Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Mar. 25, 2021 | Jun. 30, 2020 | |
Cover [Abstract] | |||
Entity Registrant Name | Guardion Health Sciences, Inc. | ||
Entity Central Index Key | 0001642375 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2020 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business Flag | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 37,500,000 | ||
Entity Common Stock, Shares Outstanding | 24,426,993 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2020 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Current assets | ||
Cash | $ 8,518,732 | $ 11,115,502 |
Accounts receivable | 11,248 | 78,337 |
Inventories | 384,972 | 310,941 |
Prepaid expenses | 179,931 | 362,938 |
Total current assets | 9,094,883 | 11,867,718 |
Deposits | 11,751 | 11,751 |
Property and equipment, net | 285,676 | 374,638 |
Operating lease right-of-use asset, net | 418,590 | 572,714 |
Intangible assets, net | 50,000 | 50,000 |
Total assets | 9,860,900 | 12,876,821 |
Current liabilities | ||
Accounts payable and accrued liabilities | 608,313 | 129,132 |
Accrued expenses | 127,637 | 116,211 |
Payable to former officer | 148,958 | |
Derivative warrant liability | 25,978 | 13,323 |
Operating lease liability - current | 162,845 | 151,568 |
Total current liabilities | 1,073,731 | 410,234 |
Operating lease liability - long-term | 271,903 | 434,747 |
Total liabilities | 1,345,634 | 844,981 |
Commitments and contingencies | ||
Stockholders' Equity | ||
Preferred stock, $0.001 par value; 10,000,000 shares authorized; no shares issued and outstanding at December 31, 2020 and December 31, 2019 | ||
Common stock, $0.001 par value; 250,000,000 shares authorized; 15,170,628 and 12,497,094 shares issued and outstanding at December 31, 2020 and December 31, 2019 | 15,171 | 12,497 |
Additional paid-in capital | 62,583,423 | 57,531,014 |
Accumulated deficit | (54,083,328) | (45,511,671) |
Total stockholders' equity | 8,515,266 | 12,031,840 |
Total liabilities and stockholders' equity | $ 9,860,900 | $ 12,876,821 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares issued | 15,170,628 | 12,497,094 |
Common stock, shares outstanding | 15,170,628 | 12,497,094 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Revenue | ||
Total revenue | $ 1,889,844 | $ 902,937 |
Cost of goods sold | ||
Total cost of goods sold | 1,946,635 | 341,315 |
Gross profit (loss) | (56,791) | 561,622 |
Operating expenses | ||
Research and development | 160,978 | 194,311 |
Sales and marketing | 1,450,205 | 1,874,901 |
General and administrative | 7,450,245 | 7,425,827 |
Costs related to resignation of former officer (including the reversal of previously recognized stock compensation expense of $965,295 during the year ended December 31, 2020) | (615,936) | |
Loss on sales of equipment | 18,500 | |
Equipment impairment | 30,948 | |
Goodwill impairment | 1,563,520 | |
Total operating expenses | 8,494,940 | 11,058,559 |
Loss from operations | (8,551,731) | (10,496,937) |
Other income (expenses): | ||
Interest expense | (7,271) | (258,365) |
Finance cost upon issuance of warrants | (415,955) | |
Change in fair value of derivative liability | (12,655) | 292,949 |
Total other income (expenses) | (19,926) | (381,371) |
Net loss | $ (8,571,657) | $ (10,878,308) |
Net loss per common share - basic and diluted | $ (0.60) | $ (1.79) |
Weighted average common shares outstanding - basic and diluted | 14,256,856 | 6,078,014 |
Medical Foods [Member] | ||
Revenue | ||
Total revenue | $ 1,609,482 | $ 444,657 |
Cost of goods sold | ||
Total cost of goods sold | 1,599,510 | 155,212 |
Medical Devices [Member] | ||
Revenue | ||
Total revenue | 275,862 | 434,010 |
Cost of goods sold | ||
Total cost of goods sold | 344,647 | 178,815 |
Other [Member] | ||
Revenue | ||
Total revenue | 4,500 | 24,270 |
Cost of goods sold | ||
Total cost of goods sold | $ 2,478 | $ 7,288 |
Consolidated Statements of Op_2
Consolidated Statements of Operations (Parenthetical) | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Inventory write-down | $ 971,719 |
Recognized stock compensation expense | 965,295 |
Medical Foods [Member] | |
Inventory write-down | 760,488 |
Medical Devices [Member] | |
Inventory write-down | $ 211,231 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2018 | $ 3,427 | $ 37,815,699 | $ (34,633,363) | $ 3,185,763 |
Balance, shares at Dec. 31, 2018 | 3,427,388 | |||
Fair value of vested stock options - officer and director | 2,339,560 | 2,339,560 | ||
Fair value of vested stock options | 254,170 | 254,170 | ||
Reclass of warrant liability to equity | 359,683 | 359,683 | ||
Issuance of common stock for services | $ 10 | 123,992 | 124,002 | |
Issuance of common stock for services, shares | 9,065 | |||
Issuance of common stock - warrant exercises | $ 3,034 | 168,341 | 171,375 | |
Issuance of common stock - warrant exercises, shares | 3,034,135 | |||
Sale of common stock | $ 6,008 | 16,218,799 | 16,224,807 | |
Sale of common stock, shares | 6,008,333 | |||
Fair value of common stock - conversion of notes payable and related interest | $ 18 | 250,770 | 250,788 | |
Fair value of common stock - conversion of notes payable and related interest, shares | 18,173 | |||
Net loss | (10,878,308) | (10,878,308) | ||
Balance at Dec. 31, 2019 | $ 12,497 | 57,531,014 | (45,511,671) | 12,031,840 |
Balance, shares at Dec. 31, 2019 | 12,497,094 | |||
Reversal of previously recognized stock compensation expense – former officer | (940,936) | (940,936) | ||
Fair value of vested stock options | 494,677 | 494,677 | ||
Issuance of common stock for services | $ 17 | 49,433 | $ 49,450 | |
Issuance of common stock for services, shares | 16,667 | 100,000 | ||
Issuance of common stock - warrant exercises | $ 2,657 | 5,449,235 | $ 5,451,892 | |
Issuance of common stock - warrant exercises, shares | 2,656,867 | |||
Sale of common stock, shares | 1,250,000 | |||
Fair value of common stock - conversion of notes payable and related interest | ||||
Net loss | (8,571,657) | (8,571,657) | ||
Balance at Dec. 31, 2020 | $ 15,171 | $ 62,583,423 | $ (54,083,328) | $ 8,515,266 |
Balance, shares at Dec. 31, 2020 | 15,170,628 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Operating Activities | ||
Net loss | $ (8,571,657) | $ (10,878,308) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 65,476 | 477,346 |
Impairment loss on equipment | 30,948 | |
Loss on sale of equipment | 18,500 | |
Inventory write-down | 971,719 | |
Goodwill impairment | 1,563,520 | |
Amortization of debt discount | 250,000 | |
Accrued interest expense included in notes payable | 788 | |
Amortization of operating lease right of use asset | 154,124 | 148,440 |
Stock-based compensation | 544,127 | 378,172 |
Stock-based compensation - former officer | 2,339,560 | |
Reversal of previously recognized stock compensation expense-former officer | (940,936) | |
Finance cost upon issuance of warrants | 415,955 | |
Change in fair value of derivative liability | 12,655 | (292,949) |
Changes in operating assets and liabilities: | ||
Accounts receivable | 67,089 | (50,135) |
Inventories | (728,801) | 47,056 |
Deposits and prepaid expenses | (125,171) | (315,165) |
Accounts payable and accrued expenses | 479,181 | (14,244) |
Operating lease liability | (151,567) | (140,888) |
Accrued expenses | 11,426 | 40,848 |
Payable to former officer | 148,958 | |
Net cash used in operating activities | (8,013,929) | (6,030,004) |
Investing Activities | ||
Purchase of property and equipment | (40,733) | (171,076) |
Proceeds from sales of equipment | 6,000 | |
Net cash used in investing activities | (34,733) | (171,076) |
Financing Activities | ||
Proceeds from initial public offering | 3,888,000 | |
Proceeds from follow-on public offerings | 12,336,807 | |
Proceeds from issuance of convertible notes | 250,000 | |
Proceeds from issuance of promissory note | 100,000 | |
Payments on promissory note | (100,548) | |
Proceeds from exercise of warrants | 5,451,892 | 171,375 |
Net cash provided by financing activities | 5,451,892 | 16,645,634 |
Cash: | ||
Net increase (decrease) | (2,596,770) | 10,444,554 |
Balance at beginning of period | 11,115,502 | 670,948 |
Balance at end of period | 8,518,732 | 11,115,502 |
Supplemental disclosure of cash flow information: | ||
Cash paid for - Interest | 7,271 | |
Cash paid for - Income taxes | ||
Non-cash financing activities: | ||
Fair value of warrant liability in connection with issuance of convertible notes | 436,034 | |
Recording of lease asset and liability | 721,154 | |
Reclassification of prepaid costs to inventory | 308,178 | |
Reclassification of property and equipment to inventory | 8,771 | |
Reclassification of warrant liability to equity | 359,683 | |
Fair value of common stock issued upon conversion of convertible notes and accrued interest | 250,788 | |
Reclass of deferred offering costs to equity | $ 270,000 |
Business and Summary of Signifi
Business and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Business and Summary of Significant Accounting Policies | 1. Business and Summary of Significant Accounting Policies Business Guardion Health Sciences, Inc. (the “Company”) is a specialty health sciences company (1) that has developed medical foods and medical devices in the ocular health space and (2) that is developing nutraceuticals that the Company believes will provide supportive health benefits to consumers. The Company has been primarily engaged in research and development, product commercialization and capital raising activities. 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. Liquidity The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. For the year ended December 31, 2020, the Company incurred a net loss of $8,571,657 and used cash in operating activities of $8,013,929. At December 31, 2020, the Company had cash on hand of $8,518,732 and working capital of $8,021,152. Subsequent to December 31, 2020, the Company sold an aggregate of 7,566,734 shares of its common stock for net proceeds of approximately $33,600,000 in two offerings, one completed in January 2021, and one completed in February 2021. In addition, in January and February 2021, the Company issued an aggregate of 1,647,691 shares of common stock upon the exercise of warrants and received cash proceeds of $3,608,509. Notwithstanding the net loss for 2020, management believes that its current cash balance, plus net proceeds from issuance of common stock and exercise of warrants in January and February 2021, is sufficient to fund operations for at least one year from the date the Company’s 2020 financial statements are issued. The Company expects to continue to incur net losses and negative operating cash flows in the near-term, and will continue to incur significant expenses for development and commercialization of its medical foods and medical devices, and the successful development and commercialization of any new products or product lines. The Company may also utilize cash to fund acquisitions. The Company may seek 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. Over time, 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. COVID-19 The Company is subject to risks and uncertainties of the COVID-19 pandemic that could adversely impact our business, including the commercialization of our medicines, our supply chain, our clinical trials, our liquidity and access to capital markets and our business development activities. The Company has implemented additional health and safety precautions and protocols in response to the pandemic and government guidelines, including curtailing employee travel and working from its executive offices, with many employees continuing their work remotely. During 2020, sales of certain products remained flat, as many eye doctor offices were closed, or operating with limited capacity, due to COVID-19 related “shelter at home” orders. During 2020, we did not experience a jeopardization of our supply chain due to the COVID-19 outbreak. The extent of the impact of the COVID-19 pandemic has had and will continue to have on the Company’s business is highly uncertain and difficult to predict and quantify. The full extent to which the COVID-19 pandemic will directly or indirectly impact the Company’s business, results of operations and financial condition, will depend on future developments that are highly uncertain, including as a result of new information that may emerge concerning COVID-19 and the actions taken to contain or treat it, including vaccination efforts, as well as the economic impact on local, regional, national and international markets. NASDAQ Notice and Compliance On September 20, 2019, the Company received notice from the Listing Qualifications staff (the “Staff”) of The Nasdaq Stock Market LLC (“Nasdaq”) indicating that, based upon the closing bid price of the Company’s common stock for the previous 30 consecutive business days, the Company no longer satisfied the requirement to maintain a minimum bid price of $1.00 per share, as required by Nasdaq Listing Rule 5550(a)(2) (the “Bid Price Rule”). In accordance with the Nasdaq Listing Rules, the Company was afforded 180 days, or until March 18, 2020, to regain compliance with the Bid Price Rule by evidence of a closing bid price of at least $1.00 per share for a minimum of 10 consecutive business days. Thereafter, the Company had been afforded a second 180-calendar day compliance period (which 180-day period was extended due to circumstances related to COVID-19), or until November 30, 2020, to regain compliance with the Bid Price Rule. The Company was unable to regain compliance with the Bid Price Rule by November 30, 2020. Accordingly, on December 1, 2020, the Company received a letter from the Staff notifying it that its Common Stock would be subject to delisting from Nasdaq unless the Company timely appealed Nasdaq’s determination to a Nasdaq Listing Qualifications Panel (the “Panel”). The Company timely appealed Nasdaq’s determination to the Panel. On January 26, 2021, the Company received written notification that the Panel granted the Company an extension for continued listing through March 15, 2021. On March 1, 2021, the Company implemented the Reverse Stock Split (as defined below). On March 15, 2021, the Company received a letter from the Staff notifying it that it had regained compliance with the Bid Price Rule. The letter stated the staff had determined that for the prior 10 consecutive business days, from March 1, 2021 to March 12, 2021, the closing bid price of the Company’s common stock had been at $1.00 per share or greater and that accordingly, the Company had regained compliance under the Bid Price Rule, and that the matter was closed. Reverse Stock Splits On January 30, 2019, following stockholder and board approval, the Company effected a 1-for-2 reverse split of its outstanding shares of common stock, without any change to its par value. The authorized number of shares of common 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. On March 1, 2021, following stockholder and board approval, the Company effectuated a 1-for-6 reverse split of its outstanding shares of common stock, without any change to its par value. The authorized number of shares of common 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. Accordingly, all share and per share amounts presented herein with respect to common stock have been retroactively adjusted to reflect the above described reverse stock splits for all periods presented . Basis of presentation The Company has prepared its consolidated financial statements in accordance with accounting practices generally accepted in the United States (“U.S. GAAP”) and has adopted accounting policies and practices which are generally accepted in the industry in which it operates. The Company’s significant accounting policies are summarized below. Principles of consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, VectorVision Ocular Health, Inc., NutriGuard Formulations, Inc., and Transcranial Doppler Solutions, Inc. All intercompany balances and transactions have been eliminated in consolidation. Use of Estimates The preparation of our financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make certain estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities. Actual results could differ from those estimates. On an ongoing basis, management reviews its estimates and if deemed appropriate, those estimates are adjusted. Significant estimates include those related to assumptions used in valuing inventories at net realizable value, assumptions used in valuing assets acquired in business acquisitions, impairment testing of goodwill and other long-term assets, assumptions used in valuing stock-based compensation, the valuation allowance for deferred tax assets, accruals for potential liabilities, and assumptions used in the determination of the Company’s liquidity. Actual results could differ from those estimates. Revenue Recognition The Company generates its revenue from two business segments: ● Medical Foods and Nutraceuticals Segment ● Medical Devices Segment The Company recognizes revenue in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers All products sold by the Company are distinct individual products and 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. 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. Payments for sales of medical foods and dietary supplements are 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 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 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. Revenues by segment: Years Ended December 31, 2020 2019 Medical Foods and Nutraceuticals $ 1,609,482 $ 444,657 Medical Devices 275,862 434,010 Other 4,500 24,270 $ 1,889,844 $ 902,937 During the year ended December 31, 2020, the Company recorded a sale to the Malaysian company of approximately $890,000. The remainder of the Company’s Medical Foods and Nutraceuticals revenues earned during the year ended December 31, 2020 are derived from individual retail customers in North America. During the year ended December 31, 2019, all the Company’s Medical Foods and Nutraceuticals revenues are derived from individual retail customers in North America. Medical Devices revenues are derived from a worldwide customer base consisting of both retail customers and distributors. Sales to distributors were approximately 51% and 62% of total revenues for the years ended December 31, 2020 and 2019, respectively. Revenues by geographical area: Years Ended December 31, 2020 2019 North America $ 891,768 $ 725,520 Malaysia 889,508 Other Asia 58,688 129,453 Europe and Other 49,880 47,964 $ 1,889,844 $ 902,937 Medical Devices revenues are derived from a worldwide customer base consisting of both retail customers and distributors. Sales to distributors were approximately 51% and 62% of total revenues for the years ended December 31, 2020 and 2019, respectively. Cash Cash consists of cash and demand deposits with banks. The Company holds no cash equivalents as of December 31, 2020 and 2019, respectively. Accounts Receivable Accounts receivable are recorded at the invoiced amounts. Management evaluates the collectability of its trade accounts receivable and determines an allowance for doubtful accounts based on historical write-offs, known or expected trends, and the identification of specific balances deemed uncollectible based on a customer’s financial condition, credit history and the current economic conditions. At December 31, 2020 and 2019, based on management’s assessment, no allowance for doubtful accounts was considered necessary. Inventories Inventories are stated at the lower of cost or net realizable value, with cost determined on a first-in, first-out (“FIFO”) basis. The Company records adjustments to its inventory for estimated obsolescence or diminution in net realizable value equal to the difference between the cost of the inventory and the estimated net realizable value. When evidence exists that the net realizable value of inventory is lower than its cost, the difference is recognized as a loss in the period in which it occurs. Once inventory has been written down, it creates a new cost basis for inventory that may not subsequently written up. For the year ended December 31, 2020, the Company wrote-down inventory of $971,719, which was recorded in cost of sales (see Note 3). For the year ended December 31, 2019, there were no write-downs of inventory. Property and Equipment Property and equipment are recorded at cost less accumulated depreciation. Additions, improvements, and major renewals or replacements that substantially extend the useful life of an asset are capitalized. Repairs and maintenance expenditures are expensed as incurred. