Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2022 | Nov. 10, 2022 | |
Document Information Line Items | ||
Entity Registrant Name | LogicMark, Inc. | |
Trading Symbol | LGMK | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 9,608,937 | |
Amendment Flag | false | |
Entity Central Index Key | 0001566826 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Document Period End Date | Sep. 30, 2022 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 001-36616 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 46-0678374 | |
Entity Address, Address Line One | 2801 Diode Lane | |
Entity Address, City or Town | Louisville | |
Entity Address, State or Province | KY | |
Entity Address, Postal Zip Code | 40299 | |
City Area Code | (502) | |
Local Phone Number | 442-7911 | |
Title of 12(b) Security | Common Stock, par value $0.0001 per share | |
Security Exchange Name | NASDAQ | |
Entity Interactive Data Current | Yes |
Condensed Balance Sheets (Unaud
Condensed Balance Sheets (Unaudited) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Current Assets | ||
Cash and cash equivalents | $ 9,328,504 | $ 12,044,415 |
Restricted cash | 59,988 | 210,131 |
Accounts receivable, net | 416,852 | 98,749 |
Inventory, net | 1,077,160 | 1,237,280 |
Prepaid expenses and other current assets | 889,413 | 849,190 |
Total Current Assets | 11,771,917 | 14,439,765 |
Property and equipment: | ||
Equipment | 414,671 | 410,444 |
Furniture and fixtures | 35,761 | 35,761 |
Website and other | 259,646 | 9,427 |
Property and equipment, gross | 710,078 | 455,632 |
Accumulated depreciation | (463,376) | (455,632) |
Property and equipment, net | 246,702 | |
Right-of-use assets, net | 199,619 | 248,309 |
Product development costs | 481,768 | |
Goodwill | 10,958,662 | 10,958,662 |
Other intangible assets, net of amortization of $4,710,437 and $4,127,920, respectively | 3,900,138 | 4,476,647 |
Total Assets | 27,558,806 | 30,123,383 |
Current Liabilities | ||
Accounts payable | 1,330,780 | 492,431 |
Accrued expenses | 1,049,754 | 849,285 |
Total Current Liabilities | 2,380,534 | 1,341,716 |
Other long-term liabilities | 331,351 | 385,196 |
Total Liabilities | 2,711,885 | 1,726,912 |
Commitments and Contingencies (Note 8) | ||
Series C Redeemable Preferred Stock | ||
Series C redeemable preferred stock, par value $0.0001 per share: 2,000 shares designated; 200 shares issued and outstanding as of September 30, 2022 and December 31, 2021 | 1,807,300 | 1,807,300 |
Stockholders’ Equity | ||
Preferred stock, par value $0.0001 per share: 10,000,000 shares authorized | ||
Series F preferred stock, par value $0.0001 per share: 1,333,333 shares designated; 173,333 shares issued and outstanding as of September 30, 2022, aggregate liquidation preference of $520,000 as of September 30, 2022, and December 31, 2021 | 520,000 | 520,000 |
Common stock, par value $0.0001 per share: 100,000,000 shares authorized; 9,608,937 and 9,163,039 issued and outstanding as of September 30, 2022 and December 31, 2021 | 961 | 917 |
Additional paid-in capital | 105,697,391 | 104,725,115 |
Accumulated deficit | (83,178,731) | (78,656,861) |
Total Stockholders’ Equity | 23,039,621 | 26,589,171 |
Total Liabilities, Series C Redeemable Preferred Stock and Stockholders’ Equity | $ 27,558,806 | $ 30,123,383 |
Condensed Balance Sheets (Una_2
Condensed Balance Sheets (Unaudited) (Parentheticals) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Other intangible assets, net of amortization (in Dollars) | $ 4,710,437 | $ 4,127,920 |
Preferred stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred Stock, shares authorized | 10,000,000 | 10,000,000 |
Common stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 9,608,937 | 9,163,039 |
Common stock, shares outstanding | 9,608,937 | 9,163,039 |
Series C Preferred Stock | ||
Preferred stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares designated | 2,000 | 2,000 |
Preferred stock, shares issued | 200 | 200 |
Preferred stock, shares outstanding | 200 | 200 |
Series F Preferred Stock | ||
Preferred stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares designated | 1,333,333 | 1,333,333 |
Preferred stock, shares issued | 173,333 | 173,333 |
Preferred stock, shares outstanding | 173,333 | 173,333 |
Preferred stock, liquidation preference (in Dollars) | $ 520,000 | $ 520,000 |
Condensed Statements of Operati
Condensed Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2022 | Sep. 30, 2021 | [1] | Sep. 30, 2022 | Sep. 30, 2021 | [1] | |
Income Statement [Abstract] | ||||||
Revenues | $ 2,751,570 | $ 2,383,029 | $ 9,769,951 | $ 7,604,287 | ||
Costs of goods sold | 1,047,204 | 1,255,445 | 3,860,176 | 3,319,710 | ||
Gross Profit | 1,704,366 | 1,127,584 | 5,909,775 | 4,284,577 | ||
Operating Expenses | ||||||
Direct operating cost | 345,972 | 228,512 | 1,156,959 | 729,038 | ||
Selling and marketing | 332,698 | 75,389 | 796,916 | 245,292 | ||
Research and development | 374,842 | 136,891 | 841,917 | 730,236 | ||
General and administrative | 2,575,105 | 969,264 | 7,025,674 | 3,426,596 | ||
Other expense | 3,222 | 20,588 | 35,306 | 45,856 | ||
Depreciation and amortization | 210,632 | 193,823 | 599,686 | 599,004 | ||
Total Operating Expenses | 3,842,471 | 1,624,467 | 10,456,458 | 5,776,022 | ||
Operating Loss | (2,138,105) | (496,883) | (4,546,683) | (1,491,445) | ||
Other Income and (Expense) | ||||||
Interest income (expense) | 44,587 | (144,821) | 57,747 | (1,395,611) | ||
Forgiveness of Paycheck Protection Program loan and accrued interest | 349,176 | |||||
Warrant modification expense | (2,881,729) | |||||
Total Other Income (Expense), Net | 44,587 | (144,821) | 57,747 | (3,928,164) | ||
Loss before Income Taxes | (2,093,518) | (641,704) | (4,488,936) | (5,419,609) | ||
Income tax (expense) benefit | ||||||
Net Loss | (2,093,518) | (641,704) | (4,488,936) | (5,419,609) | ||
Preferred stock dividends | (81,790) | (82,301) | (257,934) | (2,253,102) | ||
Net Loss Attributable to Common Stockholders | $ (2,175,308) | $ (724,005) | $ (4,746,870) | $ (7,672,711) | ||
Net Loss Per Share - Basic and Diluted (in Dollars per share) | $ (0.23) | $ (0.12) | $ (0.5) | $ (1.43) | ||
Weighted Average Number of Common Shares Outstanding - Basic and Diluted (in Shares) | 9,608,937 | 5,969,312 | 9,562,347 | 5,377,465 | ||
[1]Expenses in 2021 have been reclassified to conform to the 2022 presentation format. |
Condensed Statements of Opera_2
Condensed Statements of Operations (Unaudited) (Parentheticals) - $ / shares | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2022 | Sep. 30, 2021 | [1] | Sep. 30, 2022 | Sep. 30, 2021 | [1] | |
Income Statement [Abstract] | ||||||
Net Loss Per Share - Basic and Diluted | $ (0.23) | $ (0.12) | $ (0.50) | $ (1.43) | ||
Weighted Average Number of Common Shares Outstanding - Basic and Diluted | 9,608,937 | 5,969,312 | 9,562,347 | 5,377,465 | ||
[1]Expenses in 2021 have been reclassified to conform to the 2022 presentation format. |
Condensed Statements of Changes
Condensed Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) | Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total | |
Balance at Dec. 31, 2020 | $ 407 | $ 74,586,801 | $ (65,427,998) | $ 9,159,210 | ||
Balance (in Shares) at Dec. 31, 2020 | 4,061,997 | |||||
Issuance of stock for services | 120,000 | 120,000 | ||||
Issuance of Series E Preferred stock, net | $ 4,000,003 | 4,000,003 | ||||
Issuance of Series E Preferred stock, net (in Shares) | 1,476,016 | |||||
Conversion of Series E Preferred stock to common stock | $ (4,000,003) | $ 29 | 3,999,974 | |||
Conversion of Series E Preferred stock to common stock (in Shares) | (1,476,016) | 295,203 | ||||
Deemed dividend related to beneficial conversion feature of Series E preferred stock | 1,480,801 | (1,480,801) | ||||
Issuance of Series F Preferred stock, net | $ 3,999,999 | 3,999,999 | ||||
Issuance of Series F Preferred stock, net (in Shares) | 1,333,333 | |||||
Conversion of Series F Preferred stock to common stock | $ (3,479,999) | $ 66 | 3,479,933 | |||
Conversion of Series F Preferred stock to common stock (in Shares) | (1,160,000) | 656,604 | ||||
Exercise of common stock purchase warrants on a cash basis | $ 54 | 6,669,957 | 6,670,011 | |||
Exercise of common stock purchase warrants on a cash basis (in Shares) | 536,774 | |||||
Exercise of common stock purchase warrants on a cashless basis | $ 42 | (42) | ||||
Exercise of common stock purchase warrants on a cashless basis (in Shares) | 423,933 | |||||
Warrant modification expense recorded in connection with the issuance of replacement warrants | 2,881,729 | 2,881,729 | ||||
Shares issued in connection with the management incentive plan for 2018 and 2019 | $ 1 | 80,455 | 80,456 | |||
Shares issued in connection with the management incentive plan for 2018 and 2019 (in Shares) | 13,283 | |||||
Sale of common stock and warrants pursuant to a registration statement on Form S-1 | $ 279 | 11,834,443 | 11,834,722 | |||
Sale of common stock and warrants pursuant to a registration statement on Form S-1 (in Shares) | 2,788,750 | |||||
Fees incurred in connection with equity offerings | (424,813) | (424,813) | ||||
Shares issued as stock compensation | $ 5 | 287,995 | 288,000 | |||
Shares issued as stock compensation (in Shares) | 50,000 | |||||
Common Stock issued for dividends | 19,584 | (19,584) | ||||
Common Stock issued for dividends (in Shares) | 3,695 | |||||
Series C Redeemable Preferred stock dividends | (765,000) | (765,000) | ||||
Series F Preferred stock dividends | (7,299) | (7,299) | ||||
Net loss | (5,419,609) | (5,419,609) | [1] | |||
Balance at Sep. 30, 2021 | $ 520,000 | $ 883 | 104,251,817 | (72,355,291) | 32,417,409 | |
Balance (in Shares) at Sep. 30, 2021 | 173,333 | 8,830,239 | ||||
Balance at Jun. 30, 2021 | $ 533 | 89,045,519 | (71,686,702) | 17,359,350 | ||
Balance (in Shares) at Jun. 30, 2021 | 5,331,190 | |||||
Issuance of stock options for services | 40,000 | 40,000 | ||||
Issuance of Series F Preferred stock, net | $ 3,999,999 | 3,999,999 | ||||
Issuance of Series F Preferred stock, net (in Shares) | 1,333,333 | |||||
Conversion of Series F Preferred stock to common stock | $ (3,479,999) | $ 66 | 3,479,933 | |||
Conversion of Series F Preferred stock to common stock (in Shares) | (1,160,000) | 656,604 | ||||
Sale of common stock and warrants pursuant to a registration statement on Form S-1 | $ 279 | 11,834,443 | 11,834,722 | |||
Sale of common stock and warrants pursuant to a registration statement on Form S-1 (in Shares) | 2,788,750 | |||||
Fees incurred in connection with equity offerings | (380,657) | (380,657) | ||||
Shares issued as stock compensation | $ 5 | 287,995 | 288,000 | |||
Shares issued as stock compensation (in Shares) | 50,000 | |||||
Common Stock issued for dividends | 19,584 | (19,584) | ||||
Common Stock issued for dividends (in Shares) | 3,695 | |||||
Series C Redeemable Preferred stock dividends | (75,000) | (75,000) | ||||
Series F Preferred stock dividends | (7,301) | (7,301) | ||||
Net loss | (641,704) | (641,704) | [1] | |||
Balance at Sep. 30, 2021 | $ 520,000 | $ 883 | 104,251,817 | (72,355,291) | 32,417,409 | |
Balance (in Shares) at Sep. 30, 2021 | 173,333 | 8,830,239 | ||||
Balance at Dec. 31, 2021 | $ 520,000 | $ 917 | 104,725,115 | (78,656,861) | 26,589,171 | |
