minimum | 2 |
Range of exercise prices warrants maximum | $ 2 |
Remaining weighted average life of the warrants outstanding (in years) | 2.45 |
Related Party Transactions (Nar
Related Party Transactions (Narrative) (Details) | 9 Months Ended |
Sep. 30, 2016USD ($)$ / sharesshares | |
Related Party Transactions (Narrative) | |
On January 1, 2016, Issued shares of restricted Common Stock to Interim Chief Financial Officer | 252,000 |
Shares issued to Interim Chief Financial Officer vest over a period of 36 mos. at the rate of shares per month | 7,000 |
On January 2, 2016, Company entered into a Contribution Agreement with Rosellini Scientific, LLC and issued shares of restricted Common Stock to Rosellini Scientific, LLC | 13,200,000 |
Shares of common stock of Nuviant Medical, Inc. acquired in exchange for shares of Common Stock issued to Rosellini Scientific, LLC | 1,675,000 |
Shares of common stock in MicroTransponsder, Inc. acquired in exchange for shares of Common Stock issued to Rosellini Scientific, LLC | 167 |
Shares of common stock of Emeritus Clinical Solutions, Inc., acquired in exchange for shares of Common Stock issued to Rosellini Scientific, LLC | 175 |
Issued shares of restricted Common Stock to the Vice President of Clinical Affairs in exchange for shares of Emeritus Clinical Solutions, Inc. and Nuviant Medical Inc. | 1,800,000 |
Shares of common stock in Emeritus Clinical Solutions, Inc. received in exchange for shares of Common Stock issued to the Vice President of Clinical Affairs | 214 |
Shares of common stock in Nuviant Medical, Inc. received in exchange for shares of Common Stock issued to the Vice President of Clinical Affairs | 60,000 |
On April 1, 2016, issued the Company's Chief Innovation Officer, Vice President of Clinical Affairs and a consultant to the Company each 252,000 non-qualified options to purchase shares pursuant to the 2016 Omnibus Incentive Plan | 756,000 |
Exercise price of the options granted to Chief Innovation Officer, Vice President of Clinical Affairs and a consultant | $ / shares | $ 1 |
Term of the options granted to Chief Innovation Officer, Vice President of Clinical Affairs and a consultant, with the vesting term for each option beginning upon each date of vesting (in years) | 3 |
Options granted to Chief Innovation Officer, Vice President of Clinical Affairs and a consultant vest in monthly increments (Shares) | 7,000 |
As part of the Merger Agreement, the Company's Chief Innovation Officer and Director received shares of the Company's Common Stock upon conversion of the NXDE preferred shares (Shares) | 386,212 |
As part of the Merger Agreement, the Company's Chief Innovation Officer and Director converted debt owed by NXDE into shares of the Company's Common Stock - Amount of debt converted | $ | $ 370,000 |
As part of the Merger Agreement, the Company's Chief Innovation Officer and Director received shares of the Company's Common Stock upon conversion of debt (Shares) | 370,000 |
As part of the Merger Agreement, the Company's Chief Innovation Officer and Director received warrants to purchase additional shares of Common Stock of the Company upon conversion of debt (Warrants) | 370,000 |
Warrants issued to Chief Innovation Officer and Director have a strike price | $ / shares | $ 2 |
Term of the warrants issued to Chief Innovation Officer and Director (months) | 36 |
Accrued interest on debt contributed by Chief Innovation Officer and Director reflected as additional paid-in capital of the Company | $ | $ 202,825 |
Monthly consulting fee to be received by Chief Innovation Officer and Director beginning May 1, 2016 | $ | $ 3,500 |
As part of the Merger Agreement, Mr. Ralph Ballard, co-founder and Director of NXDE, received total shares of the Company's Common Stock upon conversion of the NXDE preferred shares ("Ballard Shares") (Shares) | 123,759 |
Ballard Shares issued to Mr. Ballard personally | 1,398 |
Ballard Shares issued to Custodial IRA FBO Ralph Ballard | 7,691 |
Ballard Shares issued to Ballard Investments | 114,670 |
As part of the Merger Agreement, Mr. Ballard converted of debt owed to him by NXDE into shares of the Company's Common Stock - Amount of debt converted | $ | $ 451,482 |
As part of the Merger Agreement, Mr. Ballard received shares of the Company's Common Stock upon conversion of debt (Shares) | 451,482 |
As part of the Merger Agreement, Mr. Ballard received warrants to purchase additional shares of Common Stock of the Company upon conversion of debt (Warrants) | 451,482 |
Warrants issued to Mr. Ballard have a strike price | $ / shares | $ 2 |
Term of the warrants issued to Mr. Ballard (months) | 36 |
As part of the Merger Agreement, three trusts representing three of Mr. Ballard's children (the "Ballard Trusts") converted debt owed by NXDE into shares of the Company's Common Stock - Amount of debt converted | $ | $ 431,821 |
As part of the Merger Agreement, the Ballard Trusts received shares of the Company's Common Stock upon conversion of debt, which were divided between the trusts (Shares) | 431,821 |
As part of the Merger Agreement, the Ballard Trusts received warrants to purchase additional shares of Common Stock of the Company upon conversion of debt (Warrants) | 431,821 |
Warrants issued to the. Ballard Trusts have a strike price | $ / shares | $ 2 |
Term of the warrants issued to the Ballard Trusts (months) | 36 |
On June 1, 2016, issued the Company's Vice President of Emerging Therapies, non-qualified options to purchase shares pursuant to the 2016 Omnibus Incentive Plan | 252,000 |
Exercise price of the options granted to Vice President of Emerging Therapies | $ / shares | $ 1 |
Term of the options granted to Vice President of Emerging Therapies, with the vesting term for each option beginning upon each date of vesting (in years) | 3 |
Options granted to Vice President of Emerging Therapies vest in monthly increments (Shares) | 7,000 |
Company's Chief Operating Officer loaned amount to the Company | $ | $ 415 |
Amount due and payable to Rosellini Scientific, LLC on loan | $ | 85,436 |
Notes payable with two stockholders, which mature on March 31, 2018, amount each | $ | $ 10,000 |
Notes payable with two stockholders, interest rate per annum | 12.00% |
Subsequent Events (Details)
Subsequent Events (Details) | Sep. 30, 2016USD ($)shares |
Subsequent Events Transactions | |
Additional Units issued in the Private Placement value | $ | $ 1,873,000 |
Additional shares of restricted Common Stock being subscribed for in cash (in shares) | 1,873,000 |
Total units value issued in the Private Placement as of the time of filing | $ | $ 2,159,446 |
Each Unit consisting of one share of restricted common stock and one warrant to purchase one additional share of restricted common stock, resulting in total warrants being issued (Warrants) | 2,159,446 |
Each Unit consisting of one share of restricted common stock and one warrant to purchase one additional share of restricted common stock, resulting in total shares of Common Stock being issued (Shares) | 2,159,446 |
Issued shares of restricted Common Stock for research and development services | 25,000 |