Document And Entity Information
Document And Entity Information - shares | 6 Months Ended | |
Jun. 30, 2020 | Aug. 12, 2020 | |
Warrants [Text Block] | ||
Entity Registrant Name | SANUWAVE Health, Inc. | |
Entity Central Index Key | 0001417663 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | true | |
Entity Current Reporting Status | Yes | |
Entity Shell Company | false | |
Entity Interactive Data Current | Yes | |
Entity Incorporation, State or Country Code | NV | |
Entity File Number | 000-52985 | |
Entity Common Stock, Shares Outstanding | 302,119,428 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 430,606 | $ 1,760,455 |
Accounts receivable, net of allowance for doubtful of $255,503 in 2020 and $72,376 in 2019 | 110,501 | 75,543 |
Inventory | 651,344 | 542,955 |
Prepaid expenses and other current assets | 1,337,086 | 125,405 |
TOTAL CURRENT ASSETS | 2,529,537 | 2,504,358 |
PROPERTY AND EQUIPMENT, net | 591,064 | 512,042 |
RIGHT OF USE ASSETS, net | 243,251 | 323,661 |
OTHER ASSETS | 43,096 | 41,931 |
TOTAL ASSETS | 3,406,948 | 3,381,992 |
CURRENT LIABILITIES | ||
Accounts payable | 1,799,630 | 1,439,413 |
Accrued expenses | 1,071,214 | 1,111,109 |
Accrued employee compensation | 2,160,610 | 1,452,910 |
Contract liabilities | 551,755 | 66,577 |
Operating lease liability | 179,524 | 173,270 |
Finance lease liability | 181,371 | 121,634 |
Convertible promissory notes, net | 705,980 | 0 |
SBA loans | 614,335 | 0 |
Line of credit, related parties | 222,164 | 212,388 |
Short term note payable | 210,000 | 587,233 |
Advances from related parties | 0 | 18,098 |
Notes payable, related parties, net | 5,372,743 | 5,372,743 |
Accrued interest, related parties | 2,229,713 | 1,859,977 |
TOTAL CURRENT LIABILITIES | 15,299,039 | 12,415,352 |
NON-CURRENT LIABILITIES | ||
Contract liabilities | 53,782 | 573,224 |
Operating lease liability | 92,889 | 185,777 |
Finance lease liability | 333,771 | 271,240 |
TOTAL NON-CURRENT LIABILITIES | 480,442 | 1,030,241 |
TOTAL LIABILITIES | 15,779,481 | 13,445,593 |
COMMITMENTS AND CONTINGENCIES | ||
STOCKHOLDERS' DEFICIT | ||
PREFERRED STOCK | 0 | 0 |
COMMON STOCK, par value $0.001, 350,000,000 shares authorized; 302,119,428 and 293,780,400 issued and outstanding in 2020 and 2019, respectively | 302,119 | 293,781 |
ADDITIONAL PAID-IN CAPITAL | 117,326,629 | 115,457,808 |
ACCUMULATED DEFICIT | (132,386,958) | (125,752,956) |
ACCUMULATED OTHER COMPREHENSIVE LOSS | (64,323) | (62,234) |
TOTAL STOCKHOLDERS' DEFICIT | (14,822,533) | (10,063,601) |
TOTAL LIABILITIES, MEZZANIE EQUITY AND STOCKHOLDERS' DEFICIT | 3,406,948 | 3,381,992 |
Series C Convertible Preferred Stock | ||
NON-CURRENT LIABILITIES | ||
REDEEMABLE PREFERRED STOCK, SERIES C CONVERTIBLE, par value $0.001, 90 designated; 90 shares issued and outstanding in 2020 | 2,250,000 | 0 |
Series D Convertible Preferred Stock | ||
NON-CURRENT LIABILITIES | ||
REDEEMABLE PREFERRED STOCK, SERIES D CONVERTIBLE, par value $0.001, 8 designater; 8 shares issued and outstanding in 2020 | 200,000 | 0 |
Series A Convertible Preferred Stock | ||
STOCKHOLDERS' DEFICIT | ||
PREFERRED STOCK | 0 | 0 |
Series B Convertible Preferred Stock | ||
STOCKHOLDERS' DEFICIT | ||
PREFERRED STOCK | $ 0 | $ 0 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Accounts receivable, allowance for doubtful accounts | $ 72,376 | |
Preferred stock, par value | $ .001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ .001 | $ 0.001 |
Common stock, shares authorized | 350,000,000 | 350,000,000 |
Common stock, shares issued | 302,119,428 | 293,780,400 |
Common stock, shares outstanding | 302,119,428 | 293,780,400 |
Series C Convertible Preferred Stock | ||
Preferred stock, par value | $ .001 | $ 0.001 |
Preferred stock, shares authorized | 90 | 90 |
Preferred stock, shares issued | 90 | 90 |
Preferred stock, shares outstanding | 90 | 90 |
Series D Convertible Preferred Stock | ||
Preferred stock, par value | $ .001 | $ 0.001 |
Preferred stock, shares authorized | 8 | 8 |
Preferred stock, shares issued | 8 | 8 |
Preferred stock, shares outstanding | 8 | 8 |
Series A Convertible Preferred Stock | ||
Preferred stock, shares authorized | 6,175 | 6,175 |
Series B Convertible Preferred Stock | ||
Preferred stock, shares authorized | 293 | 293 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
REVENUES | $ 83,301 | $ 316,976 | $ 231,893 | $ 494,939 |
COST OF REVENUES | 26,347 | 185,881 | 115,224 | 279,734 |
GROSS MARGIN | 56,954 | 131,095 | 116,669 | 215,205 |
OPERATING EXPENSES | ||||
Research and development | 264,907 | 307,273 | 551,661 | 567,922 |
Selling and marketing | 433,151 | 407,477 | 1,041,001 | 565,559 |
General and administrative | 2,566,793 | 1,426,405 | 4,474,710 | 2,943,860 |
Depreciation | 64,766 | 9,455 | 117,789 | 17,812 |
TOTAL OPERATING EXPENSES | 3,329,617 | 2,150,610 | 6,185,161 | 4,095,153 |
OPERATING LOSS | (3,272,663) | (2,019,515) | (6,068,492) | (3,879,948) |
OTHER INCOME (EXPENSE) | ||||
Gain on warrant valuation adjustment | 0 | 195,310 | 0 | 227,669 |
Interest expense | (168,941) | (790,178) | (187,673) | (938,439) |
Interest expense, related party | (187,172) | (112,984) | (369,736) | (332,671) |
Loss on foreign currency exchange | (4,244) | (7,064) | (8,267) | (8,359) |
TOTAL OTHER INCOME (EXPENSE), NET | (360,357) | (714,916) | (565,676) | (1,051,800) |
NET LOSS | (3,633,020) | (2,734,431) | (6,634,168) | (4,931,748) |
OTHER COMPREHENSIVE INCOME (LOSS) | ||||
Foreign currency translation adjustments | (6,551) | 1,489 | (1,923) | (909) |
TOTAL COMPREHENSIVE LOSS | $ (3,639,571) | $ (2,732,942) | $ (6,636,091) | $ (4,932,657) |
LOSS PER SHARE: | ||||
Net loss - basic and diluted | $ (0.01) | $ (0.02) | $ (0.02) | $ (0.03) |
Weighted average shares outstanding - basic and diluted | 299,497,960 | 174,730,747 | 297,856,870 | 165,921,811 |
Product | ||||
REVENUES | $ 69,341 | $ 220,667 | $ 143,900 | $ 285,232 |
COST OF REVENUES | 24,825 | 178,458 | 103,740 | 243,570 |
License Fees | ||||
REVENUES | 0 | 66,808 | 10,000 | 173,058 |
COST OF REVENUES | 11,484 | 36,164 | ||
Other | ||||
REVENUES | 13,960 | 29,501 | 77,993 | 36,649 |
COST OF REVENUES | $ 1,522 | $ 7,423 | $ 0 | $ 0 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Deficit - USD ($) | Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total |
Beginning balance (in shares) at Dec. 31, 2018 | 0 | 155,665,138 | ||||
Beginning balance at Dec. 31, 2018 | $ 0 | $ 155,665 | $ 101,153,882 | $ (116,602,778) | $ 96,268 | $ (15,356,099) |
Net loss | (2,197,317) | (2,197,317) | ||||
Cashless warrant exercises (in shares) | 704,108 | |||||
Cashless warrant exercises | $ 704 | (704) | 0 | |||
Proceeds from warrant exercise (in shares) | 620,000 | |||||
Proceeds from warrant exercise | $ 620 | 52,580 | 53,200 | |||
Stock-based compensation | 0 | |||||
Conversion of short term notes and convertible notes payable (in shares) | 3,333,334 | |||||
Conversion of short term notes and convertible notes payable | $ 3,334 | 263,333 | 266,667 | |||
Conversion of advances from related parties | 0 | |||||
Reclassification of warrant liability to equity due to adoption of ASU 2017-11 | 262,339 | 1,279,661 | 1,542,000 | |||
Foreign currency translation adjustment | (2,398) | (2,398) | ||||
Ending balance (in shares) at Mar. 31, 2019 | 0 | 160,322,580 | ||||
Ending balance at Mar. 31, 2019 | $ 0 | $ 160,323 | 101,731,430 | (117,520,434) | (65,266) | (15,693,947) |
Beginning balance (in shares) at Dec. 31, 2018 | 0 | 155,665,138 | ||||
Beginning balance at Dec. 31, 2018 | $ 0 | $ 155,665 | 101,153,882 | (116,602,778) | 96,268 | (15,356,099) |
Net loss | (4,931,748) | |||||
Beneficial conversion feature on convertible debt | 0 | |||||
Conversion of advances from related parties | 180,000 | |||||
Ending balance (in shares) at Jun. 30, 2019 | 0 | 188,650,891 | ||||
Ending balance at Jun. 30, 2019 | $ 0 | $ 188,651 | 103,774,485 | (120,254,865) | (63,777) | (16,355,506) |
Beginning balance (in shares) at Mar. 31, 2019 | 0 | 160,322,580 | ||||
