Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2020 | |
Cover [Abstract] | |
Entity Registrant Name | Vivos Therapeutics, Inc. |
Entity Central Index Key | 0001716166 |
Document Type | S-1 |
Amendment Flag | false |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business Flag | true |
Entity Emerging Growth Company | true |
Entity Ex Transition Period | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Current assets | ||
Cash and cash equivalents | $ 18,205,668 | $ 469,353 |
Accounts receivable, net | 1,430,890 | 871,290 |
Current portion of note receivable | 84,696 | 84,696 |
Deferred offering costs | 263,814 | |
Prepaid expenses and other current assets | 673,061 | 295,002 |
Total current assets | 20,394,315 | 1,984,155 |
Property and equipment, net | 871,597 | 1,139,501 |
Intangible assets, net | 270,121 | 689,151 |
Note receivable, net - related party | 810,635 | 785,061 |
Goodwill | 2,671,434 | 2,671,434 |
Deposits | 309,367 | 282,235 |
Total assets | 25,327,469 | 7,551,537 |
Current liabilities | ||
Accounts payable | 781,364 | 1,083,422 |
Accounts payable - related party | 1,500,000 | |
Accrued expenses | 1,736,721 | 1,353,161 |
Contract liability | 2,937,992 | 2,947,565 |
Current portion of long-term debt | 866,972 | 3,709,535 |
Total current liabilities | 7,823,049 | 9,093,683 |
Long-term debt | 423,095 | |
Deferred rent | 163,966 | 84,246 |
Total liabilities | 8,410,110 | 9,177,929 |
Commitments and contingencies | ||
Convertible Redeemable Series A Preferred Stock - $0.0001 par value. 50,000,000 shares authorized, none and 730,000 shares issued and outstanding at December 31, 2020 and 2019, respectively | 1,316,667 | |
Stockholders' equity | ||
Preferred Stock Series B, nonvoting - $0.0001 par value, 1,200,000 authorized, none issued and outstanding at December 31, 2020 and 2019, respectively | ||
Common Stock Class A, voting - $0.0001 par value, 200,000,000 shares authorized, 18,209,452 and 12,444,165 issued and outstanding at December 31, 2020 and 2019, respectively | 1,821 | 1,244 |
Additional paid-in capital | 52,250,266 | 20,333,548 |
Accumulated deficit | (35,334,728) | (23,277,851) |
Total stockholders' equity | 16,917,359 | (2,943,059) |
Total liabilities and stockholders' equity | $ 25,327,469 | $ 7,551,537 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Convertible redeemable series A preferred stock, par value | $ 0.0001 | $ 0.0001 |
Convertible redeemable series A preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Convertible redeemable series A preferred stock, shares issued | 730,000 | |
Convertible redeemable series A preferred stock, shares outstanding | 730,000 | |
Preferred stock series B, par value | $ 0.0001 | $ 0.0001 |
Preferred stock series B, shares authorized | 1,200,000 | 1,200,000 |
Preferred stock series B, shares issued | ||
Preferred stock series B, shares outstanding | ||
Common stock class A, par value | $ 0.0001 | $ 0.0001 |
Common stock class A, shares authorized | 200,000,000 | 200,000,000 |
Common stock class A, shares issued | 18,209,452 | 12,444,165 |
Common stock class A, shares outstanding | 18,209,452 | 12,444,165 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Revenue | ||
Total revenue | $ 13,066,237 | $ 11,393,277 |
Cost of sales (exclusive of depreciation and amortization shown separately below) | 2,653,429 | 2,736,034 |
Gross profit | 10,412,808 | 8,657,243 |
Operating expenses | ||
General and administrative | 16,090,049 | 16,172,505 |
Sales and marketing | 2,314,023 | 2,310,743 |
Settlement | 3,330,679 | |
Depreciation and amortization | 717,865 | 751,228 |
Total operating expenses | 22,452,616 | 19,234,476 |
Operating loss before interest expense and income taxes | (12,039,808) | (10,577,233) |
Interest expense | (96,681) | (137,876) |
Loss on sale of business | (60,343) | |
Interest income | 79,612 | 21,133 |
Loss before income taxes | (12,056,877) | (10,754,319) |
Income tax expense | ||
Net loss | (12,056,877) | (10,754,319) |
Warrant beneficial conversion feature expense | (3,597,585) | |
Preferred stock accretion | (2,333,333) | (1,000,000) |
Net loss attributable to common stockholders | $ (17,987,795) | $ (11,754,319) |
Net loss per share attributable to common stockholders (basic and diluted) | $ (1.40) | $ (0.95) |
Weighted average number of shares of Common Stock outstanding (basic and diluted) | 12,869,266 | 12,331,280 |
Product [Member] | ||
Revenue | ||
Total revenue | $ 4,889,840 | $ 4,349,623 |
Service [Member] | ||
Revenue | ||
Total revenue | $ 8,176,397 | $ 7,043,654 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) | Common Stock [Member] | Series B Preferred [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2018 | $ 1,207 | $ 17,349,118 | $ (12,523,532) | $ 4,826,793 | |
Balance, shares at Dec. 31, 2018 | 12,067,592 | ||||
Stock-based compensation expense | 1,987,275 | 1,987,275 | |||
Preferred stock accretion | (1,000,000) | (1,000,000) | |||
Common stock and preferred stock sold and issued for cash, net of issuance costs | $ 15 | 1,165,984 | 1,165,999 | ||
Common stock and preferred stock sold and issued for cash, net of issuance costs, shares | 155,769 | ||||
Common stock issued from exercise of stock options | $ 5 | 82,495 | $ 82,500 | ||
Common stock issued from exercise of stock options, shares | 50,000 | 50,000 | |||
Common stock and preferred stock issued in exchange for convertible debt | $ 17 | 748,676 | $ 748,693 | ||
Common stock and preferred stock issued in exchange for convertible debt, shares | 170,804 | ||||
Net loss | (10,754,319) | (10,754,319) | |||
Balance at Dec. 31, 2019 | $ 1,244 | 20,333,548 | (23,277,851) | (2,943,059) | |
Balance, shares at Dec. 31, 2019 | 12,444,165 | ||||
Stock-based compensation expense | 2,172,197 | 2,172,197 | |||
Series A preferred stock accretion | (2,333,333) | (2,333,333) | |||
Common stock and preferred stock sold and issued for cash, net of issuance costs | $ 2,402,668 | 2,402,668 | |||
Common stock and preferred stock sold and issued for cash, net of issuance costs, shares | 163,500 | ||||
Common stock and preferred stock issued in exchange for convertible debt | $ 2,943,870 | 2,943,870 | |||
Common stock and preferred stock issued in exchange for convertible debt, shares | 196,258 | ||||
Exchange of Series B preferred stock into common shares, net of issuance costs | $ 120 | $ (5,346,538) | 5,346,418 | ||
Exchange of Series B preferred stock into common shares, net of issuance costs, shares | 1,199,195 | (359,758) | |||
Issuance of common stock in initial public offering, net of issuance costs | $ 402 | 21,577,241 | 21,577,643 | ||
Issuance of common stock in initial public offering, net of issuance costs, shares | 4,025,000 | ||||
Common stock issued in settlement | $ 30 | 1,799,970 | 1,800,000 | ||
Common stock issued in settlement, shares | 300,000 | ||||
Common stock warrants issued in settlement | 1,530,679 | 1,530,679 | |||
Common stock issued to consultants for services | $ 9 | 677,494 | 677,503 | ||
Common stock issued to consultants for services, shares | 88,111 | ||||
Common stock issued for settlement of liability | $ 5 | 349,995 | 350,000 | ||
Common stock issued for settlement of liability, shares | 46,667 | ||||
Conversion of convertible debt to common stock | $ 11 | 796,057 | 796,068 | ||
Conversion of convertible debt to common stock, shares | 106,314 | ||||
Net loss | (12,056,877) | (12,056,877) | |||
Balance at Dec. 31, 2020 | $ 1,821 | $ 52,250,266 | $ (35,334,728) | $ 16,917,359 | |
Balance, shares at Dec. 31, 2020 | 18,209,452 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (12,056,877) | $ (10,754,319) |
Adjustments to reconcile net loss to net cash: used in operating activities: | ||
Depreciation and amortization expense | 717,865 | 751,228 |
Stock-based compensation expense | 2,172,197 | 1,987,275 |
Common stock for settlements | 1,925,003 | 76,200 |
Warrants issued for settlements | 1,530,679 | |
Common stock issued for services | 487,488 | |
Accretion of discount on convertible debt | 13,455 | |
Accretion of discount on note receivable | (25,574) | (6,587) |
Loss on sale of business | 60,343 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (559,600) | (276,103) |
Prepaid expenses and other current assets | (114,244) | (271,877) |
Deposits | (27,132) | (258,331) |
Accounts payable | (274,212) | 547,620 |
Accrued expenses | 473,967 | 672,892 |
Contract liability | (9,573) | 2,058,057 |
Deferred rent | 79,719 | 59,667 |
Net Cash Used In Operating Activities | (5,680,294) | (5,340,480) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Acquisitions of property and equipment | (120,252) | (175,599) |
Proceeds from sale of business | 250,000 | |
Principal collections under note receivable | 11,822 | |
Net Cash Used In Investing Activities | (120,252) | 86,223 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from issuance of common stock | 22,289,500 | 1,248,499 |
Proceeds from issuance of debt | 1,265,067 | 3,759,535 |
Redemption of preferred stock | (2,150,000) | (350,000) |
Proceeds from issuance of preferred stock | 2,452,500 | |
Payment for issuance costs | (245,206) | (159,887) |
Principal payments on debt | (75,000) | (29,260) |
Net Cash Provided by Financing Activities | 23,536,861 | 4,468,887 |
Net increase (decrease) in cash and cash equivalents | 17,736,315 | (785,370) |
Cash and cash equivalents, at beginning of period | 469,353 | 1,254,723 |
Cash and cash equivalents, at end of period | 18,205,668 | 469,353 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||
Cash paid for interest | 33,169 | 20,674 |
Cash paid for income taxes | ||
Accretion of redeemable preferred stock | 1,000,000 | |
Conversion of debt to common stock | 770,000 | 720,740 |
Exchange of debt to Series B preferred stock | 2,943,870 | |
Exchange of Series B preferred stock into common shares | 5,346,538 | |
Common stock issued for payment of interest | 26,068 | 27,952 |
Series B Preferred Stock issued for payment of interest | 102,422 | |
Series A Preferred Stock redemption included in accounts payable | 1,500,000 | |
Capital expenditures included in accounts payable | $ 2,400 | $ 91,719 |
Organization, Description and S
Organization, Description and Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Organization, Description and Significant Accounting Policies | 1 - ORGANIZATION, DESCRIPTION AND SIGNIFICANT ACCOUNTING POLICIES Organization BioModeling Solutions, Inc. (“BioModeling”) was organized on March 20, 2007 as an Oregon limited liability company, and subsequently incorporated in 2013. On August 16, 2016, BioModeling entered into a share exchange agreement (the “SEA”) with First Vivos, Inc. (“First Vivos”), and Vivos Therapeutics, Inc. (“Vivos”), a Wyoming corporation established on July 7, 2016 to facilitate this merger. Vivos was formerly named Corrective BioTechnologies, Inc. until its name changed on September 6, 2016 to Vivos Biotechnologies and on March 2, 2018 to Vivos Therapeutics, Inc. and had no substantial pre-combination business activities. First Vivos was incorporated in Texas on November 10, 2015. Pursuant to the SEA, all of the outstanding shares of common stock and warrants of BioModeling and all of the shares of commons stock of First Vivos were exchanged for newly issued shares of Class A common stock and warrants of Vivos, the legal acquirer, collectively the “Company”. The transaction was accounted for as a reverse acquisition and recapitalization, with BioModeling as the acquirer for financial reporting and accounting purposes. Upon the consummation of the merger, the historical financial statements of BioModeling became the Company’s historical financial statements and continued to be recorded at their historical carrying amounts. COVID-19 The early 2020 outbreak of COVID-19 and its development into a pandemic in March 2020 has resulted in significant economic disruption globally. Actions taken by various governmental authorities, individuals and companies around the world to prevent the spread of COVID-19 through social distancing have restricted travel, many business operations, public gatherings and the overall level of individual movement and in-person interaction across the globe. This has significantly reduced global economic activity and resulted in a decline in demand across many industries. Many of the Company’s VIPs and potential VIPs closed their offices as a result of COVID-19, although some remained open to specifically provide patients with Company products as Company appliances and VIPs were deemed an essential business for health considerations in many jurisdictions. In the face of the pandemic and the results potential for revenue reduction, Company management worked diligently to reduce expenses and maintain revenues during 2020. While revenue growth flattened in March and April 2020, expenses were reduced and the Company aggressively expanded its network of healthcare providers familiar with its products by offering online continuing education courses which introduced many in the medical and dental communities to the Company’s product line. As a result of improving operating cash flows, the Company determined no triggering events had occurred indicating no impairment needed as of December 31, 2020. Description of Business The Company is engaged in the designing and selling of oral devices that assist with sleep and breathing disorders and hosting training seminars for medical and dental professionals on sleep and breathing disorders. The Company owns and operates three locations where Vivos systems are measured and fitted. The Company licenses its intellectual property to third-party manufacturers which fabricate appliance devices for orders requested by healthcare professionals, at a specified price per appliance. Basis of Presentation and Consolidation The accompanying consolidated financial statements, which include the accounts of the Company and its wholly owned subsidiaries (BioModeling and First Vivos), are prepared in conformity with generally accepted accounting principles in the United States of America (“U.S. GAAP”). All significant intercompany balances and transactions have been eliminated in consolidation. On July 30, 2020, the Company effected a reverse stock split in which each common shareholder received one share of common stock for every three shares outstanding. On August 12, 2020, the Company reincorporated as a domestic Delaware corporation under Delaware General Corporate Law from Wyoming. All share and per share amounts have been adjusted to reflect the effect of these Reverse Stock Split. Use of Estimates To prepare financial statements in conformity with U.S. GAAP, management must make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Initial Public Offering On December 11, 2020, the Company completed its initial public offering (“IPO”) by offering 4,025,000 common shares at a price of $6.00 per share, for net proceeds of approximately $21.6 million after deducting underwriting discounts and commissions and offering expenses payable by the Company. In connection with the IPO, our outstanding units of Series B preferred stock were automatically converted into an aggregate of 1,199,195 shares of common stock and 1,199,195 warrants to purchase an aggregate of 1,199,195 shares of common stock (see Note 9). Payroll Protection Program Loan On May 8, 2020, the Company received approximately $1,265,000 in funding through the U.S. Small Business Administration’s Payroll Protection Program (PPP) that was