Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | May 03, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | Guardion Health Sciences, Inc. | |
Entity Central Index Key | 0001642375 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business Flag | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Common Stock, Shares Outstanding | 22,491,264 | |
Trading Symbol | GHSI | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2019 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Current assets | ||
Cash | $ 174,298 | $ 670,948 |
Accounts receivable | 15,086 | 28,203 |
Inventories | 303,819 | 357,997 |
Prepaid expenses | 51,161 | 47,773 |
Total current assets | 544,364 | 1,104,921 |
Deposits | 11,751 | 11,751 |
Property and equipment, net | 265,176 | 274,804 |
Right of use asset, net | 626,667 | |
Deferred offering costs | 557,000 | 270,000 |
Intangible assets, net | 402,445 | 456,104 |
Goodwill | 1,563,520 | 1,563,520 |
Total assets | 3,970,923 | 3,681,100 |
Current liabilities | ||
Accounts payable and accrued liabilities | 829,040 | 413,925 |
Accrued expenses and deferred rent | 65,000 | 81,412 |
Derivative warrant liability | 436,034 | |
Lease liability - current | 121,546 | |
Convertible notes payable | 17,024 | |
Notes payable | 100,548 | |
Total current liabilities | 1,569,192 | 495,337 |
Lease liability - long term | 513,585 | |
Total liabilities | 2,082,777 | 495,337 |
Commitments and contingencies | ||
Stockholders' Equity | ||
Preferred stock, $0.001 par value; 10,000,000 shares authorized | ||
Common stock, $0.001 par value; 90,000,000 shares authorized; 20,856,611 and 20,564,328 shares issued and outstanding at March 31, 2019 and December 31, 2018, respectively | 20,857 | 20,564 |
Additional paid-in capital | 37,885,751 | 37,798,562 |
Accumulated deficit | (36,018,462) | (34,633,363) |
Total stockholders' equity | 1,888,146 | 3,185,763 |
Total liabilities and stockholders' equity | $ 3,970,923 | $ 3,681,100 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 90,000,000 | 90,000,000 |
Common stock, shares issued | 20,856,611 | 20,564,328 |
Common stock, shares outstanding | 20,856,611 | 20,564,328 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenue | ||
Medical foods | $ 99,934 | $ 72,138 |
Vision testing diagnostics | 142,604 | 120,902 |
Total Revenue | 242,538 | 193,040 |
Cost of goods sold | ||
Medical foods | 38,272 | 32,188 |
Vision testing diagnostics | 55,220 | 47,090 |
Total Cost of goods sold | 93,492 | 79,278 |
Gross profit | 149,046 | 113,762 |
Operating expenses | ||
Research and development | 29,028 | 159,588 |
Sales and marketing | 353,537 | 605,990 |
General and administrative | 947,974 | 1,680,810 |
Total operating expenses | 1,330,539 | 2,446,388 |
Loss from operations | (1,181,493) | (2,332,626) |
Other expenses: | ||
Interest expense | 17,572 | 835 |
Fair value of warrants | 186,034 | |
Total other expenses | 203,606 | 835 |
Net loss | $ (1,385,099) | $ (2,333,461) |
Net loss per common share - basic and diluted | $ (0.07) | $ (0.12) |
Weighted average common shares outstanding - basic and diluted | 20,709,469 | 20,157,461 |
Condensed Consolidated Statem_2
Condensed Consolidated Statement of Stockholders' Equity (Unaudited) - USD ($) | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2017 | $ 20,092 | $ 33,716,140 | $ (26,865,956) | $ 6,870,276 |
Balance, shares at Dec. 31, 2017 | 20,091,761 | |||
Fair value of vested stock options | 777,513 | 777,513 | ||
Issuance of common stock - warrant exercises | $ 73 | 1,387 | 1,460 | |
Issuance of common stock - warrant exercises, shares | 73,000 | |||
Net loss | (2,333,461) | (2,333,461) | ||
Balance at Mar. 31, 2018 | $ 20,165 | 34,495,040 | (29,199,417) | 5,315,788 |
Balance, shares at Mar. 31, 2018 | 20,164,761 | |||
Balance at Dec. 31, 2018 | $ 20,564 | 37,798,562 | (34,633,363) | 3,185,763 |
Balance, shares at Dec. 31, 2018 | 20,564,328 | |||
Fair value of vested stock options | 56,232 | 56,232 | ||
Issuance of common stock - warrant exercises | $ 293 | 30,957 | 31,250 | |
Issuance of common stock - warrant exercises, shares | 292,283 | |||
Net loss | (1,385,099) | (1,385,099) | ||
Balance at Mar. 31, 2019 | $ 20,857 | $ 37,885,751 | $ (36,018,462) | $ 1,888,146 |
Balance, shares at Mar. 31, 2019 | 20,856,611 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Operating Activities | ||
Net loss | $ (1,385,099) | $ (2,333,461) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 68,102 | 73,022 |
Amortization of debt discount | 16,545 | |
Amortization of lease right | 30,502 | |
Accrued interest expense included in notes payable | 1,027 | |
Stock-based compensation | 56,231 | 777,513 |
Fair value of warrants - derivative liability | 186,034 | |
(Increase) decrease in - | ||
Accounts receivable | 13,116 | 15,345 |
Inventories | 54,178 | (28,188) |
Deposits and prepaid expenses | (3,388) | 2,486 |
Lease liability | (28,088) | |
Increase (decrease) in - | ||
Accounts payable and accrued expenses | 415,118 | 135,324 |
Accrued and deferred rent costs | (10,363) | 4,429 |
Net cash used in operating activities | (586,085) | (1,353,530) |
Investing Activities | ||
Purchase of property and equipment | (4,815) | (95,111) |
Purchase of intellectual property | (50,000) | |
Net cash used in investing activities | (4,815) | (145,111) |
Financing Activities | ||
Proceeds from issuance of convertible notes | 250,000 | |
Proceeds from issuance of promissory notes | 100,000 | |
Payments on line of credit | (30,535) | |
Proceeds from exercise of warrants | 31,250 | 1,460 |
Deferred financing costs of IPO | (287,000) | |
Decrease in due to related parties | (9,165) | |
Net cash provided by (used in) financing activities | 94,250 | (38,240) |
Cash: | ||
Net decrease | (496,650) | (1,536,881) |
Balance at beginning of period | 670,948 | 4,735,230 |
Balance at end of period | 174,298 | 3,198,349 |
Supplemental disclosure of cash flow information: | ||
Cash paid for - Interest | ||
Cash paid for - Income taxes | ||
Non-cash financing activities: | ||
Fair value of warrants issued in connection with convertible notes | 436,034 | |
Recording of lease asset and liability upon adoption of ASU 2016-02 | $ 663,218 |
Organization and Business Opera
Organization and Business Operations | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Business Operations | 1. Organization and Business Operations Organization and Business Guardion Health Sciences, Inc. (the “Company”) was formed in December 2009 as a California limited liability company under the name P4L Health Sciences, LLC. On June 30, 2015, the Company converted from a California limited liability company to a Delaware corporation, changing its name from Guardion Health Sciences, LLC to Guardion Health Sciences, Inc. The Company is a specialty health sciences company that develops, formulates and distributes condition-specific medical foods with an initial medical food product on the market under the brand name Lumega-Z ® ® On September 29, 2017, the Company, through its wholly owned subsidiary VectorVision Ocular Health, Inc. (“VectorVision”), completed its acquisition of substantially all of the assets and certain liabilities of VectorVision, Inc. (an Ohio corporation), a company that specialized in the standardization of contrast sensitivity, glare sensitivity, low contrast acuity, and early treatment diabetic retinopathy study (“ETDRS”) visual acuity testing. VectorVision develops, manufactures and sells equipment and supplies for standardized vision testing. The acquisition expands the Company’s technical portfolio. CSV-1000 and CSV-3000 instruments offer auto-calibrated tests to ensure correct testing luminance and contrast levels for consistent, highly accurate and repeatable results. Recently issued patents the Company received for continuously calibrating the light source will be incorporated into the new CSV-2000, in which the proprietary standardized contrast sensitivity test patterns can be presented to the patient using a computer monitor as opposed to the current calibrated backlit system. In August 2018, the Company created a wholly owned subsidiary, Transcranial Doppler Solutions, Inc. (“TDSI”). TDSI is dedicated to the pursuit of early predictors resulting in, the Company believes, valuable therapeutic intervention for practitioners and their patients, and additional revenue streams generated from the testing and sale of Company products to appropriate customers. The Company has established operations with selected clinics and is focusing on expanding its client base. In November 2018, the Company launched a new medical food product, GlaucoCetin TM On April 9, 2019, the Company closed its initial public offering (the “IPO”) of 1,250,000 shares of common stock, par value $0.001 per share, at an IPO price to the public of $4.00 per share. The Company has had limited operations to date and has been primarily engaged in research and development, product commercialization and capital raising activities. Going Concern and Liquidity The financial statements have been prepared assuming the Company will continue as a going concern. The Company had a net loss of $1,385,099 and utilized cash in operating activities of $586,085 during the three months ended March 31, 2019. The Company expects to continue to incur net losses and negative operating cash flows in the near-term. As a result, management has concluded that there is substantial doubt about the Company’s ability to continue as a going concern within one year of the date that the consolidated financial statements are issued. The Company’s independent registered public accounting firm has also included explanatory language in their opinion accompanying the Company’s audited financial statements for the year ended December 31, 2018. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the possible inability of the Company to continue as a going concern. The Company will continue to incur significant expenses for commercialization activities related to its medical foods, the MapcatSF medical device, VectorVision diagnostic equipment, the TDSI business and with respect to efforts to continue to build the Company’s infrastructure. Development and commercialization of medical foods and medical devices involves a lengthy and complex process. Additionally, the Company’s long-term viability and growth may depend upon the successful development and commercialization of products other than Lumega-Z and the MapcatSF. Subsequent to March 31, 2019, the Company completed the IPO, resulting in net cash proceeds of $3,945,000 to the Company. The Company is seeking to raise additional debt and/or equity capital to fund future operations, but there can be no assurances that the Company will be able to secure such additional financing in the amounts necessary to fully fund its operating requirements on acceptable terms or at all. If the Company is unable to access sufficient capital resources on a timely basis, the Company may be forced to reduce or discontinue its technology and product development programs and curtail or cease operations. Reverse Stock Split On January 30, 2019, following stockholder and Board approval, the Company filed a Certificate of Amendment to its Amended Certificate of Incorporation, as amended (the “Amendment”), with the Secretary of State of the State of Delaware to effectuate a one-for-two (1:2) reverse stock split (the “Reverse Stock Split”) of its common stock, par value $0.001 per share, without any change to its par value. The Amendment became effective on the filing date. The number of shares authorized for common and preferred stock were not affected by the Reverse Stock Split. No fractional shares were issued in connection with the Reverse Stock Split as all fractional shares were “rounded up” to the next whole share. Proportional adjustments for the Reverse Stock Split were made to all share and per share amounts as if the split occurred at the beginning of the earliest period presented. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying condensed consolidated financial statements are unaudited. These unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 filed with the SEC. The condensed consolidated balance sheet as of December 31, 2018 included herein was derived from the audited consolidated financial statements as of that date, but does not include all disclosures, including notes, required by GAAP. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary to fairly present the Company’s financial position and results of operations for the interim periods reflected. Except as noted, all adjustments contained herein are of a normal recurring nature. The results of operations for the interim periods presented are not necessarily indicative of the results of operations to be expected for the full fiscal year ending December 31, 2019. Certain prior period amounts have been reclassified to conform to current period presentation. Such amounts consist of operating segment disclosures, whereby revenue and cost of goods sold have been broken out on the Consolidated Statements of Operations to conform with the Company’s two reportable business segments as of March 31, 2019. Use of Estimates The preparation of the financial statements in conformity with GAAP requires management to make certain 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 reported amounts of expenses during the reporting period. Actual results could differ from those estimates. These estimates and assumptions include estimates for reserves of uncollectible accounts, inventory obsolescence, depreciable lives of property and equipment, analysis of impairments of recorded long-term tangible and intangible assets, realization of deferred tax assets, accruals for potential liabilities and assumptions made in valuing stock instruments issued for services. Intangible Assets In connection with the VectorVision transaction, the Company identified and allocated estimated fair values to intangible assets including goodwill and customer relationships. In accordance with Accounting Standard Codification (“ASC”) 350 – Intangibles – Goodwill and Other, the Company determined whether these assets are expected to have indefinite (such as goodwill) or limited useful lives, and for those with limited lives, the Company established an amortization period and method of amortization. Its goodwill and other intangible assets are subject to periodic impairment testing. The Company utilized the services of an independent third-party valuation firm to assist in identifying intangible assets and in estimating their fair values. The useful lives for the Company’s intangible assets other than goodwill were estimated based on Management’s consideration of various factors, including assumptions that market participants might use about sales expectations as well as potential effects of obsolescence, competition, technological progress and the regulatory environment. Because the future pattern in which the economic benefits of these intangible assets may not be reliably determined, amortization expense is generally calculated on a straight-line basis. Amortization expense for the identifiable intangible assets associated with the VectorVision acquisition is approximately $54,000 per quarter and is included with general and administrative expenses in the Company’s Statements of Operations. Impairment of Long-Lived Assets The Company reviews long-lived assets, including property and equipment, identifiable intangible assets, and goodwill for impairment at each fiscal year end or when events or changes in circumstances indicate the carrying value of these assets may exceed their current fair values. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the fair value of the assets. Assets to be disposed of are separately presented in the balance sheet and reported at the lower of the carrying amount or fair value less costs to sell and are no longer depreciated. The Company has not historically recorded any impairment to its long-lived assets. In the future, if events or market conditions affect the estimated fair value to the extent that a long-lived asset is impaired, the Company will adjust the carrying value of these long-lived assets in the period in which the impairment occurs. As of March 31, 2019 and December 31, 2018, the Company had not deemed any long-lived assets as impaired and was not aware of the existence of any indicators of impairment at such dates. Deferred Offering Costs Deferred offering costs consist principally of legal, accounting, and underwriters’ fees incurred related to the IPO. These deferred offering costs will be charged against the gross proceeds received during the appropriate period. Revenue Recognition The Company’s revenue is comprised of sales of medical foods and dietary supplements to consumers through a direct sales/credit card process. In addition, the Company sells medical device equipment and supplies to customers both in the U.S. and internationally. On January 1, 2018. the Company adopted ASU 2014-09, Revenue from Contracts with Customers (Topic 606) Under the new guidance, revenue is recognized when control of promised goods or services is transferred to the Company’s customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. The Company reviews its sales transactions to identify contractual rights, performance obligations, and transaction prices, including the allocation of prices to separate performance obligations, if applicable. Revenue and costs of sales are recognized once products are delivered to the customer’s control and performance obligations are satisfied. All products sold by the Company are distinct individual products and consist of medical foods, supplemental formulas, medical devices and related supplies. The products are offered for sale as finished goods only, and there are no performance obligations required post-shipment for customers to derive the expected value from them. Contracts with customers contain no incentives or discounts that could cause revenue to be allocated or adjusted over time. Control of products sold transfers to customers upon shipment from the Company’s facilities, and the Company’s performance obligations are satisfied at that time. Shipping and handling activities are performed before the customer obtains control of the goods and therefore represent a fulfillment activity rather than a promised service to the customer. Payment for sales of Lumega-Z is generally made by approved credit cards. Payments for medical device sales are generally made by check, credit card, or wire transfer. Historically the Company has not experienced any significant payment delays from customers. The Company provides a 30-day right of return to its retail Lumega-Z customers. A right of return does not represent a separate performance obligation, but because customers are allowed to return products, the consideration to which the Company expects to be entitled is variable. Upon evaluation of historical Lumega-Z and VectorVision product returns, the Company determined that less than one percent of products is returned, and therefore believes it is probable that such returns will not cause a significant reversal of revenue in the future. Due to the insignificant amount of historical returns as well as the standalone nature of the Company’s products and assessment of performance obligations and transaction pricing for the Company’s sales contracts, the Company does not currently maintain a contract asset or liability balance at this time. The Company assesses its contracts and the reasonableness of its conclusions on a quarterly basis. The following table presents the Company’s revenues disaggregated by segment: Three Months Ended March 31, 2019 2018 Medical foods $ 99,934 $ 72,138 Vision testing diagnostics 142,604 120,902 $ 242,538 $ 193,040 Research and Development Costs Research and development costs consist primarily of fees paid to consultants and outside service providers, patent fees and costs, and other expenses relating to the acquisition, design, development and testing of the Company’s medical foods and related products. Research and development expenditures, which include stock compensation expense, are expensed as incurred and totaled $29,028 and $159,588 for the three months ended March 31, 2019 and 2018, respectively. Patent Costs The Company is the owner of three issued domestic patents, two pending domestic patent applications, one issued foreign patent in Europe, and three foreign patent applications in Canada, Europe and Hong Kong. Due to the significant uncertainty associated with the successful development of one or more commercially viable products based on the Company’s research efforts and any related patent applications, patent costs, including patent-related legal fees, filing fees and internally generated costs, are expensed as incurred. During the three months ended March 31, 2019 and 2018, patent costs were $26,025 and $12,474, respectively, and are included in general and administrative costs in the statements of operations. Leases Prior to January 1, 2019, the Company accounted for leases under Accounting Standards Codification (ASC) 840, Accounting for Leases. Effective from January 1, 2019, the