Beginning balance at Mar. 31, 2019 | $ 0 | $ 160,323 | 101,731,430 | (117,520,434) | (65,266) | (15,693,947) |
Net loss | (2,734,431) | (2,734,431) | ||||
Proceeds from stock option exercise, amount | 31,758 | |||||
Cashless warrant exercises (in shares) | 2,997,375 | |||||
Cashless warrant exercises | $ 2,997 | 13,003 | 16,000 | |||
Proceeds from warrant exercise (in shares) | 17,051,769 | |||||
Proceeds from warrant exercise | $ 17,052 | 1,333,005 | 1,350,057 | |||
Other warrant exercise, shares | 5,804,167 | |||||
Other warrant exercise, amount | $ 5,804 | 451,697 | 457,501 | |||
Stock-based compensation | 31,758 | 31,758 | ||||
Conversion of short term notes and convertible notes payable (in shares) | 2,475,000 | |||||
Conversion of short term notes and convertible notes payable | $ 2,475 | 177,525 | 180,000 | |||
Warrants issued for consulting services | 36,067 | 36,067 | ||||
Foreign currency translation adjustment | 1,489 | 1,489 | ||||
Ending balance (in shares) at Jun. 30, 2019 | 0 | 188,650,891 | ||||
Ending balance at Jun. 30, 2019 | $ 0 | $ 188,651 | 103,774,485 | (120,254,865) | (63,777) | (16,355,506) |
Beginning balance (in shares) at Dec. 31, 2019 | 0 | 293,780,400 | ||||
Beginning balance at Dec. 31, 2019 | $ 0 | $ 293,781 | 115,457,808 | (125,752,956) | (62,234) | (10,063,601) |
Net loss | (3,001,148) | (3,001,148) | ||||
Proceeds from warrant exercise (in shares) | 1,000,000 | |||||
Proceeds from warrant exercise | $ 1,000 | 9,000 | 10,000 | |||
Shares issued for services (in shares) | 1,000,000 | |||||
Shares issued for services | $ 1,000 | 199,000 | 200,000 | |||
Stock-based compensation | 21,900 | 21,900 | ||||
Conversion of short term notes and convertible notes payable (in shares) | 1,820,461 | |||||
Conversion of short term notes and convertible notes payable | $ 1,820 | 262,164 | 263,984 | |||
Conversion of advances from related parties (in shares) | 62,811 | |||||
Conversion of advances from related parties | $ 63 | 2,035 | 2,098 | |||
Foreign currency translation adjustment | 4,826 | 4,826 | ||||
Ending balance (in shares) at Mar. 31, 2020 | 0 | 297,663,672 | ||||
Ending balance at Mar. 31, 2020 | $ 0 | $ 297,664 | 115,951,907 | (128,754,104) | (57,408) | (12,561,941) |
Beginning balance (in shares) at Dec. 31, 2019 | 0 | 293,780,400 | ||||
Beginning balance at Dec. 31, 2019 | $ 0 | $ 293,781 | 115,457,808 | (125,752,956) | (62,234) | (10,063,601) |
Net loss | (6,634,002) | |||||
Beneficial conversion feature on convertible debt | 560,682 | |||||
Conversion of short term notes and convertible notes payable | 354,729 | |||||
Conversion of advances from related parties | 18,098 | |||||
Ending balance (in shares) at Jun. 30, 2020 | 0 | 302,119,428 | ||||
Ending balance at Jun. 30, 2020 | $ 0 | $ 302,119 | 117,326,629 | (132,386,958) | (64,323) | (14,822,533) |
Beginning balance (in shares) at Mar. 31, 2020 | 0 | 297,663,672 | ||||
Beginning balance at Mar. 31, 2020 | $ 0 | $ 297,664 | 115,951,907 | (128,754,104) | (57,408) | (12,561,941) |
Net loss | (3,632,854) | (3,632,854) | ||||
Proceeds from PIPE, shares | 1,071,428 | |||||
Proceeds from PIPE, amount | $ 1,071 | 1,489,929 | 150,000 | |||
Proceeds from stock option exercise, shares | 225,000 | |||||
Proceeds from stock option exercise, amount | $ 225 | 44,025 | 44,250 | |||
Beneficial conversion feature on convertible debt | 560,682 | 560,682 | ||||
Shares issued for services (in shares) | 2,200,000 | |||||
Shares issued for services | $ 2,200 | 515,300 | 517,500 | |||
Conversion of short term notes and convertible notes payable (in shares) | 759,328 | |||||
Conversion of short term notes and convertible notes payable | $ 759 | 89,986 | 90,745 | |||
Conversion of advances from related parties (in shares) | 200,000 | |||||
Conversion of advances from related parties | $ 200 | 15,800 | 16,000 | |||
Foreign currency translation adjustment | (6,915) | (6,915) | ||||
Ending balance (in shares) at Jun. 30, 2020 | 0 | 302,119,428 | ||||
Ending balance at Jun. 30, 2020 | $ 0 | $ 302,119 | $ 117,326,629 | $ (132,386,958) | $ (64,323) | $ (14,822,533) |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (6,634,002) | $ (4,931,748) |
Adjustments to reconcile net loss to net cash used by operating activities | ||
Depreciation | 117,789 | 17,812 |
Change in allowance for doubtful accounts | 183,127 | 25,248 |
Share-based payment | 739,400 | 67,825 |
Amortization of debt issuance costs | 69,862 | 0 |
Accrued interest | 84,072 | 936,658 |
Interest payable, related parties | 369,736 | 332,671 |
Amortization of operating leases | (6,224) | (3,471) |
Waived proceeds from warrant exercise | 0 | 16,000 |
Gain on warrant valuation adjustment | 0 | (227,669) |
Changes in operating assets and liabilities | ||
Accounts receivable - trade | (218,085) | 34,485 |
Inventory | (108,389) | (66,112) |
Prepaid expenses | (1,211,681) | (126,505) |
Due from related parties | 0 | 1,228 |
Other assets | (1,165) | (7,070) |
Operating leases | 0 | 44,623 |
Accounts payable | 360,217 | (135,916) |
Accrued expenses | (39,895) | 106,178 |
Accrued employee compensation | 707,700 | 525,487 |
Contract liabilties | (34,264) | 3,642 |
NET CASH USED BY OPERATING ACTIVITIES | (5,621,802) | (3,386,634) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchases of property and equipment | (4,855) | (25,839) |
NET CASH USED BY INVESTING ACTIVITIES | (4,855) | (25,839) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from sale of convertible preferred stock | 2,450,000 | 0 |
Proceeds from convertible promissory note | 1,100,000 | 0 |
Proceeds from SBA loan | 614,335 | 0 |
Proceeds from PIPE offering | 150,000 | 0 |
Proceeds from stock option exercise | 44,250 | 0 |
Proceeds from short term note | 0 | 1,215,000 |
Proceeds from warrant exercise | 10,000 | 1,403,257 |
Advances from related parties | 0 | 585,022 |
Payments of principal on finance leases | (69,688) | 0 |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 4,298,897 | 3,203,279 |
EFFECT OF EXCHANGE RATES ON CASH | (2,089) | (909) |
NET DECREASE IN CASH AND CASH EQUIVALENTS | (1,329,849) | (210,103) |
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 1,760,455 | 364,549 |
CASH AND CASH EQUIVALENTS, END OF PERIOD | 430,606 | 154,446 |
NONCASH INVESTING ACTIVITIES | ||
Conversion of short term notes payable to equity | 354,729 | 724,168 |
Conversion of advances from related parties to equity | 18,098 | 180,000 |
Additions to right of use assets from new finance lease liabilities | 127,611 | 0 |
Beneficial conversion feature on convertible debt | 560,682 | 0 |
Reclassification of warrant liability to equity | $ 0 | $ 262,339 |
Note 1 - Nature of the Business
Note 1 - Nature of the Business | 6 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of the Business | SANUWAVE Health, Inc. and Subsidiaries (the “Company”) is a shock wave technology company using a patented system of noninvasive, high-energy, acoustic shock waves for regenerative medicine and other applications. The Company’s initial focus is regenerative medicine – utilizing noninvasive, acoustic shock waves to produce a biological response resulting in the body healing itself through the repair and regeneration of tissue, musculoskeletal and vascular structures. The Company’s lead regenerative product in the United States is the dermaPACE® device, used for treating diabetic foot ulcers, which was subject to two double-blinded, randomized Phase III clinical studies. On December 28, 2017, the U.S. FDA granted the Company’s request to classify the dermaPACE System as a Class II device via the de novo The Company’s portfolio of healthcare products and product candidates activate biologic signaling and angiogenic responses, including new vascularization and microcirculatory improvement, helping to restore the body’s normal healing processes and regeneration. The Company is marketing its dermaPACE System for treatment usage in the United States and is able to generate revenue from sales of the European Conformity Marking (CE Mark) devices and accessories in