part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act signed into law in March 2020. The interest rate on the loan is 1.00% per year and matures on May 5, 2022 and may be forgiven to the extent proceeds of the loan are used for eligible expenditures such as payroll and other expenses described in the CARES Act. The note is payable in monthly installments of principal and interest over 12 months, beginning 12 months from the date of the note (deferral period). The note might be repaid at any time with no payment penalty. The Company used these funds to assist with payroll, rent and utilities. The Company has spent the funding in a manner in which it believes the entire balance of the outstanding promissory note will be eligible for forgiveness through the terms of the PPP. An application to forgive the entire amount was submitted with the lender in January 2021, however, there can be no assurance given that any portion of the PPP loan will be forgiven. Any request for forgiveness is subject to review and approval by the lender and the SBA, including review of qualifying expenditures, staffing and salary levels. Currently, there is no guidance in U.S. GAAP that specifically addresses the accounting by an entity that obtains a forgivable loan from a government entity. In the absence of specific guidance, the Company believes that is acceptable to account for the PPP loan as a debt instrument under ASC 470, Debt Imputation of Interest Other Presentation Cash and Cash Equivalents We consider currency on hand, demand deposits and all highly liquid investments with an original or remaining maturity of three months or less to be cash and cash equivalents. As of December 31, 2020 and 2019, the Company had no cash equivalents and all cash amounts consisted of cash on deposit. As of December 31, 2020 and 2019, and from time to time during each year, the Company maintained balances in excess of federally insured limits. Concentration of Credit Risk and Significant Customers Financial instruments, which potentially subject the Company to concentrations of credit risk, consist primarily of cash and cash equivalents and accounts receivable. The Company limits its exposure to credit loss by placing its cash with high credit quality financial institutions. Additionally, the Company has a diverse customer base and no single customer represented greater than ten percent of sales or accounts receivable for the years ended December 31, 2020 and 2019. Accounts Receivable, Net The accounts receivable in the accompanying financial statements are stated at the amounts management expects to collect. The Company performs credit evaluations of its customers’ financial condition and may require a prepayment for a portion of the services to be performed. The Company reduces accounts receivable by estimating an allowance that may become uncollectible in the future. Management determines the estimated allowance for uncollectible amounts based on its judgements in evaluating the aging of the receivables and the financial condition of our clients. Allowance for uncollectible receivables was $507,347 and $180,852 as of December 31, 2020 and 2019, respectively. Property and Equipment, Net Property and equipment are stated at historical cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which ranges from 4 to 5 years. Amortization of leasehold improvements is recognized using the straight-line method over the shorter of the life of the improvement or the term of the respective leases which range between 5 and 7 years. The Company does not begin depreciating assets until they are placed in service. Intangible Assets, Net Intangible assets consist of assets acquired from First Vivos and costs paid to third parties for work related to the Company’s patents. The identified intangible assets acquired from First Vivos are amortized using the straight-line method over the estimated life of the assets, which approximates 5 years (See Note 5). The costs paid to third parties for the Companies’ assets are amortized using the straight-line method over the life of the underlying patents, which approximates 15 years. The Company initially determined the fair value of the intangible assets using a discounted cash flow approach. Goodwill Goodwill is the excess of acquisition cost of an acquired entity over the fair value of the identifiable net assets acquired (See Note 5). Goodwill is not amortized, but tested for impairment annually or whenever indicators of impairment exist. These indicators may include a significant change in the business climate, legal factors, operating performance indicators, competition, sale or disposition of a significant portion of the business or other factors. The Company tests for impairment annually. There was no impairment of goodwill recognized at December 31, 2020 or 2019. Long-lived Assets The Company reviews and evaluates the recoverability of long-lived assets whenever events or changes in circumstances indicate that an asset’s carrying amount may not be recoverable. Such circumstances could include, but are not limited to, 1) a significant decrease in the market value of an asset, 2) a significant adverse change in the extent or manner in which an asset is used, or 3) an adverse action or assessment by a regulator. The Company measures the carrying amount of the asset against the estimated undiscounted future cash flows associated with it. Should the sum of the expected future net cash flows be less than the carrying value of the asset being evaluated, an impairment loss would be recognized. The impairment loss would be calculated as the amount by which the carrying value of the asset exceeds its fair value. The fair value is measured based on quoted market prices, if available. If quoted market prices are not available, the estimate of fair value is based on various valuation techniques, including the discounted value of estimated future cash flows. The evaluation of asset impairment requires the Company to make assumptions about future cash flows over the life of the asset being evaluated. These assumptions require significant judgment and actual results may differ from assumed and estimated amounts. The Company’s evaluation of long-lived assets completed for the years ended December 31, 2020 and 2019 resulted in no impairment loss. Notes Receivable, net The notes receivable in the accompanying financial statements are stated at the amount management expects to collect. The current portion is what the Company expects to collect in the next twelve months and the long-term portion consists of the portion the Company expects to collect beyond twelve months. The Company reduced notes receivable by estimating a discount based on market rates. The discount on notes receivable was $68,101 and $93,421 as of December 31, 2020 and 2019, respectively. Accretion on the discount and interest on the note is recorded in interest income. Fair Value Measurements Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: Level 1 - Quoted prices in active markets for identical assets or liabilities. Level 2 - Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 - Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability. The Company believes that the fair value of cash, accounts receivable, accounts payable and accrued liabilities approximates their carrying values at December 31, 2020 and 2019 due to their short maturities. The Company also believes that the current and long-term portion of notes receivable and debt approximates their carrying value at December 31, 2020 and 2019 as its terms are commensurate with terms the Company can obtain from third parties. Share-Based Compensation The Company accounts for share-based payments to employees by recognizing compensation expense based upon the estimated fair value of the awards on the date of grant. Absent a publicly traded market for our stock, the Company uses the price paid for our stock in the most recent sales to third parties as the stock price input into our valuation model as of the date of grant. The Company determines the estimated grant fair value using the Black-Scholes option pricing model and recognizes compensation costs ratably over the requisite service period which approximates the vesting period using the straight-line method. The Black-Scholes model requires the input of certain subjective assumptions and the application of judgment in determining the fair value of the awards. The most significant assumptions and judgments include the expected volatility, risk-free interest rate, the expected dividend yield, and the expected term of the awards. The Company accounts for forfeitures as they occur. The assumptions used in our option pricing model represent management’s best estimates. If factors change and different assumptions are used, our equity-based compensation expense could be materially different in the future. The key assumptions included in the model are as follows: ● Share price – Historically, we used the price of our stock sold to third parties in our offerings as the most available representation of fair value per share of common stock on date of grant. Beginning in 2021, we will use our publicly quoted market price on Nasdaq. ● Expected volatility — We determine the expected price volatility based on the historical volatilities of our peer group as we do not have a sufficient trading history for our common stock. Industry peers consist of several public companies in the bio-tech industry similar to us in size, stage of life cycle and financial leverage. We intend to continue to consistently apply this process using the same or similar public companies until a sufficient amount of historical information regarding the volatility of our own stock price becomes available, or unless circumstances change such that the identified companies are no longer similar to us, in which case, more suitable companies whose share prices are publicly available would be utilized in the calculation. ● Risk-free interest rate — The risk-free rate was determined based on yields of U.S. Treasury Bonds of comparable terms. The volatility is based on analyzing the stock price and implied volatility of guideline companies. ● Expected dividend yield — We have not previously issued dividends and do not anticipate paying dividends in the foreseeable future. Therefore, we used a dividend rate of zero based on our expectation of not paying additional dividends. ● Expected term — We estimate the expected term using the simplified method which is the average of the vesting term and the contractual term of the options. Research and Development Costs related to research and development are expensed as incurred and include costs associated with research and development of new products and enhancements to existing products. There were no significant research and development costs incurred during the years ended December 31, 2020 or 2019. Income Taxes The Company uses the asset and liability method to recognize deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax basis of assets and liabilities. Deferred tax assets and liabilities are determined using the effective tax rates for the years in which the tax assets and liabilities are expected to be realized. A valuation allowance is established when it is more likely than not that the future realization of all or some of the deferred tax assets will not be achieved. Basic and Diluted Net Loss Per Share Basic net loss per share is computed using the weighted average number of common shares outstanding during the period. Diluted net loss per common share is computed using the weighted average number of common shares outstanding and the weighted average dilutive potential common shares outstanding using the treasury stock method. However, for the years ended December 31, 2019 and 2018, diluted net loss per share is the same as basic net loss per share as the inclusion of weighted average shares of common stock issuable upon the exercise of outstanding warrants and stock options would be anti-dilutive. The numerator in the basic and diluted net loss per share calculation is the net loss attributable to common stockholders, which is the net loss for the year increased by the current year preferred stock dividends accrued. The holder of the Company’s outstanding Series A Preferred Stock (see Note 8) was entitled to participate in Common Stock dividends, if and when declared, on a one-to-one per-share basis. Accordingly, in periods in which the Company has net income, earnings per share will be computed using the two-class method whereby the pro rata dividends distributable to the holder of Series A Preferred Stock will be deducted from earnings applicable to common stockholders, regardless of whether a dividend is declared for such undistributed earnings. For the years ended December 31, 2020 and 2019, the Company incurred a net loss and, accordingly, there were no undistributed earnings to allocate under the two-class method. The following table summarizes outstanding common stock securities not included in the computation of diluted net loss per common share as their inclusion would be anti-dilutive: December 31, 2020 2019 Common Stock Warrants 1,960,029 83,334 Common Stock Options 2,302,370 1,900,000 Recent Accounting Pronouncements The Company is an emerging growth company (“EGC”) as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), whereby the Company is not required to comply with new or revised financial accounting standards until the dates when private companies are required to comply with such standards. The JOBS Act provides that a company can elect to opt out of the extended transition periods and comply with the requirements that apply to non-EGC public companies but any such election to opt out is irrevocable. Presented below is a discussion of new accounting standards including deadlines for adoption assuming that the Company retains its designation as an EGC. Standards Required to be Adopted in Future Years. In February 2016, the FASB issued ASU 2016-02, Leases Targeted Improvements In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. In December 2019, the FASB issued ASU 2019-12 , Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not currently expected to have a material impact on the Company’s financial statements upon adoption. Recently Adopted Standards. In June 2018, the FASB issued ASU 2018-07, Compensation — Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting Compensation—Stock Compensation In January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurements (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement. |
Revenue Recognition
Revenue Recognition | 12 Months Ended |