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets, which range from three to seven years. Leasehold improvements are amortized on a straight-line basis over the shorter of their estimated useful lives or the remaining lease term. Management assesses the carrying value of property and equipment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. If there is indication of impairment, management prepares an estimate of future cash flows expected to result from the use of the asset and its eventual disposition. If these cash flows are less than the carrying amount of the asset, an impairment loss is recognized to write down the asset to its estimated fair value at that time. At December 31, 2020 and 2019, management determined there were no impairments of the Company’s property and equipment. Leases The Company determines whether a contract is, or contains, a lease at inception. Right-of-use assets represent the Company’s right to use an underlying asset during the lease term, and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Right-of-use assets and lease liabilities are recognized at lease commencement based upon the estimated present value of unpaid lease payments over the lease term. The Company uses its incremental borrowing rate based on the information available at lease commencement in determining the present value of unpaid lease payments. Intangible Assets Finite-lived intangible assets Amortizable identifiable intangible assets are stated at cost less accumulated amortization, and represent customer relationships, technology, trade names, and noncompetition agreements acquired in business combinations. The Company follows ASC 360 in accounting for intangible assets, which requires impairment losses to be recorded when indicators of impairment are present and the undiscounted cash flows estimated to be generated by the assets are less than the assets’ carrying amounts. As of December 31, 2019, the recorded value of the Company’s finite-lived intangible assets had been fully amortized. Indefinite-lived intangible assets Intangible assets are comprised of an indefinite-lived trademark acquired, so classified because the Company can renew the underlying rights to the trademark indefinitely at nominal cost. Indefinite-lived intangible assets are not amortized but are assessed for impairment annually and evaluated annually to determine whether the indefinite useful life is appropriate. As part of our impairment test, we first assess qualitative factors to determine whether it is more likely than not the asset is impaired. If further testing is necessary, we compare the estimated fair value of our asset with its book value. If the carrying amount of the asset exceeds its fair value, as determined by its discounted cash flows, an impairment loss is recognized in an amount equal to that excess. For the years ended December 31, 2020 and 2019, the Company determined there were no impairments of its indefinite-lived brand names (see Note 5). Goodwill Goodwill is the excess of cost of an acquired entity over the fair value of amounts assigned to assets acquired and liabilities assumed in a business combination. Under the guidance of ASC 350, goodwill is not amortized, rather it is tested for impairment annually, and will be tested for impairment between annual tests if an event occurs or circumstances change that would indicate the carrying amount may be impaired. An impairment loss generally would be recognized when the carrying amount of the reporting unit’s net assets exceeds the estimated fair value of the reporting unit and would be measured as the excess carrying value of goodwill over the derived fair value of goodwill. The Company’s policy is to perform an annual impairment testing for its reporting units on December 31 of each fiscal year. During the year ended December 31, 2019, the Company recorded an impairment of its remaining goodwill of $1,563,520 (see Note 5). Accordingly, at December 31, 2020, the Company did not have any goodwill. 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 employees, directors, and for acquiring goods and services from nonemployees, which include grants of employee stock options, are recognized in the financial statements based on their grant date fair values in accordance with ASC 718, Compensation-Stock Compensation Income Taxes The Company uses an asset and liability approach for accounting and reporting for income taxes that allows recognition and measurement of deferred tax assets based upon the likelihood of realization of tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, or that future deductibility is uncertain. The Company’s policy is to recognize interest and/or penalties related to income tax matters in income tax expense. Research and Development Costs Research and development costs are expensed as incurred and 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 products. Research and development expenditures, which include stock compensation expense, totaled $160,978 and $194,311 for the years ended December 31, 2020 and 2019, respectively. Patent Costs The Company is the owner of three issued domestic patents, three pending domestic patent applications, one issued foreign patent in Europe, one issued foreign patent in Hong Kong, 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 years ended December 31, 2020 and 2019, patent costs were $124,806 and $137,183, respectively, and are included in general and administrative costs in the statements of operations. Advertising Costs Advertising costs are expensed as incurred and are included in sales and marketing expense. Advertising costs aggregated $44,429 and $19,645 for the years ended December 31, 2020 and 2019, respectively. Loss per Common Share Basic loss per share is computed by dividing net loss by the weighted-average common shares outstanding during a period. Diluted earnings per share is computed based on the weighted-average common shares outstanding plus the effect of dilutive potential common shares outstanding during the period calculated using the treasury stock method. Dilutive potential common shares include shares from unexercised warrants and options. Potential common share equivalents have been excluded where their inclusion would be anti-dilutive. 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 options are anti-dilutive. The following potentially dilutive shares were excluded from the shares used to calculate diluted earnings per share: December 31, 2020 2019 Warrants 2,132,758 4,800,456 Options 778,195 493,750 2,910,953 5,294,206 Fair Value of Financial Instruments Accounting standards require certain assets and liabilities be reported at fair value in the financial statements and provide a framework for establishing that fair value. Fair value is defined as the price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining fair value, the Company considers the principal or most advantageous market in which it transacts, and considers assumptions that market participants would use when pricing the asset or liability. The framework for determining fair value is based on a hierarchy that prioritizes the inputs and valuation techniques used to measure fair value: Level 1 - Level 2 - Level 3 - The Company determines the level in the fair value hierarchy within which each fair value measurement falls in its entirety, based on the lowest level input that is significant to the fair value measurement in its entirety. In determining the appropriate levels, the Company performs an analysis of the assets and liabilities at each reporting period end. The Company believes the carrying amount of its financial instruments (consisting of cash, accounts receivable, and accounts payable and accrued liabilities) approximates fair value due to the short-term nature of such instruments. As of December 31, 2020, and 2019, the Company’s balance sheet included Level 2 liabilities comprised of the fair value of warrant liabilities aggregating $25,978 and $13,323, respectively (see Note 9). Derivative Financial Instruments The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the consolidated statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. Concentrations Cash balances are maintained at large, well-established financial institutions. At times, cash balances may exceed federally insured limits. Insurance coverage limits are $250,000 per depositor at each financial institution. The Company believes that no significant concentration of credit risk exists with respect to its cash balances because of its assessment of the creditworthiness and financial viability of the financial institutions. During the year ended December 31, 2020, one customer accounted for approximately 47% of the Company’s sales. During the year ended December 31, 2019, one customer who accounted for approximately 22% of the Company’s sales. No other customer accounted for more than 10% of sales in either year. Recent Accounting Pronouncements In August 2020, the FASB issued ASU No. 2020-06 (“ASU 2020-06”) “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity.” ASU 2020-06 will simplify the accounting for convertible instruments by reducing the number of accounting models for convertible debt instruments and convertible preferred stock. Limiting the accounting models will result in fewer embedded conversion features being separately recognized from the host contract as compared with current GAAP. Convertible instruments that continue to be subject to separation models are (1) those with embedded conversion features that are not clearly and closely related to the host contract, that meet the definition of a derivative, and that do not qualify for a scope exception from derivative accounting and (2) convertible debt instruments issued with substantial premiums for which the premiums are recorded as paid-in capital. ASU 2020-06 also amends the guidance for the derivatives scope exception for contracts in an entity’s own equity to reduce form-over-substance-based accounting conclusions. ASU 2020-06 will be effective January 1, 2024, for the Company. Early adoption is permitted, but no earlier than January 1, 2021, including interim periods within that year. Management is currently evaluating the effect of the adoption of ASU 2020-06 on the consolidated financial statements, but currently does not believe ASU 2020-06 will have a significant impact on the Company’s financial statements. The effect will largely depend on the composition and terms of the outstanding financial instruments at the time of adoption. In December 2019, the FASB issued ASU 2019-12, Income Taxes (topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”). ASU 2019-12 simplifies the accounting for income taxes by removing certain exceptions and enhances and simplifies various aspects of the income tax accounting guidance in ASC 740. ASU 2019-12 is not expected to have any impact on the Company’s consolidated financial statement presentation or disclosures subsequent to its adoption. In June 2016, the FASB issued ASU No. 2016-13, Credit Losses - Measurement of Credit Losses on Financial Instruments (“ASC 326”). The standard significantly changes how entities will measure credit losses for most financial assets, including accounts and notes receivables. The standard will replace today’s “incurred loss” approach with an “expected loss” model, under which companies will recognize allowances based on expected rather than incurred losses. Entities will apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. As a smaller reporting company, ASU 2016-13 will be effective for us beginning January 1, 2023, with early adoption permitted. The Company is currently assessing the impact of adopting this standard on the Company’s financial statements and related disclosures. The Company’s management does not believe that any other 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. |
Acquisition of NutriGuard
Acquisition of NutriGuard | 12 Months Ended |
Dec. 31, 2020 | |
Business Combinations [Abstract] | |
Acquisition of NutriGuard | 2. Acquisition of NutriGuard Effective September 20, 2019 (the “Effective Date”), the Company’s wholly-owned subsidiary, NutriGuard Formulations, Inc., a Delaware corporation, completed an asset purchase agreement (the “Asset Purchase Agreement”) with NutriGuard Research, Inc., a California corporation (“NutriGuard”), and NutriGuard’s sole shareholder, Mark McCarty. Pursuant to the Asset Purchase Agreement, the Company purchased specified assets of the NutriGuard brand and business, consisting primarily of inventory, trademarks, copyrights and other intellectual property. In exchange, the Company agreed to pay a 3% royalty, payable quarterly, to NutriGuard based on the operating results of the NutriGuard branded products in future periods, after $500,000 in gross revenues have been achieved by the Company. The Company was unable to reasonably estimate the timing or amount of future revenue streams that would generate royalty payments, as the Company will need to develop new product formulations and implement a marketing and distribution infrastructure, which will require the investment of a significant amount of capital over an extended period of time. Accordingly, any royalty payments in the future will be charged directly to operations when incurred. As the Company did not pay any cash or non-cash consideration, nor did it assume any liabilities, in conjunction with this acquisition, the Company did not recognize any tangible or intangible assets at closing. All costs related to this transaction, consisting primarily of legal fees, were charged to operations as incurred. Although NutriGuard conducted limited operations with nominal revenues prior to its acquisition, the Company has determined that the NutriGuard acquisition qualified as the acquisition of a business under Accounting Standards Codification (“ASC”) 805: Business Combinations (“ASC 805”). However, the recent historical operations of NutriGuard did not meet any of the three-element significance level tests (investment, assets and pre-tax income) with regard to the accounting standards requiring acquisition company financial statements and related pro forma financial information, and the Company has therefore concluded that the acquisition of NutriGuard was not significant. The value of the NutriGuard business consists primarily of intangible assets for which no accounting value was attributed in the Company’s financial statements. The Company intends to utilize these intangible assets to build a nutraceutical brand and product portfolio based on updated and reformulated compounds, which will require the investment of a significant amount of capital over an extended period of time. The operations of Nutriguard have been included in the Company’s consolidated results of operations starting September 20, 2019. The following unaudited pro forma financial information gives effect to the Company’s acquisition of NutriGuard as if the acquisition had occurred on January 1, 2019: Year Ended December 31, 2019 Pro forma net revenues $ 963,167 Pro forma net loss attributable to common shareholders $ (10,913,833 ) Pro forma net loss per share $ (1.80 ) On the Effective Date, Mr. McCarty entered into a consulting agreement with the Company and provides that Mr. McCarty will serve as the Director of Research of the Company for a period of 3 years at a rate of $7,500 per month for 12 months and $5,000 per month thereafter. It is intended that Mr. McCarty will assist the Company, among other tasks, in developing new formulations for distribution under the NutriGuard brand, as well as identifying production sources for such compounds and developing distribution networks for such products. Pursuant to the consulting agreement, the Company granted Mr. McCarty stock options to purchase 16,667 shares of the Company’s common stock with a grant date fair value of $54,004 and an exercise price of $3.24 per share, which was the closing market price of the Company’s common stock on the Effective Date. The stock options were granted under the terms of the Company’s 2018 Equity Incentive Plan, and the options vest as follows: 25% on the Effective Date, 25% on the first anniversary following the Effective Date, 25% on the second anniversary following the Effective Date, and 25% on the third anniversary following the Effective Date. |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Inventories | 3. Inventories Inventories consisted of the following: December 31, 2020 2019 Raw materials $ 218,307 $ 246,875 Finished goods 166,665 64,066 Inventory $ 384,972 $ 310,941 The Company’s inventories are stated at the lower of cost or net realizable value on a FIFO basis. At December 31, 2020, as a result of the deterioration of the forecasted marketability of certain of the Company’s inventory, management determined that the inventory’s revenue-generating ability was diminished, and the net realizable value of this inventory had fallen below its historical carrying cost. Accordingly, for the year ended December 31, 2020, the Company recorded a write down of inventory of $971,719, which is included in cost of goods sold. At December 31, 2020, the balance of inventory reflects its new cost basis after the write down. For the year ended December 31, 2019, there were no write-downs of inventory. At December 31, 2020 and 2019, inventory has been reduced by cumulative write-downs totaling $1,028,324 and $56,605, respectively. |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | 4. Property and Equipment, net Property and equipment consisted of the following: December 31, 2020 2019 Leasehold improvements $ 103,255 $ 98,357 Testing equipment 348,124 394,427 Furniture and fixtures 197,349 185,799 Computer equipment 68,460 68,460 Office equipment 9,835 8,193 727,023 755,236 Less accumulated depreciation and amortization (441,347 ) (380,598 ) $ 285,676 $ 374,638 For the years ended December 31, 2020 and 2019, depreciation and amortization expense was $65,476 and $71,242, respectively, of which $35,846 and $33,004 was included in research and development expense, $13,252 and $15,641 was included in sales and marketing expense, and $16,378 and $22,597 was included in general and administrative expense, respectively. The following table shows where depreciation expense was recorded for the years ended December 31, 2019 and 2020: Years Ended December 31, 2020 2019 Research and development expense $ 35,846 $ 33,004 Sales and marketing expense 13,252 15,641 General and administrative expense 16,378 22,597 $ 65,476 $ 71,242 |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | 5. Intangible Assets The Company’s intangible assets consisted of the following: December 31, 2020 2019 Trademark $ 50,000 $ 50,000 Indefinite-lived intangible trademark asset In January 2018, the Company acquired the rights to the trademark GLAUCO-HEALTH as well as the name “International Eye Wellness Institute” (together, the “IP Assets”) from an unrelated third party. The purchase included all rights, title, and interest in and to the IP Assets, including (a) the right to register and use the IP Assets; (b) all goodwill associated with the IP Assets; (c) all income, royalties, and damages hereafter due or payable with respect to the IP Assets; (d) all rights to sue for past, present, and future infringements or misappropriations of the IP Assets; and all other intellectual property rights owned or claimed by the seller or embodied in the IP Assets. In exchange for these rights, the Company paid the seller $50,000 in cash. The Company determined that the acquired intangible asset met the definition of a defensive intangible asset under ASC 350, and the Company accounted for the $50,000 payment as an acquired intangible asset. As the Company can renew the underlying rights to the IP Assets indefinitely at nominal cost, the assets have been classified as a non-amortizable intangible asset on the Company’s balance sheet. The Company evaluates the status of the assets for impairment annually or more frequently if warranted. Based on management’s assessment, there were no indications of impairment at December 31, 2020 or 2019 for the IP Assets. Identifiable finite-lived intangible assets and goodwill related to VectorVision In September 2017, the Company acquired VectorVision, Inc. (“VectorVision”) in exchange for 508,334 shares of the Company’s common stock, valued at $2,300,000 million. In accordance with ASC 805, the purchase consideration was allocated to tangible and intangible assets at their estimated fair values on the date of acquisition. The intangible assets included $674,400 of finite-lived intangible assets including customer relationships, technology, trade names, and noncompetition, and $1,563,520 of goodwill. At December 31, 2018, the net book value of the finite-lived intangible assets was $406,104, and the net book value of the goodwill was $1,563,520. During the fourth quarter of 2019, the Company conducted its annual impairment analysis, considering multiple qualitative observations and indicators, including our customer relationships, the regulatory environment as it impacts medical devices, market penetration expectations and barriers, and our anticipated competitive environment. Although management believes in the future growth and success of the VectorVision business, development of the CSV-2000 took longer than expected due to software engineering and other factors. Although we believe we will enjoy a significant market share over time, there is subjectivity of predicting the amount and timing of that value. Recent changes in the regulatory environment may cost us more than anticipated to begin marketing the new device in Europe. Accordingly, management concluded that as of December 31, 2019, the fair value of the goodwill and finite-lived intangible assets associated with the VectorVision acquisition were less than their respective carrying amounts. For the year ended December 31, 2019, the Company recorded a goodwill impairment charge of $1,563,520, and an additional charge of $406,104 to fully amortize the balance of the finite-lived intangible assets recorded in the VectorVision acquisition. |
Operating Leases
Operating Leases | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Operating Leases | 6. Operating Leases The Company leases certain office and warehouse spaces under operating leases. In October 2012, the Company entered into a lease agreement for 9,605 square feet of office and warehouse space commencing March 1, 2013. The lease (“Lease 1”) was renewed for an additional five years in 2018 through July 2023. In connection with the VectorVision acquisition (see Note 5), the Company assumed a lease agreement (“Lease 2”) for 5,000 square feet of office and warehouse space which commenced October 1, 2017 through February 2023. In accounting for the leases, the Company adopted ASC 842 Leases During the year ended December 31, 2020, the Company made combined payments on both leases of $151,767 towards the lease liabilities. As of December 31, 2020, the lease liability for Lease 1 was $388,001, and the lease liability for Lease 2 was $46,746, or an aggregate of $434,747. ASC 842 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 years ended December 31, 2020 and 2019 was $174,323 and $174,323, respectively. Maturities of the Company’s lease liabilities are as follows: Year ending Operating Leases 2021 $ 176,934 2022 182,249 2023 98,417 Total lease payments 457,600 Less: Imputed interest/present value discount (22,852 ) Present value of lease liabilities 434,748 Less Current portion (162,845 ) $ 271,903 |
Settlement with Former Officer
Settlement with Former Officer | 12 Months Ended |
Dec. 31, 2020 | |
Settlement With Former Officer | |
Settlement with Former Officer | 7. Settlement with Former Officer Effective June 15, 2020, Michael Favish resigned as Chief Executive Officer and as an employee of the Company and resigned from the Company’s Board of Directors. Terms of the settlement agreement between the parties included the continuation of his previous salary of $325,000 during the twelve months subsequent to his resignation. The $325,000 of aggregate settlement payments was recorded in costs related to resignation of former officer expense in the accompanying consolidated statements of operations for the year ended December 31, 2020. As of December 31, 2020, $148,958 of the amount due remains accrued on our consolidated balance sheet and is payable through June 2021. In addition, 138,889 options previously granted to the former officer were forfeited (see Note 10). |
Notes Payable
Notes Payable | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Notes Payable | 8. Notes Payable 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. On April 11, 2019, the Company repaid the promissory note for a total of $100,548 including accrued interest. Convertible Notes In March 2019, the Company issued two convertible notes with aggregate principal in the amount of $250,000, simple interest of 5% annually, and with maturity dates of September 30, 2019. The convertible notes (principal and accrued interest) were mandatorily convertible upon the consummation of the Company’s IPO. In April 2019, upon the consummation of the IPO, the convertible notes and accrued interest with an aggregate balance of $250,788 were mandatorily converted into 18,173 shares of common stock based on a conversion price of $13.80 per share in April 2019. Upon conversion a valuation discount of $250,000 was recognized as interest expense. Concurrent with the issuance of the notes, the Company issued warrants to the 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) $13.80. The Company issued 18,173 warrants based upon the completion of the IPO in April 2019. Due to the variable terms of both the exercise price and the number of warrants to be issued, the warrants were accounted for as a derivative liability upon issuance (see Note 9). The aggregate fair value of the warrant derivative liability was determined to be $436,034 based on a probability effected Black-Scholes option pricing model with a stock price of $24.00, volatility of 138%, and risk-free rates ranging from 2.34% - 2.39%. The Company recognized a debt discount of $250,000 equal to the face amount of the convertible notes and recorded a financing cost of $186,034 equal to the difference between the fair value of the warrants and the debt discount. (see Note 9) |
Derivative Warrant Liability
Derivative Warrant Liability | 12 Months Ended |
Dec. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Warrant Liability | 9. Derivative Warrant Liability Derivative for warrants issued to underwriter On April 9, 2019, the Company issued 10,417 warrants with an exercise price of $30.00 per share to the underwriter in connection with the Company’s IPO. The Company accounted for these warrants as a derivative liability in the financial statements at June 30, 2019 because they were associated with the IPO, a registered offering, and the settlement provisions contained language that the shares underlying the warrants are required to be registered. The fair value of the warrants is remeasured at each reporting period, and the change in the fair value is recognized in earnings in the accompanying statements of operations. The fair value of the warrants at the date of issuance was determined to be $229,921 and was recorded as a finance cost. During the year ended December 31, 2019, a decrease in the fair value of the derivative warrant liability of $216,598 was recorded, and at December 31, 2019, the fair value of the derivative warrant liability was $13,323. During the year ended December 31, 2020, an increase in the fair value of the derivative warrant liability of $12,655 was recorded, and at December 31, 2020, the fair value of the derivative warrant liability was $25,978. Derivative for warrants issued with convertible notes in 2019 and reclassified to equity in 2019 In March 2019, the Company issued warrants to two convertible note holders pursuant to the anticipated completion of the Company’s IPO (the IPO was completed on April 9, 2019). 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 the issuance date. The Company estimated that the issuance of 18,173 warrants with an exercise price of $17.28 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 fair value of the warrants at date of issuance was determined to be $436,034, of which $250,000 was recorded as a valuation discount and $186,034 was recorded as a finance cost. Upon completion of the IPO, the exercise price and the number of warrants were fixed, and the warrants are no longer accounted for as liabilities. The fair value of the warrants at the completion of the IPO was determined to be $359,683, and such amount was reclassified to equity. This resulted in the Company recognizing a decrease in derivative warrant liability of $76,351 during the year ended December 31, 2019. The fair value of the warrant liability was determined at the following issuance and reporting dates using the Black-Scholes option pricing model and the following assumptions: Convertible Notes issued March 2019 Underwriter warrants issued April 2019 Warrant Liability Warrant Liability Stock price $ 24.00 $ 22.08 $ 1.32 2.49 Risk free interest rate 2.34 – 2.39 % 2.29 % 1.62 % 0.17 % Expected volatility 138 % 137 % 145 % 148 % Expected life in years 5.00 5.00 4.3 3.8 Expected dividend yield 0 % 0 % 0 % 0 % Number of warrants 18,173 10,417 10,417 10,417 Fair value of derivative warrant liability $ 436,034 $ 229,921 $ 13,323 25,978 |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Stockholders' Equity | 10. Stockholders’ Equity Common Stock Sales of common stock On April 9, 2019, the Company closed its initial public offering (the “IPO”) and issued 208,334 shares of its common stock at a public offering price of $24.00 per share for total gross proceeds of $5.0 million pursuant to an underwriting agreement by and between the Company, WallachBeth Capital, LLC, and WestPark Capital, Inc., acting as the representatives. On April 9, 2019, the Company issued 10,417 warrants with an exercise price of $30.00 per share to the underwriters and affiliates in connection with the IPO. The Company accounted for these warrants as a derivative liability (see Note 9) upon issuance because they were associated with a registered offering, and the settlement provisions contained language that the shares underlying the warrants are required to be registered. Net proceeds to the Company were $3,888,000 after deducting underwriting discounts, commissions, and other offering expenses. On August 15, 2019, the Company closed a second public offering consisting of (i) 2,000,000 shares of common stock, par value $0.001 per share, of the Company, (ii) pre-funded warrants exercisable for 166,667 shares of common stock, and (iii) warrants to purchase up to an aggregate of 2,166,667 shares of common stock pursuant to an underwriting agreement by and between the Company, Maxim Group LLC, and WallachBeth Capital LLC, acting as the representatives. On August 16, 2019, the Company sold an additional 325,000 warrants upon exercise of the underwriters’ over-allotment option. The public offering price was $2.64 per share of common stock, $2.58 per pre-funded warrant and $0.06 per accompanying warrant. On August 15, 2019, the Company issued 173,334 warrants with an exercise price of 3.00 per share to the underwriters in connection with the offering. Net proceeds to the Company were $4,944,340 after deducting underwriting discounts, commissions, and other offering expenses. On October 30, 2019, the Company completed an underwritten public offering of 3,800,000 shares of its common stock plus 283,334 pre-funded warrants to purchase common stock in lieu thereof and Series B warrants to purchase up to 4,083,334 shares of the Company’s common stock. Each share of common stock (or pre-funded warrant) was sold together with one Series B warrant to purchase one share of common stock at a combined price to the public of $2.05 per share and Series B warrant. The shares of common stock or pre-funded warrants and the accompanying Series B warrants were sold together but issued separately and were immediately separable upon issuance. Warrants to purchase 140,000 shares of common stock upon the exercise of the underwriters’ over-allotment option and warrants to purchase 326,667 shares of common stock were issued to the underwriters as representatives of the public offering. Net proceeds, after deducting underwriting discounts, commissions and offering expenses, were approximately $7,400,000. Common stock issued for services During the year ended December 31, 2020, the Company issued 16,667 fully vested shares of common stock for services rendered and recognized $49,350 in stock compensation expense related to these shares. Warrants A summary of the Company’s warrant activity is as follows: Shares Weighted Exercise Price Weighted December 31, 2018 210,946 $ 4.26 0.29 Granted 7,693,590 2.52 4.81 Forfeitures - - - Expirations (46,572 ) (10.98 ) - Exercised (3,057,508 ) (3.00 ) - December 31, 2019 4,800,456 2.28 4.91 Granted - - - Forfeitures - - - Expirations (10,830 ) (9.00 ) - Exercised (2,656,868 ) (2.04 ) - December 31, 2020, all exercisable 2,132,758 $ 2.40 3.81 The exercise prices of warrants outstanding and exercisable as of December 31, 2020 are as follows: Warrants Outstanding and Exercisable (Shares) Exercise Prices 1,566,466 $ 2.05 326,668 2.67 173,334 3.00 37,700 3.51 28,590 17.25 2,132,758 During the year ended December 31, 2019, the Company granted a total of 7,693,590 warrants consisting of: (a) 10,417 warrants associated with our IPO financing in April 2019, (b) 18,173 warrants in connection with the conversion of certain notes (c) 2,831,667 warrants associated with our August public offering, and (d) 4,833,334 warrants associated with our October public offering. No warrants were granted in the year ended December 31, 2020. The August and October 2019 pre-funded warrants were sold to purchasers whose purchase of shares of common stock in the offerings would otherwise result in the purchaser, together with its affiliates and certain related parties, beneficially owning more than 4.99% of the Company’s outstanding common stock immediately following the consummation of the offerings, in lieu of shares of common stock. Each pre-funded warrant represents the right to purchase one share of common stock at an exercise price of $0.01 per share. The August 2019 public offering price was $2.64 per share of common stock and $0.01 per accompanying warrant. Each warrant sold with the shares of common stock represents the right to purchase one share of common stock at an exercise price of $3.51 per share. The warrants are exercisable immediately, expire five years from the date of issuance and provide that, beginning on the earlier of (i) 30 days from the effective date of the Registration Statement and (ii) the date on which the Common Stock trades an aggregate of more than 6,666,667 shares after the announcement of the pricing of the offering, and ending on the twelve month anniversary thereof, each warrant may be exercised at the option of the holder on a cashless basis at a ratio of one warrant for one share of common stock, in whole or in part, if the weighted average price of the common stock on the trading day immediately prior to the exercise date fails to exceed the initial exercise price of the warrant. The October 2019 public offering price was $1.99 per share of common stock and $0.06 per accompanying warrant. Each warrant sold with the shares of common stock represents the right to purchase one share of common stock at an exercise price of $2.05 per share. During the year ended December 31, 2019, investors exercised a total of 3,057,509 warrants for 3,034,135 shares of common stock, consisting of (i) 2,559,384 warrants exercised on a cashless basis for 2,536,010 net common shares, and (ii) 498,125 warrants exercised for a total of $171,375 in proceeds to the Company (450,000 of these warrants were exercisable for $0.06 per share, and 48,125 were exercisable for $3.00 per share). During the year ended December 31, 2020, investors exercised warrants exercisable into 2,656,868 shares of common stock for total proceeds of $5,451,892. The warrants were exercisable at $2.05 per share. As of December 31, 2020, the Company had an aggregate of 2,132,758 outstanding warrants to purchase shares of its common stock. The aggregate intrinsic value of warrants outstanding as of December 31, 2020 was $0. Stock Options A summary of the Company’s stock option activity is as follows: Shares Weighted Average Weighted Average Remaining Contractual Term (Years) December 31, 2018 227,083 $ 13.56 3.78 Granted 266,667 21.06 4.38 Forfeitures - - - Expirations - - - Exercised - - - December 31, 2019 493,750 13.56 3.64 Granted 423,333 5.58 9.51 Forfeitures (138,889 ) - - Expirations - - - Exercised - - - December 31, 2020, outstanding 778,194 $ 9.48 6.38 December 31, 2020, exercisable 500,764 $ 11.64 4.74 The exercise prices of options outstanding and exercisable as of December 31, 2020 are as follows: Options Outstanding (Shares) Options Exercisable (Shares) Exercise Prices 41,667 41,667 $ 1.48 5,000 5,000 1.91 41,667 20,833 2.34 1,667 1,667 2.46 16,667 8,333 3.24 375,000 126,738 