Europe, Canada, Asia, and Asia/Pacific. The Company generates revenue streams from dermaPACE treatments, product sales, licensing transactions and other activities. In March 2020, the World Health Organization characterized COVID-19 as a pandemic and the President of the United States declared the COVID-19 outbreak a national emergency. Since then, the COVID-19 pandemic has rapidly spread across the globe and has already resulted in significant volatility, uncertainty and economic disruption. While the COVID-19 pandemic has not had a material adverse financial impact on the Company’s operations to date, the future impacts of the pandemic and any resulting economic impact are largely unknown and rapidly evolving. It is difficult at this time to predict the impact that COVID-19 will have on the Company’s business, financial position and operating results in future periods due to numerous uncertainties. The Company is closely monitoring the impact of the pandemic on all aspects of its business and operations. Basis of Presentation The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 8-03 of Regulation S-X. Accordingly, these condensed consolidated financial statements do not include all the information and footnotes required by U.S. GAAP for complete financial statements. The financial information as of June 30, 2020 and for the three and six months ended June 30, 2020 and 2019 is unaudited; however, in the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six months ended June 30, 2020 are not necessarily indicative of the results that may be expected for any other interim period or for the year ending December 31, 2020. The condensed consolidated balance sheet at December 31, 2019 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. These financial statements should be read in conjunction with the Company’s Form 10-K filed with the Securities and Exchange Commission on March 30, 2020 (the “2019 Annual Report”). |
Note 2 - Going Concern
Note 2 - Going Concern | 6 Months Ended |
Jun. 30, 2020 | |
Notes Payable, Related Parties [Member] | |
Going Concern | The Company does not currently generate significant recurring revenue and will require additional capital during 2020. As of June 30, 2020, the Company had cash and cash equivalents of $430,606. For the six months ended June 30, 2020, the net cash used by operating activities was $5,621,968. The Company incurred a net loss of $6,634,168 for the six months ended June 30, 2020. The operating losses and the events of default on the Company’s short term notes payable (see Note 6) and the notes payable, related parties (see Note 9) raised substantial doubt about the Company’s ability to continue as a going concern for a period of at least twelve months from the filing of this report. The continuation of the Company’s business is dependent upon raising additional capital to fund operations. Management’s plans are to obtain additional capital through investments by strategic partners for market opportunities, which may include strategic partnerships or licensing arrangements, or raise capital through the issuance of common or preferred stock, securities convertible into common stock, or secured or unsecured debt. These possibilities, to the extent available, may be on terms that result in significant dilution to the Company’s existing shareholders. Although no assurances can be given, management of the Company believes that potential additional issuances of equity or other potential financing transactions as discussed above should provide the necessary funding for the Company to continue as a going concern. If these efforts are unsuccessful, the Company may be forced to seek relief through a filing under the U.S. Bankruptcy Code. The condensed consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. |
Note 3 - Summary of Significant
Note 3 - Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | The significant accounting policies followed by the Company are summarized below and should be read in conjunction with the 2019 Annual Report: Principles of consolidation Estimates Inventory Preferred stock Distinguishing Liabilities from Equity Sequencing policy |
Note 4 - Accrued Expenses
Note 4 - Accrued Expenses | 6 Months Ended |
Jun. 30, 2020 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | Accrued expenses consist of the following: June 30, 2020 December 31, 2019 Accrued board of director's fees $ 416,667 $ 400,000 Accrued legal and professional fees 200,000 134,970 Accrued executive severance 163,000 154,000 Accrued travel 120,000 120,000 Accrued outside services 106,233 108,033 Accrued inventory 50,275 167,050 Accrued clinical study expenses 13,650 13,650 Accrued other 1,389 13,406 $ 1,071,214 $ 1,111,109 |
Note 5 - Contract Liabilities
Note 5 - Contract Liabilities | 6 Months Ended |
Jun. 30, 2020 | |
Contract with Customer, Liability [Abstract] | |
Contract liabilities | As of June 30, 2020, the Company has contract assets and liabilities from contracts with customers (see Note 14). Contract liabilities consist of the following: June 30, 2020 December 31, 2019 Service agreement $ 91,746 $ 133,510 License fees 500,000 500,000 Other 13,791 6,291 Total Contract liabilities 605,537 639,801 Non-Current (551,755 ) (573,224 ) Total Current $ 53,782 $ 66,577 The timing of the Company’s revenue recognition may differ from the timing of payment by its customers. A receivable is recorded when revenue is recognized prior to payment and the Company has an unconditional right to payment. Alternatively, when payment precedes the satisfaction of performance obligations, the Company records a contract liability (deferred revenue) until the performance obligations are satisfied. Of the aggregate contract liability balances as of June 30, 2020, the Company expects to satisfy its remaining performance obligations associated with $551,755 and $53,782 of contract liability balances within the next twelve months and following thirty-two months, respectively. Of the aggregate contract liability balances as of December 31, 2019, the Company expects to satisfy its remaining performance obligations associated with $66,577 and $573,224 of contract liability balances within the next twelve months and following thirty-eight months, respectively. |
Note 6 - Short Term Notes Payab
Note 6 - Short Term Notes Payable | 6 Months Ended |
Jun. 30, 2020 | |
Notes Payable [Abstract] | |
Short Term Notes Payable | During the six months ended June 30, 2020, the Company converted $354,729 of the short-term notes payable into 2,579,789 shares of Company common stock, $0.001 par value (the “Common Stock”). |
Note 7 - Convertible Promissory
Note 7 - Convertible Promissory Note | 6 Months Ended |
Jun. 30, 2020 | |
Convertible Notes Payable [Abstract] | |
Convertible Promissory Note | On June 5, 2020, the Company entered into a Securities Purchase Agreement with investor LGH Investments LLC (the “Investor”) for (i) a Promissory Note (the “Convertible Promissory Note”) in the original principal amount of $1,210,000, convertible into shares of Common Stock, (ii) warrants entitling the Investor to acquire 1,000,000 shares of Common Stock (the “Warrants”) and (iii) two hundred thousand (200,000) restricted common shares in the Company as an inducement grant (the “Inducement Shares”). The Convertible Promissory Note matures on February 5, 2021 and includes a one-time interest charge of 8% to be applied on the issuance date to the original principal amount. The Investor can convert the Convertible Promissory Note at any time prior to maturity to the number of shares of Common Stock, equal to the amount obtained by dividing (i) the amount of the unpaid principal and interest on the note by (ii) $0.25. The Warrants have an exercise price of $0.35 per share and have a term of five years. With respect to the Inducement Shares, in the event the Company’s share price has declined on the date on which the Investor seeks to have the restricted legend removed on such shares, the Company agrees to issue the Investor additional shares such that the aggregate value of the Inducement Shares equals the aggregate value of the Inducement Shares as of June 5, 2020. The Company recorded $381,013 debt discount for the beneficial conversion feature of the Convertible Promissory Note, $179,669 in debt discount for the discount on the Warrants and $110,000 in original issuance discount costs to be amortized over the lives of the Convertible Promissory Note. The Convertible Promissory Note had an aggregate outstanding principal balance of $705,980, net of $600,820 beneficial conversion feature, warrant discount and original issuance discount costs at June 30, 2020. Interest expense on the Convertible Promissory Note totaled $166,663 for the six months ended June 30, 2020. |