Dec. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | 2 – REVENUE RECOGNITION In May 2014, the FASB issued Accounting Standards Update No. 2014-09 (Topic 606) titled, “Revenue from Contracts with Customers.” Topic 606 supersedes the revenue recognition requirements in Topic 605 “Revenue Recognition” (Topic 605), and requires entities to recognize revenues when control of the promised goods or services is transferred to customers at an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. Revenue Recognition The Company generates revenue from the sale of products and services. Revenue is recognized when control of the products or services is transferred to our customers in a way that reflects the consideration we expect to be entitled to in exchange for those products and services. The Company determines revenue recognition through the following five-step model, which entails: 1) identification of the promised goods or services in the contract; 2) determination of whether the promised goods or services are performance obligations, including whether they are distinct in the context of the contract; 3) measurement of the transaction price, including the constraint on variable consideration; 4) allocation of the transaction price to the performance obligations; and 5) recognition of revenue when, or as the Company satisfies each performance obligation. Service revenue Service revenue is recognized when the underlying training or other services are performed. Unearned revenue reported on the balance sheet as contract liability represents the portion of fees paid by customers for services that have not yet been performed as of the reporting date and are recorded as the service is rendered. The Company recognizes this revenue over the twelve-month life of the contract. Provisions for discounts are provided in the same period that the related revenue from the products and/or services is recorded. The Company enters into programs that may provide for multiple element deliverables. Commencing in 2018, the Company began enrolling medical and dental professionals in a one-year program which includes training in a highly personalized, deep immersion workshop format which provides the dentist access to a global team who is dedicated to creating a successful integrated practice. The key topics covered in training include case selection, clinical diagnosis, appliance design, adjunctive therapies, instructions on ordering Vivos products, guidance on pricing, instruction on insurance reimbursement protocols and interacting with our proprietary software system and the many features on the Company’s website. The initial training and educational workshop is typically provided in the first month that a Vivos Integrated Provider (“VIP” or “Provider”) enrolls. Since Providers are able to begin generating revenue after the first training workshop, we recognize 50% of the service revenue in the second month of enrollment and the remaining 50% prorata throughout the following eleven months of the service contract. Ongoing support and additional training is provided throughout the year and includes access to the Company’s proprietary Airway Intelligence Service (“AIS”) which provides the Provider with resources to help simplify the diagnostic and treatment planning process. AIS is provided as part of the price of each appliance and is not a separate revenue stream. Following the year of training and support, the Provider may pay for seminars and training courses that meet the Provider’s needs on a subscription or a course-by-course basis. In addition to enrollment service revenue, the Company has launched an additional service on a monthly subscription basis, its Billing Intelligence Service (“BIS”). Revenue for these services is recognized monthly during the month the services are rendered. The Company identifies all goods and services that are delivered separately under a sales arrangement and allocates revenue to each deliverable based on relative fair values. Fair values are generally established based on the relevant service period which approximates the prices for relevant training that would be charged if those services were sold separately. In general, revenues are separated between durable medical equipment (product revenue) and education and training services (service revenue). The allocated revenue for each deliverable is then recognized ratably based on relative fair values of the components of the sale. Revenue from training is recognized over the relevant service period, i.e. as the Company satisfies its performance obligations and creates value for the Provider. The Company also evaluates the impact of undelivered items on the functionality of delivered items for each sales transaction and, where appropriate, defers revenue on delivered items when that functionality has been affected. Functionality is determined to be met if the delivered products or services represent a separate earnings process. From time to time we offer various discounts to our customers. These include the following: 1) Discount for cash pay in full 2) Conference or trade show incentives 3) Negotiated concessions on annual enrollment fee The amount of the discount is determined up front prior to the sale. Accordingly, measurement is determined before the sale occurs and revenue is recognized based on the terms agreed upon between the Company and the customer over the performance period. In rare circumstances, a discount has been given after the sale during a conference which is offering a discount to full price. In this situation revenue is measured and the change in transaction price is allocated over the remaining performance obligation. The amount of consideration can vary by customer due to promotions and discounts authorized to incentivize a sale. Prior to the sale, the customer and the Company agree upon the amount of consideration that the customer will pay in exchange for the services the Company provides. The net consideration that the customer has agreed to pay is the expected value that is recognized as revenue over the service period. Any overpayments are refunded during the reporting period so that no refund liability is recognized. At the end of each reporting period, the Company updates the transaction price to represent the circumstances present at the end of the reporting period and any changes in circumstances during the reporting period. Product revenue In addition to revenue from services, the Company also generates revenue from the sale of its patented oral devices and preformed guides, known as appliances or systems to its customer, the Provider. Revenue from the appliance sale is recognized when control of product is transferred to the Provider in an amount that reflects the consideration it expects to be entitled to in exchange for those products. The Provider in turn charges the Provider’s patient and or patient’s insurance a fee for the appliance and for his or her professional services in measuring, fitting, installing the appliance and educating the patient as to its use. The Company is contracted with the Provider for the sale of the appliance and is not involved in the sale of the products and services from the Provider to the Provider’s patient. The appliance is similar to a retainer that is worn after braces are removed. Each appliance is unique and is fitted to the patient. The Company utilizes its network of certified dental Providers throughout the country to sell the appliances to their customers as well as in two centers that the Company operates. The Company utilizes third party contract manufacturers or labs to produce its unique, patented appliances and preformed guides. The manufacturer designated by the Company produces the appliance in strict adherence to the Company’s patents, design files, protocols, processes and procedures and under the direction and specific instruction of the Company, ships the appliance to the Provider who ordered the appliance from the Company. All of the Company’s contract manufacturers are required to follow the Company’s master design files in production of appliances or the lab will be in violation of the FDA’s rules and regulations. The Company performed an analysis under ASC Topic 606-10-55-36 through 55-40 and concluded it is the principal in the transaction and is reporting revenue gross. The Company bills the Provider the contracted price for the appliance which is recorded as product revenue. Product revenue is recognized once the appliance ships to the Provider under the direction of the Company. Beginning in 2018, the Company operated three centers in Colorado and Utah. Effective October 1, 2019, the Company sold its center in Utah (see Note 3). Within each center, the Company utilizes a team of medical professionals to measure, order and fit each appliance. Upon scheduling the patient (which is the Company’s customer in this case), the center takes a deposit and reviews the patient’s insurance coverage. Revenue is recognized differently for our Company owned centers than for its Providers. The Company recognizes revenue in the centers after the appliance is received from the manufacturer and once the appliance is fitted and provided to the patient. The Company offers its Clinical Advisors discounts from our standard Provider pricing. This is done to help encourage our Clinical Advisors, who help the Provider with technical aspects of our products, to purchase our products for their own practices. In addition, from time to time, we offer buy one get one offers and other credits to incentivize our Providers to embrace our products and increase volume within their practices. The Company’s revenue from contracts with customers is shown in the table below: Year Ended December 31, 2020 2019 Revenue Product revenue: Appliance sales to integrated providers $ 4,547,883 $ 2,917,095 Center revenue 341,957 1,432,528 Total product revenue 4,889,840 4,349,623 Service revenue VIP 7,540,718 6,742,283 Billing intelligence services 620,094 256,415 Sponsorship/seminar/other 15,585 44,956 Total service revenue 8,176,397 7,043,654 Total revenue $ 13,066,237 $ 11,393,277 Costs of obtaining the contract The Company does pay commissions to certain employees and others to incentivize sales growth. The Company recognizes these incremental costs of obtaining a contract as an expense when incurred since the amortization period of the asset that we would have otherwise recognized would be amortized over a period of less than one year. Contract Balances When timing of the Company’s delivery of product is different from the timing of the payments made by customers, the Company recognizes either a contract asset (performance precedes customer payment) or a contract liability (customer payment precedes performance). Contracts are often paid in arrears and are recognized as receivables after the Company considers whether a significant financing component exists. Payment on product revenues is typically paid by credit card upfront. Payment on service revenues in 2020 and 2019 was sought up front and for training to be received, a minimum deposit is required. In some cases, the Company allowed installment plans to entice additional providers. The opening and closing balances of the Company’s contract liability are as follows: 2020 2019 Beginning balance, January 1 $ 2,947,565 $ 889,508 New contracts 7,531,145 8,800,340 Revenue recognized (7,540,718 ) (6,742,283 ) Ending balance, December 31 $ 2,937,992 $ 2,947,565 |
Business Divestitures
Business Divestitures | 12 Months Ended |
Dec. 31, 2020 | |
Business Divestitures | |
Business Divestitures | 3 - BUSINESS DIVESTITURES Divestitures Effective October 1, 2019, the Company sold its center in Utah to an entity controlled by the spouse of an employee for total consideration of $1,225,000. Consideration included cash of $250,000 and a note receivable of $975,000. The note receivable has a stated interest rate of 6%. Based on market rates, the Company recorded a discount on the note receivable of approximately $100,000 that is being amortized monthly over a five-year period. Assets disposed of included goodwill of approximately $1,072,000, other intangible assets of $27,000 and tangible assets of approximately $86,000. The sale of the center resulted in recognizing a loss of approximately $60,000. The results of operations from this center were immaterial to the Company as a whole. |
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 consist of the following: December 31, 2020 December 31, 2019 Furniture and equipment $ 935,697 $ 908,957 Leasehold improvements 519,378 519,378 Construction in progress 143,037 138,845 Molds 74,822 74,822 Gross property and equipment 1,672,934 1,642,002 Less - Accumulated depreciation and amortization (801,337 ) (502,501 ) Net property and equipment $ 871,597 $ 1,139,501 Leasehold improvements relate to the centers in Colorado. Total depreciation and amortization expense was $298,836 and $326,849 for the years ended December 31, 2020 and 2019, respectively. |
Intangible Assets, Net and Good
Intangible Assets, Net and Goodwill | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets, Net and Goodwill | 5 - INTANGIBLE ASSETS, NET AND GOODWILL We amortize identifiable intangible assets on a straight-line basis over their estimated lives, which range from 5-15 years. As of December 31, 2020 and 2019, identifiable intangibles were as follows: December 31, 2020 December 31, 2019 Patents and developed technology $ 1,775,438 $ 1,775,438 Trade name 330,000 330,000 Other 26,500 26,500 2,131,938 2,131,938 Less - Accumulated amortization (1,861,817 ) (1,442,787 ) $ 270,121 $ 689,151 Amortization expense of identifiable intangible assets was $419,029 and $424,379 for the years ended December 31, 2020 and 2019, respectively. The estimated future amortization of identifiable intangible assets is as follows: 2021 $ 262,279 2022 1,029 2023 1,029 2024 1,029 2025 1,029 Thereafter 3,727 Total $ 270,122 Goodwill of $2,671,434 at December 31, 2020 and 2019 was tested for impairment on December 31, 2020 and 2019, respectively and impairment was not required. |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Dec. 31, 2020 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | 6 – ACCRUED EXPENSES Accrued expenses consist of the following: December 31, 2020 December 31, 2019 Accrued payroll $ 1,024,931 $ 771,583 Accrued interest and other 411,723 156,578 Lab rebate liabilities 300,067 - Accrued common stock subscriptions - 350,000 Accrued consulting - 75,000 Total accrued expenses $ 1,736,721 $ 1,353,161 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Debt | 7 - DEBT The Company issued debt on April 19, 2017 and May 22, 2017 included stock warrants that allow the holders to purchase 33,334 and 16,667 shares of the Company’s common stock, respectively, at a price equal to the higher of a) $1.50/share or b) a 50% discount to the Company’s ten-day average stock price as quoted or listed on a national exchange. The warrants expire on the third anniversary from the date of the debt issuance. The debt issued on April 19, 2017 was converted into shares of the Company’s common stock at a conversion price of $1.50 per share on April 19, 2019. The debt issued on May 22, 2017 was converted into shares of the Company’s common stock at a conversion price of $1.50 per share on May 22, 2019. On July 1, 2018, the Company issued convertible debt of $525,000 as part of the Merger Agreement with TMJ. The debt is convertible into shares of the Company’s common stock at a conversion rate of $7.50 per share. The interest rate on the debt is 6% and the maturity date is July 1, 2023. The debt was paid in full in 2019. On November 6, 2018, the Company issued convertible debt of $25,000 as part of the asset purchase agreement with Empowered Dental Lab, LLC. The debt is convertible into shares of the Company’s common stock at a conversion rate of $7.50 per share. The interest rate on the debt is 10% per annum beginning July 1, 2020, and the maturity date was extended to December 31, 2020. The Company repaid this convertible debt plus interest in January 2021. On April 18, 2019, the Company began offering 6% convertible notes (the “2019 Notes”) to accredited investors pursuant to SEC Rule 506(c). Upon the closing of an aggregate gross cash