Company adopted the guidance of ASU 2016-02 (ASC 842), Leases, which requires an entity to recognize a right-of-use asset and a lease liability for virtually all leases. The Company adopted ASC 842 using a modified retrospective approach. As a result, the comparative financial information has not been updated and the required disclosures prior to the date of adoption have not been updated and continue to be reported under the accounting standards in effect for those periods. The adoption of ASC 842 on January 1, 2019 resulted in the recognition of operating lease right-of-use assets of $626,667, lease liabilities for operating leases of $635,131, and a zero cumulative-effect adjustment to accumulated deficit. See Note 8 for further information regarding the impact of the adoption of ASC 842 on the Company’s financial statements. Stock-Based Compensation The Company periodically issues stock-based compensation to officers, directors, contractors and consultants for services rendered. Such issuances vest and expire according to terms established at the issuance date. Stock-based payments to officers, directors, and employees, which include grants of employee stock options, are recognized in the financial statements based on their fair values in accordance with Topic 718. Stock option grants, which are generally time vested, will be measured at the grant date fair value and charged to operations on a straight-line basis over the vesting period. The fair value of stock options is determined utilizing the Black-Scholes option-pricing model, which is affected by several variables, including the risk-free interest rate, the expected dividend yield, the expected life of the equity award, the exercise price of the stock option as compared to the fair market value of the common stock on the grant date and the estimated volatility of the common stock over the term of the equity award. In prior periods, the Company accounted for stock option and warrant grants issued and vesting to non-employees in accordance with the authoritative guidance of the FASB whereby the value of the stock compensation is based upon the measurement date as determined at either a) the date at which a performance commitment is reached, or b) at the date at which the necessary performance to earn the equity instruments is complete. On January 1, 2019, the Company adopted Accounting Standards Update (ASU) 2018-07 which expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. The Company recognizes the fair value of stock-based compensation within its statements of operations with classification depending on the nature of the services rendered. The adoption of the new standard had no cumulative effect on previously reported amounts. Net Loss per Share The Company’s computation of basic and diluted net loss per common share is measured as net loss divided by the weighted average common shares outstanding during the respective periods, excluding unvested restricted common stock. Shares of restricted stock are included in the basic weighted average number of common shares outstanding from the time they vest. Potential common shares such as from unexercised warrants, options, and shares associated with convertible debt outstanding that have an anti-dilutive effect are excluded from the calculation of diluted net loss per share. The Company’s basic and diluted net loss per share is the same for all periods presented because all shares issuable upon exercise of warrants and conversion of convertible debt outstanding are anti-dilutive as they decrease loss per share. The following table sets forth the number of shares excluded from the computation of diluted loss per share, as their inclusion would have been anti-dilutive: March 31, 2019 2018 Warrants 896,712 1,418,836 Options 1,362,500 1,312,500 2,259,212 2,731,336 Recent Accounting Pronouncements The Company’s management does not believe that there are any recently issued, but not yet effective, authoritative guidance, if currently adopted, would have a material impact on the Company’s financial statement presentation or disclosures. |
Segment Reporting
Segment Reporting | 3 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
Segment Reporting | 3. Segment Reporting The Company determined its reporting units in accordance with ASC 280, “Segment Reporting” (“ASC 280”). The Company historically has reported its operating results as a single reportable segment described as the business of developing and commercializing a variety of products that support the detection, intervention and monitoring of a range of eye diseases. The Company’s chief executive officer, who is the Chief Operating Decision Maker (“CODM”), has historically reviewed financial information on an aggregated basis for purposes of allocating resources and evaluating financial performance. In September 2017, the Company, through its wholly-owned subsidiary VectorVision Ocular Health, Inc., acquired substantially all of the assets and certain liabilities of VectorVision, Inc., a company that specialized in the standardization of contrast sensitivity, glare sensitivity, low contrast acuity, and early treatment diabetic retinopathy study (“ETDRS”) visual acuity testing. In August 2018, the Company created a wholly owned subsidiary, Transcranial Doppler Solutions, Inc. (“TDSI”). The Company has established TDSI operations with selected clinics and is focusing on expanding its client base. Although all of the Company’s products and services target the early detection, intervention and monitoring of a range of eye diseases, the addition of potential new products or services as the Company grows requires management to periodically reevaluate its reporting structure. As sales of our medical food as well as sales of VectorVision products grow, there is an increased need for the CODM to evaluate revenue and gross profit on a product line or group basis for purposes of resource allocation. As of March 31, 2019, the TDSI subsidiary does not meet the required quantitative criteria to be considered a reportable operating segment. Additionally, TDSI does not share similar economic characteristics or a majority of the aggregation criteria set forth in ASC 280, and therefore is included in “Corporate” below. As of December 31, 2018, based on anticipated growth and the expanding diversity of product and service offerings by the Company, Management has concluded that results should be reported in two operating segments: Medical Foods and Vision Testing Diagnostics. The following tables set forth our results of operations by segment (expenses allocated to Corporate consist of non-cash stock compensation expense, depreciation and amortization, and corporate legal fees): For the Three Months Ended March 31, 2019 Corporate Medical Foods Vision Testing Diagnostics Total Revenue $ - $ 99,934 $ 142,604 $ 242,538 Cost of goods sold - 38,272 55,220 93,492 Gross profit - 61,662 87,384 149,046 Operating expenses 334,775 884,701 111,063 1,330,539 Loss from operations $ (334,775 ) $ (823,039 ) $ (23,679 ) $ (1,181,493 ) For the Three Months Ended March 31, 2018 Corporate Medical Foods Vision Testing Diagnostics Total Revenue $ - $ 72,138 $ 120,902 $ 193,040 Cost of goods sold - 32,188 47,090 79,278 Gross profit - 39,950 73,812 113,762 Operating expenses 1,073,400 1,320,627 52,361 2,446,388 Loss from operations $ (1,073,400 ) $ (1,280,677 ) $ 21,451 $ (2,332,626 ) The following tables set forth our total assets by segment. Intersegment balances and transactions have been removed: As of March 31, 2019 Corporate Medical Foods Vision Testing Diagnostics Total Current assets Cash $ - $ 164,914 $ 9,384 $ 174,298 Inventories - 170,554 133,265 303,819 Other - 46,950 19,297 66,247 Total current assets - 382,418 161,946 544,364 Right to use asset 626,667 - - 626,667 Property and equipment, net - 255,313 9,863 265,176 Deferred offering 557,000 - - 557,000 Intangible assets, net 402,445 - - 402,445 Goodwill 1,563,520 - - 1,563,520 Other - 11,751 - 11,751 Total assets $ 3,149,632 $ 649,482 $ 171,809 $ 3,970,923 As of December 31, 2018 Corporate Medical Foods Vision Testing Diagnostics Total Current assets Cash $ - $ 552,613 $ 118,335 $ 670,948 Inventories - 235,957 122,040 357,997 Other - 44,110 31,866 75,976 Total current assets - 832,680 272,241 1,104,921 Property and equipment, net - 264,178 10,626 274,804 Deferred offering 270,000 - - 270,000 Intangible assets, net 456,104 - - 456,104 Goodwill 1,563,520 - - 1,563,520 Other - 11,751 - 11,751 Total assets $ 2,289,624 $ 1,108,609 $ 282,867 $ 3,681,100 |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Inventories | 4. Inventories Inventories consisted of the following: March 31, December 31, 2019 2018 Raw materials $ 236,005 $ 282,574 Finished goods 67,814 75,423 $ 303,819 $ 357,997 |
Property and Equipment, Net
Property and Equipment, Net | 3 Months Ended |
Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | 5. Property and Equipment, net Property and equipment consisted of the following: March 31, December 31, 2019 2018 Leasehold improvements $ 98,357 $ 98,357 Testing equipment 249,447 249,447 Furniture and fixtures 168,002 163,186 Computer equipment 64,976 64,976 Office equipment 8,193 8,193 588,975 584,159 Less accumulated depreciation and amortization (323,799 ) (309,355 ) $ 265,176 $ 274,804 For the three months ended March 31, 2019 and 2018, depreciation and amortization expense was $14,444 and $19,363, respectively, of which $0 and $7,325 was included in research and development expense, $9,108 and $1,500 was included in sales and marketing expense, and $5,335 and $10,333 was included in general and administrative expense, respectively. |
Intangible Assets
Intangible Assets | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | 6. Intangible Assets The Company’s intangible assets, including finite-lived intangible assets and $50,000 of non-amortizable purchased intellectual property, consisted of the following: March 31, December 31, 2019 2018 Customer relationships $ 430,700 $ 430,700 Technology 161,100 161,100 Trade Names 115,600 115,600 Noncompetition 17,000 17,000 724,400 724,400 Less accumulated amortization (321,955 ) (268,296 ) $ 402,445 $ 456,104 The Company’s amortization expense on its finite-lived intangible assets was $53,659 and $53,659 for the three months ended March 31, 2019 and 2018, respectively. The Company estimates future amortization expense on its finite-lived intangible assets as of March 31, 2019 to be as follows: For Years Ended December 31, 2019 $ 160,978 2020 165,320 2021 16,307 2022 9,840 $ 352,445 |
Promissory Notes