Note 8 - SBA Loans
Note 8 - SBA Loans | 6 Months Ended |
Jun. 30, 2020 | |
Loans Payable [Abstract] | |
SBA Loans | On May 28, 2020, the Company received proceeds from a loan in the amount of $454,335 (the “PPP Loan”) from Truist Bank, as lender, pursuant to the Paycheck Protection Program (“PPP”) under the Coronavirus Aid, Relief, and Economic Security Act (15 U.S.C. 636(a)(36)) (the “CARES Act”). The PPP Loan matures on May 28, 2022 and bears interest at a rate of 1% per annum. Commencing December 12, 2020, the Company is required to pay the lender equal monthly payments of principal and interest. The PPP Loan is evidenced by a promissory note dated May 28, 2020 (the “Note”), which contains customary events of default relating to, among other things, payment defaults and breaches of representations, warranties and covenants. The PPP Loan may be prepaid by the Company at any time prior to maturity with no prepayment penalties. All or a portion of the PPP Loan may be forgiven by the U.S. Small Business Administration (“SBA”) upon application by the Company beginning 60 days but not later than 120 days after loan approval and upon documentation of expenditures in accordance with the SBA requirements. Under the terms of the PPP Loan, the Company may be eligible for full or partial loan forgiveness in the third quarter of 2020, however, no assurance is provided that the Company will apply for, or obtain forgiveness for, any portion of the PPP Loan. On June 10, 2020, the Company secured a loan offered by the U.S. Small Business Administration (SBA) under its Economic Injury Disaster Loan (“EIDL”) assistance program in light of the impact of COVID-19 pandemic on the Company’s business. The principal amount of this loan of $150,000 with proceeds to be used for working capital purposes. Interest accrues at the rate of 3.75% per annum. Installment payments, including principal and interest, are due monthly beginning June 10, 2021. The balance of principal and interest is payable 30 years from the date of the EIDL. The EIDL is secured by a security interest on all of the Company’s assets. |
Note 9 - Notes Payable, Related
Note 9 - Notes Payable, Related Parties | 6 Months Ended |
Jun. 30, 2020 | |
Notes Payable [Abstract] | |
Notes Payable, Related Parties | The notes payable, related parties as amended were issued in conjunction with the Company’s purchase of the orthopedic division of HealthTronics, Inc. The notes payable, related parties bear interest at 8% per annum, as amended. All remaining unpaid accrued interest and principal was due on December 31, 2018, as amended. HealthTronics, Inc. is a related party because it is a shareholder in the Company and has a security agreement with the Company detailed below. The Company is a party to a security agreement with HealthTronics, Inc. to provide a first security interest in the assets of the Company. During any period when an Event of Default occurs, the applicable interest rate shall increase by 2% per annum. An Event of Default under the notes payable, related parties occurred on December 31, 2016 (“Default”). As a result of the Default, the notes payable, related parties have been accruing interest at the rate of 10% per annum since January 2, 2017 and continue to accrue interest at such rate. The Company will be required to make mandatory prepayments of principal on the notes payable, related parties equal to 20% of the proceeds received by the Company through the issuance or sale of any equity securities in cash or through the licensing of the Company’s patents or other intellectual property rights. For the three months ended June 30, 2020, additional mandatory prepayments of principal and interest on the notes payable, related parties were due on June 30, 2020. The Company has not made the mandatory prepayments of principal to HealthTronics, Inc. on the notes payable, related parties as amended from proceeds received through the issuance or sale of any equity securities in cash through June 30, 2020. The notes payable, related parties had an aggregate outstanding principal balance of $5,372,743 at June 30, 2020 and December 31, 2019. Accrued interest, related parties currently payable totaled $2,229,713 at June 30, 2020 and $1,859,977 at December 31, 2019. Interest expense on notes payable, related parties totaled $187,172 and $112,984 for the three months ended June 30, 2020 and 2019, respectively and $369,736 and $332,671 for the six months ended June 30, 2020 and 2019, respectively. As of June 30, 2020, we are in default under the notes, as amended, and as a result HealthTronics, Inc. could, among other rights and remedies, exercise its rights under its first priority security interest in our assets. We are in negotiations with HealthTronics, Inc. to address the event of default. |
Note 10 - Preferred Stock
Note 10 - Preferred Stock | 6 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
Preferred Stock | On February 6, 2020, the Company entered into a Series C Preferred Stock Purchase Agreement (the “Series C Purchase Agreement”) with certain accredited investors for the sale by the Company in a private placement of an aggregate of 90 shares of the Company’s Series C Convertible Preferred Stock, par value $0.001 per share at a stated value equal to $25,000 per share (the “Series C Preferred Stock”), for an aggregate total purchase price of $2,250,000. On January 31, 2020, the Company filed a Certificate of Designation of Preferences, Right and Limitations of Series C Convertible Preferred Stock of the Company with the Nevada Secretary of State which amended our Articles of Incorporation to designate 90 shares of our preferred stock as Series C Convertible Preferred Stock. On May 14, 2020, the Company entered into a Series D Preferred Stock Purchase Agreement (the “Series D Purchase Agreement”) with certain accredited investors for the sale by the Company in a private placement of an aggregate of eight shares of the Company’s Series D Convertible Preferred Stock, par value $0.001 per share at a stated value equal to $25,000 per share (the “Series D Preferred Stock”), for an aggregate total purchase price of $200,000. On May 14, 2020, the Company filed a Certificate of Designation of Preferences, Right and Limitations of Series D Convertible Preferred Stock of the Company with the Nevada Secretary of State which amended our Articles of Incorporation to designate eight shares of our preferred stock as Series D Convertible Preferred Stock. Subject to the terms of the Certificates of Designation, each share of Series C Preferred Stock and Series D Preferred Stock is convertible into shares of Common Stock of the Company at a rate equal to the stated value of such share of Series C Preferred Stock and Series D Preferred Stock of $25,000, divided by the conversion price of $0.14 per share (subject to adjustment from time to time upon the occurrence of certain events as described in the Certificate of Designation). The Certificates of Designation became effective upon filing with the Secretary of State of the State of Nevada. If all outstanding shares of Series C Preferred Stock and Series D Preferred Stock were converted into Common Stock at the original conversion