consideration to the Company of at least $10,000,000 (a “Qualified Financing”), the outstanding loan balance of the 2019 Notes (the “Loan Balance”) shall be automatically converted into that number or principal amount of the securities of the Company issued in the Qualified Financing (the “New Securities”) at a conversion price equal to (a) seventy-five percent (75%) of the price per share (or conversion price per share as the case may be) of New Securities paid by the investors in such Qualified Financing if the Qualified Financing occurs on or prior to December 31, 2019 and (b) fifty percent (50%) of the price per share (or conversion price per share as the case may be) of New Securities paid by the investors in such Qualified Financing if the Qualified Financing occurs after December 31, 2019; provided, however, that in no event for purposes of any mandatory conversion shall the Loan Balance be convertible at a price lower than $7.50 per share, which shall serve as a floor price. In any such conversion, the holders of the 2019 Notes shall be provided with all of the same rights, privileges and preferences (including contractual rights and protections such as pre-emptive rights, rights of first refusal, co-sale rights, information and registration rights) as are provided to the holders of the New Securities issued in such Qualified Financing. The Company incurred approximately $31,000 in issuance costs associated with the 2019 Notes. The maturity date of the 2019 Notes was March 31, 2020. One holder of a $75,000 note elected to be paid out the principal and interest which was repaid in December 2020. During the year ended December 31, 2020, holders of $2,943,870 exchanged outstanding principal and interest on the notes into Series B preferred units (see Note 9). Holders of $770,000 principal (plus $26,068 in accrued interest) exchanged their 2019 Notes into the Company Class A common stock. On May 8, 2020, the Company received approximately $1,265,000 in funding through the U.S. Small Business Administration’s Payroll Protection Program (PPP) that was part of the Coronavirus Aid, Relief, and Economic Security Act signed into law in March 2020. The interest rate on the loan is 1.00% per year and matures on May 5, 2022. The Company used these funds to assist with payroll, rent and utilities. The Company has spent the funding in a manner in which it believes the entire balance of the outstanding promissory note will be eligible for forgiveness through the terms of the PPP. An application to forgive the entire amount was submitted with the lender in January 2021, however, there can be no assurance given that any portion of the PPP loan will be forgiven. Any request for forgiveness is subject to review and approval by the lender and the SBA, including review of qualifying expenditures, staffing and salary levels. Included in interest expense for the year ended December 31, 2020 was $47,001 of interest on the 2019 Notes and $2,799 of interest on the Empowered Dental Lab convertible note. Included in interest expense for the year ended December 31, 2019 was $88,045 of accrued interest on 2019 convertible notes. Outstanding debt was as follows: December 31, 2020 December 31, 2019 Principal balance of debt due December 31, 2020 $ 25,000 $ 25,000 2019 Convertible Notes due March 31, 2020 - 3,684,535 PPP loan maturing May 5, 2022 1,265,067 - Total debt 1,290,067 3,709,535 Less - Current portion of debt (866,972 ) (3,709,535 ) Long-term portion of debt $ 423,095 $ - Expected future principal payments for outstanding debt are as follows: Year ending December 31: 2021 $ 866,972 2022 423,095 Total expected future principal payments $ 1,290,067 |
Convertible Redeemable Preferre
Convertible Redeemable Preferred Stock | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Convertible Redeemable Preferred Stock | 8 – CONVERTIBLE REDEEMABLE PREFERRED STOCK The Company’s Board of Directors may, from time to time, authorize the issuance of preferred stock from the 50,000,000 shares approved for issuance. Each issuance of preferred stock may have different voting, dividend, conversion, redemption, and liquidation preferences. In May 2017, the Company entered into a Definitive Purchase Agreement (the “DPA”) to acquire all of the licensed intellectual property, consisting primarily of patents, from its largest shareholder, current Chief Medical Officer and former majority shareholder of BioModeling. The Company’s Board of Directors previously authorized the issuance of 1 million shares of Series A convertible preferred stock (“Series A Preferred Stock”) with a stated value of $5 per share. Each share is convertible at any time into one share of Class A common stock and each share of Series A Preferred Stock is also entitled to one vote. The Series A Preferred Stock was redeemable at the Company’s option at any time for the stated value and at the option of the holder at 20% each year, commencing twelve months from the closing date with a limitation of $1 million in any twelve-month period unless authorized by the Board of Directors to be more in any twelve-month period. In accordance with ASC 480, the Company has accounted for the Series A Preferred Stock as temporary equity. As such, the carrying value of the shares was accreted over time such that the carrying value of the shares was at least equal to the redemption value of the shares. The accretion was recorded as a debit to Additional Paid-In Capital and a credit to Preferred Stock. As a result of the IPO, the Company redeemed all remaining Series A Preferred Stock in December 2020 representing 700,000 shares and $3,500,000. During the years ended December 31, 2020 and 2019, the Company recognized $2,333,333 and $1,000,000 of accretion, respectively. During the years ended December 31, 2020 and 2019, the Company redeemed 730,000 and 70,000 shares, respectively, of the Series A Preferred Stock for $3,650,000 and $350,000, respectively. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Stockholders' Equity | 9 - STOCKHOLDERS’ EQUITY Common Stock The Company is authorized to issue 200,000,000 shares of common stock, par value of $0.0001 per share and 50,000,000 of preferred stock, par value of $0.0001 per share. Holders of the common stock are entitled to one vote for each share held. The Company’s Board of Directors may grant dividends to holders of the preferred stock and the common stock. For the year ended December 31, 2020, the Company issued 4,025,000 shares of common stock for net proceeds of approximately $21.6 million. Offering costs associated with this stock issuance were approximately $700,000. The Company also issued 1,199,195 shares issued through the conversion of Series B preferred stock (the “Series B Preferred”). The Company issued 300,000 shares to settle a shareholder demand (see Note 10). The Company issued 106,314 shares for the conversion of convertible debt (see Note 7). Finally, the Company also issued 134,778 shares to consultants for services. For the year ended December 31, 2019, the Company issued 376,574 shares of common stock for net proceeds of $1,997,192. Offering costs associated with this stock issuance were immaterial. Included in these amounts were 50,000 shares of common stock issued through option exercises for net proceeds of $82,500. The Company also issued 126,518 shares issued through the conversion of convertible debt for net proceeds of $250,475, and 44,286 shares through the conversion of a shareholder note for net proceeds of $498,218. Preferred Stock – Series B On January 9, 2020, the Company’s Board of Directors designated 1,200,000 shares of Series B Preferred. The terms of the Series B Preferred have a par value of $0.0001 per share and provide for an issuance price of $15.00 per share. The shares of Series B Preferred do not provide the holders with rights to demand redemption, dividends, or to vote as a class with the Company’s holders of common stock. Upon liquidation, the shares of Series B Preferred have priority over the holders of shares of common stock. The terms of the Series B Preferred provide for mandatory conversion to shares of common stock upon a sale of the Company or upon completion of a qualified financing for aggregate gross cash proceeds of at least $15.0 million. Upon a mandatory conversion event, the shares of Series B Preferred will convert to shares of common stock based on a conversion price equal to 75% of the price paid by investors in a sale of the Company or a qualified financing. The Company commenced a private placement of units (the “Series B Units”) consisting of (i) one share of Series B Preferred, and (ii) one warrant to be issued for the number of shares of common stock into which to Series B Preferred stock is convertible upon a mandatory conversion event (the “Contingent Warrants”). The Contingent Warrants will provide for an exercise price equal to 125% of the price of the Company’s shares of common stock on the date of a mandatory conversion event. The Company reported no beneficial conversion on the Contingent Warrant as the warrant has a contingent beneficial conversion feature that is not calculated as a separate derivative until the contingent event has occurred. The private placement provides for the sale of units at an issuance price of $15.00 per unit for gross proceeds up to $15,000,000. The private placement also provides for an over-allotment option for the issuance of up to an additional $3,000,000 or 200,000 units. Based on the terms of the Series B Preferred, the Company has classified it within permanent equity in the accompanying consolidated balance sheet during 2020. For the year ended December 31, 2020, the Company received gross proceeds of approximately $2,450,000 from the issuance of Series B Units resulting in the issuance of 163,500 shares of Series B Preferred stock. Additionally, holders of the 2019 Notes agreed to exchange an aggregate principal balance of $2,839,535 plus accrued interest of $104,335 into 196,258 shares of Series B Preferred. Offering costs associated with this issuance were approximately $50,000. As of December 31, 2020, all of the Series B stock was converted into 1,199,195 shares of common stock as the IPO triggered the mandatory conversion. Stock Options In 2017, the Company’s shareholders approved the adoption of a stock and option award plan (the “2017 Plan”), under which shares were reserved for future issuance for options, restricted stock awards and other equity awards. The 2017 Plan permits grants of equity awards to employees, directors, consultants and other independent contractors. The Company’s shareholders have approved a total reserve of 1,333,333 million shares for issuance under the 2017 Plan. In April 2019, the Company’s shareholders approved the adoption of a stock and option award plan (the “2019 Plan”), under which shares were reserved for future issuance for options, restricted stock awards and other equity awards. The 2019 Plan permits grants of equity awards to employees, directors, consultants and other independent contractors. The Company’s shareholders have approved a total reserve of 333,334 shares for issuance under the 2019 Plan. On June 18, 2020, the Company’s shareholders approved an amendment and restatement of the 2019 Plan to increase the number of shares of common stock available for issuance thereunder by 833,333 share of common stock such that, after amendment and restatement of the 2019 Plan, and prior to any grants, 1,166,667 shares of common stock were available under the 2019 Plan. During the years ended December 31, 2020 and 2019, the Company issued stock options to purchase 429,012 and 503,333 shares at a weighted average exercise price of $7.50 per share of the Company’s common stock to certain members of the Board of Directors and certain employees. The stock options allow the holders to purchase shares of the Company’s common stock at prices between $1.50 and $7.50 per share. Options for the purchase of 26,667 shares of common stock expired as of December 31, 2020. The following table summarizes all stock options as of December 31, 2020 and 2019: Number of Stock Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life Aggregate Intrinsic Value Options outstanding at December 31, 2018 1,803,334 $ 3.69 3.34 $ 4,551,196 Granted 503,333 $ 7.50 4.46 - Exercised (50,000 ) $ 1.65 Expired/terminated (356,667 ) $ 3.93 Options outstanding at December 31, 2019 1,900,000 $ 4.29 3.08 $ 6,695,876 Granted 429,012 7.50 4.55 - Exercised - - Expired/terminated (26,667 ) $ 7.50 Options outstanding at December 31, 2020 2,302,370 $ 4.84 1.33 $ 2,463,498 Options exercisable at December 31, 2019 1,228,176 $ 3.99 1.65 Options exercisable at December 31, 2020 1,672,991 $ 4.10 2.46 The Company accounts for share based payments by recognizing compensation expense based upon the estimated fair value of the awards on the date of grant. The Company determines the estimated grant fair value using the Black-Scholes option pricing model and recognizes compensation expense ratably over the requisite service period which approximates the vesting period using the straight-line method. The weighted average assumptions used in the fair value calculations are as follows: 2020 2019 Expected term (years) 3.15 3.20 Risk-free interest rate 0.38 % 2.00 % Expected volatility 134 % 122 % Expected dividend yield 0 % 0 % During the years ended December 31, 2020 and 2019, the Company recognized approximately $2,172,000 and $1,987,000, respectively, of share-based compensation expense relating to the vesting of stock options. The options were valued using the Black-Scholes valuation method at the date of the grant and compensation expense is recognized over the vesting period. Unrecognized expense relating to these awards as of December 31, 2020 was approximately $3,441,030, which will be recognized over the weighted average remaining term of 2.38 years at December 31, 2020. Warrants During 2020 and in connection with the IPO, the Company issued warrants to the underwriter that provide for the purchase of 402,500 shares of common stock at an exercise price of $7.50 per share, are exercisable beginning on June 8, 2021, and expire on December 10, 2025. Pursuant to the terms of the Series B Units and in connection with the IPO which qualified as a mandatory conversion event, 1,199,195 Contingent Warrants were provided for an exercise price equal to 125% of the price of the Company’s shares of common stock on the date of an MC event, or $7.50 per share based on the IPO price of $6.00. On October 22, 2020, two minority stockholders initiated a derivative demand which resulted in a settlement and release agreement that was entered into on November 6, 2020 (See Note 10). Pursuant to the settlement, the Company issued warrants to purchase an aggregate of 325,000 shares of common stock (the “Settlement Warrants”). The Settlement Warrants are exercisable on a cash only basis at an exercise price of $7.50 per share, are exercisable beginning on June 13, 2021, and expire on May 6, 2024. On June 13, 2017, the Company issued warrants to purchase an aggregate of 33,334 shares of common stock to an investor of convertible notes. The warrants are exercisable on a cash basis at an exercise price of $1.50 per share, are exercisable beginning on June 30, 2017, and expire on June 30, 2022. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 10 - RELATED PARTY TRANSACTIONS The Company was a party to a management agreement with Upeva, Inc., a company for which the Company’s prior Secretary and one of the Company’s former board members serves as chief executive officer. In return for various legal and other consulting services, the Company paid Upeva a monthly fee of $10,000. This agreement terminated on April 30, 2020. As of December 31, 2020, the Company owed Upeva, Inc. approximately $10,000. Additionally, the former Secretary and director is the beneficial owner of 254,902 common shares of the Company through Spire Family Holdings, L.P. During the year ended December 31, 2020, one of the Company’s former directors who held $200,000 in 2019 Notes exchanged her outstanding notes for Series B preferred units, which converted into 45,252 common shares. During 2019, one of the Company’s directors and holder of the Company’s Series A preferred stock, exercised his right to redeem 70,000 shares of the Series A preferred stock for $5.00 per share for a total of $350,000. During 2020, one of the Company’s Directors and holder of the Company’s Series A preferred stock, exercised his right to redeem 730,000 shares of the Series A preferred stock for $5.00 per share for a total of $3,650,000. In July 2020, two of the directors voluntarily entered into separation agreements with our company. Such agreements contained customary releases, confidentiality and non-disparagement provisions. As consideration for the entering the separation agreements, each director received an equity grant in the amount 16,667 shares and the ability to retain and exercise their previously granted and vested options, and the Company also committed to providing continued indemnification obligations consistent with organizational documents and to retain director’s and officer’s insurance for a period of twenty-four months in connection with two of the directors’ prior service on the board. In August 2020, the Company also entered into a Separation Agreement with another director pursuant to which the Company is required to purchase from the director and her affiliated entities 13,575 shares of Series B Preferred Stock and warrants to purchase common stock and 16,667 shares of common stock held for an aggregate purchase price of $325,000. If the Company was unable to close a qualified financing, as defined in the agreement of at least $3,000,000 of equity or equity-linked securities by September 15, 2020 (as was extended up to October 28, 2020), a modified consideration would include 16,667 shares of unrestricted, fully vested common stock, a grant of stock options to purchase 33,334 shares of common stock at a price of $7.50 that will be fully vested and exercisable and $22,000 in cash. The Company recorded general and administrative expense and accrued expenses of approximately $286,000 for cash and equity issuances with this settlement. In November 2020, the Company granted this former director 16,667 shares of unrestricted, fully vested common stock, a grant of stock options to purchase 33,334 shares of common stock at a price of $7.50 that will be fully vested and exercisable and paid $47,000 in cash (including $25,000 for legal fees) to settle terms outlined in her separation agreement. On October 22, 2020, two minority stockholders of the Company, Lazarus Asset Management, LLC and a former director of the Company (who we refer to as the Demanding Stockholders), sent a derivative demand to the Company through counsel asking the board of directors to review and investigate certain recent actions taken by the board of directors, or members thereof, and senior management including (i) pursuit of the initial public offering described in the Company’s filing on Form S-1, (ii) the board of directors’ previous rejection (on two occasions) of a “reverse merger” transaction proposal made by Lazarus Asset Management, LLC, (iii) purported mismanagement of corporate assets, and (iv) various matters related to stock sales and other matters. After discussions with the Demanding Stockholders and their counsel, the Company ascertained that the Demanding Stockholders were acting for themselves and on behalf of an additional group of minority shareholders, (we refer to the Demanding Stockholders and all such other minority shareholders they acted on behalf of collectively as the Stockholder Group). While the Company believes that the assertions of the Demanding Stockholders lacked any merit in fact and in law, rather than expending resources investigating or litigating the claims of the Demanding Stockholders, and in order to proceed with the Company’s initial public offering, on November 6, 2020, without admitting or denying any claims asserted by the Demanding Stockholders, the Company entered into a Settlement and Release Agreement with each member of the Stockholder Group (which the Company refers to as the Settlement and Release Agreement). Pursuant to the Settlement and Release Agreement, all claims of the Demanding Stockholders were withdrawn with prejudice, and the Company and the Stockholder Group provided each other with full releases of any claims. In consideration of such withdrawal and releases, the members of the Stockholder Group have received: (i) an aggregate of 300,000 shares of Company common stock and (ii) warrants to purchase an aggregate of 325,000 shares of common stock (see Note 9). Such warrants (x) will be exercisable on a cash only basis at a strike price of 125% of the public offering price per share in a Company qualified public offering of more than $10 million, (y) will be exercisable for a period of 36 months, beginning six months after the consummation of a qualified public offering and ending on the forty-second month anniversary of a Company qualified public offering. Finally, the Settlement and Release Agreement contains customary representations, warranties and covenants, including relating to confidentiality and non-disparagement, and the Company agreed to reimburse the Demanding Stockholders for up to $50,000 of their legal fees associated with the demand letter the Company received on October 22, 2020 from them. In late 2019, a voucher program was offered whereby any employee could pre-purchase a $30,000 VIP deposit with the Company that could be redeemed in full after February 15, 2020, subject to certain limitations, toward a VIP enrollment the employee brought forth in the future. The purpose of this program was to assist with cash flow constraints at the time. Thirteen vouchers totaling $390,000 were sold. For the year ended December 31, 2020, the Company redeemed each of the thirteen vouchers totaling $390,000. The Company included the balance in contract liabilities. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 11 - INCOME TAXES Domestic and foreign components of loss before income tax are as follows: Years Ended December 31, 2020 2019 Domestic $ (12,071,603 ) $ (10,768,069 ) Foreign 14,726 13,750 Total (12,056,877 ) (10,754,319 ) Income tax expense (benefit) consists of the following: Years Ended December 31, 2020 2019 Current income taxes Federal $ - $ - States - - Total current income taxes - - Deferred income taxes Federal - - States - - Total deferred income taxes - - Total income tax expense (benefit) $ - $ - Income tax expense (benefit) differed from amounts that would result from applying the US statutory income tax rates (21% for the year ended December 31, 2020 and 2019) to loss before income taxes as follows: Years Ended December 31, 2020 2019 U.S. statutory income tax expense (benefit) $ (2,507,484 ) $ (2,258,407 ) Permanent differences 1,622,396 509,514 State tax expenses (180,724 ) (575,086 ) Change in valuation allowance 1,065,812 2,323,979 Income tax expense $ - $ - The principal components of deferred tax assets and liabilities at December 31, 2020 and 2019 were as follows: December 31, 2020 2019 Deferred tax assets: Net operating loss carry forwards $ 5,105,063 $ 4,372,081 Stock based compensation 609,587 323,572 Others 335,882 181,700 Total deferred tax assets before valuation allowance 6,050,532 4,877,353 Valuation allowance (5,837,312 ) (4,771,500 ) Total deferred tax assets after valuation allowance 213,220 105,853 Deferred tax liabilities: Property, equipment and intangibles (213,220 ) (105,853 ) Total deferred tax liabilities (213,220 ) (105,853 ) Net deferred tax assets and liabilities $ - $ - Management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets. A significant piece of objective negative evidence evaluated was the cumulative loss incurred since inception. Such objective evidence limits the ability to consider other subjective evidence such as our projections for future growth. On the basis of this evaluation, as of December 31, 2020, a valuation allowance of $5,837,312 has been recorded to record the deferred tax asset that is more likely than not to be realized. The net change during the year in the total valuation allowance is an increase of $1,065,812. The Company has federal net operating loss carry forwards of $22,380,564. The Company has various state net operating loss carry forwards. The determination of the state net operating loss carry forwards is dependent upon the apportionment percentages and state laws that can change from year to year and impact the amount of such carry forwards. If federal net operating loss carry forwards are not utilized, $3,332,471 will begin to expire in 2036. The remaining federal net operating losses of $19,048,093 have no expiration. Management does not believe that there are significant uncertain tax positions in 2020 or 2019. There are no interest and penalties related to uncertain tax positions in 2020 or 2019. The Company files income tax returns in the United States federal and various state jurisdictions. The Company is no longer subject to income tax examinations for federal income taxes before 2016 or for states before 2015. Net operating loss carryforwards are subject to examination in the year they are utilized regardless of whether the tax year in which they are generated has been closed by statute. The amount subject to disallowance is limited to the NOL utilized. Accordingly, the Company may be subject to examination for prior NOL’s generated as such NOL’s are utilized. As of December 31, 2020, the Company had not filed its 2018 and 2019 foreign operation tax returns. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 12 – COMMITMENTS AND CONTINGENCIES Leases The Company leases office properties under various lease terms. Rent expense, including real estate taxes and related costs, for the years ended December 31, 2020 and 2019 aggregated approximately $458,497 and $309,086, respectively. In connection with some of the Company’s leases, lease incentives were granted. Deferred lease incentives are being amortized on a straight-line basis over the term of the lease. Future rental payments over the term of the Company’s leases are as follows: Year Ending December 31, 2021 337,000 2022 417,415 2023 390,500 2024 403,542 2025 537,511 Thereafter 1,109,257 Total 3,195,225 Employment Agreements During 2020, the Company entered into new employment agreements with its chief executive officer, chief medical officer and chief financial officer. The agreements include incentive compensation in the form of cash bonuses and stock options. The employment agreements require the continuation of salary and benefits for up to two years in the event the employee is terminated without cause. Consulting Agreement In August 2018, the Company entered into a consulting agreement with Pro Player Health Alliance, LLC. In accordance with the agreement, the consultant will provide business advisory and consulting services in exchange for cash and shares of the Company’s common stock. These shares will be held in escrow and distributed upon board approval as these services are performed and certain milestones are met. Total expense recognized for this agreement was approximately $0 and $151,000 for the years ended December 31, 2020 and 2019, respectively. Following the IPO, the Company issued 40,000 shares of common stock to settle a liability that had been established and recorded in accrued expenses. Regulatory status In September 2017, BioModeling was the subject of a routine FDA audit. The audit resulted in certain findings that BioModeling was required to remediate. On September 27, 2017, BioModeling believed that it had filed its response letter to the audit findings with the FDA. In January 2018, BioModeling received notice that the FDA had posted a Warning Letter on its website alleging failure by BioModeling to reply in a timely manner to the September 2017 audit findings. The Company and BioModeling immediately contacted the FDA in January 2018 and resubmitted the September 27, 2017 audit response letter. In April 2018, the FDA completed a second audit of BioModeling which focused on the September 2017 response letter and the Warning Letter. The Company believes that this issue has been satisfactorily resolved although no definitive statement to that effect has been made by the FDA. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | 13 - SUBSEQUENT EVENTS In January 2021, the Company paid off the outstanding balance of a convertible note payable (see Note 7) issued in connection with an acquisition in 2018. $25,000 in principal amount on the convertible note plus interest of $4,741 was paid. In January 2021, $1,500,000 in cash was paid to our founder and chief medical officer to fully redeem the remaining Series A preferred stock he held and had redeemed in December 2020. This amount was recorded in accounts payable at December 31, 2020. In March 2021, the Company issued 145,000 stock options to certain employees and an officer. |
Organization, Description and_2
Organization, Description and Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Organization | Organization BioModeling Solutions, Inc. (“BioModeling”) was organized on March 20, 2007 as an Oregon limited liability company, and subsequently incorporated in 2013. On August 16, 2016, BioModeling entered into a share exchange agreement (the “SEA”) with First Vivos, Inc. (“First Vivos”), and Vivos Therapeutics, Inc. (“Vivos”), a Wyoming corporation established on July 7, 2016 to facilitate this merger. Vivos was formerly named Corrective BioTechnologies, Inc. until its name changed on September 6, 2016 to Vivos Biotechnologies and on March 2, 2018 to Vivos Therapeutics, Inc. and had no substantial pre-combination business activities. First Vivos was incorporated in Texas on November 10, 2015. Pursuant to the SEA, all of the outstanding shares of common stock and warrants of BioModeling and all of the shares of commons stock of First Vivos were exchanged for newly issued shares of Class A common stock and warrants of Vivos, the legal acquirer, collectively the “Company”. The transaction was accounted for as a reverse acquisition and recapitalization, with BioModeling as the acquirer for financial reporting and accounting purposes. Upon the consummation of the merger, the historical financial statements of BioModeling became the Company’s historical financial statements and continued to be recorded at their historical carrying amounts. |