Promissory Notes | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Promissory Notes | 7. Promissory Notes Promissory Note On March 12, 2019, the Company issued a promissory note with principal in the amount of $100,000, simple interest of 10% annually, and with a maturity date of June 10, 2019. Convertible Notes and Related Warrants The Company’s convertible notes payable consisted of the following: March 31, December 31, 2019 2018 Convertible notes $ 250,000 $ - Accrued interest 479 - Debt discount (233,455 ) - Net $ 17,024 $ - On March 15, 2019, the Company issued a convertible note with principal in the amount of $100,000, simple interest of 5% annually, and with a maturity date of September 30, 2019. In addition, on March 20, 2019, the Company issued a convertible note with principal in the amount of $150,000, simple interest of 5% annually, and with a maturity date of September 30, 2019. As of March 31, 2019, convertible notes with a principal balance of $250,000 and accrued interest of $479 were outstanding. The convertible notes (principal and accrued interest) were mandatorily convertible upon the consummation of the IPO. Concurrent with the issuance of the notes, the Company issued warrants to both note holders equal to the number of shares of common stock that the holders receive in connection with the converted notes. The per share exercise price of the warrants was set at 125% of the conversion price of the notes, defined in the note agreements, as the lower of (a) 75% of the price per share of common stock of the IPO or (b) $2.30. Due to the variable terms of both the exercise price and the number of warrants to be issued, the warrants were accounted for as derivative liabilities at March 31, 2019. The aggregate fair value of the warrants was calculated as $436,034 based on a probability effected Black-Scholes option pricing model with a stock price of $4.00, volatility of 138%, and risk-free rates ranging from 2.34% - 2.39%. At March 31, 2019, the Company estimated that the issuance of 109,038 warrants with an exercise price of $2.88 per share would correspond to the number of shares of common stock that the holders would receive in connection with the completion of the IPO (the IPO was completed on April 9, 2019). The Company recognized a debt discount of $250,000 equal to the face amount of the convertible notes and recorded a financing cost equal to the difference between the fair value of the warrants and the debt discount. The financing cost of $186,034 is shown as fair value of warrants on the accompanying statement of operations for the three months ended March 31, 2019. The company recorded amortization expense related to the debt discount of $16,545 during the three months ended March 31, 2019. As of March 31, 2019, the unamortized debt discount was $233,455. |
Lease Liabilities
Lease Liabilities | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Lease Liabilities | 8. Lease Liabilities In October 2012, the Company entered into a lease agreement for 9,605 square feet of office and warehouse space commencing March 1, 2013. Upon entering into the agreement, the Company paid a deposit of $47,449, of which $36,979 represented prepaid rent. As of March 31, 2019, $10,470 remained on deposit under the lease agreement. The lease (“Lease 1”) was renewed for an additional five years in 2018. As of March 31, 2019, remaining average monthly lease payments under the amended lease agreement were $12,863 through July 2023. In connection with the VectorVision acquisition on September 29, 2017, the Company assumed a lease agreement for 5,000 square feet of office and warehouse space which commenced on October 1, 2017. The lease (“Lease 2”) was renewed for an additional 65 months. As of March 31, 2019, remaining average monthly lease payments are $1,832 through February 2023. In accounting for the leases, the Company adopted ASU 2016-02 - Leases, which requires a lessee to record a right-of-use asset and a corresponding lease liability at the inception of the lease initially measured at the present value of the lease payments. The Company classified the leases as operating leases and determined that the fair value of Lease 1 at the inception of the lease was $625,778 using a discount rate of 8.0%. the fair value of Lease 2 at the inception of the lease was $100,742 using a discount rate of 8%. During the three months ended March 31, 2019, the Company made combined payments on both leases of $41,166 towards the lease liabilities. As of March 31, 2019 and December 31, 2018, the lease liability for Lease 1 was $561,623 and $586,082, respectively, and the lease liability for Lease 2 was $73,508 and $77,137, respectively. ASU 2016-02 requires recognition in the statement of operations of a single lease cost, calculated so that the cost of the lease is allocated over the lease term, generally on a straight-line basis. Combined rent expense for both leases for the three months ended March 31, 2019 and 2018 was $43,581 and $5,336, respectively. During the three months ended March 31, 2019 and 2018, the Company reflected amortization of right of use asset of $30,502 and $3,543 related to the leases, respectively, resulting in a net asset balance of $626,667 as of March 31, 2019. |
Contingencies
Contingencies | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | 9. Contingencies The Company is periodically the subject of various pending or threatened legal actions and claims arising out of its operations in the normal course of business. In the opinion of management of the Company, adequate provision has been made in the Company’s financial statements at March 31, 2019 with respect to such matters. |
Stockholders' Equity (Deficit)
Stockholders' Equity (Deficit) | 3 Months Ended |
Mar. 31, 2019 | |
Equity [Abstract] | |
Stockholders' Equity (Deficit) | 10. Stockholders’ Equity (Deficit) Warrants A summary of the Company’s warrant activity is as follows: Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) December 31, 2018 1,230,674 0.71 0.29 Granted 109,038 0.35 0.60 Forfeitures - - - Expirations (70,500 ) (0.11 ) - Exercised (372,500 ) (0.24 ) - March 31, 2019, all exercisable 896,712 $ 1.19 0.79 The exercise prices of warrants outstanding and exercisable as of March 31, 2019 are as follows: Warrants Outstanding and Exercisable (Shares) Exercise Prices 536,250 $ 0.50 5,000 1.00 30,000 1.50 216,424 2.00 109,038 2.88 896,712 In February and March 2019, investors net exercised a total of 310,000 warrants for 231,740 shares of common stock on a cashless basis. In February 2019, an investor exercised warrants for 62,500 shares of common stock. The warrants were exercisable for $0.50 per share, and the Company received $31,250 in cash. In March 2019, the Company issued 109,038 warrants with an exercise price of $2.88 per share to two convertible note holders pursuant to the anticipated completion of the Company’s IPO (the IPO was completed on April 9, 2019). As of March 31, 2019, the Company had an aggregate of 896,712 outstanding warrants to purchase shares of its common stock with a weighted average exercise price of $1.19, weighted average remaining life of 0.8 years and aggregate intrinsic value of $2,522,391, based upon a stock valuation of $4.00 per share. The intrinsic value is calculated as the difference between the market value of the underlying common stock and the exercise price of the warrants. Stock Options A summary of the Company’s stock option activity is as follows: Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) December 31, 2018 1,362,500 2.26 3.78 Granted - - - Forfeitures - - - Expirations - - - Exercised - - - March 31, 2019, outstanding 1,362,500 $ 2.26 3.53 March 31, 2019, exercisable 1,287,500 $ 2.24 3.67 The exercise prices of options outstanding and exercisable as of March 31, 2019 are as follows: Options Outstanding (Shares) Options Exercisable (Shares) Exercise Prices 625,000 625,000 $ 2.00 62,500 62,500 2.30 675,000 600,000 2.50 1,362,500 1,287,500 As of March 31, 2019, options were valued based upon the Black-Scholes option-pricing model, with a stock price of $4.00, volatility of 138%, and an average risk-free rate of 2.21%. During the three months ended March 31, 2019 and 2018, we recognized aggregate stock-compensation expense of $56,232 and $777,513, respectively, based upon stock prices ranging from $2.30 to $4.00 per share, all of which was recorded in general and administrative expense. As of March 31, 2019, the Company had an aggregate of 75,000 remaining unvested options outstanding, with a total estimated fair value of $138,516, weighted average exercise price of $2.50, and weighted average remaining life of 2.8 years. The Company remeasures unvested options for non-employees to fair value at the end of each reporting period. The aggregate intrinsic value of options outstanding as of March 31, 2019 was $2,368,750. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 11. Related Party Transactions During the three months ended March 31, 2019 and March 31, 2018, the Company incurred and paid $75,000 and 68,750, respectively, of salary expense to our CEO, Michael Favish. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | 12. Subsequent Events On April 9, 2019, the Company closed the IPO and issued 1,250,000 shares of its common stock at a public offering price of $4.00 per share for total gross proceeds of $5.0 million, resulting in net proceeds to the Company of $3,945,000 after deducting underwriting discounts and commissions and other offering costs and expenses payable by Guardion. The shares began trading on the Nasdaq Capital Market on April 5, 2019, under the symbol “GHSI.” In connection with the IPO, the convertible promissory notes previously issued on March 15, 2019 and March 20, 2019 were automatically converted into 109,038 shares of common stock based on a conversion price of $2.30 per share. The following table sets forth the Company’s cash, debt and derivative liabilities, and stockholders’ equity as of March 31, 2019 on: ● an actual basis; and ● a pro forma basis giving effect to (i) the issuance of 109,038 shares of common stock to be issued upon the mandatory conversion of the principal amount and accrued interest of the convertible promissory notes issued in March 2019, (ii) the extinguishment of the corresponding derivative liability, and (iii) the sale and issuance by the Company of 1,250,000 shares of common stock in this offering at the public offering price of $4.00 per share, resulting in net proceeds to the Company of $3,945,000 after deducting underwriting discounts and commissions and estimated offering expenses payable by the Company. As of March 31, 2019 Actual Pro Forma Cash and cash equivalents $ 174,298 $ 4,119,298 Other current assets 370,066 370,066 Non-current assets 3,426,559 3,426,559 Total assets $ 3,970,923 $ 7,915,923 Derivative warrant liability $ 436,034 $ - Convertible notes payable 17,024 - Other current liabilities 1,116,134 1,116,134 Lease liability – long term 513,585 513,585 Total liabilities 2,082,777 1,629,719 Stockholders’ equity: Common stock 20,857 22,216 Additional paid-in capital 37,885,751 42,282,450 Accumulated deficit (36,018,462 ) (36,018,462 ) Total stockholders’ equity 1,888,146 6,286,204 Total liabilities and stockholders’ equity $ 3,970,923 $ 7,915,923 On April 11, 2019, the Company repaid its promissory note previously issued on March 12, 2019, for a total of $100,849 including accrued interest. On April 12, 2019, an investor exercised warrants for 26,250 shares of common stock. The warrants were exercisable for $0.50 per share, and the Company received $13,125 in cash. On April 5 and 17, 2019, investors exercised a total of 275,000 warrants on a cashless basis resulting in the issuance of 229,365 shares of common stock. The warrants were exercisable for $0.50 and $2.00 per share. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated financial statements are unaudited. These unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 filed with the SEC. The condensed consolidated balance sheet as of December 31, 2018 included herein was derived from the audited consolidated financial statements as of that date, but does not include all disclosures, including notes, required by GAAP. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary to fairly present the Company’s financial position and results of operations for the interim periods reflected. Except as noted, all adjustments contained herein are of a normal recurring nature. The results of operations for the interim periods presented are not necessarily indicative of the results of operations to be expected for the full fiscal year ending December 31, 2019. Certain prior period amounts have been reclassified to conform to current period presentation. Such amounts consist of operating segment disclosures, whereby revenue and cost of goods sold have been broken out on the Consolidated Statements of Operations to conform with the Company’s two reportable business segments as of March 31, 2019. |
Use of Estimates | Use of Estimates The preparation of the financial statements in conformity with GAAP requires management to make certain 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 reported amounts of expenses during the reporting period. Actual results could differ from those estimates. These estimates and assumptions include estimates for reserves of uncollectible accounts, inventory obsolescence, depreciable lives of property and equipment, analysis of impairments of recorded long-term tangible and intangible assets, realization of deferred tax assets, accruals for potential liabilities and assumptions made in valuing stock instruments issued for services. |
Intangible Assets | Intangible Assets In connection with the VectorVision transaction, the Company identified and allocated estimated fair values to intangible assets including goodwill and customer relationships. In accordance with Accounting Standard Codification (“ASC”) 350 – Intangibles – Goodwill and Other, the Company determined whether these assets are expected to have indefinite (such as goodwill) or limited useful lives, and for those with limited lives, the Company established an amortization period and method of amortization. Its goodwill and other intangible assets are subject to periodic impairment testing. The Company utilized the services of an independent third-party valuation firm to assist in identifying intangible assets and in estimating their fair values. The useful lives for the Company’s intangible assets other than goodwill were estimated based on Management’s consideration of various factors, including assumptions that market participants might use about sales expectations as well as potential effects of obsolescence, competition, technological progress and the regulatory environment. Because the future pattern in which the economic benefits of these intangible assets may not be reliably determined, amortization expense is generally calculated on a straight-line basis. Amortization expense for the identifiable intangible assets associated with the VectorVision acquisition is approximately $54,000 per quarter and is included with general and administrative expenses in the Company’s Statements of Operations. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company reviews long-lived assets, including property and equipment, identifiable intangible assets, and goodwill for impairment at each fiscal year end or when events or changes in circumstances indicate the carrying value of these assets may exceed their current fair values. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the fair value of the assets. Assets to be disposed of are separately presented in the balance sheet and reported at the lower of the carrying amount or fair value less costs to sell and are no longer depreciated. The Company has not historically recorded any impairment to its long-lived assets. In the future, if events or market conditions affect the estimated fair value to the extent that a long-lived asset is impaired, the Company will adjust the carrying value of these long-lived assets in the period in which the impairment occurs. As of March 31, 2019 and December 31, 2018, the Company had not deemed any long-lived assets as impaired and was not aware of the existence of any indicators of impairment at such dates. |
Deferred Offering Costs | Deferred Offering Costs Deferred offering costs consist principally of legal, accounting, and underwriters’ fees incurred related to the IPO. These deferred offering costs will be charged against the gross proceeds received during the appropriate period. |
Revenue Recognition | Revenue Recognition The Company’s revenue is comprised of sales of medical foods and dietary supplements to consumers through a direct sales/credit card process. In addition, the Company sells medical device equipment and supplies to customers both in the U.S. and internationally. On January 1, 2018. the Company adopted ASU 2014-09, Revenue from Contracts with Customers (Topic 606) Under the new guidance, revenue is recognized when control of promised goods or services is transferred to the Company’s customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. The Company reviews its sales transactions to identify contractual rights, performance obligations, and transaction prices, including the allocation of prices to separate performance obligations, if applicable. Revenue and costs of sales are recognized once products are delivered to the customer’s control and performance obligations are satisfied. All products sold by the Company are distinct individual products and consist of medical foods, supplemental formulas, medical devices and related supplies. The products are offered for sale as finished goods only, and there are no performance obligations required post-shipment for customers to derive the expected value from them. Contracts with customers contain no incentives or discounts that could cause revenue to be allocated or adjusted over time. Control of products sold transfers to customers upon shipment from the Company’s facilities, and the Company’s performance obligations are satisfied at that time. Shipping and handling activities are performed before the customer obtains control of the goods and therefore represent a fulfillment activity rather than a promised service to the customer. Payment for sales of Lumega-Z is generally made by approved credit cards. Payments for medical device sales are generally made by check, credit card, or wire transfer. Historically the Company has not experienced any significant payment delays from customers. The Company provides a 30-day right of return to its retail Lumega-Z customers. A right of return does not represent a separate performance obligation, but because customers are allowed to return products, the consideration to which the Company expects to be entitled is variable. Upon evaluation of historical Lumega-Z and VectorVision product returns, the Company determined that less than one percent of products is returned, and therefore believes it is probable that such returns will not cause a significant reversal of revenue in the future. Due to the insignificant amount of historical returns as well as the standalone nature of the Company’s products and assessment of performance obligations and transaction pricing for the Company’s sales contracts, the Company does not currently maintain a contract asset or liability balance at this time. The Company assesses its contracts and the reasonableness of its conclusions on a quarterly basis. The following table presents the Company’s revenues disaggregated by segment: Three Months Ended March 31, 2019 2018 Medical foods $ 99,934 $ 72,138 Vision testing diagnostics 142,604 120,902 $ 242,538 $ 193,040 |
Research and Development Costs | Research and Development Costs Research and development costs consist primarily of fees paid to consultants and outside service providers, patent fees and costs, and other expenses relating to the acquisition, design, development and testing of the Company’s medical foods and related products. Research and development expenditures, which include stock compensation expense, are expensed as incurred and totaled $29,028 and $159,588 for the three months ended March 31, 2019 and 2018, respectively. |
Patent Costs | Patent Costs The Company is the owner of three issued domestic patents, two pending domestic patent applications, one issued foreign patent in Europe, and three foreign patent applications in Canada, Europe and Hong Kong. Due to the significant uncertainty associated with the successful development of one or more commercially viable products based on the Company’s research efforts and any related patent applications, patent costs, including patent-related legal fees, filing fees and internally generated costs, are expensed as incurred. During the three months ended March 31, 2019 and 2018, patent costs were $26,025 and $12,474, respectively, and are included in general and administrative costs in the statements of operations. |