rate, such shares would convert into an aggregate of 17,500,000 shares of Common Stock. Notwithstanding the foregoing, the Series C Preferred Stock and Series D Preferred Stock is not currently convertible into shares of Common Stock because the Company does not currently have sufficient authorized and unissued shares of its Common Stock to permit conversion in full of all issued and outstanding shares of Series C Preferred Stock and Series D Preferred Stock. Accordingly, the Certificate of Designation provides that the Series C Preferred Stock and Series D Preferred Stock is only convertible into Common Stock once the Company amends its Articles of Incorporation to increase its authorized and unissued Common Stock to an amount sufficient to permit such conversion of the Series C Preferred Stock and Series D Preferred Stock. Each investor has agreed in the Purchase Agreement that such investor will, within five business days following such amendment to the Articles of Incorporation, convert all of such investor’s shares of Series C Preferred Stock and Series D Preferred Stock into shares of Common Stock. The Certificate of Designation provides that if the Company has not obtained the approval of its shareholders to amend the Company’s Articles of Incorporation to increase the authorized shares of Common Stock sufficient to permit such conversion, or if such amendment has not otherwise been filed with the Nevada Secretary of State on or before December 31, 2020 (either such event, an “Authorization Failure”), then the Company shall be required to redeem all outstanding shares of Series C Preferred Stock and Series D Preferred Stock for a per-share redemption price, payable in cash in a single installment not later than thirty (30) days following the date of such Authorization Failure, equal to the greater of (a) two hundred percent (200%) of the stated value of such share, and (b)(i) the volume-weighted average sale price of a share of Common Stock reported on the trading market on which the Common Stock is then traded for the thirty (30) consecutive trading days immediately preceding the date of such Authorization Failure, multiplied by (ii) the number of shares of Common Stock such share of Series C Preferred Stock and Series D Preferred Stock would otherwise be convertible into as of such date had such Authorization Failure not occurred. The closing of the private placements occurred on February 6, 2020 and May 14, 2020, respectively, and the preferred stock was recorded in temporary equity on the related condensed consolidated balance sheet at an aggregate value of $2,250,000 and $200,000 respectively. Ninety shares of the Series C Preferred Stock and eight shares of Series D Preferred Stock have been issued as of June 30, 2020. |
Note 11 - Equity Transactions
Note 11 - Equity Transactions | 6 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
Equity Transactions | Warrant Exercises During the six months ended June 30, 2020, the Company issued 1,000,000 shares of Common Stock upon the exercise of 1,000,000 Class P Warrants to purchase shares of stock and an exercise price of $0.01 per share under the terms of the respective warrant agreement. Conversion of liabilities During the six months ended June 30, 2020, the Company issued 2,579,789 shares of Common Stock upon the conversion of short term notes payable in the principal and accrued interest amount of $354,729 with the receipt of notices of Class L warrant exercises, all pursuant to the terms of the short term notes payable. Conversion of advances from related parties During the six months ended June 30, 2020, the Company issued 262,811 shares of Common Stock upon the conversion of advances from related parties in the amount of $18,098 with the receipt of notice of Series A Warrant exercise to purchase shares of stock under the terms of the respective warrant agreement. Consulting Agreement In January 2020, the Company entered into a six month consulting agreement for which the fee for the services was to be paid with Common Stock. The number of shares to be paid with Common Stock was 1,000,000 earned upon signing and an additional 1,000,000 upon agreement by both consultant and the Company no later than May 1, 2020. The Company issued 1,000,000 shares in March 2020 and 1,000,000 shares in April 2020. The fair value of the shares of $380,000 was recorded as a non-cash general and administrative expense during the six months ended June 30, 2020. The consulting agreement was extended to November 30, 2020 with an additional 2,000,000 Common Stock shares to be issued for services. The Company issued 1,000,000 shares to the consultant in June 2020. The fair value of the shares of $287,500 was recorded as a non-cash general and administrative expense during the six months ended June 30, 2020. PIPE Offering On December 11, 2019, the Company entered into a Common Stock Purchase Agreement with certain investors for the sale by the Company in a private placement of an aggregate of up to 21,071,143 shares of its common stock at a purchase price of $0.14 per share. During the six months ended June 30, 2020, the Company issued 1,071,428 shares of Common Stock in conjunction with this offering and received $150,000 in cash proceeds. Stock Option Exercise During the six months ended June 30, 2020, the Company issued 225,000 shares of Common Stock upon the exercise of stock options to purchase shares of common stock, resulting in net proceeds of $44,250. Litigation Settlement During the six months ended June 30, 2020, the Company issued 200,000 shares of restricted Common Stock upon the settlement of outstanding litigation. The fair value of the shares of $50,000 was recorded as a non-cash general and administrative expense during the six months ended June 30, 2020. |
Note 12 - Warrants
Note 12 - Warrants | 6 Months Ended |
Jun. 30, 2020 | |
Note 12 - Warrants | |
Warrants | A summary of the warrant activity during the six months ended June 30, 2020 is presented as follows: Warrant class Outstanding as of December 31, 2019 Issued Exercised Expired Outstanding as of June 30, 2020 Class K Warrants 7,200,000 - - - 7,200,000 Class O Warrants 909,091 - - - 909,091 Class P Warrants 1,365,000 - (1,000,000 ) (100,000 ) 265,000 Common Stock Purchase Warrants - 1,000,000 - - 1,000,000 9,474,091 1,000,000 (1,000,000 ) (100,000 ) 9,374,091 A summary of the warrant exercise price per share and expiration date is presented as follows: Exercise price/share Expiration date Class K Warrants $ 0.08 June 2025 Class K Warrants $ 0.11 August 2027 Class O Warrants $ 0.11 January2022 Class P Warrants $ 0.20 June 2024 Common Stock Purchase Warrants $ 0.35 June 2025 |
Note 13 - Commitments and Conti
Note 13 - Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Operating Leases The Company is a party to certain operating leases. The Company has entered into a lease agreement, as amended, for office space for office, research and development, quality control, production and warehouse space which expires on December 31, 2021. Under the terms of the lease, the Company pays monthly rent of $14,651, subject to a 3% adjustment on an annual basis. For leases where the Company is the lessee, ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent an obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at the lease commencement date (except we used the practical expedients and recorded the outstanding operating lease at January 1, 2019) based on the present value of lease payments over the lease term. As the Company’s lease did not provide an implicit interest rate, the Company used the equivalent borrowing rate for a secured financing with the term of that equal to the remaining life of the lease at inception. The lease terms used to calculate the ROU asset and related lease liability did not include options to extend or termination of the lease; there are none and there is no reasonable certainty that the Company would extend the lease at expiration. Lease expense for