6.00 104,166 104,166 12.00 10,416 10,416 13.80 112,500 112,500 15.00 69,445 69,445 26.40 778,194 500,765 The Company accounts for share-based payments in accordance with ASC 718 wherein grants are measured at the grant date fair value and charged to operations over the vesting periods. During the year ended December 31, 2020, the Company granted options to purchase 215,000 shares of common stock to six employees with a grant date fair value determined to be $554,775 using a Black-Scholes option pricing model based on the following assumptions: (i) volatility rate of 141% to 147%, (ii) discount rate of 0.18%, (iii) zero expected dividend yield, and (iv) expected life of 5.25 to 6 years. The options have an exercise price of $1.92 to $6.00 per share. Options for 41,667 shares vest on a quarterly basis over two years and options for 6,667 shares vest in full six months after the grant date. Options for 166,667 shares vest ratably over three years. On June 30, 2020, the Company granted options to purchase 208,334 shares of common stock to the members of the Company’s Board of Directors with a grant date fair value determined to be $478,735 using a Black-Scholes option pricing model based on the following assumptions: (i) volatility rate of 142% to 148%, (ii) discount rate of 0.18%, (iii) zero expected dividend yield, and (iv) expected life of 5.25 years. The options have an exercise price of $6.00 per share. The options vest on a quarterly basis over two years beginning three months after the grant date. The Company’s volatility is based on an average volatility of similar companies in the same industry. The risk-free interest rate was based on rates established by the Federal Reserve Bank. The expected dividend yield was based on the fact that the Company has not paid dividends to its common stockholders in the past and does not expect to pay dividends to its common stockholders in the future. The expected life of the stock options granted is estimated using the “simplified” method, whereby the expected term equals the average of the vesting term and the original contractual term of the stock option. For the years ended December 31, 2020 and 2019, the Company recognized aggregate stock-compensation expense of $494,677 and $2,593,730 respectively, related to the fair value of vested options. As of December 31, 2020, the Company had an aggregate of 230,556 remaining unvested options outstanding, with a remaining fair value of $629,568 to be amortized over an average of 3.0 years, weighted average exercise price of $5.58, and weighted average remaining life of 9.3 years. Based on the closing price of the Company’s common stock on December 31, 2020 of $2.49, the aggregate intrinsic value of options outstanding as of December 31, 2020 was zero. Settlement of stock options issued to former officer In connection with a separation agreement entered into with Michael Favish, the Company’s former CEO (see Note 7), the expiration date of his vested stock options was extended for twelve months from June 15, 2020. In accordance with ASC 718, the extension of the exercise period for the vested options constitutes a modification of the original option agreement. In accounting for the modification, the Company calculated the fair value of the vested options immediately before modification using current valuation inputs including the Company’s closing stock price of $2.94 on June 15, 2020, volatility of 142%, and discount rate of 0.22%. The Company also calculated the fair value of the vested options immediately following the modification using the extended 12-month exercise period. An incremental stock compensation charge of $24,359 was recorded in costs related to resignation of former officer. Mr. Favish’s unvested options of 138,889 at the time of his separation were forfeited. All compensation from prior periods related to these unvested options was reversed, resulting in an adjustment to stock compensation expense during the year ended December 31, 2020 of $(965,295), which was recorded in costs related to resignation of former officer. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 11. Income Taxes Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets as of December 31, 2020 and 2019 are summarized below. December 31, 2020 2019 Net operating loss carryforwards $ 5,893,000 $ 3,961,000 Stock-based compensation 1,362,000 1,479,000 Amortization of intangibles 106,000 83,000 Accrued expenses 12,000 12,000 Right of use (4,000 ) - Research and development credit (13,000 ) (7,000 ) Depreciation (57,000 ) (43,000 ) Total deferred tax assets 7,299,000 5,485,000 Valuation allowance (7,299,000 ) (5,485,000 ) Net deferred tax assets $ — $ — In assessing the potential realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the Company attaining future taxable income during the periods in which those temporary differences become deductible. As of December 31, 2020, management was unable to determine if it is more likely than not that the Company’s deferred tax assets will be realized and has therefore recorded an appropriate valuation allowance against deferred tax assets at such dates. No federal tax provision has been provided for the years ended December 31, 2020 and 2019, due to the losses incurred during the periods. Reconciled below is the difference between the income tax rate computed by applying the U.S. federal statutory rate and the effective tax rates for the years ended December 31, 2020 and 2019: Years Ended December 31, 2020 2019 U. S. federal statutory tax rate (21.0 )% (21.0 )% State, net of federal benefit (7.0 )% (7.0 )% Non-deductible goodwill impairment charge - % 3.0 % (28.0 )% (25.0 )% Change in valuation allowance 28.0 % 25.0 % Effective tax rate 0.0 % 0.0 % At December 31, 2020, the Company has available net operating loss carryforwards for federal income tax purposes of approximately $23,338,000 which, if not utilized earlier, will begin to expire in 2035. Due to restrictions imposed by Internal Revenue Code Section 382 regarding substantial changes in ownership of companies with loss carryforwards, the utilization of the Company’s NOLs may be limited as a result of changes in stock ownership. The Company records a valuation allowance to reduce its deferred tax assets to the amount that is more likely than not to be realized. In the event the Company determines that it would be able to realize its deferred tax assets in the future in excess of its recorded amount, an adjustment to the deferred tax assets would be credited to operations in the period such determination was made. Likewise, should the Company determine that it would not be able to realize all or part of its deferred tax assets in the future, an adjustment to the deferred tax assets would be charged to operations in the period such determination was made. The Company is subject to U.S. federal income taxes and income taxes of various state tax jurisdictions. As the Company’s net operating losses have yet to be utilized, all previous tax years remain open to examination by Federal authorities and other jurisdictions in which the Company currently operates or has operated in the past. The Company had no unrecognized tax benefits as of December 31, 2020 and 2019 and does not anticipate any material amount of unrecognized tax benefits within the next 12 months. The Company accounts for uncertainty in income tax law under a comprehensive model for the financial statement recognition, measurement, presentation and disclosure of uncertain tax positions taken or expected to be taken in income tax returns as prescribed by GAAP. The tax effects of a position are recognized only if it is “more-likely-than-not” to be sustained by the taxing authority as of the reporting date. If the tax position is not considered “more-likely-than-not” to be sustained, then no benefits of the position are recognized. As of December 31, 2020, the Company had not recorded any liability for uncertain tax positions. In subsequent periods, any interest and penalties related to uncertain tax positions will be recognized as a component of income tax expense. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 12. Related Party Transactions During the years ended December 31, 2020 and 2019, the Company incurred and paid $325,000 and $300,000, respectively, of salary expense to our former CEO, Michael Favish. During the years ended December 31, 2020 and 2019, the Company incurred and paid salaries of $75,000 and $114,000, respectively, to Karen Favish, spouse of Michael Favish. During the years ended December 31, 2020 and 2019, the Company incurred and paid salaries of $60,000 and $55,000, respectively, to Kristine Townsend, spouse of former Controller and Chief Accounting Officer John Townsend. In December 2018, the Company had entered into an Employment Agreement (the “Agreement”) with Michael Favish, which agreement became effective as of January 1, 2019. Pursuant to the Agreement, Mr. Favish was to serve in such positions for a term of three (3) years and following the expiration of such three (3) year term, Mr. Favish’s employment was to be on an “at-will” basis, and such post-term employment will be subject to termination by either party at any time, with or without cause or prior notice. Pursuant to the terms of the Agreement, Mr. Favish was entitled to receive an annual base salary of $300,000 in 2019, $325,000 in 2020, and $350,000 in 2021. Effective June 15, 2020, Mr. Favish resigned as CEO of the Company and resigned from the Company’s Board of Directors. Terms of the settlement agreement between the parties included the continuation of his previous salary of $325,000 during the twelve months subsequent to his resignation. The $325,000 of aggregated settlement payments was recorded in costs related to resignation of former officer expense in the accompanying consolidated statement of operations for the year ended December 31, 2020. As of December 31, 2020, $148,958 of the settlement amount remains payable on our consolidated balance sheet and is payable through June 2021. Dr. Evans, together with his spouse, wholly owns Ceatus Media Group LLC, a California limited liability company (“Ceatus”), founded in 2004 specializing in digital marketing in the eye health care sector. The Company paid Ceatus $81,000 in 2019 and $95,750 in 2020, for services related to digital marketing for the Company. Dr. Evans, together with his spouse, wholly owns DWT Evans LLC, an Ohio limited liability company (“DWT”), founded in 2000 which holds several pieces of real estate. One of these holdings includes real property in Greenville, Ohio where the Company’s subsidiary, VectorVision Ocular Health, leases office and warehouse space. The Company paid DWT rent in the amounts of $19,770 and $20,898 in 2020 and 2019 respectively. When the Company acquired VectorVision, it also acquired AcQviz from Dr. Evans, which is a patented methodology for auto-calibrating and standardizing the testing light level for computer generated vision testing systems. Dr. Evans is entitled to receive a royalty on net revenue from AcQviz. As part of the development of the CSV-2000, AcQviz was embedded in the product by Radiant Technologies, Inc. in exchange for a 3% royalty on the sales of AcQviz. Radiant Technologies is owned by Joseph T. Evans, the brother of Dr. David Evans. |
Segment Reporting
Segment Reporting | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Segment Reporting | 13. Segment Reporting The Company determined its reporting units in accordance with ASC 280, “Segment Reporting”. The Company currently operate in two reportable segments: Medical Foods and Nutraceuticals and Medical Devices. The Medical Foods and Nutraceuticals segment provides a portfolio of science-based, clinically supported nutrition, medical foods, and supplements. The Medical Devices segment includes a portfolio of medical diagnostic devices currently focused on the ocular space and contrast testing. The Company’s medical devices and accessories are used to measure visual function and certain anatomical features of the eye that detect early disease and monitor changes over time. The segments are based on the discrete financial information reviewed by the Chief Executive Officer, who is the Company’s Chief Operating Decision Maker (“CODM”), to make resource allocation decisions and to evaluate performance. The reportable segments are each managed separately because they manufacture and distribute distinct products or provide services with different processes. All reported segment revenues are derived from external customers. The accounting policies of the Company’s reportable segments are the same as those described in the summary of significant accounting policies (see Note 1). Certain corporate general and administrative expenses, including general overhead functions such as information systems, accounting, human resources, Board of Director fees, corporate legal fees, other compliance costs and certain administrative expenses, as well as interest and tax expense, are not allocated to the segments. The following tables set forth our results of operations by segment: For the Year Ended December 31, 2020 Corporate Medical Foods and Nutraceuticals Medical Devices Total Revenue $ 4,500 $ 1,609,482 $ 275,862 $ 1,889,844 Cost of goods sold 2,478 1,599,510 344,647 1,946,635 Gross profit (loss) 2,022 9,972 (68,785 ) (56,791 ) Stock compensation expense 544,127 - - 544,127 Operating expenses 3,757,945 3,892,899 299,969 7,950,813 Loss from operations $ (4,300,050 ) $ (3,882,927 ) $ (368,754 ) $ (8,551,731 ) For the Year Ended December 31, 2019 Corporate Medical Foods and Nutraceuticals Medical Devices Total Revenue $ 24,270 $ 444,657 $ 434,010 $ 902,937 Cost of goods sold 7,288 155,212 178,815 341,315 Gross profit 16,982 289,445 255,195 561,622 Stock compensation expense 2,717,731 - - 2,717,731 Goodwill impairment charge - - 1,563,520 1,563,520 Operating expenses 360,257 5,308,508 1,108,543 6,777,308 Loss from operations $ (3,061,006 ) $ (5,019,063 ) $ (2,416,868 ) $ (10,496,937 ) The following tables set forth our total assets by segment. Intersegment balances and transactions have been removed: As of December 31, 2020 Corporate Medical Foods and Nutraceuticals Medical Devices Total Current assets Cash $ 8,518,732 $ - $ - $ 8,518,732 Inventories, net - 254,879 130,093 384,972 Other - 89,333 101,846 191,179 Total current assets 8,518,732 344,212 231,939 9,094,883 Right of use asset - 374,447 44,143 418,590 Property and equipment, net - 135,641 150,035 285,676 Intangible assets, net - 50,000 - 50,000 Other - 11,751 - 11,751 Total assets $ 8,518,732 $ 916,051 $ 426,217 $ 9,860,900 As of December 31, 2019 Corporate Medical Foods and Nutraceuticals Medical Devices Total Current assets Cash $ 11,115,502 $ - $ - $ 11,115,502 Inventories, net 5,003 126,708 179,230 310,941 Other 7,399 219,223 214,653 441,275 Total current assets 11,127,904 345,931 393,883 11,867,718 Right of use asset - 509,464 63,250 572,714 Property and equipment, net - 219,056 155,582 374,638 Intangible assets, net - 50,000 - 50,000 Other - 11,751 - 11,751 Total assets $ 11,127,904 $ 1,136,202 $ 612,715 $ 12,876,821 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 14. Commitments and 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 December 31, 2020 with respect to such matters. See notes 6,7, 11 and 13. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | 15. Subsequent Events The Company performed an evaluation of subsequent events through the date of filing of these consolidated financial statements with the SEC. Other than those matters described below, there were no material subsequent events which affected, or could affect, the amounts or disclosures in the consolidated financial statements. Sale of common stock On January 8, 2021, we entered into the Sales Agreement and filed a prospectus supplement pursuant to which we could sell up to $10,000,000 worth of shares of our common stock in an “at the market” offering through the Distribution Agent (the “January 2021 1 st st On January 28, 2021, we entered into the Sales Agreement and filed a prospectus supplement pursuant to which we could sell up to $25,000,000 worth of shares of our common stock in an “at the market” offering through the Distribution Agent (the “January 2021 2 nd nd In addition, in January 2021 and February 2021, the Company issued an aggregate of 1,647,691 shares of common stock upon the exercise of warrants and received $3,608,509. The following table sets forth the Company’s assets, liabilities, and stockholders’ equity as December 31, 2020 on: ● an actual basis; and ● a pro forma basis giving effect to the January 2021 1 st nd As of December 31, 2020 Actual Pro Forma (unaudited) Cash and cash equivalents $ 8,518,732 $ 45,727,241 Other current assets 576,151 576,151 Non-current assets 766,017 766,017 Total assets $ 9,860,900 $ 47,069,409 Current liabilities $ 1,073,731 $ 1,073,731 Non-current liabilities 271,903 271,903 Total liabilities 1,345,634 1,345,634 Stockholders’ equity: Common stock 15,171 24,427 Additional paid-in capital 62,583,423 99,782,676 Accumulated deficit (54,083,328 ) (54,083,328 ) Total stockholders’ equity 8,515,266 45,723,775 Total liabilities and stockholders’ equity $ 9,860,900 $ 47,069,409 The Company had a total of 15,170,628 shares of common stock (actual) and 24,426,993 shares of common stock (pro forma, which includes an addition of 41,941 shares attributed to the reverse-split fractional share adjustment) issued and outstanding at December 31, 2020. Appointment of New CEO Effective as of January 6, 2021, the Board of Directors appointed Bret Scholtes as President and Chief Executive Officer and as a director of the Company. The Company and Mr. Scholtes entered into an employment pursuant to which Mr. Scholtes’s annual base salary is $400,000. The Employment Agreement provides that Mr. Scholtes shall have an annual target cash bonus opportunity of no less than $400,000 (the “Bonus”) based on the achievement of Company and individual performance objectives to be determined by the Board of Directors. Mr. Scholtes was granted an award of a number of stock options equal to one percent (1%) of the issued and outstanding number of shares of the Company’s common stock (the “Stock Options”) pursuant to the Company’s 2018 Equity Incentive Plan (the “Incentive Plan”), at an exercise price equal to the closing price of the Company’s common stock on the Effective Date (152,671 shares, exercise price of $3.95 per share) . One third (1/3) of the Stock Options shall vest and become exercisable the first anniversary of the Effective Date, and the balance of the Stock Options shall vest ratably in equal installments for the twenty-four (24) months thereafter, subject to continued service, and shall vest in full upon a Change in Control (as defined in the Incentive Plan). Additionally, the Company shall grant unvested shares of common stock in an amount equal to one percent (1%) of the number of shares of Company common stock issued and outstanding on the Effective Date (the “Stock Grant”) to Mr. Scholtes under the Incentive Plan (152,671 shares). The shares underlying the Stock Grant shall become vested in full on the first anniversary of the Effective Date. Additionally, Mr. Scholtes shall be granted (i) additional stock options equal to two percent (2%) of the Company’s issued and outstanding shares of common stock on the date of grant if the Company achieves specified written performance objectives established by the Board for the Company’s fiscal years ending December 31, 2021 and December 31, 2022 and (ii) additional stock options equal to either two percent (2%) or three percent (3%) of the Company’s issued and outstanding shares of common stock on the date of grant if the Company meets certain financial objectives during the first five years following the Effective Date. If Mr. Scholtes’s employment is terminated by the Company without cause (as defined in the Employment Agreement), if the Term expires after a notice of non-renewal is delivered by the Company or if Mr. Scholtes’s employment is terminated following a change of control (as defined in the Incentive Plan), Mr. Scholtes will be entitled to (a) twelve months’ base salary, (b) the prorated portion of the Bonus for the year in which the termination occurs, based on actual performance and (c) base salary and benefits accrued through the date of termination. |