COVID-19 | COVID-19 The early 2020 outbreak of COVID-19 and its development into a pandemic in March 2020 has resulted in significant economic disruption globally. Actions taken by various governmental authorities, individuals and companies around the world to prevent the spread of COVID-19 through social distancing have restricted travel, many business operations, public gatherings and the overall level of individual movement and in-person interaction across the globe. This has significantly reduced global economic activity and resulted in a decline in demand across many industries. Many of the Company’s VIPs and potential VIPs closed their offices as a result of COVID-19, although some remained open to specifically provide patients with Company products as Company appliances and VIPs were deemed an essential business for health considerations in many jurisdictions. In the face of the pandemic and the results potential for revenue reduction, Company management worked diligently to reduce expenses and maintain revenues during 2020. While revenue growth flattened in March and April 2020, expenses were reduced and the Company aggressively expanded its network of healthcare providers familiar with its products by offering online continuing education courses which introduced many in the medical and dental communities to the Company’s product line. As a result of improving operating cash flows, the Company determined no triggering events had occurred indicating no impairment needed as of December 31, 2020. |
Description of Business | Description of Business The Company is engaged in the designing and selling of oral devices that assist with sleep and breathing disorders and hosting training seminars for medical and dental professionals on sleep and breathing disorders. The Company owns and operates three locations where Vivos systems are measured and fitted. The Company licenses its intellectual property to third-party manufacturers which fabricate appliance devices for orders requested by healthcare professionals, at a specified price per appliance. |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation The accompanying consolidated financial statements, which include the accounts of the Company and its wholly owned subsidiaries (BioModeling and First Vivos), are prepared in conformity with generally accepted accounting principles in the United States of America (“U.S. GAAP”). All significant intercompany balances and transactions have been eliminated in consolidation. On July 30, 2020, the Company effected a reverse stock split in which each common shareholder received one share of common stock for every three shares outstanding. On August 12, 2020, the Company reincorporated as a domestic Delaware corporation under Delaware General Corporate Law from Wyoming. All share and per share amounts have been adjusted to reflect the effect of these Reverse Stock Split. |
Use of Estimates | Use of Estimates To prepare financial statements in conformity with U.S. GAAP, management must make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. |
Initial Public Offering | Initial Public Offering On December 11, 2020, the Company completed its initial public offering (“IPO”) by offering 4,025,000 common shares at a price of $6.00 per share, for net proceeds of approximately $21.6 million after deducting underwriting discounts and commissions and offering expenses payable by the Company. In connection with the IPO, our outstanding units of Series B preferred stock were automatically converted into an aggregate of 1,199,195 shares of common stock and 1,199,195 warrants to purchase an aggregate of 1,199,195 shares of common stock (see Note 9). |
Payroll Protection Program Loan | Payroll Protection Program Loan On May 8, 2020, the Company received approximately $1,265,000 in funding through the U.S. Small Business Administration’s Payroll Protection Program (PPP) that was part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act signed into law in March 2020. The interest rate on the loan is 1.00% per year and matures on May 5, 2022 and may be forgiven to the extent proceeds of the loan are used for eligible expenditures such as payroll and other expenses described in the CARES Act. The note is payable in monthly installments of principal and interest over 12 months, beginning 12 months from the date of the note (deferral period). The note might be repaid at any time with no payment penalty. The Company used these funds to assist with payroll, rent and utilities. The Company has spent the funding in a manner in which it believes the entire balance of the outstanding promissory note will be eligible for forgiveness through the terms of the PPP. An application to forgive the entire amount was submitted with the lender in January 2021, however, there can be no assurance given that any portion of the PPP loan will be forgiven. Any request for forgiveness is subject to review and approval by the lender and the SBA, including review of qualifying expenditures, staffing and salary levels. Currently, there is no guidance in U.S. GAAP that specifically addresses the accounting by an entity that obtains a forgivable loan from a government entity. In the absence of specific guidance, the Company believes that is acceptable to account for the PPP loan as a debt instrument under ASC 470, Debt Imputation of Interest Other Presentation |
Cash and Cash Equivalents | Cash and Cash Equivalents We consider currency on hand, demand deposits and all highly liquid investments with an original or remaining maturity of three months or less to be cash and cash equivalents. As of December 31, 2020 and 2019, the Company had no cash equivalents and all cash amounts consisted of cash on deposit. As of December 31, 2020 and 2019, and from time to time during each year, the Company maintained balances in excess of federally insured limits. |
Concentration of Credit Risk and Significant Customers | Concentration of Credit Risk and Significant Customers Financial instruments, which potentially subject the Company to concentrations of credit risk, consist primarily of cash and cash equivalents and accounts receivable. The Company limits its exposure to credit loss by placing its cash with high credit quality financial institutions. Additionally, the Company has a diverse customer base and no single customer represented greater than ten percent of sales or accounts receivable for the years ended December 31, 2020 and 2019. |
Accounts Receivable, Net | Accounts Receivable, Net The accounts receivable in the accompanying financial statements are stated at the amounts management expects to collect. The Company performs credit evaluations of its customers’ financial condition and may require a prepayment for a portion of the services to be performed. The Company reduces accounts receivable by estimating an allowance that may become uncollectible in the future. Management determines the estimated allowance for uncollectible amounts based on its judgements in evaluating the aging of the receivables and the financial condition of our clients. Allowance for uncollectible receivables was $507,347 and $180,852 as of December 31, 2020 and 2019, respectively. |
Property and Equipment, Net | Property and Equipment, Net Property and equipment are stated at historical cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which ranges from 4 to 5 years. Amortization of leasehold improvements is recognized using the straight-line method over the shorter of the life of the improvement or the term of the respective leases which range between 5 and 7 years. The Company does not begin depreciating assets until they are placed in service. |
Intangible Assets, Net | Intangible Assets, Net Intangible assets consist of assets acquired from First Vivos and costs paid to third parties for work related to the Company’s patents. The identified intangible assets acquired from First Vivos are amortized using the straight-line method over the estimated life of the assets, which approximates 5 years (See Note 5). The costs paid to third parties for the Companies’ assets are amortized using the straight-line method over the life of the underlying patents, which approximates 15 years. The Company initially determined the fair value of the intangible assets using a discounted cash flow approach. |
Goodwill | Goodwill Goodwill is the excess of acquisition cost of an acquired entity over the fair value of the identifiable net assets acquired (See Note 5). Goodwill is not amortized, but tested for impairment annually or whenever indicators of impairment exist. These indicators may include a significant change in the business climate, legal factors, operating performance indicators, competition, sale or disposition of a significant portion of the business or other factors. The Company tests for impairment annually. There was no impairment of goodwill recognized at December 31, 2020 or 2019. |
Long-lived Assets | Long-lived Assets The Company reviews and evaluates the recoverability of long-lived assets whenever events or changes in circumstances indicate that an asset’s carrying amount may not be recoverable. Such circumstances could include, but are not limited to, 1) a significant decrease in the market value of an asset, 2) a significant adverse change in the extent or manner in which an asset is used, or 3) an adverse action or assessment by a regulator. The Company measures the carrying amount of the asset against the estimated undiscounted future cash flows associated with it. Should the sum of the expected future net cash flows be less than the carrying value of the asset being evaluated, an impairment loss would be recognized. The impairment loss would be calculated as the amount by which the carrying value of the asset exceeds its fair value. The fair value is measured based on quoted market prices, if available. If quoted market prices are not available, the estimate of fair value is based on various valuation techniques, including the discounted value of estimated future cash flows. The evaluation of asset impairment requires the Company to make assumptions about future cash flows over the life of the asset being evaluated. These assumptions require significant judgment and actual results may differ from assumed and estimated amounts. The Company’s evaluation of long-lived assets completed for the years ended December 31, 2020 and 2019 resulted in no impairment loss. |
Notes Receivable, Net | Notes Receivable, net The notes receivable in the accompanying financial statements are stated at the amount management expects to collect. The current portion is what the Company expects to collect in the next twelve months and the long-term portion consists of the portion the Company expects to collect beyond twelve months. The Company reduced notes receivable by estimating a discount based on market rates. The discount on notes receivable was $68,101 and $93,421 as of December 31, 2020 and 2019, respectively. Accretion on the discount and interest on the note is recorded in interest income. |
Fair Value Measurements | Fair Value Measurements Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: Level 1 - Quoted prices in active markets for identical assets or liabilities. Level 2 - Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 - Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability. The Company believes that the fair value of cash, accounts receivable, accounts payable and accrued liabilities approximates their carrying values at December 31, 2020 and 2019 due to their short maturities. The Company also believes that the current and long-term portion of notes receivable and debt approximates their carrying value at December 31, 2020 and 2019 as its terms are commensurate with terms the Company can obtain from third parties. |
Share-Based Compensation | Share-Based Compensation The Company accounts for share-based payments to employees by recognizing compensation expense based upon the estimated fair value of the awards on the date of grant. Absent a publicly traded market for our stock, the Company uses the price paid for our stock in the most recent sales to third parties as the stock price input into our valuation model as of the date of grant. The Company determines the estimated grant fair value using the Black-Scholes option pricing model and recognizes compensation costs ratably over the requisite service period which approximates the vesting period using the straight-line method. The Black-Scholes model requires the input of certain subjective assumptions and the application of judgment in determining the fair value of the awards. The most significant assumptions and judgments include the expected volatility, risk-free interest rate, the expected dividend yield, and the expected term of the awards. The Company accounts for forfeitures as they occur. The assumptions used in our option pricing model represent management’s best estimates. If factors change and different assumptions are used, our equity-based compensation expense could be materially different in the future. The key assumptions included in the model are as follows: ● Share price – Historically, we used the price of our stock sold to third parties in our offerings as the most available representation of fair value per share of common stock on date of grant. Beginning in 2021, we will use our publicly quoted market price on Nasdaq. ● Expected volatility — We determine the expected price volatility based on the historical volatilities of our peer group as we do not have a sufficient trading history for our common stock. Industry peers consist of several public companies in the bio-tech industry similar to us in size, stage of life cycle and financial leverage. We intend to continue to consistently apply this process using the same or similar public companies until a sufficient amount of historical information regarding the volatility of our own stock price becomes available, or unless circumstances change such that the identified companies are no longer similar to us, in which case, more suitable companies whose share prices are publicly available would be utilized in the calculation. ● Risk-free interest rate — The risk-free rate was determined based on yields of U.S. Treasury Bonds of comparable terms. The volatility is based on analyzing the stock price and implied volatility of guideline companies. ● Expected dividend yield — We have not previously issued dividends and do not anticipate paying dividends in the foreseeable future. Therefore, we used a dividend rate of zero based on our expectation of not paying additional dividends. ● Expected term — We estimate the expected term using the simplified method which is the average of the vesting term and the contractual term of the options. |
Research and Development | Research and Development Costs related to research and development are expensed as incurred and include costs associated with research and development of new products and enhancements to existing products. There were no significant research and development costs incurred during the years ended December 31, 2020 or 2019. |
Income Taxes | Income Taxes The Company uses the asset and liability method to recognize deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax basis of assets and liabilities. Deferred tax assets and liabilities are determined using the effective tax rates for the years in which the tax assets and liabilities are expected to be realized. A valuation allowance is established when it is more likely than not that the future realization of all or some of the deferred tax assets will not be achieved. |