Balance (in Shares) at Dec. 31, 2021 | 173,333 | 9,163,039 | ||||
Issuance of stock options for services | 669,015 | 669,015 | ||||
Shares issued as stock compensation | $ 44 | 528,261 | 528,305 | |||
Shares issued as stock compensation (in Shares) | 445,898 | |||||
Series C Redeemable Preferred stock dividends | (225,000) | (225,000) | ||||
Series F Preferred stock dividends | (32,934) | (32,934) | ||||
Net loss | (4,488,936) | (4,488,936) | ||||
Balance at Sep. 30, 2022 | $ 520,000 | $ 961 | 105,697,391 | (83,178,731) | 23,039,621 | |
Balance (in Shares) at Sep. 30, 2022 | 173,333 | 9,608,937 | ||||
Balance at Jun. 30, 2022 | $ 520,000 | $ 961 | 105,318,990 | (81,078,423) | 24,761,528 | |
Balance (in Shares) at Jun. 30, 2022 | 173,333 | 9,608,937 | ||||
Issuance of stock options for services | 453,401 | 453,401 | ||||
Shares issued as stock compensation | ||||||
Series C Redeemable Preferred stock dividends | (75,000) | (75,000) | ||||
Series F Preferred stock dividends | (6,790) | (6,790) | ||||
Net loss | (2,093,518) | (2,093,518) | ||||
Balance at Sep. 30, 2022 | $ 520,000 | $ 961 | $ 105,697,391 | $ (83,178,731) | $ 23,039,621 | |
Balance (in Shares) at Sep. 30, 2022 | 173,333 | 9,608,937 | ||||
[1]Expenses in 2021 have been reclassified to conform to the 2022 presentation format. |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Cash Flows from Operating Activities | ||
Net loss | $ (4,488,936) | $ (5,419,609) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 17,171 | 29,208 |
Stock based compensation | 1,197,320 | 288,000 |
Amortization of debt discount | 137,855 | |
Amortization of intangible assets | 582,517 | 569,796 |
Amortization of deferred debt issuance costs | 713,119 | |
Non-cash charge for modification of warrant terms | 2,881,729 | |
Forgiveness of Paycheck Protection Plan loans and accrued interest | (349,176) | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (318,103) | 66,671 |
Inventory | 160,120 | (145,538) |
Prepaid expenses and other current assets | (40,223) | (314,563) |
Accounts payable | 817,094 | (1,519,328) |
Accrued expenses | 162,380 | (228,483) |
Net Cash Used in Operating Activities | (1,910,660) | (3,290,319) |
Cash flows from Investing Activities | ||
Purchase of equipment and website development | (242,618) | |
Product development costs | (481,768) | |
Purchase of intangible assets | (6,008) | |
Net Cash Used in Investing Activities | (730,394) | |
Cash flows from Financing Activities | ||
Proceeds from sale of common stock and warrants | 11,834,722 | |
Proceeds received in connection with issuance of Series E preferred stock, net | 4,000,003 | |
Proceeds received in connection with issuance of Series F preferred stock, net | 3,999,999 | |
Proceeds from exercise of common stock warrants | 6,670,494 | |
Term loan repayment | (11,095,877) | |
Fees paid in connection with equity offerings | (424,813) | |
Series C redeemable preferred stock dividends | (225,000) | |
Net Cash (Used in) Provided by Financing Activities | (225,000) | 14,984,528 |
Net (Decrease) Increase in Cash, Cash Equivalents and Restricted Cash | (2,866,054) | 11,694,209 |
Cash, Cash Equivalents and Restricted Cash - Beginning of Year | 12,254,546 | 4,537,546 |
Cash, Cash Equivalents and Restricted Cash - End of Period | 9,388,492 | 16,231,755 |
Cash paid during the periods for: | ||
Interest | 1,395,611 | |
Taxes | 47,874 | |
Non-cash investing and financing activities: | ||
Accrued fees incurred in connection with equity offerings | ||
Accrued Series C redeemable and Series F preferred stock dividends | 32,934 | 266,907 |
Shares issued in connection with prior year accrual | 80,456 | |
Conversion of Series E preferred stock to common stock | 4,000,003 | |
Conversion of Series F preferred stock to common stock | 3,479,999 | |
Website development included in accounts payable | $ 21,255 |
Organization and Principal Busi
Organization and Principal Business Activities | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND PRINCIPAL BUSINESS ACTIVITIES | NOTE 1 - ORGANIZATION AND PRINCIPAL BUSINESS ACTIVITIES LogicMark, Inc. (“LogicMark” or the “Company”) was incorporated in the State of Delaware on February 8, 2012. LogicMark provides personal emergency response systems (PERS), health communications devices, and Internet of Things (“IoT”) technology that creates a connected care platform. The Company’s devices give people the ability to receive care at home and the confidence to age independently. LogicMark revolutionized the PERS industry by incorporating two-way voice communication technology directly in the medical alert pendant and providing life-saving technology at a price point everyday consumers could afford. The PERS technologies are sold through dealers and distributors, as well as directly to the United States Veterans Health Administration. |
Liquidity and Management Plans
Liquidity and Management Plans | 9 Months Ended |
Sep. 30, 2022 | |
Liquidity and Management Plans [Abstract] | |
LIQUIDITY AND MANAGEMENT PLANS | NOTE 2 - LIQUIDITY AND MANAGEMENT PLANS The Company generated an operating loss of $4,546,683 and a net loss of $4,488,936 for the nine months ended September 30, 2022. As of September 30, 2022, the Company had cash and cash equivalents and stockholders’ equity of $9,328,504 and $23,039,621, respectively. As of September 30, 2022, the Company had working capital of $9,391,383 compared to working capital on December 31, 2021, of $13,098,049. Given the Company’s cash position on September 30, 2022, and its projected cash flow from operations, the Company believes that it will have sufficient capital to sustain operations for a period of one year following the date of this filing. |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION | NOTE 3 - BASIS OF PRESENTATION The accompanying unaudited condensed financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) and applicable rules and regulations of the Securities and Exchange Commission (SEC) regarding interim financial reporting. In the opinion of management, the information herein reflects all adjustments, consisting only of normal recurring adjustments except as otherwise noted, considered necessary for a fair statement of results of operations, financial position, stockholders’ equity, and cash flows. The results for the interim periods presented are not necessarily indicative of the results expected for any future period. The following information should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 which was filed with the SEC on April 15, 2022. Certain prior year amounts have been reclassified for consistency with the current year’s presentation. These reclassifications had no effect on the reported results of operations. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 4 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES USE OF ESTIMATES IN THE FINANCIAL STATEMENTS The preparation of financial statements in conformity with generally accepted accounting principles in the United States (U.S. GAAP) 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. The Company’s management evaluates these significant estimates and assumptions, including those related to the fair value of acquired assets and liabilities, stock-based compensation, income taxes, allowance for doubtful accounts, long-lived assets, and inventories, and other matters that affect the financial statements and disclosures. Actual results could differ from those estimates. CASH AND CASH EQUIVALENTS The Company considers all highly liquid securities with an original maturity date of three months or less when purchased to be cash equivalents. Due to their short-term nature, cash equivalents are carried at cost, which approximates fair value. On September 30, 2022, and December 31, 2021, cash and cash equivalents totaled $9,328,504 and $12,044,415, respectively. RESTRICTED CASH On September 30, 2022, and December 31, 2021, the Company had restricted cash of $59,988 and $210,131, respectively. Restricted cash includes amounts held back by the Company’s third-party credit card processor for potential customer refunds, claims, and disputes and held as collateral for company credit cards. CONCENTRATIONS OF CREDIT RISK Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents. The Company maintains its cash and cash equivalents balances in large well-established financial institutions located in the United States. At times, the Company’s cash and cash equivalents balances may be uninsured or in deposit accounts that exceed the Federal Deposit Insurance Corporation (FDIC) insurance limits. Cash equivalents amounted to $9,057,747 on September 30, 2022. REVENUE RECOGNITION The Company’s revenues consist of product sales to either end customers or distributors. The Company’s revenues are derived from contracts with customers, which are in most cases customer purchase orders. For each contract, the promise to transfer the control of the products, each of which is individually distinct, is considered to be the identified performance obligation. As part of the consideration promised in each contract, the Company evaluates the customer’s credit risk. Our contracts do not have any financing components, as payment terms are generally due Net-30 days after the invoice date. The Company’s products are almost always sold at fixed prices. In determining the transaction price, we evaluate whether the price is subject to any refunds, due to product returns or adjustments due to volume discounts, rebates, or price concessions to determine the net consideration we expect to be entitled to. The Company’s sales are recognized at a point-in-time under the core principle of recognizing revenue when control transfers to the customer, which generally occurs when the Company ships or delivers the product from its fulfillment center to our customers, when our customer accepts and has the legal title of the goods, and the Company has a present right to payment for such goods. Based on the respective contract terms, most of our contract revenues are recognized either (i) upon shipment based on free on board (FOB) shipping point, or (ii) when the product arrives at its destination. For the nine months ended September 30, 2022, and 2021, none of our sales were recognized over time. SALES TO DISTRIBUTORS AND RESELLERS Sales to certain distributors and resellers are made under terms allowing limited rights of return of the Company’s products held in their inventory or upon sale to their end customers. The Company maintains a reserve for unprocessed and estimated future price adjustments claims and returns as a refund liability. The reserve is recorded as a reduction to revenue in the same period that the related revenue is recorded and is calculated based on an analysis of historical claims and returns over a period of time to appropriately account for current pricing and business trends. Similarly, sales returns and allowances are recorded based on historical return rates, as a reduction in revenue with a corresponding reduction to cost of sales for the estimated cost of inventory that is expected to be returned. These reserves were not material on the Condensed Balance Sheets on September 30, 2022, and December 31, 2021. SHIPPING AND HANDLING Amounts billed to customers