Business and Summary of Signi_2
Business and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Business | Business Guardion Health Sciences, Inc. (the “Company”) is a specialty health sciences company (1) that has developed medical foods and medical devices in the ocular health space and (2) that is developing nutraceuticals that the Company believes will provide supportive health benefits to consumers. The Company has been primarily engaged in research and development, product commercialization and capital raising activities. 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. |
Liquidity | Liquidity The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. For the year ended December 31, 2020, the Company incurred a net loss of $8,571,657 and used cash in operating activities of $8,013,929. At December 31, 2020, the Company had cash on hand of $8,518,732 and working capital of $8,021,152. Subsequent to December 31, 2020, the Company sold an aggregate of 7,566,734 shares of its common stock for net proceeds of approximately $33,600,000 in two offerings, one completed in January 2021, and one completed in February 2021. In addition, in January and February 2021, the Company issued an aggregate of 1,647,691 shares of common stock upon the exercise of warrants and received cash proceeds of $3,608,509. Notwithstanding the net loss for 2020, management believes that its current cash balance, plus net proceeds from issuance of common stock and exercise of warrants in January and February 2021, is sufficient to fund operations for at least one year from the date the Company’s 2020 financial statements are issued. The Company expects to continue to incur net losses and negative operating cash flows in the near-term, and will continue to incur significant expenses for development and commercialization of its medical foods and medical devices, and the successful development and commercialization of any new products or product lines. The Company may also utilize cash to fund acquisitions. The Company may seek 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. Over time, 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. |
COVID-19 | COVID-19 The Company is subject to risks and uncertainties of the COVID-19 pandemic that could adversely impact our business, including the commercialization of our medicines, our supply chain, our clinical trials, our liquidity and access to capital markets and our business development activities. The Company has implemented additional health and safety precautions and protocols in response to the pandemic and government guidelines, including curtailing employee travel and working from its executive offices, with many employees continuing their work remotely. During 2020, sales of certain products remained flat, as many eye doctor offices were closed, or operating with limited capacity, due to COVID-19 related “shelter at home” orders. During 2020, we did not experience a jeopardization of our supply chain due to the COVID-19 outbreak. The extent of the impact of the COVID-19 pandemic has had and will continue to have on the Company’s business is highly uncertain and difficult to predict and quantify. The full extent to which the COVID-19 pandemic will directly or indirectly impact the Company’s business, results of operations and financial condition, will depend on future developments that are highly uncertain, including as a result of new information that may emerge concerning COVID-19 and the actions taken to contain or treat it, including vaccination efforts, as well as the economic impact on local, regional, national and international markets. |
NASDAQ Notice and Compliance | NASDAQ Notice and Compliance On September 20, 2019, the Company received notice from the Listing Qualifications staff (the “Staff”) of The Nasdaq Stock Market LLC (“Nasdaq”) indicating that, based upon the closing bid price of the Company’s common stock for the previous 30 consecutive business days, the Company no longer satisfied the requirement to maintain a minimum bid price of $1.00 per share, as required by Nasdaq Listing Rule 5550(a)(2) (the “Bid Price Rule”). In accordance with the Nasdaq Listing Rules, the Company was afforded 180 days, or until March 18, 2020, to regain compliance with the Bid Price Rule by evidence of a closing bid price of at least $1.00 per share for a minimum of 10 consecutive business days. Thereafter, the Company had been afforded a second 180-calendar day compliance period (which 180-day period was extended due to circumstances related to COVID-19), or until November 30, 2020, to regain compliance with the Bid Price Rule. The Company was unable to regain compliance with the Bid Price Rule by November 30, 2020. Accordingly, on December 1, 2020, the Company received a letter from the Staff notifying it that its Common Stock would be subject to delisting from Nasdaq unless the Company timely appealed Nasdaq’s determination to a Nasdaq Listing Qualifications Panel (the “Panel”). The Company timely appealed Nasdaq’s determination to the Panel. On January 26, 2021, the Company received written notification that the Panel granted the Company an extension for continued listing through March 15, 2021. On March 1, 2021, the Company implemented the Reverse Stock Split (as defined below). On March 15, 2021, the Company received a letter from the Staff notifying it that it had regained compliance with the Bid Price Rule. The letter stated the staff had determined that for the prior 10 consecutive business days, from March 1, 2021 to March 12, 2021, the closing bid price of the Company’s common stock had been at $1.00 per share or greater and that accordingly, the Company had regained compliance under the Bid Price Rule, and that the matter was closed. |
Reverse Stock Split | Reverse Stock Splits On January 30, 2019, following stockholder and board approval, the Company effected a 1-for-2 reverse split of its outstanding shares of common stock, without any change to its par value. The authorized number of shares of common 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. On March 1, 2021, following stockholder and board approval, the Company effectuated a 1-for-6 reverse split of its outstanding shares of common stock, without any change to its par value. The authorized number of shares of common 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. Accordingly, all share and per share amounts presented herein with respect to common stock have been retroactively adjusted to reflect the above described reverse stock splits for all periods presented . |
Basis of Presentation | Basis of presentation The Company has prepared its consolidated financial statements in accordance with accounting practices generally accepted in the United States (“U.S. GAAP”) and has adopted accounting policies and practices which are generally accepted in the industry in which it operates. The Company’s significant accounting policies are summarized below. |
Principles of consolidation | Principles of consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, VectorVision Ocular Health, Inc., NutriGuard Formulations, Inc., and Transcranial Doppler Solutions, Inc. All intercompany balances and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of our financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make certain estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities. Actual results could differ from those estimates. On an ongoing basis, management reviews its estimates and if deemed appropriate, those estimates are adjusted. Significant estimates include those related to assumptions used in valuing inventories at net realizable value, assumptions used in valuing assets acquired in business acquisitions, impairment testing of goodwill and other long-term assets, assumptions used in valuing stock-based compensation, the valuation allowance for deferred tax assets, accruals for potential liabilities, and assumptions used in the determination of the Company’s liquidity. Actual results could differ from those estimates. |
Revenue Recognition | Revenue Recognition The Company generates its revenue from two business segments: ● Medical Foods and Nutraceuticals Segment ● Medical Devices Segment The Company recognizes revenue in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers All products sold by the Company are distinct individual products and 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. 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. Payments for sales of medical foods and dietary supplements are 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 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 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. Revenues by segment: Years Ended December 31, 2020 2019 Medical Foods and Nutraceuticals $ 1,609,482 $ 444,657 Medical Devices 275,862 434,010 Other 4,500 24,270 $ 1,889,844 $ 902,937 During the year ended December 31, 2020, the Company recorded a sale to the Malaysian company of approximately $890,000. The remainder of the Company’s Medical Foods and Nutraceuticals revenues earned during the year ended December 31, 2020 are derived from individual retail customers in North America. During the year ended December 31, 2019, all the Company’s Medical Foods and Nutraceuticals revenues are derived from individual retail customers in North America. Medical Devices revenues are derived from a worldwide customer base consisting of both retail customers and distributors. Sales to distributors were approximately 51% and 62% of total revenues for the years ended December 31, 2020 and 2019, respectively. Revenues by geographical area: Years Ended December 31, 2020 2019 North America $ 891,768 $ 725,520 Malaysia 889,508 Other Asia 58,688 129,453 Europe and Other 49,880 47,964 $ 1,889,844 $ 902,937 Medical Devices revenues are derived from a worldwide customer base consisting of both retail customers and distributors. Sales to distributors were approximately 51% and 62% of total revenues for the years ended December 31, 2020 and 2019, respectively. |
Cash | Cash Cash consists of cash and demand deposits with banks. The Company holds no cash equivalents as of December 31, 2020 and 2019, respectively. |
Accounts Receivable | Accounts Receivable Accounts receivable are recorded at the invoiced amounts. Management evaluates the collectability of its trade accounts receivable and determines an allowance for doubtful accounts based on historical write-offs, known or expected trends, and the identification of specific balances deemed uncollectible based on a customer’s financial condition, credit history and the current economic conditions. At December 31, 2020 and 2019, based on management’s assessment, no allowance for doubtful accounts was considered necessary. |
Inventories | Inventories Inventories are stated at the lower of cost or net realizable value, with cost determined on a first-in, first-out (“FIFO”) basis. The Company records adjustments to its inventory for estimated obsolescence or diminution in net realizable value equal to the difference between the cost of the inventory and the estimated net realizable value. When evidence exists that the net realizable value of inventory is lower than its cost, the difference is recognized as a loss in the period in which it occurs. Once inventory has been written down, it creates a new cost basis for inventory that may not subsequently written up. For the year ended December 31, 2020, the Company wrote-down inventory of $971,719, which was recorded in cost of sales (see Note 3). For the year ended December 31, 2019, there were no write-downs of inventory. |
Property and Equipment | Property and Equipment Property and equipment are recorded at cost less accumulated depreciation. Additions, improvements, and major renewals or replacements that substantially extend the useful life of an asset are capitalized. Repairs and maintenance expenditures are expensed as incurred. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets, which range from three to seven years. Leasehold improvements are amortized on a straight-line basis over the shorter of their estimated useful lives or the remaining lease term. Management assesses the carrying value of property and equipment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. If there is indication of impairment, management prepares an estimate of future cash flows expected to result from the use of the asset and its eventual disposition. If these cash flows are less than the carrying amount of the asset, an impairment loss is recognized to write down the asset to its estimated fair value at that time. At December 31, 2020 and 2019, management determined there were no impairments of the Company’s property and equipment. |
Leases | Leases The Company determines whether a contract is, or contains, a lease at inception. Right-of-use assets represent the Company’s right to use an underlying asset during the lease term, and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Right-of-use assets and lease liabilities are recognized at lease commencement based upon the estimated present value of unpaid lease payments over the lease term. The Company uses its incremental borrowing rate based on the information available at lease commencement in determining the present value of unpaid lease payments. |
Intangible Assets | Intangible Assets Finite-lived intangible assets Amortizable identifiable intangible assets are stated at cost less accumulated amortization, and represent customer relationships, technology, trade names, and noncompetition agreements acquired in business combinations. The Company follows ASC 360 in accounting for intangible assets, which requires impairment losses to be recorded when indicators of impairment are present and the undiscounted cash flows estimated to be generated by the assets are less than the assets’ carrying amounts. As of December 31, 2019, the recorded value of the Company’s finite-lived intangible assets had been fully amortized. Indefinite-lived intangible assets Intangible assets are comprised of an indefinite-lived trademark acquired, so classified because the Company can renew the underlying rights to the trademark indefinitely at nominal cost. Indefinite-lived intangible assets are not amortized but are assessed for impairment annually and evaluated annually to determine whether the indefinite useful life is appropriate. As part of our impairment test, we first assess qualitative factors to determine whether it is more likely than not the asset is impaired. If further testing is necessary, we compare the estimated fair value of our asset with its book value. If the carrying amount of the asset exceeds its fair value, as determined by its discounted cash flows, an impairment loss is recognized in an amount equal to that excess. For the years ended December 31, 2020 and 2019, the Company determined there were no impairments of its indefinite-lived brand names (see Note 5). |
Goodwill | Goodwill Goodwill is the excess of cost of an acquired entity over the fair value of amounts assigned to assets acquired and liabilities assumed in a business combination. Under the guidance of ASC 350, goodwill is not amortized, rather it is tested for impairment annually, and will be tested for impairment between annual tests if an event occurs or circumstances change that would indicate the carrying amount may be impaired. An impairment loss generally would be recognized when the carrying amount of the reporting unit’s net assets exceeds the estimated fair value of the reporting unit and would be measured as the excess carrying value of goodwill over the derived fair value of goodwill. The Company’s policy is to perform an annual impairment testing for its reporting units on December 31 of each fiscal year. During the year ended December 31, 2019, the Company recorded an impairment of its remaining goodwill of $1,563,520 (see Note 5). Accordingly, at December 31, 2020, the Company did not have any goodwill. |
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 employees, directors, and for acquiring goods and services from nonemployees, which include grants of employee stock options, are recognized in the financial statements based on their grant date fair values in accordance with ASC 718, Compensation-Stock Compensation |
Income Taxes | Income Taxes The Company uses an asset and liability approach for accounting and reporting for income taxes that allows recognition and measurement of deferred tax assets based upon the likelihood of realization of tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, or that future deductibility is uncertain. The Company’s policy is to recognize interest and/or penalties related to income tax matters in income tax expense. |
Research and Development Costs | Research and Development Costs Research and development costs are expensed as incurred and 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 products. Research and development expenditures, which include stock compensation expense, totaled $160,978 and $194,311 for the years ended December 31, 2020 and 2019, respectively. |
Patent Costs | Patent Costs The Company is the owner of three issued domestic patents, three pending domestic patent applications, one issued foreign patent in Europe, one issued foreign patent in Hong Kong, 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 years ended December 31, 2020 and 2019, patent costs were $124,806 and $137,183, respectively, and are included in general and administrative costs in the statements of operations. |
Advertising Costs | Advertising Costs Advertising costs are expensed as incurred and are included in sales and marketing expense. Advertising costs aggregated $44,429 and $19,645 for the years ended December 31, 2020 and 2019, respectively. |