Basic and Diluted Net Loss Per Share | Basic and Diluted Net Loss Per Share Basic net loss per share is computed using the weighted average number of common shares outstanding during the period. Diluted net loss per common share is computed using the weighted average number of common shares outstanding and the weighted average dilutive potential common shares outstanding using the treasury stock method. However, for the years ended December 31, 2019 and 2018, diluted net loss per share is the same as basic net loss per share as the inclusion of weighted average shares of common stock issuable upon the exercise of outstanding warrants and stock options would be anti-dilutive. The numerator in the basic and diluted net loss per share calculation is the net loss attributable to common stockholders, which is the net loss for the year increased by the current year preferred stock dividends accrued. The holder of the Company’s outstanding Series A Preferred Stock (see Note 8) was entitled to participate in Common Stock dividends, if and when declared, on a one-to-one per-share basis. Accordingly, in periods in which the Company has net income, earnings per share will be computed using the two-class method whereby the pro rata dividends distributable to the holder of Series A Preferred Stock will be deducted from earnings applicable to common stockholders, regardless of whether a dividend is declared for such undistributed earnings. For the years ended December 31, 2020 and 2019, the Company incurred a net loss and, accordingly, there were no undistributed earnings to allocate under the two-class method. The following table summarizes outstanding common stock securities not included in the computation of diluted net loss per common share as their inclusion would be anti-dilutive: December 31, 2020 2019 Common Stock Warrants 1,960,029 83,334 Common Stock Options 2,302,370 1,900,000 |
Recent Accounting Pronouncements | Recent Accounting Pronouncements The Company is an emerging growth company (“EGC”) as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), whereby the Company is not required to comply with new or revised financial accounting standards until the dates when private companies are required to comply with such standards. The JOBS Act provides that a company can elect to opt out of the extended transition periods and comply with the requirements that apply to non-EGC public companies but any such election to opt out is irrevocable. Presented below is a discussion of new accounting standards including deadlines for adoption assuming that the Company retains its designation as an EGC. Standards Required to be Adopted in Future Years. In February 2016, the FASB issued ASU 2016-02, Leases Targeted Improvements In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. In December 2019, the FASB issued ASU 2019-12 , Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not currently expected to have a material impact on the Company’s financial statements upon adoption. Recently Adopted Standards. In June 2018, the FASB issued ASU 2018-07, Compensation — Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting Compensation—Stock Compensation In January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurements (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement. |
Organization, Description and_3
Organization, Description and Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of Outstanding Common Stock Securities not Included in the Computation of Diluted Net Loss Per Share | The following table summarizes outstanding common stock securities not included in the computation of diluted net loss per common share as their inclusion would be anti-dilutive: December 31, 2020 2019 Common Stock Warrants 1,960,029 83,334 Common Stock Options 2,302,370 1,900,000 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Revenue From Contract With Customers | The Company’s revenue from contracts with customers is shown in the table below: Year Ended December 31, 2020 2019 Revenue Product revenue: Appliance sales to integrated providers $ 4,547,883 $ 2,917,095 Center revenue 341,957 1,432,528 Total product revenue 4,889,840 4,349,623 Service revenue VIP 7,540,718 6,742,283 Billing intelligence services 620,094 256,415 Sponsorship/seminar/other 15,585 44,956 Total service revenue 8,176,397 7,043,654 Total revenue $ 13,066,237 $ 11,393,277 |
Schedule of Contract Liability | The opening and closing balances of the Company’s contract liability are as follows: 2020 2019 Beginning balance, January 1 $ 2,947,565 $ 889,508 New contracts 7,531,145 8,800,340 Revenue recognized (7,540,718 ) (6,742,283 ) Ending balance, December 31 $ 2,937,992 $ 2,947,565 |
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 consist of the following: December 31, 2020 December 31, 2019 Furniture and equipment $ 935,697 $ 908,957 Leasehold improvements 519,378 519,378 Construction in progress 143,037 138,845 Molds 74,822 74,822 Gross property and equipment 1,672,934 1,642,002 Less - Accumulated depreciation and amortization (801,337 ) (502,501 ) Net property and equipment $ 871,597 $ 1,139,501 |
Intangible Assets, Net and Go_2
Intangible Assets, Net and Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Identifiable Intangibles | We amortize identifiable intangible assets on a straight-line basis over their estimated lives, which range from 5-15 years. As of December 31, 2020 and 2019, identifiable intangibles were as follows: December 31, 2020 December 31, 2019 Patents and developed technology $ 1,775,438 $ 1,775,438 Trade name 330,000 330,000 Other 26,500 26,500 2,131,938 2,131,938 Less - Accumulated amortization (1,861,817 ) (1,442,787 ) $ 270,121 $ 689,151 |
Schedule of Estimated Future Amortization of Identifiable Intangible Assets | Amortization expense of identifiable intangible assets was $419,029 and $424,379 for the years ended December 31, 2020 and 2019, respectively. The estimated future amortization of identifiable intangible assets is as follows: 2021 $ 262,279 2022 1,029 2023 1,029 2024 1,029 2025 1,029 Thereafter 3,727 Total $ 270,122 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses | Accrued expenses consist of the following: December 31, 2020 December 31, 2019 Accrued payroll $ 1,024,931 $ 771,583 Accrued interest and other 411,723 156,578 Lab rebate liabilities 300,067 - Accrued common stock subscriptions - 350,000 Accrued consulting - 75,000 Total accrued expenses $ 1,736,721 $ 1,353,161 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Outstanding Debt | Outstanding debt was as follows: December 31, 2020 December 31, 2019 Principal balance of debt due December 31, 2020 $ 25,000 $ 25,000 2019 Convertible Notes due March 31, 2020 - 3,684,535 PPP loan maturing May 5, 2022 1,265,067 - Total debt 1,290,067 3,709,535 Less - Current portion of debt (866,972 ) (3,709,535 ) Long-term portion of debt $ 423,095 $ - |
Schedule of Future Principal Payments for Outstanding Debt | Expected future principal payments for outstanding debt are as follows: Year ending December 31: 2021 $ 866,972 2022 423,095 Total expected future principal payments $ 1,290,067 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Schedule of Stock Options | The following table summarizes all stock options as of December 31, 2020 and 2019: Number of Stock Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life Aggregate Intrinsic Value Options outstanding at December 31, 2018 1,803,334 $ 3.69 3.34 $ 4,551,196 Granted 503,333 $ 7.50 4.46 - Exercised (50,000 ) $ 1.65 Expired/terminated (356,667 ) $ 3.93 Options outstanding at December 31, 2019 1,900,000 $ 4.29 3.08 $ 6,695,876 Granted 429,012 7.50 4.55 - Exercised - - Expired/terminated (26,667 ) $ 7.50 Options outstanding at December 31, 2020 2,302,370 $ 4.84 1.33 $ 2,463,498 Options exercisable at December 31, 2019 1,228,176 $ 3.99 1.65 Options exercisable at December 31, 2020 1,672,991 $ 4.10 2.46 |
Schedule of Weighted Average Assumptions Used in the Fair Value | The weighted average assumptions used in the fair value calculations are as follows: 2020 2019 Expected term (years) 3.15 3.20 Risk-free interest rate 0.38 % 2.00 % Expected volatility 134 % 122 % Expected dividend yield 0 % 0 % |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of Loss Before Income Tax | Domestic and foreign components of loss before income tax are as follows: Years Ended December 31, 2020 2019 Domestic $ (12,071,603 ) $ (10,768,069 ) Foreign 14,726 13,750 Total (12,056,877 ) (10,754,319 ) |
Schedule of Income Tax Expense (Benefit) | Income tax expense (benefit) consists of the following: Years Ended December 31, 2020 2019 Current income taxes Federal $ - $ - States - - Total current income taxes - - Deferred income taxes Federal - - States - - Total deferred income taxes - - Total income tax expense (benefit) $ - $ - |
Schedule of Income tax Expense (Benefit) Differed from Loss Before Income Taxes | Income tax expense (benefit) differed from amounts that would result from applying the US statutory income tax rates (21% for the year ended December 31, 2020 and 2019) to loss before income taxes as follows: Years Ended December 31, 2020 2019 U.S. statutory income tax expense (benefit) $ (2,507,484 ) $ (2,258,407 ) Permanent differences 1,622,396 509,514 State tax expenses (180,724 ) (575,086 ) Change in valuation allowance 1,065,812 2,323,979 Income tax expense $ - $ - |
Schedule of Deferred Tax Assets and Liabilities | The principal components of deferred tax assets and liabilities at December 31, 2020 and 2019 were as follows: December 31, 2020 2019 Deferred tax assets: Net operating loss carry forwards $ 5,105,063 $ 4,372,081 Stock based compensation 609,587 323,572 Others 335,882 181,700 Total deferred tax assets before valuation allowance 6,050,532 4,877,353 Valuation allowance (5,837,312 ) (4,771,500 ) Total deferred tax assets after valuation allowance 213,220 105,853 Deferred tax liabilities: Property, equipment and intangibles (213,220 ) (105,853 ) Total deferred tax liabilities (213,220 ) (105,853 ) Net deferred tax assets and liabilities $ - $ - |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Rental Payments of Leases | Future rental payments over the term of the Company’s leases are as follows: Year Ending December 31, 2021 337,000 2022 417,415 2023 390,500 2024 403,542 2025 537,511 Thereafter 1,109,257 Total 3,195,225 |
Organization, Description and_4
Organization, Description and Significant Accounting Policies (Details Narrative) - USD ($) | Dec. 11, 2020 | May 08, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Oct. 02, 2019 |
Cash equivalents | |||||
Allowance for uncollectible receivables | $ 507,347 | 180,852 | |||
Finite lived intangible asstes acquired, useful life | 5 years | ||||
Good will impairment | |||||
Long-lived assets impairment loss | |||||
Discount on notes receivable | 68,101 | 93,421 | $ 100,000 | ||
Research and development costs | |||||
Underlying Patents [Member] | |||||
Finite lived intangible asstes acquired, useful life | 15 years | ||||
Minimum [Member] | |||||
Property and equipment, useful life | 4 years | ||||
Minimum [Member] | Leasehold Improvements [Member] | |||||
Property and equipment, useful life | 5 years | ||||
Maximum [Member] | |||||
Property and equipment, useful life | 5 years | ||||
Maximum [Member] | Leasehold Improvements [Member] | |||||
Property and equipment, useful life | 7 years | ||||
Payroll Protection Program Loan [Member] | |||||
Debt recieved through small business administration | $ 1,265,000 | ||||
Interest rate on the loan | 1.00% | ||||
Maturity date of the loan | May 5, 2022 | May 5, 2022 | |||
Loan payment description | The note is payable in monthly installments of principal and interest over 12 months, beginning 12 months from the date of the note (deferral period). The note might be repaid at any time with no payment penalty. | ||||
IPO [Member] | |||||
Offering Common shares | 4,025,000 | ||||
Stock price per share | $ 6 | ||||
Proceeds from issuance after deducting underwriting discounts and commissions | $ 21,600,000 | ||||
IPO [Member] | Series B Preferred [Member] | |||||
Conversion of shares to common stock | 1,199,195 | ||||
Warrants to purchase shares of common stock | 1,199,195 |
Organization, Description and_5
Organization, Description and Significant Accounting Policies - Schedule of Outstanding Common Stock Securities not Included in the Computation of Diluted Net Loss Per Share (Details) - shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Common Stock Warrants [Member] | ||
Computation of diluted net loss per share | 1,960,029 | 83,334 |
Common Stock Options [Member] | ||
Computation of diluted net loss per share | 2,302,370 | 1,900,000 |
Revenue recognition (Details Na
Revenue recognition (Details Narrative) | 12 Months Ended |
Dec. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Service revenue description | Since Providers are able to begin generating revenue after the first training workshop, we recognize 50% of the service revenue in the second month of enrollment and the remaining 50% prorata throughout the following eleven months of the service contract. |
Revenue Recognition - Schedule
Revenue Recognition - Schedule of Revenue From Contract With Customers (Details) (USD $) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Total revenue | $ 13,066,237 | $ 11,393,277 |
Appliance Sales To Integrated Providers [Member] | ||
Total revenue | 4,547,883 | 2,917,095 |
Center Revenue [Member] | ||
Total revenue | 341,957 | 1,432,528 |
Product [Member] | ||
Total revenue | 4,889,840 | 4,349,623 |
VIP [Member] | ||
Total revenue | 7,540,718 | 6,742,283 |
Billing Intelligence Services [Member] | ||
Total revenue | 620,094 | 256,415 |
Sponsorship/Seminar/Other [Member] | ||
Total revenue | 15,585 | 44,956 |
Service [Member] | ||
Total revenue | $ 8,176,397 | $ 7,043,654 |
Revenue recognition - Schedul_2
Revenue recognition - Schedule of Contract Liability (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | ||
Beginning balance, January 1 | $ 2,947,565 | $ 889,508 |
New contracts | 7,531,145 | 8,800,340 |
Revenue recognized | (7,540,718) | (6,742,283) |
Ending balance, December 31 | $ 2,937,992 | $ 2,947,565 |
Business Divestitures (Details
Business Divestitures (Details Narrative) - USD ($) | Oct. 02, 2019 | Dec. 31, 2020 | Dec. 31, 2019 |
Business Divestitures | |||
Total Consideration | $ 1,225,000 | ||
Cash Consideration | 250,000 | ||
Notes Receivable | $ 975,000 | ||
Interest rate | 6.00% | ||
Discount on the notes receivable | $ 100,000 | $ 68,101 | $ 93,421 |
Disposed assets including goodwill | 1,072,000 | ||
Disposed of intangible assets | 27,000 | ||
Disposed of tangible assets | 86,000 | ||
Recognized loss on sale of business | $ 60,000 | $ (60,343) |
Property and Equipment, Net (De
Property and Equipment, Net (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation and Amortization | $ 298,836 | $ 326,849 |
Property and Equipment, Net - S
Property and Equipment, Net - Schedule of Property and Equipment (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Gross property and equipment | $ 1,672,934 | $ 1,642,002 |
Less - Accumulated depreciation and amortization | (801,337) | (502,501) |
Net property and equipment | 871,597 | 1,139,501 |
Furniture and Equipment [Member] | ||
Gross property and equipment | 935,697 | 908,957 |
Leasehold Improvements [Member] | ||
Gross property and equipment | 519,378 | 519,378 |
Construction in Progress [Member] | ||
Gross property and equipment | 143,037 | 138,845 |
Molds [Member] | ||
Gross property and equipment | $ 74,822 | $ 74,822 |
Intangible Assets, Net and Go_3