for shipping and handling are included in revenues. The related freight charges incurred by the Company are included in the cost of goods sold and were $94,080 and $467,293, respectively, for the three and nine months ended September 30, 2022, and $149,923, and $374,484, respectively, for the three and nine months ended September 30, 2021. ACCOUNTS RECEIVABLE - NET For the three and nine months ended September 30, 2022, and the year ended December 31, 2021, the Company’s revenues primarily included shipments of the LogicMark products. The terms and conditions of these sales provided certain customers with trade credit terms. In addition, these sales were made to the retailers with no rights of return and are subject to the normal warranties offered to the ultimate consumer for product defects. Accounts receivable are stated at net realizable value. The Company regularly reviews accounts receivable balances and adjusts the receivable allowance for doubtful accounts as necessary whenever events or circumstances indicate the carrying value may not be recoverable. On September 30, 2022, and December 31, 2021, the Company had an allowance for doubtful accounts of $1,146 and $5,411, respectively. INVENTORY The Company measures inventory at the lower of cost or net realizable value, defined as estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The Company performs regular reviews of inventory quantities on hand and evaluates the realizable value of its inventories. The Company adjusts the carrying value of the inventory as necessary with estimated valuation reserves for excess, obsolete, and slow-moving inventory by comparing the individual inventory parts to forecasted product demand or production requirements. The inventory is valued at the lower of cost or net realizable value with cost determined using the first-in, first-out method. As of September 30, 2022, inventory was comprised of $1,077,160 in finished goods on hand. As of December 31, 2021, inventory was comprised of $1,237,280 in finished goods on hand. The Company is required to prepay for certain inventory with certain vendors until credit terms can be established. As of September 30, 2022, and December 31, 2021, $670,221 and $559,938 respectively, of prepayments made for inventory are included in prepaid expenses and other current assets on the balance sheet. LONG-LIVED ASSETS Long-lived assets, such as property and equipment, and other intangibles are evaluated for impairment whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable. When indicators exist, the Company tests for the impairment of the definite-lived assets based on the undiscounted future cash flow the assets are expected to generate over their remaining useful lives, compared to the carrying value of the assets. If the carrying amount of the assets is determined not to be recoverable, a write-down to fair value is recorded. Management estimates future cash flows using assumptions about expected future operating performance. Management’s estimates of future cash flows may differ from actual cash flow due to, among other things, technological changes, economic conditions, or changes to the Company’s business operations. PROPERTY AND EQUIPMENT Property and equipment consisting of equipment, furniture and fixtures, and website and other are stated at cost. The costs of additions and improvements are generally capitalized and expenditures for repairs and maintenance are expensed in the period incurred. When items of property and equipment are sold or retired, the related costs and accumulated depreciation are removed from the accounts, and any gain or loss is included in income. Depreciation of property and equipment is provided utilizing the straight-line method over the estimated useful life of the respective asset as follows: Equipment 5 years Furniture and fixtures 3 to 5 years Website and other 3 years GOODWILL Goodwill is reviewed annually in the fourth quarter, or when circumstances indicate that an impairment may have occurred. The Company first performs a qualitative assessment of goodwill impairment, which considers factors such as market conditions, performance compared to forecast, business outlook, and unusual events. If the qualitative assessment indicates a possible goodwill impairment, goodwill is then quantitatively tested for impairment. The Company may elect to bypass the qualitative assessment and proceed directly to the quantitative test. If a quantitative goodwill impairment test is required, the fair value is determined using a variety of assumptions including estimated future cash flows using applicable discount rates (income approach) and comparisons to other similar companies (market approach). OTHER INTANGIBLE ASSETS The Company’s intangible assets are related to the acquisition of LogicMark, LLC and are included in other intangible assets in the Company’s balance sheet on September 30, 2022 and December 31, 2021. On September 30, 2022, Other intangible assets, net of amortization, are comprised of patents of $1,793,889; trademarks of $867,559; and customer relationships of $1,238,690. On December 31, 2021, Other intangible assets are comprised of patents of $2,072,984; trademarks of $915,619; and customer relationships of $1,488,044. The Company amortizes these intangible assets using the straight-line method over their estimated useful lives which for the patents, trademarks, and customer relationships are 11 years, 20 years, and 10 years, respectively. During the three and nine months ended September 30, 2022, the Company recorded amortization expense of $194,232 and $582,516, respectively. During the three and nine months ended September 30, 2021, the Company recorded amortization expense of $192,019 and $569,796, respectively. As of September 30, 2022, total amortization expense estimated for the remainder of fiscal year 2022 is $194,241, and for each of the next five fiscal years, the total amortization expense is estimated to be as follows: 2023 - $776,964; 2024 - $776,964; 2025 - $776,964; 2026 - $602,648; 2027- $241,218; and later years - $531,139. CONVERTIBLE INSTRUMENTS The Company applies the accounting standards for derivatives and hedging and for distinguishing liabilities from equity when accounting for hybrid contracts that feature conversion options. The accounting standards require companies to separate conversion options from their host instruments and account for them as free-standing derivatives according to certain criteria. The criteria include circumstances in which (i) the economic characteristics and risks of the embedded derivative are not closely related to the economic characteristics and risks of the host contract, (ii) the hybrid instrument that embodies both the embedded derivative and the host contract is not re-measured at fair value under generally accepted accounting principles with changes in fair value reported in earnings as they occur and (iii) a separate instrument with the same terms as the embedded derivative would be considered a derivative. The derivative is subsequently marked to market at each reporting date based on the current fair value, with the changes in fair value reported in the results of operations. Conversion options with variable settlement features such as provisions to adjust the conversion price upon subsequent issuances at exercise prices more favorable than that in the hybrid contract generally result in their separation from the host instrument. The Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. The debt discounts under these arrangements are amortized over the earlier of (i) the term of the related debt using the straight-line method which approximates the interest rate method or (ii) conversion of the debt. The amortization of debt discount is included as interest expense included in other income and expenses in the unaudited condensed statements of operations. DERIVATIVE FINANCIAL INSTRUMENTS The Company does not use derivatives to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. Derivative financial instruments accounted for as liabilities are initially recorded at fair value and then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivatives, the Company uses the Black-Scholes or binomial option valuation model to value the derivatives at inception and on subsequent valuation dates. The Company accounts for conversion features that are embedded within the Company’s convertible notes payable that do not have fixed settlement provisions as a separate derivative. In addition, warrants issued by the Company that do not have fixed settlement provisions are also treated as derivatives. The classification of derivatives, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the balance sheet as current or non-current based on whether net-cash settlement of the derivative could be required within 12 months of the unaudited condensed balance sheet date. STOCK-BASED COMPENSATION The Company accounts for share-based awards exchanged for employee services at the estimated grant date fair value of the award. The Company accounts for equity instruments issued to non-employees at their fair value on the measurement date. The measurement of stock-based compensation is subject to periodic adjustment as the underlying equity instrument vests or becomes non-forfeitable. Stock-based compensation charges are amortized over the vesting period or as earned. Stock-based compensation is recorded in the same component of operating expenses as if it were paid in cash. The Company generally issues new shares of common stock to satisfy conversion and warrant exercises. NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS PER SHARE Net loss attributable to common shareholders equals the Company’s net loss minus preferred stock dividends. Basic net loss attributable to common shareholders per share (“Basic net loss per share”) was computed using the weighted average number of common shares outstanding. Diluted net loss applicable to common shareholders per share (“Diluted net loss per share”) includes the effect of diluted common stock equivalents. Potentially dilutive securities from the exercise of stock options to purchase 444,660 shares of common stock and warrants to purchase 4,295,380 shares of common stock as of September 30, 2022, were excluded from the computation of diluted net loss per share because the effect of their inclusion would have been anti-dilutive. Potentially dilutive securities from the exercise of stock options to purchase 40,858 shares of common stock and warrants to purchase 4,393,230 shares of common stock as of September 30, 2021, were excluded from the computation of diluted net loss per share because the effect of their inclusion would have been anti-dilutive. RESEARCH AND DEVELOPMENT AND PRODUCT DEVELOPMENT COSTS Research and development costs are expenditures on new market development and related engineering costs. In addition to internal resources, the Company utilizes functional consulting resources, third-party software, and hardware development firms. The Company expenses all research and development costs as incurred until technological feasibility has been established for the product. Once technological feasibility is established, development costs including software and hardware design are capitalized until the product is available for general release to customers. Judgment is required in determining when technological feasibility of a product is established. For the nine months ended September 30, 2022, the Company capitalized $481,768 of such product development costs. Amortization of these costs, which will be on a straight-line basis over three years, has not yet commenced. RECENT ACCOUNTING PRONOUNCEMENTS Recent accounting standards that have been issued or proposed by FASB (Financial Accounting Standards Board) or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company’s financial statements upon adoption. |