operating leases is recognized on a straight-line basis over the lease term as an operating expense. The Company has lease agreements which require payments for lease and non-lease components and has elected to account for these as separate lease components. Non-leasing components are not included in the ROU asset. Right of use assets and Lease liability – right of use consist of the following: June 30, 2020 Right of use assets $ 243,251 June 30, 2020 Lease liability - right of use Current portion $ 173,270 Long term portion 99,142 $ 272,412 As of June 30, 2020, the maturities of the Company’s lease liability – right of use which have initial or remaining lease terms in excess of one year consist of the following: Year ending December 31, Amount 2020 (remainder) $ 97,041 2021 197,462 Total lease payments 294,503 Less: Present value adjustment (22,090 ) Lease liability - right of use $ 272,413 As of June 30, 2020, the Company’s operating lease had a weighted average remaining lease term of 1.5 years and a weighted average discount rate of 7%. Rent expense for the three months ended June 30, 2020 and 2019 was $52,346 and $54,698, respectively, and for the six months ended June 30, 2020 and 2019 was $117,876 and $107,536, respectively. Financing Lease For leases where the Company is the lessee, ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent an obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. The present value of the lease payment exceeds 90% of the sales price of the equipment, therefore this lease will be considered a financing lease is included in Property and equipment, net on our Condensed Consolidated Balance Sheets. Lease expense will be recognized as payment of financing lease, depreciation expense and interest expense. Right of use assets and Lease liability – right of use consist of the following: June 30, 2020 Right of use assets $ 515,551 June 30, 2020 Lease liability - right of use Current portion $ 181,371 Long term portion 333,771 $ 515,141 As of June 30, 2020, the maturities of the Company’s lease liability – right of use which have initial or remaining lease terms in excess of one year consist of the following: Year ending December 31, Amount 2020 (remainder) $ 117,297 2021 234,593 2022 199,793 2023 18,388 Total $ 570,071 As of June 30, 2020, the Company’s financing leases had a weighted average remaining lease term of 2.44 years based on annualized base payments expiring through 2023 and a weighted average discount rate of 13.2%. As of June 30, 2020, the Company did not have additional operating or financing leases that have yet commenced. Litigation From time to time, the Company is subject to various legal actions, claims and proceedings arising in the ordinary course of business, including claims related to breach of contracts and intellectual property matters resulting from our business activities. As with most actions such as these, an estimation of any possible and/or ultimate liability cannot always be determined. We believe that all pending claims, if adversely decided, would not have a material adverse effect on our business, financial position or results of operations. |
Note 14 - Revenue
Note 14 - Revenue | 6 Months Ended |
Jun. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | The Company accounts for revenue in accordance with ASC 606. Disaggregation of Revenue The disaggregation of revenue is based on geographical region. The following table presents revenue from contracts with customers for the three and six months ended June 30, 2020 and 2019: Three months ended June 30, 2020 Three months ended June 30, 2019 United States International Total United States International Total Product $ 63,076 $ 6,265 $ 69,341 $ 120,488 $ 100,179 $ 220,667 License fees - - - 6,250 60,558 66,808 Other Revenue 711 13,249 13,960 - 29,501 29,501 $ 63,787 $ 19,514 $ 83,301 $ 126,738 $ 190,238 $ 316,976 Six months ended June 30, 2020 Six months ended June 30, 2019 United States International Total United States International Total Product $ 96,730 $ 47,170 $ 143,900 $ 138,167 $ 147,065 $ 285,232 License fees 10,000 - 10,000 12,500 160,558 173,058 Other Revenue 1,252 76,741 77,993 - 36,649 36,649 $ 107,982 $ 123,911 $ 231,893 $ 150,667 $ 344,272 $ 494,939 Management routinely assesses the financial strength of its customers and, as a consequence, believes accounts receivable are stated at the net realizable value and credit risk exposure is limited. One distributor accounted for 86% of revenue for the six months ended June 30, 2020 and 72% of accounts receivable at June 30, 2020. Three distributors accounted for 72% of revenues for the six months ended June 30, 2019 and 49%, 0% and 25% of accounts receivable at June 30, 2019. |
Note 15 - Related Party Transa
Note 15 - Related Party Transactions | 6 Months Ended |
Jun. 30, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | During the three and six months ended June 30, 2020 and 2019, the Company recorded $13,105 and $17,678, respectively, and $26,210 and $138,167 respectively, in revenue from an entity owned by A. Michael Stolarski, a member of the Company’s board of directors and an existing shareholder of the Company. Contract liabilities includes a balance at June 30, 2020 and 2019 of $90,943 and $102,899, respectively from this related party. |
Note 16 - Stock-based Compensat
Note 16 - Stock-based Compensation | 6 Months Ended |
Jun. 30, 2020 | |
Share-based Payment Arrangement, Noncash Expense [Abstract] | |
Stock-based Compensation | During the six months ended June 30, 2020, 10,000 stock options to purchase the Company’s common stock were forfeited due to termination. The range of exercise prices for options was $0.04 to $2.00 for options outstanding at June 30, 2020 and December 31, 2019, respectively. The aggregate intrinsic value for all vested and exercisable options was $3,034,841 and $2,085,866 at June 30, 2020 and December 31, 2019, respectively. The weighted average remaining contractual term for outstanding exercisable stock options was 6.1 and 6.6 years as of June 30, 2020 and December 31, 2019, respectively. |
Note 17 - Earnings (Loss) Per S
Note 17 - Earnings (Loss) Per Share | 6 Months Ended |
Jun. 30, 2020 | |
LOSS PER SHARE: | |
Earnings (Loss) Per Share | Basic net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding for the period. Diluted net loss per share reflects the potential dilution that could occur if securities or other instruments to issue common stock were exercised or converted into common stock. Potentially dilutive securities are excluded from the computation of diluted net loss per share as their inclusive would be anti-dilutive and consist of the following: June 30, 2020 June 30, 2019 Stock options 34,168,385 32,183,385 Preferred stock conversion 17,500,000 - Warrants 9,374,091 68,357,635 Convertible promissory notes 5,227,200 26,004,347 Short term notes payable 2,250,000 - Anti-dilutive equity securities 68,519,676 126,545,367 |
Note 18 - Subsequent Events
Note 18 - Subsequent Events | 6 Months Ended |
Jun. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | On July 23, 2020, in connection with the Company’s 2020 Annual Meeting of Stockholders, the Company’s stockholders approved, among other matters, the following; ● An amendment to the Company’s Articles of Incorporation to increase the number of authorized shares of Common Stock from 355,000,000 to 605,000,000; and ● To grant the board of directors the authority to effect a reverse split of the Company’s outstanding Common Stock at an exchange rate of between 1-for-10 and 1-for-50, with the exact ratio to be determined by the board of directors in its sole discretion. Amendments to the Company’s Articles of Incorporation to effect the increase in the number of authorized shares of Common Stock and the reverse stock split have not yet been filed with the Secretary of State of Nevada. [ PLACEHOLDER FOR CELULARITY The Company has evaluated its subsequent events from June 30, 2020 through the date these condensed consolidated financial statements were issued, and has determined that there are no additional subsequent events required to be disclosed. |