Loss per Common Share | Loss per Common Share Basic loss per share is computed by dividing net loss by the weighted-average common shares outstanding during a period. Diluted earnings per share is computed based on the weighted-average common shares outstanding plus the effect of dilutive potential common shares outstanding during the period calculated using the treasury stock method. Dilutive potential common shares include shares from unexercised warrants and options. Potential common share equivalents have been excluded where their inclusion would be anti-dilutive. 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 options are anti-dilutive. The following potentially dilutive shares were excluded from the shares used to calculate diluted earnings per share: December 31, 2020 2019 Warrants 2,132,758 4,800,456 Options 778,195 493,750 2,910,953 5,294,206 |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Accounting standards require certain assets and liabilities be reported at fair value in the financial statements and provide a framework for establishing that fair value. Fair value is defined as the price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining fair value, the Company considers the principal or most advantageous market in which it transacts, and considers assumptions that market participants would use when pricing the asset or liability. The framework for determining fair value is based on a hierarchy that prioritizes the inputs and valuation techniques used to measure fair value: Level 1 - Level 2 - Level 3 - The Company determines the level in the fair value hierarchy within which each fair value measurement falls in its entirety, based on the lowest level input that is significant to the fair value measurement in its entirety. In determining the appropriate levels, the Company performs an analysis of the assets and liabilities at each reporting period end. The Company believes the carrying amount of its financial instruments (consisting of cash, accounts receivable, and accounts payable and accrued liabilities) approximates fair value due to the short-term nature of such instruments. As of December 31, 2020, and 2019, the Company’s balance sheet included Level 2 liabilities comprised of the fair value of warrant liabilities aggregating $25,978 and $13,323, respectively (see Note 9). |
Derivative Financial Instruments | Derivative Financial Instruments The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the consolidated statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. |
Concentrations | Concentrations Cash balances are maintained at large, well-established financial institutions. At times, cash balances may exceed federally insured limits. Insurance coverage limits are $250,000 per depositor at each financial institution. The Company believes that no significant concentration of credit risk exists with respect to its cash balances because of its assessment of the creditworthiness and financial viability of the financial institutions. During the year ended December 31, 2020, one customer accounted for approximately 47% of the Company’s sales. During the year ended December 31, 2019, one customer who accounted for approximately 22% of the Company’s sales. No other customer accounted for more than 10% of sales in either year. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In August 2020, the FASB issued ASU No. 2020-06 (“ASU 2020-06”) “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity.” ASU 2020-06 will simplify the accounting for convertible instruments by reducing the number of accounting models for convertible debt instruments and convertible preferred stock. Limiting the accounting models will result in fewer embedded conversion features being separately recognized from the host contract as compared with current GAAP. Convertible instruments that continue to be subject to separation models are (1) those with embedded conversion features that are not clearly and closely related to the host contract, that meet the definition of a derivative, and that do not qualify for a scope exception from derivative accounting and (2) convertible debt instruments issued with substantial premiums for which the premiums are recorded as paid-in capital. ASU 2020-06 also amends the guidance for the derivatives scope exception for contracts in an entity’s own equity to reduce form-over-substance-based accounting conclusions. ASU 2020-06 will be effective January 1, 2024, for the Company. Early adoption is permitted, but no earlier than January 1, 2021, including interim periods within that year. Management is currently evaluating the effect of the adoption of ASU 2020-06 on the consolidated financial statements, but currently does not believe ASU 2020-06 will have a significant impact on the Company’s financial statements. The effect will largely depend on the composition and terms of the outstanding financial instruments at the time of adoption. In December 2019, the FASB issued ASU 2019-12, Income Taxes (topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”). ASU 2019-12 simplifies the accounting for income taxes by removing certain exceptions and enhances and simplifies various aspects of the income tax accounting guidance in ASC 740. ASU 2019-12 is not expected to have any impact on the Company’s consolidated financial statement presentation or disclosures subsequent to its adoption. In June 2016, the FASB issued ASU No. 2016-13, Credit Losses - Measurement of Credit Losses on Financial Instruments (“ASC 326”). The standard significantly changes how entities will measure credit losses for most financial assets, including accounts and notes receivables. The standard will replace today’s “incurred loss” approach with an “expected loss” model, under which companies will recognize allowances based on expected rather than incurred losses. Entities will apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. As a smaller reporting company, ASU 2016-13 will be effective for us beginning January 1, 2023, with early adoption permitted. The Company is currently assessing the impact of adopting this standard on the Company’s financial statements and related disclosures. The Company’s management does not believe that any other 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. |
Business and Summary of Signi_3
Business and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of Revenues by Segment | Revenues by segment: Years Ended December 31, 2020 2019 Medical Foods and Nutraceuticals $ 1,609,482 $ 444,657 Medical Devices 275,862 434,010 Other 4,500 24,270 $ 1,889,844 $ 902,937 |
Schedule of Revenue by Geographical Area | Revenues by geographical area: Years Ended December 31, 2020 2019 North America $ 891,768 $ 725,520 Malaysia 889,508 Other Asia 58,688 129,453 Europe and Other 49,880 47,964 $ 1,889,844 $ 902,937 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following potentially dilutive shares were excluded from the shares used to calculate diluted earnings per share: December 31, 2020 2019 Warrants 2,132,758 4,800,456 Options 778,195 493,750 2,910,953 5,294,206 |
Acquisition of NutriGuard (Tabl
Acquisition of NutriGuard (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Business Combinations [Abstract] | |
Schedule of Pro Forma Financial Information | The following unaudited pro forma financial information gives effect to the Company’s acquisition of NutriGuard as if the acquisition had occurred on January 1, 2019: Year Ended December 31, 2019 Pro forma net revenues $ 963,167 Pro forma net loss attributable to common shareholders $ (10,913,833 ) Pro forma net loss per share $ (1.80 ) |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories consisted of the following: December 31, 2020 2019 Raw materials $ 218,307 $ 246,875 Finished goods 166,665 64,066 Inventory $ 384,972 $ 310,941 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consisted of the following: December 31, 2020 2019 Leasehold improvements $ 103,255 $ 98,357 Testing equipment 348,124 394,427 Furniture and fixtures 197,349 185,799 Computer equipment 68,460 68,460 Office equipment 9,835 8,193 727,023 755,236 Less accumulated depreciation and amortization (441,347 ) (380,598 ) $ 285,676 $ 374,638 |
Summary of Depreciation Expense | The following table shows where depreciation expense was recorded for the years ended December 31, 2019 and 2020: Years Ended December 31, 2020 2019 Research and development expense $ 35,846 $ 33,004 Sales and marketing expense 13,252 15,641 General and administrative expense 16,378 22,597 $ 65,476 $ 71,242 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | The Company’s intangible assets consisted of the following: December 31, 2020 2019 Trademark $ 50,000 $ 50,000 |
Operating Leases (Tables)
Operating Leases (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Schedule of Lease Liability | Maturities of the Company’s lease liabilities are as follows: Year ending Operating Leases 2021 $ 176,934 2022 182,249 2023 98,417 Total lease payments 457,600 Less: Imputed interest/present value discount (22,852 ) Present value of lease liabilities 434,748 Less Current portion (162,845 ) $ 271,903 |
Derivative Warrant Liability (T
Derivative Warrant Liability (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Fair Value Assumptions of Warrant Liability | The fair value of the warrant liability was determined at the following issuance and reporting dates using the Black-Scholes option pricing model and the following assumptions: Convertible Notes issued March 2019 Underwriter warrants issued April 2019 Warrant Liability Warrant Liability Stock price $ 24.00 $ 22.08 $ 1.32 2.49 Risk free interest rate 2.34 – 2.39 % 2.29 % 1.62 % 0.17 % Expected volatility 138 % 137 % 145 % 148 % Expected life in years 5.00 5.00 4.3 3.8 Expected dividend yield 0 % 0 % 0 % 0 % Number of warrants 18,173 10,417 10,417 10,417 Fair value of derivative warrant liability $ 436,034 $ 229,921 $ 13,323 25,978 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Schedule of Warrants Activity | A summary of the Company’s warrant activity is as follows: Shares Weighted Exercise Price Weighted December 31, 2018 210,946 $ 4.26 0.29 Granted 7,693,590 2.52 4.81 Forfeitures - - - Expirations (46,572 ) (10.98 ) - Exercised (3,057,508 ) (3.00 ) - December 31, 2019 4,800,456 2.28 4.91 Granted - - - Forfeitures - - - Expirations (10,830 ) (9.00 ) - Exercised (2,656,868 ) (2.04 ) - December 31, 2020, all exercisable 2,132,758 $ 2.40 3.81 |
Schedule of Exercise Price of Warrants Outstanding and Exercisable | The exercise prices of warrants outstanding and exercisable as of December 31, 2020 are as follows: Warrants Outstanding and Exercisable (Shares) Exercise Prices 1,566,466 $ 2.05 326,668 2.67 173,334 3.00 37,700 3.51 28,590 17.25 2,132,758 |
Schedule of Share-based Compensation, Stock Options, Activity | A summary of the Company’s stock option activity is as follows: Shares Weighted Average Weighted Average Remaining Contractual Term (Years) December 31, 2018 227,083 $ 13.56 3.78 Granted 266,667 21.06 4.38 Forfeitures - - - Expirations - - - Exercised - - - December 31, 2019 493,750 13.56 3.64 Granted 423,333 5.58 9.51 Forfeitures (138,889 ) - - Expirations - - - Exercised - - - December 31, 2020, outstanding 778,194 $ 9.48 6.38 December 31, 2020, exercisable 500,764 $ 11.64 4.74 |
Schedule of Exercise Price of Options Outstanding and Exercisable | The exercise prices of options outstanding and exercisable as of December 31, 2020 are as follows: Options Outstanding (Shares) Options Exercisable (Shares) Exercise Prices 41,667 41,667 $ 1.48 5,000 5,000 1.91 41,667 20,833 2.34 1,667 1,667 2.46 16,667 8,333 3.24 375,000 126,738 6.00 104,166 104,166 12.00 10,416 10,416 13.80 112,500 112,500 15.00 69,445 69,445 26.40 778,194 500,765 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Deferred Tax Assets | Significant components of the Company’s deferred tax assets as of December 31, 2020 and 2019 are summarized below. December 31, 2020 2019 Net operating loss carryforwards $ 5,893,000 $ 3,961,000 Stock-based compensation 1,362,000 1,479,000 Amortization of intangibles 106,000 83,000 Accrued expenses 12,000 12,000 Right of use (4,000 ) - Research and development credit (13,000 ) (7,000 ) Depreciation (57,000 ) (43,000 ) Total deferred tax assets 7,299,000 5,485,000 Valuation allowance (7,299,000 ) (5,485,000 ) Net deferred tax assets $ — $ — |
Schedule of Effective Income Tax Rate Reconciliation | Reconciled below is the difference between the income tax rate computed by applying the U.S. federal statutory rate and the effective tax rates for the years ended December 31, 2020 and 2019: Years Ended December 31, 2020 2019 U. S. federal statutory tax rate (21.0 )% (21.0 )% State, net of federal benefit (7.0 )% (7.0 )% Non-deductible goodwill impairment charge - % 3.0 % (28.0 )% (25.0 )% Change in valuation allowance 28.0 % 25.0 % Effective tax rate 0.0 % 0.0 % |
Segment Reporting (Tables)
Segment Reporting (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The following tables set forth our results of operations by segment: For the Year Ended December 31, 2020 Corporate Medical Foods and Nutraceuticals Medical Devices Total Revenue $ 4,500 $ 1,609,482 $ 275,862 $ 1,889,844 Cost of goods sold 2,478 1,599,510 344,647 1,946,635 Gross profit (loss) 2,022 9,972 (68,785 ) (56,791 ) Stock compensation expense 544,127 - - 544,127 Operating expenses 3,757,945 3,892,899 299,969 7,950,813 Loss from operations $ (4,300,050 ) $ (3,882,927 ) $ (368,754 ) $ (8,551,731 ) For the Year Ended December 31, 2019 Corporate Medical Foods and Nutraceuticals Medical Devices Total Revenue $ 24,270 $ 444,657 $ 434,010 $ 902,937 Cost of goods sold 7,288 155,212 178,815 341,315 Gross profit 16,982 289,445 255,195 561,622 Stock compensation expense 2,717,731 - - 2,717,731 Goodwill impairment charge - - 1,563,520 1,563,520 Operating expenses 360,257 5,308,508 1,108,543 6,777,308 Loss from operations $ (3,061,006 ) $ (5,019,063 ) $ (2,416,868 ) $ (10,496,937 ) The following tables set forth our total assets by segment. Intersegment balances and transactions have been removed: As of December 31, 2020 Corporate Medical Foods and Nutraceuticals Medical Devices Total Current assets Cash $ 8,518,732 $ - $ - $ 8,518,732 Inventories, net - 254,879 130,093 384,972 Other - 89,333 101,846 191,179 Total current assets 8,518,732 344,212 231,939 9,094,883 Right of use asset - 374,447 44,143 418,590 Property and equipment, net - 135,641 150,035 285,676 Intangible assets, net - 50,000 - 50,000 Other - 11,751 - 11,751 Total assets $ 8,518,732 $ 916,051 $ 426,217 $ 9,860,900 As of December 31, 2019 Corporate Medical Foods and Nutraceuticals Medical Devices Total Current assets Cash $ 11,115,502 $ - $ - $ 11,115,502 Inventories, net 5,003 126,708 179,230 310,941 Other 7,399 219,223 214,653 441,275 Total current assets 11,127,904 345,931 393,883 11,867,718 Right of use asset - 509,464 63,250 572,714 Property and equipment, net - 219,056 155,582 374,638 Intangible assets, net - 50,000 - 50,000 Other - 11,751 - 11,751 Total assets $ 11,127,904 $ 1,136,202 $ 612,715 $ 12,876,821 |
Subsequent Events (Tables)
Subsequent Events (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Subsequent Events [Abstract] | |
Schedule of Assets, Liabilities, and Stockholders' Equity | The following table sets forth the Company’s assets, liabilities, and stockholders’ equity as December 31, 2020 on: ● an actual basis; and ● a pro forma basis giving effect to the January 2021 1 st nd As of December 31, 2020 Actual Pro Forma (unaudited) Cash and cash equivalents $ 8,518,732 $ 45,727,241 Other current assets 576,151 576,151 Non-current assets 766,017 766,017 Total assets $ 9,860,900 $ 47,069,409 Current liabilities $ 1,073,731 $ 1,073,731 Non-current liabilities 271,903 271,903 Total liabilities 1,345,634 1,345,634 Stockholders’ equity: Common stock 15,171 24,427 Additional paid-in capital 62,583,423 99,782,676 Accumulated deficit (54,083,328 ) (54,083,328 ) Total stockholders’ equity 8,515,266 45,723,775 Total liabilities and stockholders’ equity $ 9,860,900 $ 47,069,409 |
Business and Summary of Signi_4
Business and Summary of Significant Accounting Policies (Details Narrative) - USD ($) | Mar. 15, 2021 | Mar. 02, 2021 | Oct. 30, 2019 | Sep. 20, 2019 | Feb. 28, 2021 | Jan. 31, 2021 | Jan. 30, 2019 | Dec. 31, 2020 | Dec. 31, 2019 |
Net loss | $ (8,571,657) | $ (10,878,308) | |||||||
Cash utilized in operating activities | (8,013,929) | (6,030,004) | |||||||
Cash on hand | 8,518,732 | ||||||||
Working capital | $ 8,021,152 | ||||||||
Number of common stock issued | 140,000 | 1,250,000 | |||||||
Proceeds from warrants exercise | $ 5,451,892 | $ 171,375 | |||||||
Reverse stock split | 1-for-6 reverse split | 1-for-2 reverse split | |||||||
Common stock, par value | $ 0.001 | $ 0.001 | |||||||
Revenue | $ 1,889,844 | $ 902,937 | |||||||
Cash equivalents | |||||||||
Allowance for doubtful accounts | |||||||||
Write-downs of inventory | 971,719 | ||||||||
Impairments of indefinite-lived asset | |||||||||
Impairment of goodwill | 1,563,520 | ||||||||
Research and development expense | 160,978 | 194,311 | |||||||
Patent costs | 124,806 | 137,183 | |||||||
Advertising costs | 44,429 | 19,645 | |||||||
Warrant liabilities | 25,978 | $ 13,323 | |||||||
Cash FDIC insured | $ 250,000 | ||||||||
Sales [Member] | One Customer [Member] | |||||||||
Revenue from sales | 47.00% | 22.00% | |||||||
Malaysian Company [Member] | |||||||||
Revenue | $ 890,000 | ||||||||
Malaysian Company [Member] | Medical Foods and Nutraceuticals Segment [Member] | |||||||||
Revenue from sales | 51.00% | 62.00% | |||||||
Nasdaq Stock Market LLC [Member] | |||||||||
Common stock bid price description | On September 20, 2019, the Company received notice from the Listing Qualifications staff (the "Staff") of The Nasdaq Stock Market LLC ("Nasdaq") indicating that, based upon the closing bid price of the Company's common stock for the previous 30 consecutive business days, the Company no longer satisfied the requirement to maintain a minimum bid price of $1.00 per share, as required by Nasdaq Listing Rule 5550(a)(2) (the "Bid Price Rule"). In accordance with the Nasdaq Listing Rules, the Company was afforded 180 days, or until March 18, 2020, to regain compliance with the Bid Price Rule by evidence of a closing bid price of at least $1.00 per share for a minimum of 10 consecutive business days. Thereafter, the Company had been afforded a second 180-calendar day compliance period (which 180-day period was extended due to circumstances related to COVID-19), or until November 30, 2020, to regain compliance with the Bid Price Rule. | ||||||||
Subsequent Event [Member] | |||||||||
Number of common stock issued | 7,566,734 | 7,566,734 | |||||||
Proceeds from issuance of common stock | $ 33,600,000 | $ 33,600,000 | |||||||
Number of warrants exercise | 1,647,691 | 1,647,691 | |||||||
Proceeds from warrants exercise | $ 3,608,509 | $ 3,608,509 | |||||||
Common stock bid price description | On March 15, 2021, the Company received a letter from the Staff notifying it that it had regained compliance with the Bid Price Rule. The letter stated the staff had determined that for the prior 10 consecutive business days, from March 1, 2021 to March 12, 2021, the closing bid price of the Company's common stock had been at $1.00 per share or greater and that accordingly, the Company had regained compliance under the Bid Price Rule, and that the matter was closed. |
Business and Summary of Signi_5
Business and Summary of Significant Accounting Policies - Schedule of Revenues by Segment (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Revenues | $ 1,889,844 | $ 902,937 |
Medical Foods and Nutraceuticals [Member] | ||
Revenues | 1,609,482 | 444,657 |
Medical Devices [Member] | ||
Revenues | 275,862 | 434,010 |