Accrued Expenses
Accrued Expenses | 9 Months Ended |
Sep. 30, 2022 | |
Accrued Expenses [Abstract] | |
ACCRUED EXPENSES | NOTE 5 - ACCRUED EXPENSES Accrued expenses consist of the following: September 30, December 31, 2022 2021 Salaries, payroll taxes and vacation $ 160,719 $ 54,229 Merchant card fees 17,018 17,853 Professional fees 197,825 104,500 Management incentives 420,350 285,000 Lease liability 71,101 64,346 Dividends – Series C and F Preferred Stock 53,524 94,933 Other 129,217 228,424 Totals $ 1,049,754 $ 849,285 |
Stockholders_ Equity and Redeem
Stockholders’ Equity and Redeemable Preferred Stock | 9 Months Ended |
Sep. 30, 2022 | |
Stockholders’ Equity and Redeemable Preferred Stock [Abstract] | |
STOCKHOLDERS’ EQUITY AND REDEEMABLE PREFERRED STOCK | NOTE 6 - STOCKHOLDERS’ EQUITY AND REDEEMABLE PREFERRED STOCK October 2021 Reverse stock split On October 15, 2021, the Company announced that its shareholders had approved a reverse split of its common stock and Series C Redeemable Preferred at a ratio of 1 for 10. As a result of the reverse split, every 10 pre-split shares of common stock outstanding and every 10 pre-split shares of Series C Redeemable Preferred Stock outstanding were automatically exchanged for one new share of each without any action on the part of the holders. The number of outstanding common shares was reduced from approximately 88.3 million shares to approximately 8.8 million shares, and the number of outstanding Series C preferred shares was reduced from 2,000 shares to 200 shares. The reverse stock split did not affect the total number of shares of capital stock, including Series C Redeemable Preferred Stock, that the Company is authorized to issue. September 2021 Offering On September 15, 2021, the Company sold an aggregate of (i) 2,788,750 shares of common stock, par value of $0.0001 per share, and (ii) accompanying warrants to purchase up to an aggregate of 2,788,750 shares of Common Stock, at an exercise price of $4.95 per share, both of which include the underwriter’s full over-allotment option to purchase an additional 363,750 shares of common stock. The Shares and the Warrants were offered and sold to the public pursuant to the Company’s registration statement on Form S-1, as amended (File No. 333-259105), filed by the Company with the Securities and Exchange Commission (SEC) under the Securities Act of 1933, as amended (Securities Act), which became effective on September 14, 2021. The Warrants were not immediately exercisable, as the Company did not have a sufficient number of shares of Common Stock to reserve for issuance for the Warrants until the date (the “Initial Exercise Date”) that the Company’s stockholders approved an amendment to the Company’s certificate of incorporation to affect a reverse stock split of the shares of Common Stock so that there were a sufficient number of shares of Common Stock for issuance upon exercise of the Warrants. The Warrants became exercisable on the Initial Exercise Date (the effective date of the reverse stock split) and will terminate five years after the Initial Exercise Date. The exercise price of the Warrants is subject to customary adjustments for stock dividends, stock splits and other subdivisions, combinations, and re-classifications, and was reset on the date of the Company’s reverse stock split to the lower of (i) the closing price per share of the Common Stock immediately before the reverse stock split, giving effect to the reverse stock split and (ii) the exercise price then in effect. The Warrants are also exercisable on a cashless basis under certain circumstances, any time after the Initial Exercise Date, pursuant to the formula outlined in the Warrants. On October 15, 2021, after shareholder and Board approval of the reverse stock split, the exercise price for the Warrants was adjusted to $3.956 per share, The reverse stock split and the exercise price were retroactively reported in accordance with ASC 260-10-55-12, Restatement of EPS Data. On the Closing Date, the Company received gross proceeds of approximately $12.5 million, before deducting underwriting discounts and commissions and estimated offering expenses. The Company has been using the net proceeds from the Offering primarily for new product development, marketing and working capital. August 2021 Offering On August 13, 2021, the Company entered into a securities purchase agreement with institutional accredited investors providing for an aggregate investment of $3,999,999 for the issuance by the Company of (i) 1,333,333 shares of Series F Convertible Preferred Stock, par value $0.0001 per share, of the Company (the Series F Preferred Stock) convertible into shares of common stock, par value $0.0001 per share, of the Company that is issuable upon conversion of shares of Series F Preferred Stock; (ii) warrants, with a term of five and a half years exercisable after February 16, 2022, to purchase an aggregate of up to 666,667 shares of Common Stock at an exercise price of $7.80 per share. The securities issued to the investors were exempt from registration under the Securities Act of 1933, as amended, or the Securities Act, in reliance on Section 4(a)(2) thereof and Rule 506 of Regulation D thereunder, based on representations made by the investors, their prior relationship with the Company, and the absence of any general solicitation. The Company used the net proceeds from this offering for working capital and liability reduction purposes. In the three months ended September 30, 2021, 1,160,000 shares of Series F preferred stock were converted into 656,604 shares of common stock. On October 15, 2021, after shareholder and Board approval of the reverse stock split, the exercise price for the Warrants was adjusted to $4.95 per share and was retroactively reported in accordance with ASC 260-10-55-12, Restatement of EPS Data. For the three months and nine months ended September 30, 2022, the Company recorded Series F Preferred Stock dividends of $6,790 and $32,934, respectively. February 2021 Offering On February 2, 2021, the Company closed a registered direct offering and concurrent private placement pursuant to which the Company issued (i) an aggregate of 1,476,016 shares of Series E preferred stock, convertible into up to 295,203 shares of common stock, (ii) common stock purchase warrants to purchase up to 100,000 shares of common stock at an exercise price of $12.30 per share, which were exercisable immediately and had a term of five years, and (iii) common stock purchase warrants to purchase up to 195,203 shares of common stock at an exercise price of $12.30 per share with a term of five and one-half years first exercisable nine months after issuance, for gross proceeds of $4,000,003, before deducting any offering expenses. The Company used the net proceeds from this offering for working capital and liability reduction purposes. In February 2021, 1,476,016 shares of Series E preferred stock were converted into 295,203 shares of common stock. Also in February 2021, the Company recorded a deemed dividend of $1,480,801 from the beneficial conversion feature associated with the issuance of the Series E convertible preferred stock and warrants. January 2021 Warrant exchange On January 8, 2021, the Company entered into a Warrant Amendment and Exercise Agreement (the “Amendment”) with holders (the “Holder”) of a common stock purchase warrant, dated April 4, 2019, previously issued by the Company (the “Original Warrant”). In consideration for each exercise of the Original Warrant within 45 calendar days of the Amendment, in addition to the issuance of the Warrant shares, the Company agreed to deliver a new warrant to purchase shares of the Company’s common stock equal to the number of Original Warrants that the Holder exercised, at an exercise price of $15.25 per share, which represents the average Nasdaq Official Closing Price of the common stock for the five trading days immediately preceding the date of the Amendment (the “New Warrants”). The Investor held Original Warrants exercisable for up to 246,913 shares of common stock, subsequently exercised 50,000 Original Warrants within the 45 days, and received 50,000 New Warrants in addition to the Warrant shares. Series C Redeemable Preferred Stock In May 2017, the Company authorized Series C Redeemable Preferred Stock. Holders of Series C Redeemable Preferred Stock are entitled to receive dividends of 15% per year, payable in cash. For the three and nine months ended September 30, 2022, the Company recorded Series C Redeemable Preferred Stock dividends of $75,000 and $225,000, respectively. The Series C Redeemable Preferred Stock may be redeemed by the Company at the Company’s option in cash at any time, in whole or in part, upon payment of the stated value of the Series C Redeemable Preferred Stock and unpaid dividends. If a “fundamental change” occurs, the Series C Redeemable Preferred Stock shall be immediately redeemed in cash equal to the stated value of the Series C Redeemable Preferred Stock, and unpaid dividends. A fundamental change includes but is not limited to any change in the ownership of at least fifty percent of the voting stock; liquidation or dissolution, or the common stock ceases to be listed on the market upon which it currently trades. The holders of the Series C Redeemable Preferred Stock are entitled to vote on any matter submitted to the stockholders of the Company for a vote. One share of Series C Redeemable Preferred Stock carries the same voting rights as one share of common stock. Redeemable equity security is to be classified as temporary equity if it is conditionally redeemable upon the occurrence of an event that is not solely within the control of the issuer. Upon the determination that such events are probable, the equity security would be classified as a liability. Given that the Series C Redeemable Preferred Stock contains a fundamental change provision, the security is considered conditionally redeemable. Therefore, the Company has classified the Series C Redeemable Preferred Stock as temporary equity in the balance sheets on September 30, 2022, and December 31, 2021, until such time that events occur that indicate otherwise. Warrants There was no warrant activity during the nine months ended September 30, 2022. The following table summarizes the Company’s warrants outstanding and exercisable on September 30, 2022, and December 31, 2021: Number of Warrants Weighted Average Exercise Price Weighted Average Remaining Life In Years Aggregate Intrinsic Value Outstanding and Exercisable at January 1, 2021 1,569,007 $ 13.30 4.10 $ 10,850,158 Issued 3,897,534 $ 5.26 4.77 - Exercised (1,002,307 ) 9.07 - - Cancelled (168,854 ) 38.32 - - Outstanding and Exercisable at December 31, 2021 4,295,380 $ 6.02 4.59 - Outstanding and Exercisable at September 30, 2022 4,295,380 $ 6.02 4.02 $ 0.00 |