Note 3 - Summary of Significa_2
Note 3 - Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated. |
Estimates | These condensed consolidated financial statements have been prepared in accordance with U.S. GAAP. Because a precise determination of assets and liabilities, and correspondingly revenues and expenses, depend on future events, the preparation of condensed consolidated financial statements for any period necessarily involves the use of estimates and assumptions. Actual amounts may differ from these estimates. These condensed consolidated financial statements have, in management’s opinion, been properly prepared within reasonable limits of materiality and within the framework of the accounting policies summarized herein. Significant estimates include the recording of allowances for doubtful accounts, estimate of the net realizable value of inventory, the determination of the valuation allowances for deferred taxes, estimated fair value of stock-based compensation, and debt discounts of warrants. |
Inventory | Inventory consists of finished medical equipment and parts and is stated at the lower of cost, which is valued using the first in, first out (“FIFO”) method, or net realizable value less allowance for selling and distribution expenses. The Company analyzes its inventory levels and writes down inventory that has, or is expected to, become obsolete. As of June 30, 2020, inventory consists of goods of $367,988 and parts of $283,356 for a total inventory of $651,344. As of December 31, 2019, inventory consisted of goods of $357,264 and parts of $185,691 for a total inventory of $542,955. |
Preferred Stock | The Company evaluates Preferred Stock issuances for liability or equity classification in accordance with the provisions of ASC 480, Distinguishing Liabilities from Equity |
Sequencing policy | The Company has granted certain options and warrants which, upon settlement, may exceed the limit on the authorized number of shares of common stock. The Company follows a sequencing policy for which in the event partial reclassifications of contracts subject to ASC 815-40-25 is necessary, due to the Company’s inability to demonstrate it has sufficient authorized shares, shares will be allocated on the basis of earliest issuance date of potentially dilutive instruments with the earliest grants receiving first allocation of shares. The Company evaluated such instruments and determined that there was no impact to the Company’s condensed consolidated financial statements. |
Note 4 - Accrued Expenses (Tabl
Note 4 - Accrued Expenses (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Payables and Accruals [Abstract] | |
Accrued expenses | June 30, 2020 December 31, 2019 Accrued board of director's fees $ 416,667 $ 400,000 Accrued legal and professional fees 200,000 134,970 Accrued executive severance 163,000 154,000 Accrued travel 120,000 120,000 Accrued outside services 106,233 108,033 Accrued inventory 50,275 167,050 Accrued clinical study expenses 13,650 13,650 Accrued other 1,389 13,406 $ 1,071,214 $ 1,111,109 |
Note 5 - Contract Liabilities (
Note 5 - Contract Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Contract with Customer, Liability [Abstract] | |
Contract liabilities | June 30, 2020 December 31, 2019 Service agreement $ 91,746 $ 133,510 License fees 500,000 500,000 Other 13,791 6,291 Total Contract liabilities 605,537 639,801 Non-Current (551,755 ) (573,224 ) Total Current $ 53,782 $ 66,577 |
Note 12 - Warrants (Tables)
Note 12 - Warrants (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Note 12 - Warrants | |
Warrant activity | Warrant class Outstanding as of December 31, 2019 Issued Exercised Expired Outstanding as of June 30, 2020 Class K Warrants 7,200,000 - - - 7,200,000 Class O Warrants 909,091 - - - 909,091 Class P Warrants 1,365,000 - (1,000,000 ) (100,000 ) 265,000 Common Stock Purchase Warrants - 1,000,000 - - 1,000,000 9,474,091 1,000,000 (1,000,000 ) (100,000 ) 9,374,091 |
Warrant exercise price per share | Exercise price/share Expiration date Class K Warrants $ 0.08 June 2025 Class K Warrants $ 0.11 August 2027 Class O Warrants $ 0.11 January2022 Class P Warrants $ 0.20 June 2024 Common Stock Purchase Warrants $ 0.35 June 2025 |
Note 13 - Commitments and Con_2
Note 13 - Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Operating right of use assets and lease liabilities | June 30, 2020 Right of use assets $ 243,251 June 30, 2020 Lease liability - right of use Current portion $ 173,270 Long term portion 99,142 $ 272,412 |
Operating lease liability maturities | Year ending December 31, Amount 2020 (remainder) $ 97,041 2021 197,462 Total lease payments 294,503 Less: Present value adjustment (22,090 ) Lease liability - right of use $ 272,413 |
Finance right of use assets and lease liabilities | June 30, 2020 Right of use assets $ 515,551 June 30, 2020 Lease liability - right of use Current portion $ 181,371 Long term portion 333,771 $ 515,141 |
Finance lease liability maturities | Year ending December 31, Amount 2020 (remainder) $ 117,297 2021 234,593 2022 199,793 2023 18,388 Total $ 570,071 |
Note 14 - Revenue (Tables)
Note 14 - Revenue (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of revenue | Three months ended June 30, 2020 Three months ended June 30, 2019 United States International Total United States International Total Product $ 63,076 $ 6,265 $ 69,341 $ 120,488 $ 100,179 $ 220,667 License fees - - - 6,250 60,558 66,808 Other Revenue 711 13,249 13,960 - 29,501 29,501 $ 63,787 $ 19,514 $ 83,301 $ 126,738 $ 190,238 $ 316,976 Six months ended June 30, 2020 Six months ended June 30, 2019 United States International Total United States International Total Product $ 96,730 $ 47,170 $ 143,900 $ 138,167 $ 147,065 $ 285,232 License fees 10,000 - 10,000 12,500 160,558 173,058 Other Revenue 1,252 76,741 77,993 - 36,649 36,649 $ 107,982 $ 123,911 $ 231,893 $ 150,667 $ 344,272 $ 494,939 |
Note 17 - Earnings (Loss) Per_2
Note 17 - Earnings (Loss) Per Share (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
LOSS PER SHARE: | |
Antidilutive shares | June 30, 2020 June 30, 2019 Stock options 34,168,385 32,183,385 Preferred stock conversion 17,500,000 - Warrants 9,374,091 68,357,635 Convertible promissory notes 5,227,200 26,004,347 Short term notes payable 2,250,000 - Anti-dilutive equity securities 68,519,676 126,545,367 |
Note 2 - Going Concern (Details
Note 2 - Going Concern (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Notes Payable, Related Parties [Member] | ||||||
Accumulated deficit | $ (132,386,958) | $ (132,386,958) | $ (125,752,956) | |||
Cash and cash equivalents | 430,606 | $ 154,446 | 430,606 | $ 154,446 | $ 1,760,455 | $ 364,549 |
Net cash used in operating activities | (5,621,802) | (3,386,634) | ||||
Net loss | $ (3,633,020) | $ (2,734,431) | $ (6,634,168) | $ (4,931,748) |
Note 3 - Summary of Significa_3
Note 3 - Summary of Significant Accounting Policies (Details Narrative) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Accounting Policies [Abstract] | ||
Inventory, goods | $ 367,988 | $ 357,264 |
Inventory, parts | 283,356 | 185,691 |
Inventory, net | $ 651,344 | $ 542,955 |
Note 4 - Accrued Expenses (Deta
Note 4 - Accrued Expenses (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Payables and Accruals [Abstract] | ||
Accrued board of directors' fees | $ 416,667 | $ 400,000 |
Accrued legal and professional fees | 200,000 | 134,970 |
Accrued executive severance | 163,000 | 154,000 |
Accrued travel | 120,000 | 120,000 |
Accrued outside services | 106,233 | 108,033 |
Accrued inventory | 50,275 | 167,050 |
Accrued clinical study expenses | 13,650 | 13,650 |
Accrued other | 1,389 | 13,406 |
Total accrued expenses | $ 1,071,214 | $ 1,111,109 |
Note 5 - Contract Liabilities_2
Note 5 - Contract Liabilities (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Total contract liabilities | $ 605,537 | $ 639,801 |