Leases | Leases Prior to January 1, 2019, the Company accounted for leases under Accounting Standards Codification (ASC) 840, Accounting for Leases. Effective from January 1, 2019, the Company adopted the guidance of ASU 2016-02 (ASC 842), Leases, which requires an entity to recognize a right-of-use asset and a lease liability for virtually all leases. The Company adopted ASC 842 using a modified retrospective approach. As a result, the comparative financial information has not been updated and the required disclosures prior to the date of adoption have not been updated and continue to be reported under the accounting standards in effect for those periods. The adoption of ASC 842 on January 1, 2019 resulted in the recognition of operating lease right-of-use assets of $626,667, lease liabilities for operating leases of $635,131, and a zero cumulative-effect adjustment to accumulated deficit. See Note 8 for further information regarding the impact of the adoption of ASC 842 on the Company’s financial statements. |
Stock-Based Compensation | Stock-Based Compensation The Company periodically issues stock-based compensation to officers, directors, contractors and consultants for services rendered. Such issuances vest and expire according to terms established at the issuance date. Stock-based payments to officers, directors, and employees, which include grants of employee stock options, are recognized in the financial statements based on their fair values in accordance with Topic 718. Stock option grants, which are generally time vested, will be measured at the grant date fair value and charged to operations on a straight-line basis over the vesting period. The fair value of stock options is determined utilizing the Black-Scholes option-pricing model, which is affected by several variables, including the risk-free interest rate, the expected dividend yield, the expected life of the equity award, the exercise price of the stock option as compared to the fair market value of the common stock on the grant date and the estimated volatility of the common stock over the term of the equity award. In prior periods, the Company accounted for stock option and warrant grants issued and vesting to non-employees in accordance with the authoritative guidance of the FASB whereby the value of the stock compensation is based upon the measurement date as determined at either a) the date at which a performance commitment is reached, or b) at the date at which the necessary performance to earn the equity instruments is complete. On January 1, 2019, the Company adopted Accounting Standards Update (ASU) 2018-07 which expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. The Company recognizes the fair value of stock-based compensation within its statements of operations with classification depending on the nature of the services rendered. The adoption of the new standard had no cumulative effect on previously reported amounts. |
Net Loss Per Share | Net Loss per Share The Company’s computation of basic and diluted net loss per common share is measured as net loss divided by the weighted average common shares outstanding during the respective periods, excluding unvested restricted common stock. Shares of restricted stock are included in the basic weighted average number of common shares outstanding from the time they vest. Potential common shares such as from unexercised warrants, options, and shares associated with convertible debt outstanding that have an anti-dilutive effect are excluded from the calculation of diluted net loss per share. The Company’s basic and diluted net loss per share is the same for all periods presented because all shares issuable upon exercise of warrants and conversion of convertible debt outstanding are anti-dilutive as they decrease loss per share. The following table sets forth the number of shares excluded from the computation of diluted loss per share, as their inclusion would have been anti-dilutive: March 31, 2019 2018 Warrants 896,712 1,418,836 Options 1,362,500 1,312,500 2,259,212 2,731,336 |
Recent Accounting Pronouncements | Recent Accounting Pronouncements The Company’s management does not believe that there are any recently issued, but not yet effective, authoritative guidance, if currently adopted, would have a material impact on the Company’s financial statement presentation or disclosures. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Schedule of Disaggregation of Revenue | The following table presents the Company’s revenues disaggregated by segment: Three Months Ended March 31, 2019 2018 Medical foods $ 99,934 $ 72,138 Vision testing diagnostics 142,604 120,902 $ 242,538 $ 193,040 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following table sets forth the number of shares excluded from the computation of diluted loss per share, as their inclusion would have been anti-dilutive: March 31, 2019 2018 Warrants 896,712 1,418,836 Options 1,362,500 1,312,500 2,259,212 2,731,336 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The following tables set forth our results of operations by segment (expenses allocated to Corporate consist of non-cash stock compensation expense, depreciation and amortization, and corporate legal fees): For the Three Months Ended March 31, 2019 Corporate Medical Foods Vision Testing Diagnostics Total Revenue $ - $ 99,934 $ 142,604 $ 242,538 Cost of goods sold - 38,272 55,220 93,492 Gross profit - 61,662 87,384 149,046 Operating expenses 334,775 884,701 111,063 1,330,539 Loss from operations $ (334,775 ) $ (823,039 ) $ (23,679 ) $ (1,181,493 ) For the Three Months Ended March 31, 2018 Corporate Medical Foods Vision Testing Diagnostics Total Revenue $ - $ 72,138 $ 120,902 $ 193,040 Cost of goods sold - 32,188 47,090 79,278 Gross profit - 39,950 73,812 113,762 Operating expenses 1,073,400 1,320,627 52,361 2,446,388 Loss from operations $ (1,073,400 ) $ (1,280,677 ) $ 21,451 $ (2,332,626 ) The following tables set forth our total assets by segment. Intersegment balances and transactions have been removed: As of March 31, 2019 Corporate Medical Foods Vision Testing Diagnostics Total Current assets Cash $ - $ 164,914 $ 9,384 $ 174,298 Inventories - 170,554 133,265 303,819 Other - 46,950 19,297 66,247 Total current assets - 382,418 161,946 544,364 Right to use asset 626,667 - - 626,667 Property and equipment, net - 255,313 9,863 265,176 Deferred offering 557,000 - - 557,000 Intangible assets, net 402,445 - - 402,445 Goodwill 1,563,520 - - 1,563,520 Other - 11,751 - 11,751 Total assets $ 3,149,632 $ 649,482 $ 171,809 $ 3,970,923 As of December 31, 2018 Corporate Medical Foods Vision Testing Diagnostics Total Current assets Cash $ - $ 552,613 $ 118,335 $ 670,948 Inventories - 235,957 122,040 357,997 Other - 44,110 31,866 75,976 Total current assets - 832,680 272,241 1,104,921 Property and equipment, net - 264,178 10,626 274,804 Deferred offering 270,000 - - 270,000 Intangible assets, net 456,104 - - 456,104 Goodwill 1,563,520 - - 1,563,520 Other - 11,751 - 11,751 Total assets $ 2,289,624 $ 1,108,609 $ 282,867 $ 3,681,100 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories consisted of the following: March 31, December 31, 2019 2018 Raw materials $ 236,005 $ 282,574 Finished goods 67,814 75,423 $ 303,819 $ 357,997 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | Property and equipment consisted of the following: March 31, December 31, 2019 2018 Leasehold improvements $ 98,357 $ 98,357 Testing equipment 249,447 249,447 Furniture and fixtures 168,002 163,186 Computer equipment 64,976 64,976 Office equipment 8,193 8,193 588,975 584,159 Less accumulated depreciation and amortization (323,799 ) (309,355 ) $ 265,176 $ 274,804 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | The Company’s intangible assets, including finite-lived intangible assets and $50,000 of non-amortizable purchased intellectual property, consisted of the following: March 31, December 31, 2019 2018 Customer relationships $ 430,700 $ 430,700 Technology 161,100 161,100 Trade Names 115,600 115,600 Noncompetition 17,000 17,000 724,400 724,400 Less accumulated amortization (321,955 ) (268,296 ) $ 402,445 $ 456,104 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | The Company estimates future amortization expense on its finite-lived intangible assets as of March 31, 2019 to be as follows: For Years Ended December 31, 2019 $ 160,978 2020 165,320 2021 16,307 2022 9,840 $ 352,445 |
Promissory Notes (Tables)
Promissory Notes (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Convertible Notes Payable | The Company’s convertible notes payable consisted of the following: March 31, December 31, 2019 2018 Convertible notes $ 250,000 $ - Accrued interest 479 - Debt discount (233,455 ) - Net $ 17,024 $ - |
Stockholders' Equity (Deficit)
Stockholders' Equity (Deficit) (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Equity [Abstract] | |
Schedule of Warrants Activity | A summary of the Company’s warrant activity is as follows: Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) December 31, 2018 1,230,674 0.71 0.29 Granted 109,038 0.35 0.60 Forfeitures - - - Expirations (70,500 ) (0.11 ) - Exercised (372,500 ) (0.24 ) - March 31, 2019, all exercisable 896,712 $ 1.19 0.79 |
Schedule of Exercise Price of Warrants Outstanding and Exercisable | The exercise prices of warrants outstanding and exercisable as of March 31, 2019 are as follows: Warrants Outstanding and Exercisable (Shares) Exercise Prices 536,250 $ 0.50 5,000 1.00 30,000 1.50 216,424 2.00 109,038 2.88 896,712 |
Schedule of Share-based Compensation, Stock Options, Activity | A summary of the Company’s stock option activity is as follows: Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) December 31, 2018 1,362,500 2.26 3.78 Granted - - - Forfeitures - - - Expirations - - - Exercised - - - March 31, 2019, outstanding 1,362,500 $ 2.26 3.53 March 31, 2019, exercisable 1,287,500 $ 2.24 3.67 |
Schedule of Exercise Price of Options Outstanding and Exercisable | The exercise prices of options outstanding and exercisable as of March 31, 2019 are as follows: Options Outstanding (Shares) Options Exercisable (Shares) Exercise Prices 625,000 625,000 $ 2.00 62,500 62,500 2.30 675,000 600,000 2.50 1,362,500 1,287,500 |
Subsequent Events (Tables)
Subsequent Events (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Subsequent Events [Abstract] | |