Stock Incentive Plans
Stock Incentive Plans | 9 Months Ended |
Sep. 30, 2022 | |
Stock Incentive Plans [Abstract] | |
STOCK INCENTIVE PLANS | NOTE 7 - STOCK INCENTIVE PLANS 2017 Stock Incentive Plan On August 24, 2017, the Company’s stockholders approved the 2017 Stock Incentive Plan (2017 SIP). The aggregate maximum number of shares of common stock that may be issued under the 2017 SIP is limited to 10% of the outstanding shares of common stock, calculated on the first business day of each fiscal year. Under the 2017 SIP, options that are forfeited or terminated, settled in cash in lieu of shares of common stock, or settled in a manner such that shares are not issued, will again immediately become available to be issued. If shares of common stock are withheld from payment of an award to satisfy tax obligations concerning the award, those shares of common stock will be treated as shares that have been issued under the 2017 SIP and will not again be available for issuance. During the quarter ended March 31, 2022, the Company issued 430,339 shares of common stock vesting over periods ranging from 30 to 48 months with an aggregate fair value of $1,331,870 to certain employees as inducement and incentive grants. During the quarter ended June 30, 2022, the Company issued 15,559 shares of common stock vesting on September 30, 2022 with an aggregate fair value of $17,582 to certain non-employees in lieu of cash payment for services. No shares were issued during the three months ended September 30, 2022. 2013 Long-Term Stock Incentive Plan On January 4, 2013, the Company’s stockholders approved the Company’s Long-Term Stock Incentive Plan (LTIP). The maximum number of shares of common stock that may be issued under the LTIP, including stock awards, stock issued to the Company’s Board, and stock appreciation rights, are limited to 10% of the common shares outstanding on the first business day of any fiscal year. During the three months ended March 31, 2022, the Company issued 237,500 stock options (5,000 of which were forfeited during the three months ended June 30, 2022) vesting over four years to employees with an exercise price of $3.36 and an option for 12,500 shares to a non-employee with a strike price of $2.20 and a total aggregate fair value of $743,310. In addition, 27,276 fully vested stock options were granted to six non-employee Board directors at an exercise price of $2.20 during the three months ended March 31, 2022. The aggregate fair value of the shares issued to the directors was $51,187. A total of 22,101 stock options were granted to two Advisory Board members at strike prices ranging from $1.80 to $1.82 vesting over periods up to one year during the three months ended June 30, 2022 and a total aggregate fair value of $34,203. During the three months ended September 30, 2022, the Company issued 22,500 stock options vesting over four years to employees with an exercise price of $1.09 and 10,900 stock options with 100% cliff vesting in one year to non-employees with a strike price of $1.09 and a total aggregate fair value of $54,233. In addition, 45,875 fully vested stock options were granted to five Stock-based Compensation Expense Total stock-based compensation expense during the nine months ended September 30, 2022, pertaining to awards under the 2017 Stock Incentive Plan and 2013 Long-Term Stock Incentive Plan amounted to $1,197,320. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 8 - COMMITMENTS AND CONTINGENCIES LEGAL MATTERS From time to time, the Company may be involved in various claims and legal actions arising in the ordinary course of our business. There is no action, suit, proceeding, inquiry, or investigation before or by any court, public board, government agency, self-regulatory organization, or body pending or, to the knowledge of the executive officers of the Company or any of our subsidiaries, threatened against or affecting our company, or any of our subsidiaries in which an adverse decision could have a material adverse effect upon our business, operating results, or financial condition. COMMITMENTS The Company leases office space and equipment, in the U.S., which is classified as operating leases expiring at various dates. The Company determines if an arrangement qualifies as a lease at the lease inception. Operating lease liabilities are recorded based on the present value of the future lease payments over the lease term, assessed as of the commencement date. The Company’s real estate lease, which is for office space and a fulfillment center, with a lease term of 5 years, expiring in August 2025. The Company also leases a copier with a lease term of 5 years, ending August 2023. The Company has elected to account for the lease and non-lease components (insurance and property taxes) as a single lease component for its real estate leases. Lease payments, which include lease components and non-lease components, are included in the measurement of the Company’s lease liabilities to the extent that such payments are either fixed amounts or variable amounts based on a rate or index (fixed in substance) as stipulated in the lease contract. Any actual costs over such amounts are expensed as incurred as variable lease costs. The Company’s lease agreements generally do not specify an implicit borrowing rate, and as such, the Company uses its incremental borrowing rate to calculate the present value of the future lease payments. The discount rate represents a risk-adjusted rate on a secured basis and is the rate at which the Company would borrow funds to satisfy the scheduled lease liability payment streams. The Company entered into a new five-year lease agreement in June 2020 for a new warehouse space located in Louisville, Kentucky. The ROU asset value-added because of this new lease agreement was $279,024. The Company’s ROU asset and lease liability accounts reflect the inclusion of this lease in the Company’s balance sheet as of September 30, 2022. The current monthly rent of $6,400 commenced in September 2022 and increases approximately 3% annually thereafter. The Company’s lease agreements include options for the Company to either renew or early terminate the lease. Renewal options are reviewed at lease commencement to determine if such options are reasonably certain of being exercised, which could impact the lease term. When determining if a renewal option is reasonably certain of being exercised, the Company considers several factors, including the significance of leasehold improvements on the property, whether the asset is difficult to replace, or specific characteristics unique to the lease that would make it reasonably certain that the Company would exercise the option. In most cases, the Company has concluded that renewal and early termination options are not reasonably certain of being exercised by the Company and thus not included in the Company’s ROU asset and lease liability. For the nine months ended September 30, 2022, the total operating lease cost was $75,761 of which $58,613 is recorded in direct operating costs and $17,148 is recorded in general and administrative expenses. The operating lease cost is recognized on a straight-line basis over the lease term. The following summarizes (i) the future minimum undiscounted lease payments under the non-cancelable lease for each of the next four years and thereafter, incorporating the practical expedient to account for lease and non-lease components as a single lease component for our existing real estate lease, (ii) a reconciliation of the undiscounted lease payments to the present value of the lease liabilities, and (iii) the lease-related account balances on the Company’s balance sheet as of September 30, 2022: Year Ending December 31, 2022 (excluding the nine months ended September 30, 2022) $ 23,746 2023 89,724 2024 80,000 2025 54,400 Total future minimum lease payments $ 247,870 Less imputed interest (41,051 ) Total present value of future minimum lease payments $ 206,819 As of September 30, 2022 Operating lease right-of-use assets $ 199,619 Other accrued expenses $ 71,101 Other long-term liabilities 135,718 $ 206,819 As of September 30, 2022 Weighted Average Remaining Lease Term 2.76 Weighted Average Discount Rate 12.90 % |
Subsequent Event
Subsequent Event | 9 Months Ended |
Sep. 30, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENT | NOTE 9 - SUBSEQUENT EVENT Nasdaq Notification On October 31, 2022, the Company received a written notification (the “Notice”) from the Listing Qualifications Department of the Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that it was not in compliance with the minimum bid price requirement for continued listing on the Nasdaq Capital Market, as set forth under Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Price Requirement”), because the closing bid price of the Common Stock was below $1.00 per share for the previous thirty (30) consecutive business days. The Notice has no immediate effect on the listing of the Common Stock, which will continue to trade uninterrupted on the Nasdaq Capital Market under the ticker “LGMK”. Pursuant to Nasdaq Listing Rule 5810(c)(3)(A), the Company has been granted 180 calendar days from the date of the Notice, or until April 29, 2023 (the “Compliance Period”), to regain compliance with the Minimum Bid Price Requirement. If at any time during the Compliance Period, the bid price of the Common Stock closes at or above $1.00 per share for a minimum of ten (10) consecutive business days, Nasdaq will provide the Company with written confirmation of compliance with the Minimum Bid Price Requirement and the matter will be closed. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
USE OF ESTIMATES IN THE FINANCIAL STATEMENTS | USE OF ESTIMATES IN THE FINANCIAL STATEMENTS The preparation of financial statements in conformity with generally accepted accounting principles in the United States (U.S. GAAP) 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. The Company’s management evaluates these significant estimates and assumptions, including those related to the fair value of acquired assets and liabilities, stock-based compensation, income taxes, allowance for doubtful accounts, long-lived assets, and inventories, and other matters that affect the financial statements and disclosures. Actual results could differ from those estimates. |
CASH AND CASH EQUIVALENTS | CASH AND CASH EQUIVALENTS The Company considers all highly liquid securities with an original maturity date of three months or less when purchased to be cash equivalents. Due to their short-term nature, cash equivalents are carried at cost, which approximates fair value. On September 30, 2022, and December 31, 2021, cash and cash equivalents totaled $9,328,504 and $12,044,415, respectively. |
RESTRICTED CASH | RESTRICTED CASH On September 30, 2022, and December 31, 2021, the Company had restricted cash of $59,988 and $210,131, respectively. Restricted cash includes amounts held back by the Company’s third-party credit card processor for potential customer refunds, claims, and disputes and held as collateral for company credit cards. |