Others [Member] | ||
Revenues | $ 4,500 | $ 24,270 |
Business and Summary of Signi_6
Business and Summary of Significant Accounting Policies - Schedule of Revenue by Geographical Area (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Revenues | $ 1,889,844 | $ 902,937 |
North America [Member] | ||
Revenues | 891,768 | 725,520 |
Malaysia [Member] | ||
Revenues | 889,508 | |
Other Asia [Member] | ||
Revenues | 58,688 | 129,453 |
Europe and Other [Member] | ||
Revenues | $ 49,880 | $ 47,964 |
Business and Summary of Signi_7
Business and Summary of Significant Accounting Policies - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Antidilutive securities excluded from computation of earnings per share | 2,910,953 | 5,294,206 |
Warrants [Member] | ||
Antidilutive securities excluded from computation of earnings per share | 2,132,758 | 4,800,456 |
Options [Member] | ||
Antidilutive securities excluded from computation of earnings per share | 778,195 | 493,750 |
Acquisition of NutriGuard (Deta
Acquisition of NutriGuard (Details Narrative) - USD ($) | Sep. 20, 2020 | Sep. 20, 2019 | Dec. 31, 2020 | Dec. 31, 2019 |
Gross profit | $ (56,791) | $ 561,622 | ||
Officers compensation per month | $ 2,339,560 | |||
Stock options to purchase common stock | 423,333 | 266,667 | ||
Exercisable price per share | $ 11.64 | |||
2018 Equity Incentive Plan [Member] | Mark McCarty [Member] | ||||
Stock option vesting, description | The stock options were granted under the terms of the Company's 2018 Equity Incentive Plan, and the options vest as follows: 25% on the Effective Date, 25% on the first anniversary following the Effective Date, 25% on the second anniversary following the Effective Date, and 25% on the third anniversary following the Effective Date. | |||
Stock option vesting, percentage | 25.00% | |||
First Anniversary [Member] | 2018 Equity Incentive Plan [Member] | Mark McCarty [Member] | ||||
Stock option vesting, percentage | 25.00% | |||
Second Anniversary [Member] | 2018 Equity Incentive Plan [Member] | Mark McCarty [Member] | ||||
Stock option vesting, percentage | 25.00% | |||
Third Anniversary [Member] | 2018 Equity Incentive Plan [Member] | Mark McCarty [Member] | ||||
Stock option vesting, percentage | 25.00% | |||
McCarty [Member] | ||||
Stock options to purchase common stock | 16,667 | |||
Common stock with a grant date fair value | $ 54,004 | |||
Exercisable price per share | $ 3.24 | |||
Consulting Agreement [Member] | McCarty [Member] | ||||
Agreement term | 3 years | |||
Officers compensation, description | On the Effective Date, Mr. McCarty entered into a consulting agreement with the Company and provides that Mr. McCarty will serve as, the Director of Research of the Company for a period of 3 years at a rate of $7,500 per month for 12 months and $5,000 per month thereafter. It is intended that Mr. McCarty will assist the Company, among other tasks, in developing new formulations for distribution under the NutriGuard brand, as well as identifying production sources for such compounds and developing distribution networks for such products. | |||
Consulting Agreement [Member] | McCarty [Member] | Intial 12 Months [Members] | ||||
Officers compensation per month | $ 7,500 | |||
Consulting Agreement [Member] | McCarty [Member] | Thereafter [Members] | ||||
Officers compensation per month | $ 5,000 | |||
NutriGuard Research, Inc [Member] | Asset Purchase Agreement [Member] | ||||
Royalty percentage | 3.00% | |||
Gross profit | $ 500,000 |
Acquisition of NutriGuard - Sch
Acquisition of NutriGuard - Schedule of Pro Forma Financial Information (Details) | 12 Months Ended |
Dec. 31, 2019USD ($)$ / shares | |
Business Combinations [Abstract] | |
Pro forma net revenues | $ 963,167 |
Pro forma net loss attributable to common shareholders | $ (10,913,833) |
Pro forma net loss per share | $ / shares | $ (1.80) |
Inventories (Details Narrative)
Inventories (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Inventory Disclosure [Abstract] | ||
Write down inventory | $ 971,719 | |
Reduction in inventory write-downs | $ 1,028,324 | $ 56,605 |
Inventories - Schedule of Inven
Inventories - Schedule of Inventories (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 218,307 | $ 246,875 |
Finished goods | 166,665 | 64,066 |
Inventory, net | $ 384,972 | $ 310,941 |
Property and Equipment, Net (De
Property and Equipment, Net (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Depreciation and amortization | $ 65,476 | $ 477,346 |
Research and Development Expense [Member] | ||
Depreciation and amortization | 35,846 | 33,004 |
Sales and Marketing Expense [Member] | ||
Depreciation and amortization | 13,252 | 15,641 |
General and Administrative Expense [Member] | ||
Depreciation and amortization | $ 16,378 | $ 22,597 |
Property and Equipment, Net - S
Property and Equipment, Net - Schedule of Property and Equipment (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Property, plant and equipment, gross | $ 727,023 | $ 755,236 |
Less accumulated depreciation and amortization | (441,347) | (380,598) |
Property, plant and equipment, net | 285,676 | 374,638 |
Leasehold Improvements [Member] | ||
Property, plant and equipment, gross | 103,255 | 98,357 |
Testing Equipment [Member] | ||
Property, plant and equipment, gross | 348,124 | 394,427 |
Furniture and Fixtures [Member] | ||
Property, plant and equipment, gross | 197,349 | 185,799 |
Computer Equipment [Member] | ||
Property, plant and equipment, gross | 68,460 | 68,460 |
Office Equipment [Member] | ||
Property, plant and equipment, gross | $ 9,835 | $ 8,193 |
Property and Equipment, Net -_2
Property and Equipment, Net - Summary of Depreciation Expense (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Depreciation expense | $ 65,476 | $ 71,242 |
Research and Development Expense [Member] | ||
Depreciation expense | 35,846 | 33,004 |
Sales and Marketing Expense [Member] | ||
Depreciation expense | 13,252 | 15,641 |
General and Administrative Expense [Member] | ||
Depreciation expense | $ 16,378 | $ 22,597 |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) - USD ($) | Jan. 31, 2018 | Sep. 30, 2017 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2009 |
Goodwill impairment | $ 1,563,520 | |||||
Vector Vision [Member] | ||||||
Stock issued during period, shares, purchase of assets | 508,334 | |||||
Stock issued during period, value, purchase of assets | $ 2,300,000 | |||||
Finite-lived intangible assets, net | 674,400 | $ 406,104 | $ 406,104 | |||
Goodwill | $ 1,563,520 | $ 1,563,520 | ||||
Goodwill impairment | $ 1,563,520 | |||||
Trademarks [Member] | ||||||
Payment to acquire right of trade mark | $ 50,000 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Trademarks [Member] | ||
Trademark | $ 50,000 | $ 50,000 |
Operating Leases (Details Narra
Operating Leases (Details Narrative) | 1 Months Ended | 12 Months Ended | |
Oct. 31, 2012ft² | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | |
Monthly lease payments | $ 721,154 | ||
Amortization of right of use asset | 154,124 | $ 148,440 | |
Accumulated amortization of the right-of-use assets | 302,564 | ||
Right-of-use assets | 418,590 | 572,714 | |
Lease liabilities | 434,747 | ||
Rent expense | 174,323 | $ 174,323 | |
Lease 1 [Member] | |||
Monthly lease payments | $ 639,520 | ||
Lease discount rate | 3.90% | ||
Lease liabilities | $ 388,001 | ||
Lease 2 [Member] | |||
Monthly lease payments | $ 81,634 | ||
Lease discount rate | 3.90% | ||
Lease liabilities | $ 46,746 | ||
Lease 1 & 2 [Member] | |||
Monthly lease payments | $ 151,767 | ||
Lease Agreement [Member] | |||
Area of land | ft² | 9,605 | ||
Renewal of lease term, description | Five years in 2018 through July 2023. | ||
Lease Agreement [Member] | VectorVision, Inc [Member] | |||
Area of land | ft² | 5,000 | ||
Renewal of lease term, description | Commenced October 1, 2017 through February 2023. |
Operating Leases - Schedule of
Operating Leases - Schedule of Lease Liability (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
2021 | $ 176,934 | |
2022 | 182,249 | |
2023 | 98,417 | |
Total lease payments | 457,600 | |
Less: Imputed interest/present value discount | (22,852) | |
Present value of lease liabilities | 434,747 | |
Less Current portion | (162,845) | $ (151,568) |
Operating lease liability - long term | $ 271,903 | $ 434,747 |
Settlement with Former Officer
Settlement with Former Officer (Details Narrative) - USD ($) | Jun. 15, 2020 | Dec. 31, 2020 | Dec. 31, 2019 |
Due to former officers | $ 148,958 | ||
Due payable to former officers description | The amount due remains accrued on our consolidated balance sheet and is payable through June 2021. | ||
Unvested options forfeited | 138,889 | ||
Michael Favish [Member] | |||
Former officers costs | $ 325,000 | ||
Michael Favish [Member] | Settlement Agreement [Member] | Twelve Months [Member] | |||
Payments to former officers | $ 325,000 |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) | Apr. 11, 2019USD ($) | Mar. 12, 2019USD ($) | Apr. 30, 2019USD ($)$ / sharesshares | Mar. 31, 2019USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($)shares |
Repayment of notes | $ 100,548 | |||||
Interest expense | $ 7,271 | $ 258,365 | ||||
Warrants issued | shares | 7,693,590 | |||||
IPO [Member] | ||||||
Conversion of shares of common stock | shares | 18,173 | |||||
Warrants issued | shares | 18,173 | |||||
IPO [Member] | Warrants [Member] | ||||||
Warrants issued | shares | 10,417 | |||||
Aggregate fair value of the warrant derivative liability | $ 436,034 | |||||
Warrants price per share | $ / shares | $ 24 | |||||
Debt discount | $ 250,000 | |||||
Financing cost | $ 186,034 | |||||
IPO [Member] | Warrants [Member] | Expected Volatility [Member] | ||||||
Warrants measurement input | 138 | |||||
IPO [Member] | Warrants [Member] | Risk Free Interest Rate [Member] | Minimum [Member] | ||||||
Warrants measurement input | 2.34 | |||||
IPO [Member] | Warrants [Member] | Risk Free Interest Rate [Member] | Maximum [Member] | ||||||
Warrants measurement input | 2.39 | |||||
Promissory Note [Member] | ||||||
Debt principal amount | $ 100,000 | |||||
Interest rate | 10.00% | |||||
Maturity date | Jun. 10, 2019 | |||||
Repayment of notes | $ 100,548 | |||||
Two Convertible Notes [Member] | ||||||
Debt principal amount | $ 250,000 | |||||
Interest rate | 5.00% | |||||
Maturity date | Sep. 30, 2019 | |||||
Convertible Note [Member] | IPO [Member] | ||||||
Convertible notes | $ 250,788 | |||||
Conversion of shares of common stock | shares | 18,173 | |||||
Conversion price | $ / shares | $ 13.80 | |||||
Interest expense | $ 250,000 | |||||
Conversion price percentage | 125.00% | |||||
Conversion of shares, description | 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) $13.80. |
Derivative Warrant Liability (D
Derivative Warrant Liability (Details Narrative) - USD ($) | Apr. 09, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Apr. 30, 2019 |
Warrants issued | 7,693,590 | ||||
Increase decrease in derivative warrant liability | $ (12,655) | $ 292,949 | |||
IPO [Member] | |||||
Warrants issued | 18,173 | ||||
Underwriters [Member] | IPO [Member] | |||||
Warrants issued | 10,417 | ||||
Warrants price per share | $ 30 | ||||
Aggregate fair value of the warrant derivative liability | $ 229,921 | 25,978 | 13,323 | ||
Increase decrease in derivative warrant liability | $ 12,655 | 216,598 | |||
Two Convertible Note Holders [Member] | Convertible Notes in 2019 and Reclassified to Equity in 2019 [Member] | |||||
Warrants issued | 18,173 | ||||
Warrants price per share | $ 17.28 | ||||
Aggregate fair value of the warrant derivative liability | $ 436,034 | ||||
Valuation discount | 250,000 | ||||
Debt finance cost | $ 186,034 | ||||
Two Convertible Note Holders [Member] | IPO [Member] | Convertible Notes in 2019 and Reclassified to Equity in 2019 [Member] | |||||
Aggregate fair value of the warrant derivative liability | 359,683 | ||||
Increase decrease in derivative warrant liability | $ 76,351 |
Derivative Warrant Liability -
Derivative Warrant Liability - Schedule of Fair Value Assumptions of Warrant Liability (Details) | Dec. 31, 2020USD ($)$ / sharesshares | Dec. 31, 2019USD ($)$ / sharesshares |
Number of warrants | 7,693,590 | |
Underwriter Warrants Issued April 2019 [Member] | ||
Number of warrants | 10,417 | |
Fair value of derivative warrant liability | $ | $ 229,921 | |
Warrant Liability [Member] | ||
Number of warrants | 10,417 | 10,417 |
Fair value of derivative warrant liability | $ | $ 25,978 | $ 13,323 |
Stock Price [Member] | Underwriter Warrants Issued April 2019 [Member] | ||
Stock price | $ / shares | $ 22.08 | |
Stock Price [Member] | Warrant Liability [Member] | ||
Stock price | $ / shares | $ 2.49 | $ 1.32 |
Risk Free Interest Rate [Member] | Underwriter Warrants Issued April 2019 [Member] | ||
Warrant liability, measurement input | 2.29 | |
Risk Free Interest Rate [Member] | Warrant Liability [Member] | ||
Warrant liability, measurement input | 0.17 | 1.62 |
Expected Volatility [Member] | Underwriter Warrants Issued April 2019 [Member] | ||
Warrant liability, measurement input | 137 | |
Expected Volatility [Member] | Warrant Liability [Member] | ||
Warrant liability, measurement input | 148 | 145 |
Expected Life in Years [Member] | Underwriter Warrants Issued April 2019 [Member] | ||
Warrant liability, measurement input, expected life (years) | 5 years | |
Expected Life in Years [Member] | Warrant Liability [Member] | ||
Warrant liability, measurement input, expected life (years) | 3 years 9 months 18 days | 4 years 3 months 19 days |
Expected Dividend Yield [Member] | Underwriter Warrants Issued April 2019 [Member] | ||
Warrant liability, measurement input | 0 | |
Expected Dividend Yield [Member] | Warrant Liability [Member] | ||
Warrant liability, measurement input | 0 | 0 |
Convertible Notes Issued March 2019 [Member] | ||
Number of warrants | 18,173 | |
Fair value of derivative warrant liability | $ | $ 436,034 | |
Convertible Notes Issued March 2019 [Member] | Stock Price [Member] | ||
Stock price | $ / shares | $ 24 | |
Convertible Notes Issued March 2019 [Member] | Risk Free Interest Rate [Member] | Minimum [Member] | ||
Warrant liability, measurement input | 2.34 | |
Convertible Notes Issued March 2019 [Member] | Risk Free Interest Rate [Member] | Maximum [Member] | ||
Warrant liability, measurement input | 2.39 | |
Convertible Notes Issued March 2019 [Member] | Expected Volatility [Member] | ||
Warrant liability, measurement input | 138 | |
Convertible Notes Issued March 2019 [Member] | Expected Life in Years [Member] | ||
Warrant liability, measurement input, expected life (years) | 5 years | |
Convertible Notes Issued March 2019 [Member] | Expected Dividend Yield [Member] | ||
Warrant liability, measurement input | 0 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) | Jun. 30, 2020 | Jun. 15, 2020 | Oct. 30, 2019 | Aug. 15, 2019 | Apr. 09, 2019 | Apr. 30, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Aug. 16, 2019 |
Number of common stock issued | 140,000 | 1,250,000 | |||||||
Proceeds from public offering | $ 3,888,000 | ||||||||
Warrants issued | 7,693,590 | ||||||||
Net proceeds from warrants | $ 7,400,000 | ||||||||
Common stock par value | $ 0.001 | $ 0.001 | |||||||
Warrants to purchase common stock | 16,667 | ||||||||
Stock issued for services | 100,000 | ||||||||
Stock issued for services, value | $ 49,450 | $ 124,002 | |||||||
Shares options, granted | 423,333 | 266,667 | |||||||
Aggregate stock-compensation expense | $ 544,127 | $ 2,717,731 | |||||||
Unvested options forfeited | 138,889 | ||||||||
Recognized stock compensation expense | $ 965,295 | ||||||||
Stock Options [Member] | |||||||||
Aggregate stock-compensation expense | $ 494,677 | $ 2,593,730 | |||||||
Pre-funded Warrants [Member] | |||||||||
Warrants price per share | $ 0.01 | ||||||||
Number of warrants exercised | 450,000 | ||||||||
Warrants to purchase common stock | 283,334 | ||||||||
Series B Warrants [Member] | |||||||||
Warrants price per share | $ 2.05 | ||||||||
Series B Warrants [Member] | Maximum [Member] | |||||||||
Warrants to purchase common stock | 4,083,334 | ||||||||
August and October Pre-funded Warrants [Member] | |||||||||
Minimum outstanding common stock beneficial owned percentage | 4.99% | ||||||||
August Pre-funded Warrants [Member] | |||||||||
Warrants price per share | $ 0.01 | ||||||||
Warrant term | 30 days | ||||||||
Unvested Options [Member] | |||||||||
Number of unvested options outstanding | 230,556 | ||||||||
Number of unvested options outstanding, value | $ 629,568 | ||||||||
Unvested options, amortized year | 3 years | ||||||||
Unvested options, weighted average exercise price | $ 5.58 | ||||||||
Unvested options, weighted average remaining life | 9 years 3 months 19 days | ||||||||
Aggregate intrinsic value of options outstanding | $ 0 | ||||||||
Closing stock price | $ 2.49 | ||||||||
Investors [Member] | Warrants [Member] | |||||||||
Number of common stock issued | 3,034,135 | ||||||||
Number of warrants exercised | 3,057,509 | ||||||||
Investors [Member] | Warrants One [Member] | |||||||||
Number of warrants exercised | 2,559,384 | ||||||||
Warrants to purchase common stock | 2,536,010 | ||||||||
Investors [Member] | Warrants Two [Member] | |||||||||
Net proceeds from warrants | $ 171,375 | ||||||||
Number of warrants exercised | 498,125 | ||||||||
Investors [Member] | Warrants Three [Member] | |||||||||
Warrants price per share | $ 0.06 | ||||||||
Investors [Member] | Warrants Four [Member] | |||||||||
Warrants price per share | $ 3 | ||||||||
Number of warrants exercised | 48,125 | ||||||||
Investors [Member] | Warrants Five [Member] | |||||||||
Warrants price per share | $ 2.05 | ||||||||
Net proceeds from warrants | $ 5,451,892 | ||||||||
Number of warrants exercised | 2,656,868 | ||||||||
Warrants to purchase common stock | 212,132,758 | ||||||||
Intrinsic value of warrants outstanding | $ 0 | ||||||||
Six Employees [Member] | |||||||||
Shares options, granted | 215,000 | ||||||||
Grant date fair value of options granted | $ 554,775 | ||||||||
Discount rate | 18.00% | ||||||||
Expected dividend yield | 0.00% | ||||||||
Option vesting period | 2 years | ||||||||
Six Employees [Member] | Vest On a Quarterly Basis [Member] | |||||||||
Number of options vested | 41,667 | ||||||||
Six Employees [Member] | Vest in Full Six Months [Member] | |||||||||
Number of options vested | 6,667 | ||||||||
Six Employees [Member] | Over Three Years [Member] | |||||||||
Number of options vested | 166,667 | ||||||||
Six Employees [Member] | Maximum [Member] | |||||||||
Volatility rate | 147.00% | ||||||||
Expected life | 6 years | ||||||||
Stock option, exercise price per share | $ 6 | ||||||||
Six Employees [Member] | Minimum [Member] | |||||||||
Volatility rate | 141.00% | ||||||||
Expected life | 5 years 2 months 30 days | ||||||||
Stock option, exercise price per share | $ 1.92 | ||||||||
Board of Directors [Member] | |||||||||
Shares options, granted | 208,334 | ||||||||
Grant date fair value of options granted | $ 478,735 | ||||||||
Discount rate | 0.18% | ||||||||
Expected dividend yield | 0.00% | ||||||||
Expected life | 5 years 2 months 30 days | ||||||||
Stock option, exercise price per share | $ 6 | ||||||||
Board of Directors [Member] | Maximum [Member] | |||||||||
Volatility rate | 148.00% | ||||||||
Board of Directors [Member] | Minimum [Member] | |||||||||