Schedule of Cash and Stockholders' Equity | The following table sets forth the Company’s cash, debt and derivative liabilities, and stockholders’ equity as of March 31, 2019 on: ● an actual basis; and ● a pro forma basis giving effect to (i) the issuance of 109,038 shares of common stock to be issued upon the mandatory conversion of the principal amount and accrued interest of the convertible promissory notes issued in March 2019, (ii) the extinguishment of the corresponding derivative liability, and (iii) the sale and issuance by the Company of 1,250,000 shares of common stock in this offering at the public offering price of $4.00 per share, resulting in net proceeds to the Company of $3,945,000 after deducting underwriting discounts and commissions and estimated offering expenses payable by the Company. As of March 31, 2019 Actual Pro Forma Cash and cash equivalents $ 174,298 $ 4,119,298 Other current assets 370,066 370,066 Non-current assets 3,426,559 3,426,559 Total assets $ 3,970,923 $ 7,915,923 Derivative warrant liability $ 436,034 $ - Convertible notes payable 17,024 - Other current liabilities 1,116,134 1,116,134 Lease liability – long term 513,585 513,585 Total liabilities 2,082,777 1,629,719 Stockholders’ equity: Common stock 20,857 22,216 Additional paid-in capital 37,885,751 42,282,450 Accumulated deficit (36,018,462 ) (36,018,462 ) Total stockholders’ equity 1,888,146 6,286,204 Total liabilities and stockholders’ equity $ 3,970,923 $ 7,915,923 |
Organization and Business Ope_2
Organization and Business Operations (Details Narrative) - USD ($) | Jan. 30, 2019 | Mar. 31, 2019 | Mar. 31, 2018 |
Initial public offering number of shares issued | 1,250,000 | ||
Common stock par value | $ 0.001 | ||
Shares issued price per share | $ 4 | ||
Net loss | $ (1,385,099) | $ (2,333,461) | |
Cash utilized in operating activities | (586,085) | $ (1,353,530) | |
Reverse stock split | one-for-two (1:2) reverse stock split | ||
Subsequent to March 31, 2019 [Member] | |||
Proceeds from offering of equity securities | $ 3,945,000 | ||
IPO [Member] | April 9, 2019 [Member] | |||
Initial public offering number of shares issued | 1,250,000 | ||
Common stock par value | $ 0.001 | ||
Shares issued price per share | $ 4 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details Narrative) | 3 Months Ended | |||
Mar. 31, 2019USD ($)Segment | Mar. 31, 2018USD ($) | Jan. 02, 2019USD ($) | Dec. 31, 2018USD ($) | |
Number of reportable business segments | Segment | 2 | |||
Amortization of intangible assets | $ 53,659 | $ 53,659 | ||
Research and development costs | 29,028 | 159,588 | ||
Patent costs | 26,025 | $ 12,474 | ||
Operating lease right-of-use assets | 626,667 | $ 626,667 | ||
Lease liabilities for operating leases | 635,131 | |||
Cumulative- effect adjustment to accumulated deficit | $ 0 | |||
VectorVision, Inc [Member] | ||||
Amortization of intangible assets | $ 54,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Disaggregation of Revenue (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenues | $ 242,538 | $ 193,040 |
Medical Foods [Member] | ||
Revenues | 99,934 | 72,138 |
Vision Testing Diagnostics [Member] | ||
Revenues | $ 142,604 | $ 120,902 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Antidilutive securities excluded from computation of earnings per share, amount | 2,259,212 | 2,731,336 |
Warrant [Member] | ||
Antidilutive securities excluded from computation of earnings per share, amount | 896,712 | 1,418,836 |
Options [Member] | ||
Antidilutive securities excluded from computation of earnings per share, amount | 1,362,500 | 1,312,500 |
Segment Reporting (Details Narr
Segment Reporting (Details Narrative) | 3 Months Ended |
Mar. 31, 2019Segment | |
Segment Reporting [Abstract] | |
Number of segment reporting | 2 |
Segment Reporting - Schedule of
Segment Reporting - Schedule of Segment Reporting Information, by Segment (Details) - USD ($) | 3 Months Ended | ||||
Mar. 31, 2019 | Mar. 31, 2018 | Jan. 02, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenue | $ 242,538 | $ 193,040 | |||
Cost of goods sold | 93,492 | 79,278 | |||
Gross profit | 149,046 | 113,762 | |||
Operating expenses | 1,330,539 | 2,446,388 | |||
Loss from operations | (1,181,493) | (2,332,626) | |||
Cash | 174,298 | 3,198,349 | $ 670,948 | $ 4,735,230 | |
Inventories | 303,819 | 357,997 | |||
Other | 66,247 | 75,976 | |||
Total current assets | 544,364 | 1,104,921 | |||
Right to use asset | 626,667 | $ 626,667 | |||
Property and equipment, net | 265,176 | 274,804 | |||
Deferred offering | 557,000 | 270,000 | |||
Intangible assets, net | 402,445 | 456,104 | |||
Goodwill | 1,563,520 | 1,563,520 | |||
Other | 11,751 | 11,751 | |||
Total assets | 3,970,923 | 3,681,100 | |||
Corporate [Member] | |||||
Revenue | |||||
Cost of goods sold | |||||
Gross profit | |||||
Operating expenses | 334,775 | 1,073,400 | |||
Loss from operations | (334,775) | (1,073,400) | |||
Cash | |||||
Inventories | |||||
Other | |||||
Total current assets | |||||
Right to use asset | 626,667 | ||||
Property and equipment, net | |||||
Deferred offering | 557,000 | 270,000 | |||
Intangible assets, net | 402,445 | 456,104 | |||
Goodwill | 1,563,520 | 1,563,520 | |||
Other | |||||
Total assets | 3,149,632 | 2,289,624 | |||
Medical Foods [Member] | |||||
Revenue | 99,934 | 72,138 | |||
Cost of goods sold | 38,272 | 32,188 | |||
Gross profit | 61,662 | 39,950 | |||
Operating expenses | 884,701 | 1,320,627 | |||
Loss from operations | (823,039) | (1,280,677) | |||
Cash | 164,914 | 552,613 | |||
Inventories | 170,554 | 235,957 | |||
Other | 46,950 | 44,110 | |||
Total current assets | 382,418 | 832,680 | |||
Right to use asset | |||||
Property and equipment, net | 255,313 | 264,178 | |||
Deferred offering | |||||
Intangible assets, net | |||||
Goodwill | |||||
Other | 11,751 | 11,751 | |||
Total assets | 649,482 | 1,108,609 | |||
Vision Testing Diagnostics [Member] | |||||
Revenue | 142,604 | 120,902 | |||
Cost of goods sold | 55,220 | 47,090 | |||
Gross profit | 87,384 | 73,812 | |||
Operating expenses | 111,063 | 52,361 | |||
Loss from operations | (23,679) | $ 21,451 | |||
Cash | 9,384 | 118,335 | |||
Inventories | 133,265 | 122,040 | |||
Other | 19,297 | 31,866 | |||
Total current assets | 161,946 | 272,241 | |||
Right to use asset | |||||
Property and equipment, net | 9,863 | 10,626 | |||
Deferred offering | |||||
Intangible assets, net | |||||
Goodwill | |||||
Other | |||||
Total assets | $ 171,809 | $ 282,867 |
Inventories - Schedule of Inven
Inventories - Schedule of Inventories (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 236,005 | $ 282,574 |
Finished goods | 67,814 | 75,423 |
Inventory, Net | $ 303,819 | $ 357,997 |
Property and Equipment, Net (De
Property and Equipment, Net (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Depreciation and amortization expense | $ 14,444 | $ 19,363 |
Research and Development Expense [Member] | ||
Depreciation and amortization expense | 0 | 7,325 |
Sales and Marketing Expense [Member] | ||
Depreciation and amortization expense | 9,108 | 1,500 |
General and Administrative Expense [Member] | ||
Depreciation and amortization expense | $ 5,335 | $ 10,333 |
Property and Equipment, Net - S
Property and Equipment, Net - Schedule of Property, Plant and Equipment (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Property, plant and equipment, gross | $ 588,975 | $ 584,159 |
Less accumulated depreciation and amortization | (323,799) | (309,355) |
Property, plant and equipment, net | 265,176 | 274,804 |
Leasehold Improvements [Member] | ||
Property, plant and equipment, gross | 98,357 | 98,357 |
Testing Equipment [Member] | ||
Property, plant and equipment, gross | 249,447 | 249,447 |
Furniture and Fixtures [Member] | ||
Property, plant and equipment, gross | 168,002 | 163,186 |
Computer Equipment [Member] | ||
Property, plant and equipment, gross | 64,976 | 64,976 |
Office Equipment [Member] | ||
Property, plant and equipment, gross | $ 8,193 | $ 8,193 |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Non-amortizable purchased intellectual property | $ 50,000 | |
Amortization of intangible assets | $ 53,659 | $ 53,659 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Finite-Lived Intangible Assets (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Finite-lived intangible assets, gross | $ 724,400 | $ 724,400 |
Less accumulated amortization | (321,955) | (268,296) |
Finite-lived intangible assets, net | 402,445 | 456,104 |
Customer Relationships [Member] | ||
Finite-lived intangible assets, gross | 430,700 | 430,700 |
Technology [Member] | ||
Finite-lived intangible assets, gross | 161,100 | 161,100 |
Trade Names [Member] | ||
Finite-lived intangible assets, gross | 115,600 | 115,600 |
Noncompetition [Member] | ||
Finite-lived intangible assets, gross | $ 17,000 | $ 17,000 |
Intangible Assets - Schedule _2
Intangible Assets - Schedule of Finite-Lived Intangible Assets, Future Amortization Expense (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2019 | $ 160,978 | |
2020 | 165,320 | |
2021 | 16,307 | |
2022 | 9,840 | |
Finite-lived intangible assets, net | $ 402,445 | $ 456,104 |
Promissory Notes (Details Narra
Promissory Notes (Details Narrative) - USD ($) | Mar. 12, 2019 | May 20, 2019 | May 15, 2019 | Mar. 31, 2019 | Mar. 31, 2018 | Mar. 20, 2019 | Mar. 15, 2019 | Dec. 31, 2018 |
Debt instrument principal amount | $ 250,000 | |||||||
Accrued interest | $ 479 | |||||||
Warrant exercise price per share | $ 1.19 | |||||||
Debt discount | $ 233,455 | |||||||
Fair value of warrants | $ 186,034 | |||||||
Warrant issuance to purchase common stock | 896,712 | |||||||
Amortization of debt discount | $ 16,545 | |||||||
Warrant [Member] | ||||||||
Debt instrument conversion rate | 125.00% | |||||||
Warrant exercise price per share | $ 2.88 | |||||||
Fair value of warrants | $ 436,034 | |||||||
Warrant issuance to purchase common stock | 109,038 | |||||||
Warrant [Member] | Stock Price [Member] | ||||||||
Fair value assumptions, measurement input, price per shares | $ 4 | |||||||
Warrant [Member] | Volatility [Member] | ||||||||
Fair value assumptions, measurement input, percentages | 138.00% | |||||||
Warrant [Member] | Risk-free Rates [Member] | Minimum [Member] | ||||||||
Fair value assumptions, measurement input, percentages | 2.34% | |||||||
Warrant [Member] | Risk-free Rates [Member] | Maximum [Member] | ||||||||
Fair value assumptions, measurement input, percentages | 2.39% | |||||||
Common Stock [Member] | IPO [Member] | ||||||||
Debt instrument conversion rate | 75.00% | |||||||
Warrant exercise price per share | $ 2.30 | |||||||
Promissory Note [Member] | ||||||||
Debt instrument principal amount | $ 100,000 | |||||||
Debt interest rate | 10.00% | |||||||
Debt instrument maturity date | Jun. 10, 2019 | |||||||
Convertible Note [Member] | ||||||||
Debt instrument principal amount | $ 250,000 | $ 150,000 | $ 100,000 | |||||
Debt interest rate | 5.00% | 5.00% | ||||||
Debt instrument maturity date | Sep. 30, 2019 | Sep. 30, 2019 | ||||||
Accrued interest | 479 | |||||||