CONCENTRATIONS OF CREDIT RISK | CONCENTRATIONS OF CREDIT RISK Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents. The Company maintains its cash and cash equivalents balances in large well-established financial institutions located in the United States. At times, the Company’s cash and cash equivalents balances may be uninsured or in deposit accounts that exceed the Federal Deposit Insurance Corporation (FDIC) insurance limits. Cash equivalents amounted to $9,057,747 on September 30, 2022. |
REVENUE RECOGNITION | REVENUE RECOGNITION The Company’s revenues consist of product sales to either end customers or distributors. The Company’s revenues are derived from contracts with customers, which are in most cases customer purchase orders. For each contract, the promise to transfer the control of the products, each of which is individually distinct, is considered to be the identified performance obligation. As part of the consideration promised in each contract, the Company evaluates the customer’s credit risk. Our contracts do not have any financing components, as payment terms are generally due Net-30 days after the invoice date. The Company’s products are almost always sold at fixed prices. In determining the transaction price, we evaluate whether the price is subject to any refunds, due to product returns or adjustments due to volume discounts, rebates, or price concessions to determine the net consideration we expect to be entitled to. The Company’s sales are recognized at a point-in-time under the core principle of recognizing revenue when control transfers to the customer, which generally occurs when the Company ships or delivers the product from its fulfillment center to our customers, when our customer accepts and has the legal title of the goods, and the Company has a present right to payment for such goods. Based on the respective contract terms, most of our contract revenues are recognized either (i) upon shipment based on free on board (FOB) shipping point, or (ii) when the product arrives at its destination. For the nine months ended September 30, 2022, and 2021, none of our sales were recognized over time. |
SALES TO DISTRIBUTORS AND RESELLERS | SALES TO DISTRIBUTORS AND RESELLERS Sales to certain distributors and resellers are made under terms allowing limited rights of return of the Company’s products held in their inventory or upon sale to their end customers. The Company maintains a reserve for unprocessed and estimated future price adjustments claims and returns as a refund liability. The reserve is recorded as a reduction to revenue in the same period that the related revenue is recorded and is calculated based on an analysis of historical claims and returns over a period of time to appropriately account for current pricing and business trends. Similarly, sales returns and allowances are recorded based on historical return rates, as a reduction in revenue with a corresponding reduction to cost of sales for the estimated cost of inventory that is expected to be returned. These reserves were not material on the Condensed Balance Sheets on September 30, 2022, and December 31, 2021. |
SHIPPING AND HANDLING | SHIPPING AND HANDLING Amounts billed to customers for shipping and handling are included in revenues. The related freight charges incurred by the Company are included in the cost of goods sold and were $94,080 and $467,293, respectively, for the three and nine months ended September 30, 2022, and $149,923, and $374,484, respectively, for the three and nine months ended September 30, 2021. |
ACCOUNTS RECEIVABLE | ACCOUNTS RECEIVABLE - NET For the three and nine months ended September 30, 2022, and the year ended December 31, 2021, the Company’s revenues primarily included shipments of the LogicMark products. The terms and conditions of these sales provided certain customers with trade credit terms. In addition, these sales were made to the retailers with no rights of return and are subject to the normal warranties offered to the ultimate consumer for product defects. Accounts receivable are stated at net realizable value. The Company regularly reviews accounts receivable balances and adjusts the receivable allowance for doubtful accounts as necessary whenever events or circumstances indicate the carrying value may not be recoverable. On September 30, 2022, and December 31, 2021, the Company had an allowance for doubtful accounts of $1,146 and $5,411, respectively. |
INVENTORY | INVENTORY The Company measures inventory at the lower of cost or net realizable value, defined as estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The Company performs regular reviews of inventory quantities on hand and evaluates the realizable value of its inventories. The Company adjusts the carrying value of the inventory as necessary with estimated valuation reserves for excess, obsolete, and slow-moving inventory by comparing the individual inventory parts to forecasted product demand or production requirements. The inventory is valued at the lower of cost or net realizable value with cost determined using the first-in, first-out method. As of September 30, 2022, inventory was comprised of $1,077,160 in finished goods on hand. As of December 31, 2021, inventory was comprised of $1,237,280 in finished goods on hand. The Company is required to prepay for certain inventory with certain vendors until credit terms can be established. As of September 30, 2022, and December 31, 2021, $670,221 and $559,938 respectively, of prepayments made for inventory are included in prepaid expenses and other current assets on the balance sheet. |
LONG-LIVED ASSETS | LONG-LIVED ASSETS Long-lived assets, such as property and equipment, and other intangibles are evaluated for impairment whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable. When indicators exist, the Company tests for the impairment of the definite-lived assets based on the undiscounted future cash flow the assets are expected to generate over their remaining useful lives, compared to the carrying value of the assets. If the carrying amount of the assets is determined not to be recoverable, a write-down to fair value is recorded. Management estimates future cash flows using assumptions about expected future operating performance. Management’s estimates of future cash flows may differ from actual cash flow due to, among other things, technological changes, economic conditions, or changes to the Company’s business operations. |
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT Property and equipment consisting of equipment, furniture and fixtures, and website and other are stated at cost. The costs of additions and improvements are generally capitalized and expenditures for repairs and maintenance are expensed in the period incurred. When items of property and equipment are sold or retired, the related costs and accumulated depreciation are removed from the accounts, and any gain or loss is included in income. Depreciation of property and equipment is provided utilizing the straight-line method over the estimated useful life of the respective asset as follows: Equipment 5 years Furniture and fixtures 3 to 5 years Website and other 3 years |
GOODWILL | GOODWILL Goodwill is reviewed annually in the fourth quarter, or when circumstances indicate that an impairment may have occurred. The Company first performs a qualitative assessment of goodwill impairment, which considers factors such as market conditions, performance compared to forecast, business outlook, and unusual events. If the qualitative assessment indicates a possible goodwill impairment, goodwill is then quantitatively tested for impairment. The Company may elect to bypass the qualitative assessment and proceed directly to the quantitative test. If a quantitative goodwill impairment test is required, the fair value is determined using a variety of assumptions including estimated future cash flows using applicable discount rates (income approach) and comparisons to other similar companies (market approach). |
OTHER INTANGIBLE ASSETS | OTHER INTANGIBLE ASSETS The Company’s intangible assets are related to the acquisition of LogicMark, LLC and are included in other intangible assets in the Company’s balance sheet on September 30, 2022 and December 31, 2021. On September 30, 2022, Other intangible assets, net of amortization, are comprised of patents of $1,793,889; trademarks of $867,559; and customer relationships of $1,238,690. On December 31, 2021, Other intangible assets are comprised of patents of $2,072,984; trademarks of $915,619; and customer relationships of $1,488,044. The Company amortizes these intangible assets using the straight-line method over their estimated useful lives which for the patents, trademarks, and customer relationships are 11 years, 20 years, and 10 years, respectively. During the three and nine months ended September 30, 2022, the Company recorded amortization expense of $194,232 and $582,516, respectively. During the three and nine months ended September 30, 2021, the Company recorded amortization expense of $192,019 and $569,796, respectively. As of September 30, 2022, total amortization expense estimated for the remainder of fiscal year 2022 is $194,241, and for each of the next five fiscal years, the total amortization expense is estimated to be as follows: 2023 - $776,964; 2024 - $776,964; 2025 - $776,964; 2026 - $602,648; 2027- $241,218; and later years - $531,139. |
CONVERTIBLE INSTRUMENTS | CONVERTIBLE INSTRUMENTS The Company applies the accounting standards for derivatives and hedging and for distinguishing liabilities from equity when accounting for hybrid contracts that feature conversion options. The accounting standards require companies to separate conversion options from their host instruments and account for them as free-standing derivatives according to certain criteria. The criteria include circumstances in which (i) the economic characteristics and risks of the embedded derivative are not closely related to the economic characteristics and risks of the host contract, (ii) the hybrid instrument that embodies both the embedded derivative and the host contract is not re-measured at fair value under generally accepted accounting principles with changes in fair value reported in earnings as they occur and (iii) a separate instrument with the same terms as the embedded derivative would be considered a derivative. The derivative is subsequently marked to market at each reporting date based on the current fair value, with the changes in fair value reported in the results of operations. Conversion options with variable settlement features such as provisions to adjust the conversion price upon subsequent issuances at exercise prices more favorable than that in the hybrid contract generally result in their separation from the host instrument. The Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. The debt discounts under these arrangements are amortized over the earlier of (i) the term of the related debt using the straight-line method which approximates the interest rate method or (ii) conversion of the debt. The amortization of debt discount is included as interest expense included in other income and expenses in the unaudited condensed statements of operations. |