Volatility rate | 142.00% | ||||||||
Michael Favish [Member] | |||||||||
Volatility rate | 142.00% | ||||||||
Aggregate stock-compensation expense | $ 24,359 | ||||||||
Closing stock price | $ 2.94 | ||||||||
Risk free interest rate | 0.22% | ||||||||
Unvested options forfeited | 138,889 | ||||||||
Recognized stock compensation expense | $ (965,295) | ||||||||
IPO [Member] | |||||||||
Warrants issued | 18,173 | ||||||||
Debt conversion converted into shares | 18,173 | ||||||||
IPO [Member] | Warrants [Member] | |||||||||
Warrants issued | 10,417 | ||||||||
Warrants price per share | $ 24 | ||||||||
IPO [Member] | Underwriters [Member] | |||||||||
Warrants issued | 10,417 | ||||||||
Warrants price per share | $ 30 | ||||||||
Net proceeds from warrants | $ 3,888,000 | ||||||||
IPO [Member] | Underwriting Agreement [Member] | WallachBeth Capital, LLC, and WestPark Capital, Inc [Member] | |||||||||
Number of common stock issued | 208,334 | ||||||||
Shares issued price per share | $ 24 | ||||||||
Proceeds from public offering | $ 5,000,000 | ||||||||
Second Public Offering [Member] | |||||||||
Number of common stock issued | 2,000,000 | ||||||||
Shares issued price per share | $ 0.44 | ||||||||
Common stock par value | 0.001 | ||||||||
Second Public Offering [Member] | Pre-funded Warrants [Member] | |||||||||
Shares issued price per share | $ 2.58 | ||||||||
Number of warrants exercised | 166,667 | ||||||||
Second Public Offering [Member] | Underwriters [Member] | |||||||||
Warrants issued | 173,334 | ||||||||
Warrants price per share | $ 3 | ||||||||
Net proceeds from warrants | $ 4,944,340 | ||||||||
Second Public Offering [Member] | Underwriting Agreement [Member] | Maxim Group LLC, and WallachBeth Capital LLC [Member] | |||||||||
Warrants to purchase common stock | 2,166,667 | ||||||||
Underwriters' Over-Allotment Option [Member] | |||||||||
Number of common stock issued | 3,800,000 | ||||||||
Shares issued price per share | $ 0.06 | ||||||||
Warrants issued | 325,000 | ||||||||
Warrants description | Each share of common stock (or pre-funded warrant) was sold together with one Series B warrant to purchase one share of common stock at a combined price to the public of $0.342 per share and Series B warrant. | ||||||||
August Public Offering [Member] | |||||||||
Warrants issued | 2,831,667 | ||||||||
Warrants description | (i) 30 days from the effective date of the Registration Statement and (ii) the date on which the Common Stock trades an aggregate of more than 6,666,667 shares after the announcement of the pricing of the offering, and ending on the twelve month anniversary thereof, each warrant may be exercised at the option of the holder on a cashless basis at a ratio of one warrant for one share of common stock, in whole or in part, if the weighted average price of the common stock on the trading day immediately prior to the exercise date fails to exceed the initial exercise price of the warrant. | ||||||||
August Public Offering [Member] | Warrants [Member] | |||||||||
Shares issued price per share | $ 2.64 | ||||||||
Warrants price per share | $ 3.51 | ||||||||
October Public Offering [Member] | |||||||||
Warrants issued | 4,833,334 | ||||||||
Warrants price per share | $ 0.06 | ||||||||
October Public Offering [Member] | Warrants [Member] | |||||||||
Shares issued price per share | 1.99 | ||||||||
Warrants price per share | $ 2.05 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Warrants Activity (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Shares, Ending Balance | 2,132,758 | |
Warrants [Member] | ||
Shares, Beginning Balance | 4,800,456 | 210,946 |
Shares, Granted | 7,693,590 | |
Shares, Forfeitures | ||
Shares, Expirations | (10,830) | (46,572) |
Shares, Exercised | (2,656,868) | (3,057,508) |
Shares, Ending Balance | 2,132,758 | 4,800,456 |
Weighted Average Exercise Price, Beginning Balance | $ 2.28 | $ 4.26 |
Weighted Average Exercise Price, Granted | 2.52 | |
Weighted Average Exercise Price, Forfeitures | ||
Weighted Average Exercise Price, Expirations | (9) | (10.98) |
Weighted Average Exercise Price, Exercised | (2.04) | (3) |
Weighted Average Exercise Price, Ending Balance | $ 2.40 | $ 2.28 |
Weighted Average Remaining Contractual Term (Years), Beginning Balance | 4 years 10 months 28 days | 3 months 15 days |
Weighted Average Remaining Contractual Term (Years), Granted | 0 years | 4 years 9 months 22 days |
Weighted Average Remaining Contractual Term (Years), Ending Balance | 3 years 9 months 22 days | 4 years 10 months 28 days |
Stockholders' Equity - Schedu_2
Stockholders' Equity - Schedule of Exercise Price of Warrants Outstanding and Exercisable (Details) | Dec. 31, 2020$ / sharesshares |
Warrants Outstanding and Exercisable (Shares) | 2,132,758 |
Warrant One [Member] | |
Warrants Outstanding and Exercisable (Shares) | 1,566,466 |
Exercise Prices | $ / shares | $ 2.05 |
Warrant Two [Member] | |
Warrants Outstanding and Exercisable (Shares) | 326,668 |
Exercise Prices | $ / shares | $ 2.67 |
Warrant Three [Member] | |
Warrants Outstanding and Exercisable (Shares) | 173,334 |
Exercise Prices | $ / shares | $ 3 |
Warrant Four [Member] | |
Warrants Outstanding and Exercisable (Shares) | 37,700 |
Exercise Prices | $ / shares | $ 3.51 |
Warrant Five [Member] | |
Warrants Outstanding and Exercisable (Shares) | 28,590 |
Exercise Prices | $ / shares | $ 17.25 |
Stockholders' Equity - Schedu_3
Stockholders' Equity - Schedule of Share-based Compensation, Stock Options, Activity (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Equity [Abstract] | ||
Shares Outstanding, Beginning Balance | 493,750 | 227,083 |
Shares, Granted | 423,333 | 266,667 |
Shares, Forfeitures | (138,889) | |
Shares, Expirations | ||
Shares, Exercised | ||
Shares Outstanding, Ending Balance | 778,194 | 493,750 |
Shares Exercisable, Ending Balance | 500,764 | |
Weighted Average Exercise Price Outstanding, Beginning Balance | $ 13.56 | $ 13.56 |
Weighted Average Exercise Price, Granted | 5.58 | 21.06 |
Weighted Average Exercise Price, Forfeitures | ||
Weighted Average Exercise Price, Expirations | ||
Weighted Average Exercise Price, Exercised | ||
Weighted Average Exercise Price Outstanding, Ending Balance | 9.48 | $ 13.56 |
Weighted Average Exercise Price Exercisable, Ending Balance | $ 11.64 | |
Weighted Average Remaining Contractual Term (Years) Outstanding, Beginning Balance | 3 years 7 months 21 days | 3 years 9 months 11 days |
Weighted Average Remaining Contractual Term (Years), Granted | 9 years 6 months 3 days | 4 years 4 months 17 days |
Weighted Average Remaining Contractual Term (Years) Outstanding, Ending Balance | 6 years 4 months 17 days | 3 years 7 months 21 days |
Weighted Average Remaining Contractual Term (Years) Exercisable, Ending Balance | 4 years 8 months 26 days |
Stockholders' Equity - Schedu_4
Stockholders' Equity - Schedule of Exercise Price of Options Outstanding and Exercisable (Details) - $ / shares | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Options Outstanding (Shares) | 778,194 | 493,750 | 227,083 |
Options Exercisable (Shares) | 500,764 | ||
Exercise Price One [Member] | |||
Options Outstanding (Shares) | 41,667 | ||
Options Exercisable (Shares) | 41,667 | ||
Exercise Prices | $ 1.48 | ||
Exercise Price Two [Member] | |||
Options Outstanding (Shares) | 5,000 | ||
Options Exercisable (Shares) | 5,000 | ||
Exercise Prices | $ 1.91 | ||
Exercise Price Three [Member] | |||
Options Outstanding (Shares) | 41,667 | ||
Options Exercisable (Shares) | 20,833 | ||
Exercise Prices | $ 2.34 | ||
Exercise Price Four [Member] | |||
Options Outstanding (Shares) | 1,667 | ||
Options Exercisable (Shares) | 1,667 | ||
Exercise Prices | $ 2.46 | ||
Exercise Price Five [Member] | |||
Options Outstanding (Shares) | 16,667 | ||
Options Exercisable (Shares) | 8,333 | ||
Exercise Prices | $ 3.24 | ||
Exercise Price Six [Member] | |||
Options Outstanding (Shares) | 375,000 | ||
Options Exercisable (Shares) | 126,738 | ||
Exercise Prices | $ 6 | ||
Exercise Price Seven [Member] | |||
Options Outstanding (Shares) | 104,166 | ||
Options Exercisable (Shares) | 104,166 | ||
Exercise Prices | $ 12 | ||
Exercise Price Eight [Member] | |||
Options Outstanding (Shares) | 10,416 | ||
Options Exercisable (Shares) | 10,416 | ||
Exercise Prices | $ 13.80 | ||
Exercise Price Nine [Member] | |||
Options Outstanding (Shares) | 112,500 | ||
Options Exercisable (Shares) | 112,500 | ||
Exercise Prices | $ 15 | ||
Exercise Price Ten [Member] | |||
Options Outstanding (Shares) | 69,445 | ||
Options Exercisable (Shares) | 69,445 | ||
Exercise Prices | $ 26.40 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Operating loss carryforwards | $ 23,338,000 | |
Operating loss carryforwards, expiration year | 2035 | |
Unrecognized tax benefits |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Deferred Tax Assets (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforwards | $ 5,893,000 | $ 3,961,000 |
Stock-based compensation | 1,362,000 | 1,479,000 |
Amortization of intangibles | 106,000 | 83,000 |
Accrued expenses | 12,000 | 12,000 |
Right of use | (4,000) | |
Research and development credit | (13,000) | (7,000) |
Depreciation | (57,000) | (43,000) |
Total deferred tax assets | 7,299,000 | 5,485,000 |
Valuation allowance | (7,299,000) | (5,485,000) |
Net deferred tax assets |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
U. S. federal statutory tax rate | (21.00%) | (21.00%) |
State, net of federal benefit | (7.00%) | (7.00%) |
Non-deductible goodwill impairment charge | 3.00% | |
Adjustment to deferred tax asset | (28.00%) | (25.00%) |
Change in valuation allowance | 28.00% | 25.00% |
Effective tax rate | 0.00% | 0.00% |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Officers compensation | $ 2,339,560 | |
Payable to former officer | $ 148,958 | |
Settlement amount payable discription | The settlement amount remains payable on our consolidated balance sheet and is payable through June 2021. | |
Shares options, granted | 423,333 | 266,667 |
Aggregate stock-compensation expense | $ 544,127 | $ 2,717,731 |
Building rent | 174,323 | 174,323 |
Ceatus Media Group, LLC [Member] | ||
Services related digital marketing | 95,750 | 81,000 |
DWT Evans LLC [Member] | ||
Building rent | $ 19,770 | 20,898 |
Employment Agreement [Member] | ||
Employment agreement, description | Employment Agreement (the "Agreement") with Michael Favish, which agreement became effective as of January 1, 2019. Pursuant to the Agreement, Mr. Favish was to serve in such positions for a term of three (3) years and following the expiration of such three (3) year term, Mr. Favish's employment was to be on an "at-will" basis, and such post-term employment will be subject to termination by either party at any time, with or without cause or prior notice. | |
Michael Favish [Member] | 2019 [Member] | ||
Officers compensation | $ 300,000 | |
Michael Favish [Member] | 2020 [Member] | ||
Officers compensation | 325,000 | |
Michael Favish [Member] | 2021 [Member] | ||
Officers compensation | 350,000 | |
Former CEO [Member] | ||
Officers compensation | 325,000 | |
Previous salary | 325,000 | |
Former CEO [Member] | Michael Favish [Member] | ||
Officers compensation | 325,000 | 300,000 |
Former CEO [Member] | Karen Favish [Member] | ||
Officers compensation | 75,000 | 114,000 |
Chief Accounting Officer [Member] | Kristine Townsend [Member] | ||
Officers compensation | $ 60,000 | $ 55,000 |
Dr. David Evans [Member] | ||
Royalty percentage on sales | 3.00% |
Segment Reporting (Details Narr
Segment Reporting (Details Narrative) | 12 Months Ended |
Dec. 31, 2020Segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
Segment Reporting - Schedule of
Segment Reporting - Schedule of Segment Reporting Information, by Segment (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Revenue | $ 1,889,844 | $ 902,937 |
Cost of goods sold | 1,946,635 | 341,315 |
Gross profit (loss) | (56,791) | 561,622 |
Stock compensation expense | 544,127 | 2,717,731 |
Goodwill impairment charge | 1,563,520 | |
Operating expenses | 8,494,940 | 11,058,559 |
Loss from operations | (8,551,731) | (10,496,937) |
Cash | 8,518,732 | 11,115,502 |
Inventories, net | 384,972 | 310,941 |
Other | 191,179 | 441,275 |
Total current assets | 9,094,883 | 11,867,718 |
Right of use asset | 418,590 | 572,714 |
Property and equipment, net | 285,676 | 374,638 |
Intangible assets, net | 50,000 | 50,000 |
Other | 11,751 | 11,751 |
Total assets | 9,860,900 | 12,876,821 |
Corporate [Member] | ||
Revenue | 4,500 | 24,270 |
Cost of goods sold | 2,478 | 7,288 |
Gross profit (loss) | 2,022 | 16,982 |
Stock compensation expense | 544,127 | 2,717,731 |
Goodwill impairment charge | ||
Operating expenses | 3,757,945 | 360,257 |
Loss from operations | (4,300,050) | (3,061,006) |
Cash | 8,518,732 | 11,115,502 |
Inventories, net | 5,003 | |
Other | 7,399 | |
Total current assets | 8,518,732 | 11,127,904 |
Right of use asset | ||
Property and equipment, net | ||
Intangible assets, net | ||
Other | ||
Total assets | 8,518,732 | 11,127,904 |
Medical Foods and Nutraceuticals [Member] | ||
Revenue | 1,609,482 | 444,657 |
Cost of goods sold | 1,599,510 | 155,212 |
Gross profit (loss) | 9,972 | 289,445 |
Stock compensation expense | ||
Goodwill impairment charge | ||
Operating expenses | 3,892,899 | 5,308,508 |
Loss from operations | (3,882,927) | (5,019,063) |
Cash | ||
Inventories, net | 254,879 | 126,708 |
Other | 89,333 | 219,223 |
Total current assets | 344,212 | 345,931 |
Right of use asset | 374,447 | 509,464 |
Property and equipment, net | 135,641 | 219,056 |
Intangible assets, net | 50,000 | 50,000 |
Other | 11,751 | 11,751 |
Total assets | 916,051 | 1,136,202 |
Medical Devices [Member] | ||
Revenue | 275,862 | 434,010 |
Cost of goods sold | 344,647 | 178,815 |
Gross profit (loss) | (68,785) | 255,195 |
Stock compensation expense | ||
Goodwill impairment charge | 1,563,520 | |
Operating expenses | 299,969 | 1,108,543 |
Loss from operations | (368,754) | (2,416,868) |
Cash | ||
Inventories, net | 130,093 | 179,230 |
Other | 101,846 | 214,653 |
Total current assets | 231,939 | 393,883 |
Right of use asset | 44,143 | 63,250 |
Property and equipment, net | 150,035 | 155,582 |
Intangible assets, net | ||
Other | ||
Total assets | $ 426,217 | $ 612,715 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Feb. 10, 2021 | Jan. 28, 2021 | Jan. 15, 2021 | Jan. 08, 2021 | Jan. 06, 2021 | Feb. 28, 2021 | Jan. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Common stock, shares issued | 15,170,628 | 12,497,094 | |||||||
Common stock, shares outstanding | 15,170,628 | 12,497,094 | |||||||
Reverse-split fractional share adjustment | 41,941 | ||||||||
Officers compensation | $ 2,339,560 | ||||||||
Pro Forma [Member] | |||||||||
Common stock, shares issued | 24,426,993 | ||||||||
Common stock, shares outstanding | 24,426,993 | ||||||||
Subsequent Event [Member] | |||||||||
Number of warrants exercise | 1,647,691 | 1,647,691 | |||||||
Proceeds from warrants exercised | $ 3,608,509 | $ 3,608,509 | |||||||
Subsequent Event [Member] | Sales Agreement [Member ] | January 2021 1st ATM Offering [Member ] | |||||||||
Sale of stock, proceeds from transaction | $ 9,500,000 | ||||||||
Number of stock sold during period | 2,559,833 | ||||||||
Sale of stock, proceeds from transaction, gross | $ 10,000,000 | ||||||||
Subsequent Event [Member] | Sales Agreement [Member ] | January 2021 1st ATM Offering [Member ] | Maximum [Member] | |||||||||
Sale of stock, proceeds from transaction | $ 10,000,000 | ||||||||
Subsequent Event [Member] | Sales Agreement [Member ] | January 2021 2nd ATM Offering [Member] | |||||||||
Sale of stock, proceeds from transaction | $ 24,100,000 | ||||||||
Number of stock sold during period | 5,006,900 | ||||||||
Sale of stock, proceeds from transaction, gross | $ 25,000,000 | ||||||||
Subsequent Event [Member] | Sales Agreement [Member ] | January 2021 2nd ATM Offering [Member] | Maximum [Member] | |||||||||
Sale of stock, proceeds from transaction | $ 25,000,000 | ||||||||
Subsequent Event [Member] | Employment Agreement [Member] | Mr. Scholte's [Member] | |||||||||
Officers compensation | $ 400,000 | ||||||||
Description of deferred compensation arrangement | Mr. Scholtes was granted an award of a number of stock options equal to one percent (1%) of the issued and outstanding number of shares of the Company's common stock (the "Stock Options") pursuant to the Company's 2018 Equity Incentive Plan (the "Incentive Plan"), at an exercise price equal to the closing price of the Company's common stock on the Effective Date (152,671 shares, exercise price of $3.95 per share) . One third (1/3) of the Stock Options shall vest and become exercisable the first anniversary of the Effective Date, and the balance of the Stock Options shall vest ratably in equal installments for the twenty-four (24) months thereafter, subject to continued service, and shall vest in full upon a Change in Control (as defined in the Incentive Plan). Additionally, the Company shall grant unvested shares of common stock in an amount equal to one percent (1%) of the number of shares of Company common stock issued and outstanding on the Effective Date (the "Stock Grant") to Mr. Scholtes under the Incentive Plan (152,671 shares). The shares underlying the Stock Grant shall become vested in full on the first anniversary of the Effective Date. Additionally, Mr. Scholtes shall be granted (i) additional stock options equal to two percent (2%) of the Company's issued and outstanding shares of common stock on the date of grant if the Company achieves specified written performance objectives established by the Board for the Company's fiscal years ending December 31, 2021 and December 31, 2022 and (ii) additional stock options equal to either two percent (2%) or three percent (3%) of the Company's issued and outstanding shares of common stock on the date of grant if the Company meets certain financial objectives during the first five years following the Effective Date. | ||||||||
Subsequent Event [Member] | Employment Agreement [Member] | Minimum [Member] | Mr. Scholte's [Member] | |||||||||
Employee benefit | $ 400,000 |
Subsequent Events - Schedule of
Subsequent Events - Schedule of Assets, Liabilities, and Stockholders' Equity (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Cash and cash equivalents | $ 8,518,732 | $ 11,115,502 | |
Other current assets | 191,179 | 441,275 | |
Non-current assets | 766,017 | ||
Total assets | 9,860,900 | 12,876,821 | |
Current liabilities | 1,073,731 | 410,234 | |
Non-current liabilities | 271,903 | ||
Total liabilities | 1,345,634 | 844,981 | |
Common stock | 15,171 | 12,497 | |
Additional paid-in capital | 62,583,423 | 57,531,014 | |
Accumulated deficit | (54,083,328) | (45,511,671) | |
Total stockholders' equity | 8,515,266 | 12,031,840 | $ 3,185,763 |
Total liabilities and stockholders' equity | 9,860,900 | $ 12,876,821 | |
Pro Forma [Member] | |||
Cash and cash equivalents | 45,727,241 | ||
Other current assets | 576,151 | ||
Non-current assets | 766,017 | ||
Total assets | 47,069,409 | ||
Current liabilities | 1,073,731 | ||
Non-current liabilities | 271,903 | ||
Total liabilities | 1,345,634 | ||
Common stock | 24,427 | ||
Additional paid-in capital | 99,782,676 | ||
Accumulated deficit | (54,083,328) | ||
Total stockholders' equity | 45,723,775 | ||
Total liabilities and stockholders' equity | $ 47,069,409 |