Non-current contract liabilities | (53,782) | (573,224) |
Current contract liabilities | 551,755 | 66,577 |
Service Agreement | ||
Total contract liabilities | 91,746 | 133,510 |
License Fees | ||
Total contract liabilities | 500,000 | 500,000 |
Other | ||
Total contract liabilities | $ 13,791 | $ 6,291 |
Note 5 - Contract Liabilities_3
Note 5 - Contract Liabilities (Details Narrative) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Contract with Customer, Liability [Abstract] | ||
Remaining performance obligations | $ 551,755 | $ 66,577 |
Note 6 - Short Term Notes Pay_2
Note 6 - Short Term Notes Payable (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2020 | |
Notes Payable [Abstract] | |||||
Conversion of short term notes and convertible notes payable | $ 90,745 | $ 263,984 | $ 180,000 | $ 266,667 | $ 354,729 |
Note 9 - Notes Payable, Relat_2
Note 9 - Notes Payable, Related Parties (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Notes Payable [Abstract] | |||||
Notes payable principal | $ 5,372,743 | $ 5,372,743 | $ 5,372,743 | ||
Interest payable, current | 2,229,713 | 2,229,713 | $ 1,859,977 | ||
Interest expense, related party | $ 187,172 | $ 112,984 | $ 369,736 | $ 332,671 |
Note 11 - Equity Transactions (
Note 11 - Equity Transactions (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Conversion of short term notes and convertible notes payable | $ 90,745 | $ 263,984 | $ 180,000 | $ 266,667 | $ 354,729 | |
Conversion of advances from related parties | 16,000 | 2,098 | $ 0 | 18,098 | $ 180,000 | |
Shares issued for services | $ 517,500 | $ 200,000 | ||||
Consulting Agreement | ||||||
Shares issued for services | $ 287,500 |
Note 12 - Warrants (Details)
Note 12 - Warrants (Details) | 6 Months Ended |
Jun. 30, 2020shares | |
Warrants outstanding, beginning | 9,474,091 |
Warrants issued | 1,000,000 |
Warrants exercised | (1,000,000) |
Warrants expired | (100,000) |
Warrants outstanding, ending | 9,374,091 |
Class K Warrants | |
Warrants outstanding, beginning | 7,200,000 |
Warrants issued | 0 |
Warrants exercised | 0 |
Warrants expired | 0 |
Warrants outstanding, ending | 7,200,000 |
Class O Warrants | |
Warrants outstanding, beginning | 909,091 |
Warrants issued | 0 |
Warrants exercised | 0 |
Warrants expired | 0 |
Warrants outstanding, ending | 909,091 |
Class P Warrants | |
Warrants outstanding, beginning | 1,365,000 |
Warrants issued | 0 |
Warrants exercised | (1,000,000) |
Warrants expired | (100,000) |
Warrants outstanding, ending | 265,000 |
Note 12 - Warrants (Details 1)
Note 12 - Warrants (Details 1) | 6 Months Ended |
Jun. 30, 2020$ / shares | |
Class K Warrants | |
Warrant exercise price/share | $ .08 |
Warrant expiration date | June 2025 |
Class K Warrants | |
Warrant exercise price/share | $ .11 |
Warrant expiration date | August 2027 |
Class O Warrants | |
Warrant exercise price/share | $ .11 |
Warrant expiration date | January 2022 |
Class P Warrants | |
Warrant exercise price/share | $ .20 |
Warrant expiration date | June 2024 |
Common Stock Purchase Warrants | |
Warrant exercise price/share | $ .35 |
Warrant expiration date | June 2025 |
Note 13 - Commitments and Con_3
Note 13 - Commitments and Contingencies (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Commitments and Contingencies Disclosure [Abstract] | ||
Right of use assets | $ 243,251 | $ 323,661 |
Lease liability - right of use, current | 173,270 | |
Lease liability - right of use, noncurrent | 99,142 | |
Lease liability - right of use | $ 272,412 |
Note 13 - Commitments and Con_4
Note 13 - Commitments and Contingencies (Details 1) | Jun. 30, 2020USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2020 (remainder) | $ 97,041 |
2021 | 197,462 |
Total lease payments | 294,503 |
Less: imputed interest | (22,090) |
Total operating lease liability | $ 272,412 |
Note 13 - Commitments and Con_5
Note 13 - Commitments and Contingencies (Details 2) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Commitments and Contingencies Disclosure [Abstract] | ||
Right of use assets | $ 515,551 | |
Lease liability - right of use, current | 181,371 | $ 121,634 |
Lease liability - right of use, noncurrent | 333,771 | $ 271,240 |
Lease liability - right of use | $ 515,141 |
Note 13 - Commitments and Con_6
Note 13 - Commitments and Contingencies (Details 3) | Jun. 30, 2020USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2020 (remainder) | $ 117,297 |
2021 | 234,593 |
2022 | 199,793 |
2023 | 18,388 |
Total | $ 570,071 |
Note 13 - Commitments and Con_7
Note 13 - Commitments and Contingencies (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | ||||
Weighted average remaining lease term, operating lease | 1 year 6 months | 1 year 6 months | ||
Weighted average discount rate, operating lease | 7.00% | 7.00% | ||
Rent expense | $ 52,346 | $ 54,698 | $ 117,876 | $ 107,536 |
Weighted average remaining lease term, finance lease | 2 years 5 months 8 days | 2 years 5 months 8 days | ||
Weighted average discount rate, finance lease | 13.20% | 13.20% |
Note 14 - Revenue (Details)
Note 14 - Revenue (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Revenues | $ 83,301 | $ 316,976 | $ 231,893 | $ 494,939 |
Product | ||||
Revenues | 69,341 | 220,667 | 143,900 | 285,232 |
License Fees | ||||
Revenues | 0 | 66,808 | 10,000 | 173,058 |
Other | ||||
Revenues | 13,960 | 29,501 | 77,993 | 36,649 |
United States | ||||
Revenues | 63,787 | 126,738 | 107,982 | 150,667 |
United States | Product | ||||
Revenues | 63,076 | 120,488 | 96,730 | 138,167 |
United States | License Fees | ||||
Revenues | 0 | 6,250 | 10,000 | 12,500 |
United States | Other | ||||
Revenues | 711 | 0 | 1,252 | 0 |
International | ||||
Revenues | 19,514 | 190,238 | 123,911 | 344,272 |
International | Product | ||||
Revenues | 6,265 | 100,179 | 47,170 | 147,065 |
International | License Fees | ||||
Revenues | 0 | 60,558 | 0 | 160,558 |
International | Other | ||||
Revenues | $ 13,249 | $ 29,501 | $ 76,741 | $ 36,649 |
Note 14 - Revenue (Details Narr
Note 14 - Revenue (Details Narrative) | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Distributor 1 | Revenue | ||
Concentration risk | 86.00% | |
Distributor 1 | Accounts Receivable | ||
Concentration risk | 72.00% | 49.00% |
Three Distributors | Revenue | ||
Concentration risk | 72.00% | |
Distributor 2 | Accounts Receivable | ||
Concentration risk | 0.00% | |
Distributor 3 | Accounts Receivable | ||
Concentration risk | 25.00% |
Note 15 - Related Party Tran_2
Note 15 - Related Party Transactions (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Contract liabilities | $ 605,537 | $ 605,537 | $ 639,801 | ||
A. Michael Stolarski | |||||
Revenues from related party | 13,105 | $ 17,678 | 26,210 | $ 138,167 | |
Contract liabilities | $ 90,943 | $ 102,899 | $ 90,943 | $ 102,899 |
Note 16 - Stock-based Compens_2
Note 16 - Stock-based Compensation (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Dec. 31, 2019 | |
Share-based Payment Arrangement, Noncash Expense [Abstract] | ||||
Stock-based compensation | $ 44,250 | $ 31,758 | ||
Exercise prices for options, lower range limit | $ .04 | $ 0.04 | ||
Exercise prices for options, upper range limit | $ 2 | $ 2 | ||
Aggregate intrinsic value for vested and exercisable options | $ 3,034,841 | $ 3,034,841 | $ 2,085,866 | |
Weighted average remaining contractual term for outstanding exercisable stock options | 6 years 1 month 6 days | 6 years 7 months 6 days |
Note 17 - Earnings (Loss) Per_3
Note 17 - Earnings (Loss) Per Share (Details) - shares | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Anti-dilutive securities | 68,519,676 | 126,545,367 |
Stock Options | ||
Anti-dilutive securities | 34,168,385 | 32,183,385 |
Preferred Stock Conversion | ||
Anti-dilutive securities | 17,500,000 | 0 |
Warrants | ||
Anti-dilutive securities | 9,374,091 | 68,357,635 |
Convertible Promissory Notes | ||
Anti-dilutive securities | 5,227,200 | 26,004,347 |
Short Term Notes Payable | ||
Anti-dilutive securities | 2,250,000 | 0 |