DERIVATIVE FINANCIAL INSTRUMENTS | DERIVATIVE FINANCIAL INSTRUMENTS The Company does not use derivatives to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. Derivative financial instruments accounted for as liabilities are initially recorded at fair value and then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivatives, the Company uses the Black-Scholes or binomial option valuation model to value the derivatives at inception and on subsequent valuation dates. The Company accounts for conversion features that are embedded within the Company’s convertible notes payable that do not have fixed settlement provisions as a separate derivative. In addition, warrants issued by the Company that do not have fixed settlement provisions are also treated as derivatives. The classification of derivatives, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the balance sheet as current or non-current based on whether net-cash settlement of the derivative could be required within 12 months of the unaudited condensed balance sheet date. |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION The Company accounts for share-based awards exchanged for employee services at the estimated grant date fair value of the award. The Company accounts for equity instruments issued to non-employees at their fair value on the measurement date. The measurement of stock-based compensation is subject to periodic adjustment as the underlying equity instrument vests or becomes non-forfeitable. Stock-based compensation charges are amortized over the vesting period or as earned. Stock-based compensation is recorded in the same component of operating expenses as if it were paid in cash. The Company generally issues new shares of common stock to satisfy conversion and warrant exercises. |
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS PER SHARE | NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS PER SHARE Net loss attributable to common shareholders equals the Company’s net loss minus preferred stock dividends. Basic net loss attributable to common shareholders per share (“Basic net loss per share”) was computed using the weighted average number of common shares outstanding. Diluted net loss applicable to common shareholders per share (“Diluted net loss per share”) includes the effect of diluted common stock equivalents. Potentially dilutive securities from the exercise of stock options to purchase 444,660 shares of common stock and warrants to purchase 4,295,380 shares of common stock as of September 30, 2022, were excluded from the computation of diluted net loss per share because the effect of their inclusion would have been anti-dilutive. Potentially dilutive securities from the exercise of stock options to purchase 40,858 shares of common stock and warrants to purchase 4,393,230 shares of common stock as of September 30, 2021, were excluded from the computation of diluted net loss per share because the effect of their inclusion would have been anti-dilutive. |
RESEARCH AND DEVELOPMENT AND PRODUCT DEVELOPMENT COSTS | RESEARCH AND DEVELOPMENT AND PRODUCT DEVELOPMENT COSTS Research and development costs are expenditures on new market development and related engineering costs. In addition to internal resources, the Company utilizes functional consulting resources, third-party software, and hardware development firms. The Company expenses all research and development costs as incurred until technological feasibility has been established for the product. Once technological feasibility is established, development costs including software and hardware design are capitalized until the product is available for general release to customers. Judgment is required in determining when technological feasibility of a product is established. For the nine months ended September 30, 2022, the Company capitalized $481,768 of such product development costs. Amortization of these costs, which will be on a straight-line basis over three years, has not yet commenced. |
RECENT ACCOUNTING PRONOUNCEMENTS | RECENT ACCOUNTING PRONOUNCEMENTS Recent accounting standards that have been issued or proposed by FASB (Financial Accounting Standards Board) or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company’s financial statements upon adoption. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Schedule of estimated useful life of property and equipment | Equipment 5 years Furniture and fixtures 3 to 5 years Website and other 3 years |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Accrued Expenses [Abstract] | |
Schedule of accrued expenses | September 30, December 31, 2022 2021 Salaries, payroll taxes and vacation $ 160,719 $ 54,229 Merchant card fees 17,018 17,853 Professional fees 197,825 104,500 Management incentives 420,350 285,000 Lease liability 71,101 64,346 Dividends – Series C and F Preferred Stock 53,524 94,933 Other 129,217 228,424 Totals $ 1,049,754 $ 849,285 |
Stockholders_ Equity and Rede_2
Stockholders’ Equity and Redeemable Preferred Stock (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Stockholders’ Equity and Redeemable Preferred Stock [Abstract] | |
Schedule of warrants outstanding and exercisable | Number of Warrants Weighted Average Exercise Price Weighted Average Remaining Life In Years Aggregate Intrinsic Value Outstanding and Exercisable at January 1, 2021 1,569,007 $ 13.30 4.10 $ 10,850,158 Issued 3,897,534 $ 5.26 4.77 - Exercised (1,002,307 ) 9.07 - - Cancelled (168,854 ) 38.32 - - Outstanding and Exercisable at December 31, 2021 4,295,380 $ 6.02 4.59 - Outstanding and Exercisable at September 30, 2022 4,295,380 $ 6.02 4.02 $ 0.00 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies [Abstract] | |
Schedule of future lease obligation | Year Ending December 31, 2022 (excluding the nine months ended September 30, 2022) $ 23,746 2023 89,724 2024 80,000 2025 54,400 Total future minimum lease payments $ 247,870 Less imputed interest (41,051 ) Total present value of future minimum lease payments $ 206,819 |
Schedule of lease expense | As of September 30, 2022 Operating lease right-of-use assets $ 199,619 Other accrued expenses $ 71,101 Other long-term liabilities 135,718 $ 206,819 As of September 30, 2022 Weighted Average Remaining Lease Term 2.76 Weighted Average Discount Rate 12.90 % |
Liquidity and Management Plans
Liquidity and Management Plans (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||||||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Jun. 30, 2022 | Dec. 31, 2021 | Jun. 30, 2021 | Dec. 31, 2020 | |||
Liquidity and Management Plans [Abstract] | ||||||||||
Operating loss | $ (2,138,105) | $ (496,883) | [1] | $ (4,546,683) | $ (1,491,445) | [1] | ||||
Net loss | (2,093,518) | (641,704) | [1] | (4,488,936) | (5,419,609) | [1] | ||||
Cash | 9,328,504 | 9,328,504 | $ 12,044,415 | |||||||
Stockholders’ equity | 23,039,621 | $ 32,417,409 | 23,039,621 | $ 32,417,409 | $ 24,761,528 | 26,589,171 | $ 17,359,350 | $ 9,159,210 | ||
Working capital | $ 9,391,383 | $ 9,391,383 | $ 13,098,049 | |||||||
[1]Expenses in 2021 have been reclassified to conform to the 2022 presentation format. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Product Information [Line Items] | |||||
Cash and cash equivalents | $ 9,328,504 | $ 9,328,504 | $ 12,044,415 | ||
Restricted cash | 59,988 | $ 59,988 | 210,131 | ||
Cash equivalents amount | $9,057,747 | ||||
Freight charges | 94,080 | $ 149,923 | $ 467,293 | $ 374,484 | |
Allowance for doubtful accounts | 1,146 | 1,146 | 5,411 | ||
Inventory finished goods | 1,077,160 | 1,077,160 | 1,237,280 | ||
Prepaid expenses and other current assets | 670,221 | 670,221 | 559,938 | ||
Amortization expense | 582,517 | $ 569,796 | |||
Amortization expense estimated for 2022 | 194,241 | 194,241 | |||
Amortization expense estimated for 2023 | 776,964 | 776,964 | |||
Amortization expense estimated for 2024 | 776,964 | 776,964 | |||
Amortization expense estimated for 2025 | 776,964 | 776,964 | |||
Amortization expense estimated for 2026 | 602,648 | 602,648 | |||
Amortization expense estimated for 2027 | 241,218 | 241,218 | |||
Amortization expense estimated, later years | $ 531,139 | $ 531,139 | |||
Stock options purchase (in Shares) | 444,660 | 40,858 | |||
Development costs | $ 481,768 | ||||
Warrant [Member] | |||||
Product Information [Line Items] | |||||
Warrants purchase (in Shares) | 4,295,380 | 4,393,230 | 4,295,380 | 4,393,230 | |
Logic Mark Investment Partners [Member] | |||||
Product Information [Line Items] | |||||
Amortization expense | $ 194,232 | $ 192,019 | $ 582,516 | $ 569,796 | |
Logic Mark Investment Partners [Member] | Patents [Member] | |||||
Product Information [Line Items] | |||||
Intangible assets of patents | 1,793,889 | $ 1,793,889 | 2,072,984 | ||
Other intangible assets, estimated useful lives | 11 years | ||||
Logic Mark Investment Partners [Member] | Trademarks [Member] | |||||
Product Information [Line Items] | |||||
Intangible assets trademarks | 867,559 | $ 867,559 | 915,619 | ||
Other intangible assets, estimated useful lives | 20 years | ||||
Logic Mark Investment Partners [Member] | Customer Relationships [Member] | |||||
Product Information [Line Items] | |||||
Intangible assets customer relationships | $ 1,238,690 | $ 1,238,690 | $ 1,488,044 | ||
Other intangible assets, estimated useful lives | 10 years |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - Schedule of estimated useful life of property and equipment | 9 Months Ended |
Sep. 30, 2022 | |
Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 5 years |
Furniture and Fixtures [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 3 years |
Furniture and Fixtures [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 5 years |
Website and Other [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 3 years |
Accrued Expenses (Details) - Sc
Accrued Expenses (Details) - Schedule of accrued expenses - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Schedule Of Accrued Expenses Abstract | ||
Salaries, payroll taxes and vacation | $ 160,719 | $ 54,229 |
Merchant card fees | 17,018 | 17,853 |
Professional fees | 197,825 | 104,500 |
Management incentives | 420,350 | 285,000 |
Lease liability | 71,101 | 64,346 |
Dividends – Series C and F Preferred Stock | 53,524 | 94,933 |
Other | 129,217 | 228,424 |
Totals | $ 1,049,754 | $ 849,285 |
Stockholders_ Equity and Rede_3
Stockholders’ Equity and Redeemable Preferred Stock (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||
Oct. 15, 2021 | Feb. 02, 2021 | Sep. 15, 2021 | Feb. 28, 2021 | May 31, 2017 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Aug. 13, 2021 | |
Stockholders’ Equity and Redeemable Preferred Stock (Details) [Line Items] | |||||||||||
Reverse stock split, description | On October 15, 2021, the Company announced that its shareholders had approved a reverse split of its common stock and Series C Redeemable Preferred at a ratio of 1 for 10. As a result of the reverse split, every 10 pre-split shares of common stock outstanding and every 10 pre-split shares of Series C Redeemable Preferred Stock outstanding were automatically exchanged for one new share of each without any action on the part of the holders. | ||||||||||