Debt discount | $ 250,000 |
Promissory Notes - Schedule of
Promissory Notes - Schedule of Convertible Notes Payable (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Debt Disclosure [Abstract] | ||
Convertible notes | $ 250,000 | |
Accrued interest | 479 | |
Debt discount | (233,455) | |
Net | $ 17,024 |
Lease Liabilities (Details Narr
Lease Liabilities (Details Narrative) | 1 Months Ended | 3 Months Ended | ||||
Oct. 31, 2012USD ($)ft² | Mar. 31, 2019USD ($) | Mar. 31, 2018USD ($) | Jan. 02, 2019USD ($) | Dec. 31, 2018USD ($) | Sep. 29, 2017ft² | |
Lease liability | $ 635,131 | |||||
Rent expense | $ 43,581 | $ 5,336 | ||||
Amortization of right of use asset | 30,502 | $ 3,543 | ||||
Right of use asset, net | 626,667 | $ 626,667 | ||||
Lease 1 [Member] | ||||||
Fair value of lease | $ 625,778 | |||||
Lease discount rate | 8.00% | |||||
Lease liability | $ 561,623 | 586,082 | ||||
Lease 2 [Member] | ||||||
Fair value of lease | $ 100,742 | |||||
Lease discount rate | 8.00% | |||||
Lease liability | $ 73,508 | $ 77,137 | ||||
Lease 1 & 2 [Member] | ||||||
Monthly lease payments | 41,166 | |||||
Lease Agreement [Member] | ||||||
Area of Land | ft² | 9,605 | |||||
Deposit paid for lease | $ 47,449 | $ 10,470 | ||||
Prepaid rent | $ 36,979 | |||||
Renewal of lease term | 5 years | |||||
Lease Agreement [Member] | VectorVision, Inc [Member] | ||||||
Area of Land | ft² | 5,000 | |||||
Renewal of lease term | 65 months | |||||
Lease Agreement [Member] | Through July 2023 [Member] | ||||||
Monthly lease payments | $ 12,863 | |||||
Lease Agreement [Member] | Through February 2023 [Member] | VectorVision, Inc [Member] | ||||||
Monthly lease payments | $ 1,832 |
Stockholders' Equity (Deficit_2
Stockholders' Equity (Deficit) (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | |
Feb. 28, 2019 | Mar. 31, 2019 | Mar. 31, 2018 | |
Number of warrants exercised for common stock | 896,712 | ||
Warrant exercisable price per share | $ 1.19 | ||
Proceeds from exercise of warrants | $ 31,250 | $ 1,460 | |
Stock compensation expense | $ 56,231 | 777,513 | |
Stock Option [Member] | |||
Share price | $ 4 | ||
Volatility | 138.00% | ||
Average risk-free rates | 2.21% | ||
Stock compensation expense | $ 56,232 | $ 777,513 | |
Number of unvested options outstanding | 75,000 | ||
Number of unvested options outstanding, value | $ 138,516 | ||
Unvested options, weighted average exercise price | $ 2.50 | ||
Unvested options, weighted average remaining life | 2 years 9 months 18 days | ||
Unvested options, aggregate intrinsic value | $ 2,368,750 | ||
Minimum [Member] | Stock Option [Member] | |||
Share price | $ 2.30 | ||
Maximum [Member] | Stock Option [Member] | |||
Share price | $ 4 | ||
Investors [Member] | |||
Number of warrants exercised | 310,000 | 310,000 | |
Number of warrants exercised for common stock | 231,740 | 231,740 | |
Investor One [Member] | |||
Number of warrants exercised for common stock | 62,500 | ||
Warrant exercisable price per share | $ 0.50 | ||
Proceeds from exercise of warrants | $ 31,250 | ||
Warrant [Member] | |||
Number of warrants exercised for common stock | 109,038 | ||
Warrant exercisable price per share | $ 2.88 | ||
Weighted average remaining life | 9 months 18 days | ||
Aggregate intrinsic value | $ 2,522,391 | ||
Share price | $ 4 |
Stockholders' Equity (Deficit_3
Stockholders' Equity (Deficit) - Schedule of Warrants Activity (Details) - Warrant [Member] | 3 Months Ended |
Mar. 31, 2019$ / sharesshares | |
Shares, Beginning Balance | shares | 1,230,674 |
Shares, Granted | shares | 109,038 |
Shares, Forfeitures | shares | |
Shares, Expirations | shares | (70,500) |
Shares, Exercised | shares | (372,500) |
Shares, Ending Balance | shares | 896,712 |
Weighted Average Exercise Price, Beginning Balance | $ / shares | $ 0.71 |
Weighted Average Exercise Price, Granted | $ / shares | 0.35 |
Weighted Average Exercise Price, Forfeitures | $ / shares | |
Weighted Average Exercise Price, Expirations | $ / shares | (0.11) |
Weighted Average Exercise Price, Exercised | $ / shares | (0.24) |
Weighted Average Exercise Price, Ending Balance | $ / shares | $ 1.19 |
Weighted Average Remaining Contractual Term (Years), Beginning Balance | 3 months 15 days |
Weighted Average Remaining Contractual Term (Years), Granted | 7 months 6 days |
Weighted Average Remaining Contractual Term (Years), Ending Balance | 9 months 14 days |
Stockholders' Equity (Deficit_4
Stockholders' Equity (Deficit) - Schedule of Exercise Price of Warrants Outstanding and Exercisable (Details) - $ / shares | Mar. 31, 2019 | Dec. 31, 2018 |
Exercise Prices | $ 1.19 | |
Warrant One [Member] | ||
Warrants Outstanding and Exercisable (Shares) | 536,250 | |
Exercise Prices | $ 0.50 | |
Warrant Two [Member] | ||
Warrants Outstanding and Exercisable (Shares) | 5,000 | |
Exercise Prices | $ 1 | |
Warrant Three [Member] | ||
Warrants Outstanding and Exercisable (Shares) | 30,000 | |
Exercise Prices | $ 1.50 | |
Warrant Four [Member] | ||
Warrants Outstanding and Exercisable (Shares) | 216,424 | |
Exercise Prices | $ 2 | |
Warrant Five [Member] | ||
Warrants Outstanding and Exercisable (Shares) | 109,038 | |
Exercise Prices | $ 2.88 | |
Warrant [Member] | ||
Warrants Outstanding and Exercisable (Shares) | 896,712 | 1,230,674 |
Exercise Prices | $ 2.88 |
Stockholders' Equity (Deficit_5
Stockholders' Equity (Deficit) - Schedule of Share-based Compensation, Stock Options, Activity (Details) | 3 Months Ended |
Mar. 31, 2019$ / sharesshares | |
Equity [Abstract] | |
Shares Outstanding, Beginning Balance | shares | 1,362,500 |
Shares, Granted | shares | |
Shares, Forfeitures | shares | |
Shares, Expirations | shares | |
Shares, Exercised | shares | |
Shares Outstanding, Ending Balance | shares | 1,362,500 |
Shares Exercisable, Ending Balance | shares | 1,287,500 |
Weighted Average Exercise Price Outstanding, Beginning Balance | $ / shares | $ 2.26 |
Weighted Average Exercise Price, Granted | $ / shares | |
Weighted Average Exercise Price, Forfeitures | $ / shares | |
Weighted Average Exercise Price, Expirations | $ / shares | |
Weighted Average Exercise Price, Exercised | $ / shares | |
Weighted Average Exercise Price Outstanding, Ending Balance | $ / shares | 2.26 |
Weighted Average Exercise Price Exercisable, Ending Balance | $ / shares | $ 2.24 |
Weighted Average Remaining Contractual Term (Years) Outstanding, Beginning Balance | 3 years 9 months 11 days |
Weighted Average Remaining Contractual Term (Years), Granted | 0 years |
Weighted Average Remaining Contractual Term (Years) Outstanding, Ending Balance | 3 years 6 months 10 days |
Weighted Average Remaining Contractual Term (Years) Exercisable, Ending Balance | 3 years 8 months 2 days |
Stockholders' Equity (Deficit_6
Stockholders' Equity (Deficit) - Schedule of Exercise Price of Options Outstanding and Exercisable (Details) | Mar. 31, 2019$ / sharesshares |
Options Outstanding (Shares) | 1,362,500 |
Options Exercisable (Shares) | 1,287,500 |
Exercise Price One [Member] | |
Options Outstanding (Shares) | 625,000 |
Options Exercisable (Shares) | 625,000 |
Exercise Prices | $ / shares | $ 2 |
Exercise Price Two [Member] | |
Options Outstanding (Shares) | 62,500 |
Options Exercisable (Shares) | 62,500 |
Exercise Prices | $ / shares | $ 2.30 |
Exercise Price Three [Member] | |
Options Outstanding (Shares) | 675,000 |
Options Exercisable (Shares) | 600,000 |
Exercise Prices | $ / shares | $ 2.50 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Michael Favish [Member] | ||
Payments to related party | $ 68,750 | |
Chief Executive Officer [Member] | ||
Officers compensation | $ 75,000 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Apr. 17, 2019 | Apr. 12, 2019 | Apr. 11, 2019 | Apr. 09, 2019 | Apr. 05, 2019 | Mar. 20, 2019 | Mar. 15, 2019 | Mar. 31, 2019 | Mar. 31, 2018 |
Initial public offering number of shares issued | 1,250,000 | ||||||||
Initial public offering, price per share | $ 4 | ||||||||
Proceeds from initial public offering, gross | $ 3,945,000 | ||||||||
Debt conversion, converted instrument, shares issued | 109,038 | ||||||||
Number of warrants exercised for common stock | 896,712 | ||||||||
Warrant exercisable price per share | $ 1.19 | ||||||||
Proceeds from exercise of warrants | $ 31,250 | $ 1,460 | |||||||
IPO [Member] | |||||||||
Debt conversion, converted instrument, shares issued | 109,038 | 109,038 | |||||||
Debt conversion price | $ 2.30 | $ 2.30 | |||||||
Subsequent Event [Member] | |||||||||
Repayment of promissory note including accrued interest | $ 100,849 | ||||||||
Subsequent Event [Member] | Investor [Member] | |||||||||
Number of warrants exercised on cashless basis | 275,000 | 26,250 | 275,000 | ||||||
Number of warrants exercised for common stock | 229,365 | 229,365 | |||||||
Warrant exercisable price per share | $ 2 | $ 0.50 | $ 0.50 | ||||||
Proceeds from exercise of warrants | $ 13,125 | ||||||||
Subsequent Event [Member] | IPO [Member] | |||||||||
Initial public offering number of shares issued | 1,250,000 | ||||||||
Initial public offering, price per share | $ 4 | ||||||||
Proceeds from initial public offering, gross | $ 5,000,000 | ||||||||
Proceeds from offering of equity securities | $ 3,945,000 |
Subsequent Events - Schedule of
Subsequent Events - Schedule of Cash and Stockholders' Equity (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2017 |
Cash and cash equivalents | $ 174,298 | $ 670,948 | $ 3,198,349 | $ 4,735,230 |
Other current assets | 370,066 | |||
Non-current assets | 3,426,559 | |||
Total assets | 3,970,923 | 3,681,100 | ||
Derivative warrant liability | 436,034 | |||
Convertible notes payable | 17,024 | |||
Other current liabilities | 1,116,134 | |||
Lease liability – long term | 513,585 | |||
Total liabilities | 2,082,777 | 495,337 | ||
Common stock | 20,857 | 20,564 | ||
Additional paid-in capital | 37,885,751 | 37,798,562 | ||
Accumulated deficit | (36,018,462) | (34,633,363) | ||
Total stockholders' equity | 1,888,146 | 3,185,763 | $ 5,315,788 | $ 6,870,276 |
Total liabilities and stockholders' equity | 3,970,923 | $ 3,681,100 | ||
Pro Forma [Member] | ||||
Cash and cash equivalents | 4,119,298 | |||
Other current assets | 370,066 | |||
Non-current assets | 3,426,559 | |||
Total assets | 7,915,923 | |||
Derivative warrant liability | ||||
Convertible notes payable | ||||
Other current liabilities | 1,116,134 | |||
Lease liability – long term | 513,585 | |||
Total liabilities | 1,629,719 | |||
Common stock | 22,216 | |||
Additional paid-in capital | 42,282,450 | |||
Accumulated deficit | (36,018,462) | |||
Total stockholders' equity | 6,286,204 | |||
Total liabilities and stockholders' equity | $ 7,915,923 |