Common stock shares outstanding | 9,608,937 | 9,608,937 | 9,163,039 | ||||||||
Common stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||
Gross proceeds (in Dollars) | $ 12,500,000 | ||||||||||
Investment (in Dollars) | $ 3,999,999 | ||||||||||
Preferred stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||
Issuance, for gross proceeds (in Dollars) | $ 4,000,003 | ||||||||||
Deemed dividend (in Dollars) | |||||||||||
Voting rights, description | One share of Series C Redeemable Preferred Stock carries the same voting rights as one share of common stock. | ||||||||||
Common Stock [Member] | |||||||||||
Stockholders’ Equity and Redeemable Preferred Stock (Details) [Line Items] | |||||||||||
Aggregate of purchase shares | 13,283 | ||||||||||
Issuance of Series E Preferred stock, net | |||||||||||
Converted into shares of common stock | 295,203 | ||||||||||
Issuance, for gross proceeds (in Dollars) | |||||||||||
Deemed dividend (in Dollars) | |||||||||||
Maximum [Member] | |||||||||||
Stockholders’ Equity and Redeemable Preferred Stock (Details) [Line Items] | |||||||||||
Common stock shares outstanding | 88,300,000 | ||||||||||
Minimum [Member] | |||||||||||
Stockholders’ Equity and Redeemable Preferred Stock (Details) [Line Items] | |||||||||||
Common stock shares outstanding | 8,800,000 | ||||||||||
Series C Preferred Stock [Member] | |||||||||||
Stockholders’ Equity and Redeemable Preferred Stock (Details) [Line Items] | |||||||||||
Preference stock shares outstanding | 200 | 200 | 200 | ||||||||
Preferred stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||
Series C Preferred Stock [Member] | Maximum [Member] | |||||||||||
Stockholders’ Equity and Redeemable Preferred Stock (Details) [Line Items] | |||||||||||
Preference stock shares outstanding | 2,000 | ||||||||||
Series C Preferred Stock [Member] | Minimum [Member] | |||||||||||
Stockholders’ Equity and Redeemable Preferred Stock (Details) [Line Items] | |||||||||||
Preference stock shares outstanding | 200 | ||||||||||
Series F Preferred Stock [Member] | |||||||||||
Stockholders’ Equity and Redeemable Preferred Stock (Details) [Line Items] | |||||||||||
Preference stock shares outstanding | 173,333 | 173,333 | 173,333 | ||||||||
Preferred stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||
Preferred stock dividends (in Dollars) | $ 6,790 | $ 32,934 | |||||||||
Series C Redeemable Preferred Stock [Member] | |||||||||||
Stockholders’ Equity and Redeemable Preferred Stock (Details) [Line Items] | |||||||||||
Preferred stock dividends (in Dollars) | $ 75,000 | $ 225,000 | |||||||||
Cumulative dividends rate | 15% | ||||||||||
September 2021 Offering [Member] | |||||||||||
Stockholders’ Equity and Redeemable Preferred Stock (Details) [Line Items] | |||||||||||
Aggregate of sale, shares | 2,788,750 | ||||||||||
Common stock, par value (in Dollars per share) | $ 0.0001 | ||||||||||
Aggregate of purchase shares | 2,788,750 | ||||||||||
Exercise price per share (in Dollars per share) | $ 4.95 | ||||||||||
Additional shares of common stock | 363,750 | ||||||||||
Warrant exercise price (in Dollars per share) | $ 3.956 | ||||||||||
August 2021 Offering [Member] | |||||||||||
Stockholders’ Equity and Redeemable Preferred Stock (Details) [Line Items] | |||||||||||
Common stock, par value (in Dollars per share) | $ 0.0001 | ||||||||||
Shares issued | 1,333,333 | ||||||||||
Preferred stock, par value (in Dollars per share) | $ 0.0001 | ||||||||||
Common stock, shares issued | 656,604 | 656,604 | 666,667 | ||||||||
Common stock exercise price per share (in Dollars per share) | $ 7.8 | ||||||||||
Preferred stock, shares issued | 1,160,000 | ||||||||||
Warrants per share (in Dollars per share) | $ 4.95 | ||||||||||
February 2021 Offering [Member] | |||||||||||
Stockholders’ Equity and Redeemable Preferred Stock (Details) [Line Items] | |||||||||||
Registered direct offering, description | (ii) common stock purchase warrants to purchase up to 100,000 shares of common stock at an exercise price of $12.30 per share, which were exercisable immediately and had a term of five years, and (iii) common stock purchase warrants to purchase up to 195,203 shares of common stock at an exercise price of $12.30 per share with a term of five and one-half years first exercisable nine months after issuance, for gross proceeds of $4,000,003, before deducting any offering expenses. | ||||||||||
Issuance of Series E Preferred stock, net | 1,476,016 | 1,476,016 | |||||||||
Converted into shares of common stock | 295,203 | ||||||||||
Issuance, for gross proceeds (in Dollars) | $ 4,000,003 | ||||||||||
Deemed dividend (in Dollars) | $ 1,480,801 | ||||||||||
February 2021 Offering [Member] | Common Stock [Member] | |||||||||||
Stockholders’ Equity and Redeemable Preferred Stock (Details) [Line Items] | |||||||||||
Converted into shares of common stock | 295,203 | ||||||||||
January 2021 Warrant exchange [Member] | |||||||||||
Stockholders’ Equity and Redeemable Preferred Stock (Details) [Line Items] | |||||||||||
Common stock, shares issued | 246,913 | 246,913 | |||||||||
Common stock exercise price per share (in Dollars per share) | $ 15.25 | $ 15.25 | |||||||||
Original warrants | 50,000 | ||||||||||
Addition of warrants | 50,000 |
Stockholders_ Equity and Rede_4
Stockholders’ Equity and Redeemable Preferred Stock (Details) - Schedule of warrants outstanding and exercisable - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Number of Warrants [Member] | ||
Class of Warrant or Right [Line Items] | ||
Number of Warrants, Outstanding | 4,295,380 | 1,569,007 |
Number of Warrants, Issued | 3,897,534 | |
Number of Warrants, Exercised | (1,002,307) | |
Number of Warrants, Cancelled | (168,854) | |
Number of Warrants, Outstanding | 4,295,380 | 4,295,380 |
Weighted Average Exercise Price [Member] | ||
Class of Warrant or Right [Line Items] | ||
Weighted Average Exercise Price, Outstanding | $ 6.02 | $ 13.3 |
Weighted Average Exercise Price, Issued | 5.26 | |
Weighted Average Exercise Price, Exercised | 9.07 | |
Weighted Average Exercise Price, Cancelled | 38.32 | |
Weighted Average Exercise Price, Outstanding | $ 6.02 | $ 6.02 |
Weighted Average Remaining Life In Years [Member] | ||
Class of Warrant or Right [Line Items] | ||
Weighted Average Remaining Life In Years, Outstanding | 4 years 1 month 6 days | |
Weighted Average Remaining Life In Years, Issued | 4 years 9 months 7 days | |
Weighted Average Remaining Life In Years, Exercised | ||
Weighted Average Remaining Life In Years, Cancelled | ||
Weighted Average Remaining Life In Years, Outstanding | 4 years 7 days | 4 years 7 months 2 days |
Aggregate Intrinsic Value [Member] | ||
Class of Warrant or Right [Line Items] | ||
Aggregate Intrinsic Value, Outstanding | $ 10,850,158 | |
Aggregate Intrinsic Value, Issued | ||
Aggregate Intrinsic Value, Exercised | ||
Aggregate Intrinsic Value, Cancelled | ||
Aggregate Intrinsic Value, Outstanding | $ 0 |
Stock Incentive Plans (Details)
Stock Incentive Plans (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Jan. 04, 2013 | Aug. 24, 2017 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2022 | |
Stock Incentive Plans (Details) [Line Items] | ||||||
Shares issued of stock options | 22,500 | |||||
Stock options vesting term | 5 years | |||||
Exercise price (in Dollars per share) | $ 1.09 | $ 1.09 | ||||
Aggregate fair value (in Dollars) | $ 54,233 | $ 34,203 | ||||
Vested stock options shares | 45,875 | |||||
Strike price (in Dollars per share) | $ 1.09 | |||||
Vesting percentage | 100% | |||||
Fair value issued to directors (in Dollars) | $ 72,815 | |||||
Non Employee [Member] | ||||||
Stock Incentive Plans (Details) [Line Items] | ||||||
Shares issued of stock options | 10,900 | |||||
Exercise price (in Dollars per share) | $ 1.09 | $ 1.09 | ||||
2017 Stock Incentive Plan [Member] | ||||||
Stock Incentive Plans (Details) [Line Items] | ||||||
Common shares outstanding, percentage | 10% | |||||
Number of options vested | 430,339 | |||||
Stock fair value (in Dollars) | $ 17,582 | $ 1,331,870 | ||||
Number of stock options vested | 15,559 | |||||
Total stock-based compensation expense (in Dollars) | $ 1,197,320 | |||||
Long-Term Stock Incentive Plan [Member] | ||||||
Stock Incentive Plans (Details) [Line Items] | ||||||
Common shares outstanding, percentage | 10% | |||||
Shares issued of stock options | 237,500 | |||||
Forfeited shares | 5,000 | |||||
Stock options vesting term | 4 years | 4 years | ||||
Exercise price (in Dollars per share) | $ 3.36 | |||||
Number of shares option | 12,500 | |||||
Strike price per share (in Dollars per share) | $ 2.2 | |||||
Aggregate fair value (in Dollars) | $ 743,310 | |||||
Vested stock options shares | 27,276 | |||||
Directors exercise price (in Dollars per share) | $ 2.2 | |||||
Aggregate fair value (in Dollars) | $ 51,187 | |||||
Stock option granted | 22,101 | |||||
Long-Term Stock Incentive Plan [Member] | Minimum [Member] | ||||||
Stock Incentive Plans (Details) [Line Items] | ||||||
Strike price (in Dollars per share) | $ 1.8 | |||||
Long-Term Stock Incentive Plan [Member] | Maximum [Member] | ||||||
Stock Incentive Plans (Details) [Line Items] | ||||||
Strike price (in Dollars per share) | $ 1.82 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | |
Commitments and Contingencies (Details) [Line Items] | ||
Real estate lease term, description | The Company’s real estate lease, which is for office space and a fulfillment center, with a lease term of 5 years, expiring in August 2025. The Company also leases a copier with a lease term of 5 years, ending August 2023. | |
Lease agreement amount | $ 199,619 | $ 248,309 |
Monthly rent | $ 6,400 | |
Increasing annual rent, percentage | 3% | |
Operating lease cost | $ 75,761 | |
Direct operating costs | 58,613 | |
General and administrative expenses | 17,148 | |
ROU [Member] | ||
Commitments and Contingencies (Details) [Line Items] | ||
Lease agreement amount | $ 279,024 |
Commitments and Contingencies_3
Commitments and Contingencies (Details) - Schedule of future lease obligation | Sep. 30, 2022 USD ($) |
Schedule Of Future Lease Obligation Abstract | |
2022 (excluding the nine months ended September 30, 2022) | $ 23,746 |
2023 | 89,724 |
2024 | 80,000 |
2025 | 54,400 |
Total future minimum lease payments | 247,870 |
Less imputed interest | (41,051) |
Total present value of future minimum lease payments | $ 206,819 |
Commitments and Contingencies_4
Commitments and Contingencies (Details) - Schedule of lease expense - Operating Expense [Member] | Sep. 30, 2022 USD ($) |
Commitments and Contingencies (Details) - Schedule of lease expense [Line Items] | |
Operating lease right-of-use assets | $ 199,619 |
Other accrued expenses | 71,101 |
Other long-term liabilities | 135,718 |
Total | $ 206,819 |
Weighted Average Remaining Lease Term | 2 years 9 months 3 days |
Weighted Average Discount Rate | 12.90% |
Subsequent Event (Details)
Subsequent Event (Details) - $ / shares | Oct. 31, 2022 | Sep. 30, 2022 |
Subsequent Event [Member] | ||
Subsequent Event (Details) [Line Items] | ||
Common stock, per share | $ 1 | |
Nasdaq [Member] | ||
Subsequent Event (Details) [Line Items] | ||
Common stock, per share | $ 1 |