Intangible Assets, Net and Goodwill (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Amortization expense of identifiable intangible assets | $ 419,029 | $ 424,379 |
Goodwill | $ 2,671,434 | $ 2,671,434 |
Minimum [Member] | ||
Amortize identifiable intangible assets useful life | 5 years | |
Maximum [Member] | ||
Amortize identifiable intangible assets useful life | 15 years |
Intangible Assets, Net and Go_4
Intangible Assets, Net and Goodwill - Schedule of Identifiable Intangibles (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Intangible assets Gross | $ 2,131,938 | $ 2,131,938 |
Less - Accumulated amortization | (1,861,817) | (1,442,787) |
Intangible assets net | 270,121 | 689,151 |
Patents and Developed Technology [Member] | ||
Intangible assets Gross | 1,775,438 | 1,775,438 |
Trade Names [Member] | ||
Intangible assets Gross | 330,000 | 330,000 |
Other Intangible [Member] | ||
Intangible assets Gross | $ 26,500 | $ 26,500 |
Intangible Assets, Net and Go_5
Intangible Assets, Net and Goodwill - Schedule of Estimated Future Amortization of Identifiable Intangible Assets (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2021 | $ 262,279 | |
2022 | 1,029 | |
2023 | 1,029 | |
2024 | 1,029 | |
2025 | 1,029 | |
Thereafter | 3,727 | |
Total | $ 270,121 | $ 689,151 |
Accrued Expenses - Schedule of
Accrued Expenses - Schedule of Accrued Expenses (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Payables and Accruals [Abstract] | ||
Accrued payroll | $ 1,024,931 | $ 771,583 |
Accrued interest and other | 411,723 | 156,578 |
Lab rebate liabilities | 300,067 | |
Accrued common stock subscriptions | 350,000 | |
Accrued consulting | 75,000 | |
Total accrued expenses | $ 1,736,721 | $ 1,353,161 |
Debt (Details Narrative)
Debt (Details Narrative) - USD ($) | May 08, 2020 | Apr. 18, 2019 | Nov. 06, 2018 | Jul. 02, 2018 | May 22, 2017 | Apr. 19, 2017 | Dec. 31, 2020 | Dec. 31, 2019 | Apr. 19, 2019 |
Debt issuance of common stcok including warrants | 16,667 | 33,334 | |||||||
Debt instrument price per share | $ 1.50 | $ 1.50 | |||||||
Discount on average stock price | 50.00% | ||||||||
Debt instrument convertible conversion price | $ 1.50 | ||||||||
Exchange of debt to Series B preferred stock | $ 2,943,870 | ||||||||
Conversion of debt to common stock | 770,000 | 720,740 | |||||||
Common stock issued for payment of interest | 26,068 | 27,952 | |||||||
Interest expense | 96,681 | 137,876 | |||||||
2019 Notes [Member] | |||||||||
Debt instrument interest rate | 6.00% | ||||||||
Aggregate gross cash consideration | $ 10,000,000 | ||||||||
DebtInstrument Description | (a) seventy-five percent (75%) of the price per share (or conversion price per share as the case may be) of New Securities paid by the investors in such Qualified Financing if the Qualified Financing occurs on or prior to December 31, 2019 and (b) fifty percent (50%) of the price per share (or conversion price per share as the case may be) of New Securities paid by the investors in such Qualified Financing if the Qualified Financing occurs after December 31, 2019; provided, however, that in no event for purposes of any mandatory conversion shall the Loan Balance be convertible at a price lower than $7.50 per share, which shall serve as a floor price. | ||||||||
Debt issuance cost | 31,000 | ||||||||
Principal and interest Periodic payment | 75,000 | ||||||||
Interest expense | 47,001 | $ 88,045 | |||||||
Payroll Protection Program [Member] | |||||||||
Debt received through small business Administrations | $ 1,265,000 | ||||||||
Interest rate on loan | 1.00% | ||||||||
Dental Lab Convertible Note [Member] | |||||||||
Interest expense | $ 2,799 | ||||||||
Merger Agreement [Member] | |||||||||
Debt instrument convertible conversion price | $ 7.50 | ||||||||
Convertible debt | $ 525,000 | ||||||||
Debt instrument interest rate | 6.00% | ||||||||
Debt instrument maturity date | Jul. 1, 2023 | ||||||||
Purchase Agreement [Member] | |||||||||
Debt instrument convertible conversion price | $ 7.50 | ||||||||
Convertible debt | $ 25,000 | ||||||||
Debt instrument interest rate | 10.00% | ||||||||
Extended maturity date | Dec. 31, 2020 |
Debt - Schedule of Outstanding
Debt - Schedule of Outstanding Debt (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Debt Disclosure [Abstract] | ||
Principal balance of debt due December 31, 2020 | $ 25,000 | $ 25,000 |
2019 Convertible Notes due March 31, 2020 | 3,684,535 | |
PPP loan maturing May 5, 2022 | 1,265,067 | |
Total debt | 1,290,067 | 3,709,535 |
Less - Current portion of debt | (866,972) | (3,709,535) |
Long-term portion of debt | $ 423,095 |
Debt - Schedule of Outstandin_2
Debt - Schedule of Outstanding Debt (Details) (Parenthetical) | May 08, 2020 | Dec. 31, 2020 |
2019 Convertible Notes [Member] | ||
Debt instrument maturity date | Mar. 31, 2020 | |
Payroll Protection Program Loan [Member] | ||
Debt instrument maturity date | May 5, 2022 | May 5, 2022 |
Debt - Schedule of Future Princ
Debt - Schedule of Future Principal Payments for Outstanding Debt (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Debt Disclosure [Abstract] | ||
2021 | $ 866,972 | |
2022 | 423,095 | |
Total expected future principal payments | $ 1,290,067 | $ 3,709,535 |
Convertible Redeemable Prefer_2
Convertible Redeemable Preferred Stock (Details Narrative) - USD ($) | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Jan. 09, 2020 | May 31, 2017 | |
Preferred stock, shares authorized | 1,200,000 | 1,200,000 | ||
Preferred stock stated value | $ 0.0001 | $ 0.0001 | ||
Preferred stock accretion | $ 2,333,333 | $ 1,000,000 | ||
Series A Preferred Stock [Member] | ||||
Number of redeemed shares | 730,000 | 70,000 | ||
Number of redeemed shares, value | $ 3,650,000 | $ 350,000 | ||
Series A Preferred Stock [Member] | IPO [Member] | ||||
Number of redeemed shares | 700,000 | |||
Number of redeemed shares, value | $ 3,500,000 | |||
Board of Directors [Member] | ||||
Preferred stock, shares authorized | 50,000,000 | 1,200,000 | ||
Preferred stock stated value | $ 0.0001 | |||
Board of Directors [Member] | Series A Preferred Stock [Member] | ||||
Preferred stok stated value option, percentage | 20.00% | |||
Preferred stock reedemable | $ 1,000,000 | |||
Board of Directors [Member] | Definitive Purchase Agreement [Member] | ||||
Preferred stock, shares authorized | 1,000,000 | |||
Preferred stock stated value | $ 5 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) | Dec. 11, 2020$ / sharesshares | Jan. 09, 2020USD ($)$ / sharesshares | Dec. 31, 2020USD ($)$ / sharesshares | Dec. 31, 2019USD ($)$ / sharesshares | Nov. 06, 2020$ / sharesshares | Jun. 18, 2020shares | Dec. 31, 2017shares | Jun. 13, 2017$ / sharesshares | May 22, 2017$ / shares | Apr. 19, 2017$ / shares |
Common stock, shares authorized | 200,000,000 | 200,000,000 | ||||||||
Common stock, par value | $ / shares | $ 0.0001 | $ 0.0001 | ||||||||
Convertible redeemable series A preferred stock, par value | $ / shares | $ 0.0001 | $ 0.0001 | ||||||||
Convertible redeemable series A preferred stock, shares authorized | 50,000,000 | 50,000,000 | ||||||||
Proceeds from common stock | $ | $ 22,289,500 | $ 1,248,499 | ||||||||
Offering costs | $ | $ 263,814 | |||||||||
Stock option exercised shares | 50,000 | |||||||||
Number of shares for conversion of convertible debt, value | $ | $ 796,068 | |||||||||
Preferred stock series B, shares authorized | 1,200,000 | 1,200,000 | ||||||||
Preferred stock series B, par value | $ / shares | $ 0.0001 | $ 0.0001 | ||||||||
Share issuance price | $ / shares | $ 1.50 | $ 1.50 | ||||||||
Proceeds from preferred stock | $ | $ 2,452,500 | |||||||||
Principal balance | $ | $ 25,000 | $ 25,000 | ||||||||
Weighted average exercise price | $ / shares | $ 7.50 | $ 7.50 | ||||||||
Weighted average remaining term | 1 year 3 months 29 days | 3 years 29 days | ||||||||
Stock Option [Member] | ||||||||||
Stock options to purchase | 429,012 | 503,333 | ||||||||
Weighted average exercise price | $ / shares | $ 7.50 | |||||||||
Stock option expired | 26,667 | |||||||||
Share-based compensation expense | $ | $ 2,172,000 | $ 1,987,000 | ||||||||
Unrecognized expense | $ | $ 3,441,030 | |||||||||
Weighted average remaining term | 2 years 4 months 17 days | |||||||||
Stock Option [Member] | Minimum [Member] | ||||||||||
Share price | $ / shares | $ 1.50 | |||||||||
Stock Option [Member] | Maximum [Member] | ||||||||||
Share price | $ / shares | $ 7.50 | |||||||||
Contingent Warrants [Member] | ||||||||||
Warrants exercise price percentage | 1.25 | |||||||||
Warrants exercise price | $ / shares | $ 7.50 | |||||||||
Warrants issued | $ | $ 1,199,195 | |||||||||
Settlement Warrants [Member] | ||||||||||
Warrants to purchase | 325,000 | |||||||||
Warrants exercise price | $ / shares | $ 7.50 | |||||||||
Warrants expiration | May 6, 2024 | |||||||||
Offering Costs [Member] | ||||||||||
Number of shares issued | 376,574 | |||||||||
Proceeds from common stock | $ | $ 1,997,192 | |||||||||
Conversion of shares | 44,286 | |||||||||
Number of shares for conversion of convertible debt | 126,518 | |||||||||
Stock option exercised shares | 50,000 | |||||||||
Proceeds from stock option exercised | $ | $ 82,500 | |||||||||
Number of shares for conversion of convertible debt, value | $ | 250,475 | |||||||||
Proceeds from conversion of shares | $ | $ 498,218 | |||||||||
IPO [Member] | ||||||||||
Number of shares issued | 4,025,000 | |||||||||
Number of shares issued for services | 40,000 | |||||||||
Sale of stock price | $ / shares | $ 6 | |||||||||
IPO [Member] | Contingent Warrants [Member] | ||||||||||
Warrants exercise price | $ / shares | $ 6 | |||||||||
IPO [Member] | Common Stock Warrants [Member] | ||||||||||
Warrants to purchase | 402,500 | |||||||||
Warrants exercise price | $ / shares | $ 7.50 | |||||||||
Warrants expiration | Dec. 10, 2025 | |||||||||
Shareholder [Member] | 2017 Plan [Member] | ||||||||||
Shares reserved for future issuance | 1,333,333 | |||||||||
Shareholder [Member] | 2019 Plan [Member] | ||||||||||
Shares reserved for future issuance | 333,334 | |||||||||
Common stock available for issuance shares | 1,166,667 | |||||||||
Shareholder [Member] | Restatement of 2019 Plan [Member] | ||||||||||
Common stock available for issuance shares | 833,333 | |||||||||
Board of Directors [Member] | ||||||||||
Preferred stock series B, shares authorized | 1,200,000 | 50,000,000 | ||||||||
Preferred stock series B, par value | $ / shares | $ 0.0001 | |||||||||
Share issuance price | $ / shares | 15 | |||||||||
Investor [Member] | Common Stock Warrants [Member] | ||||||||||
Warrants to purchase | 33,334 | |||||||||
Warrants exercise price | $ / shares | $ 1.50 | |||||||||
Warrants expiration | Jun. 30, 2022 | |||||||||
Series B Preferred Stock [Member] | ||||||||||
Number of shares issued | 4,025,000 | |||||||||
Proceeds from common stock | $ | $ 21,600,000 | |||||||||
Offering costs | $ | $ 700,000 | |||||||||
Conversion of shares | 1,199,195 | |||||||||
Number of shares for conversion of convertible debt | 106,314 | |||||||||
Number of shares issued for services | 134,778 | |||||||||
Series B Preferred Stock [Member] | 2019 Notes [Member] | ||||||||||
Number of shares issued | 196,258 | |||||||||
Offering costs | $ | $ 50,000 | |||||||||
Principal balance | $ | 2,839,535 | |||||||||
Accrued interest | $ | $ 104,335 | |||||||||
Series B Preferred Stock [Member] | IPO [Member] | 2019 Notes [Member] | ||||||||||
Debt instrument shares converted | 1,199,195 | |||||||||
Series B Preferred Stock [Member] | Shareholder [Member] | ||||||||||
Number of shares issued | 300,000 | |||||||||
Series B Preferred Stock [Member] | ||||||||||
Sale of stock price | $ / shares | $ 15 | |||||||||
Gross proceeds from sale of stock | $ | $ 15,000,000 | |||||||||
Series B Preferred Stock [Member] | Contingent Warrants [Member] | ||||||||||
Warrants exercise price percentage | 1.25 | |||||||||
Series B Preferred Stock [Member] | Over-Allotment Option [Member] | ||||||||||
Additional stock option issued | $ | $ 3,000,000 | |||||||||
Series B Preferred Stock [Member] | Board of Directors [Member] | ||||||||||
Proceeds from conversion of shares | $ | $ 15,000,000 | |||||||||
Conversion price percentage | 0.75 | |||||||||
Series B Units [Member] | ||||||||||
Number of shares issued | 163,500 | |||||||||
Proceeds from preferred stock | $ | $ 2,450,000 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Stock Options (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Equity [Abstract] | ||
Number of Stock Options, Options outstanding, Beginning balance | 1,900,000 | 1,803,334 |
Number of Stock Options, Granted | 429,012 | 503,333 |
Number of Stock Options, Exercised | (50,000) | |
Number of Stock Options, Expired/terminated | (26,667) | (356,667) |
Number of Stock Options, Options outstanding, Ending balance | 2,302,370 | 1,900,000 |
Number of Stock Options, Options exercisable, Ending balance | 1,672,991 | 1,228,176 |
Weighted Average Exercise Price, Options outstanding, Beginning balance | $ 4.29 | $ 3.69 |
Weighted Average Exercise Price, Granted | 7.50 | 7.50 |
Weighted Average Exercise Price, Exercised | 1.65 | |
Weighted Average Exercise Price, Expired/terminated | 7.50 | 3.93 |
Weighted Average Exercise Price, Options outstanding, Ending balance | 4.84 | 4.29 |
Weighted Average Exercise Price, Options exercisable, Ending balance | $ 4.10 | $ 3.99 |
Weighted Average Remaining Contractual Life, Options outstanding, Beginning balance | 3 years 29 days | 3 years 4 months 2 days |
Weighted Average Remaining Contractual Life, Granted | 4 years 6 months 18 days | 4 years 5 months 16 days |
Weighted Average Remaining Contractual Life, Options outstanding, Ending balance | 1 year 3 months 29 days | 3 years 29 days |
Weighted Average Remaining Contractual Life, Options exercisable, Ending balance | 2 years 5 months 16 days | 1 year 7 months 24 days |
Number of Stock Options, Options outstanding, Beginning balance | $ 6,695,876 | $ 4,551,196 |
Number of Stock Options, Options outstanding, Ending balance | $ 2,463,498 | $ 6,695,876 |
Stockholders' Equity - Schedu_2
Stockholders' Equity - Schedule of Weighted Average Assumptions Used in the Fair Value (Details) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Equity [Abstract] | ||
Expected term (years) | 3 years 1 month 24 days | 3 years 2 months 12 days |
Risk-free interest rate | 0.38% | 2.00% |
Expected volatility | 134.00% | 122.00% |
Expected dividend yield | 0.00% | 0.00% |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | Oct. 22, 2020 | Nov. 30, 2020 | Aug. 31, 2020 | Jul. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | May 22, 2017 | Apr. 19, 2017 |
Shares issued price per share | $ 1.50 | $ 1.50 | ||||||
Stock options granted | 429,012 | 503,333 | ||||||
Aggregate purchase price | $ 2,402,668 | $ 1,165,999 | ||||||
Separation Agreements [Member] | ||||||||
Shares issued price per share | $ 7.50 | |||||||
Stock options granted | 33,334 | 16,667 | ||||||
Warrants to purchase common stock | 16,667 | |||||||
Aggregate purchase price | $ 325,000 | |||||||
Agreement description | If the Company was unable to close a qualified financing, as defined in the agreement of at least $3,000,000 of equity or equity-linked securities by September 15, 2020 (as was extended up to October 28, 2020), a modified consideration would include 16,667 shares of unrestricted, fully vested common stock, a grant of stock options to purchase 33,334 shares of common stock at a price of $7.50 that will be fully vested and exercisable and $22,000 in cash. | |||||||
Unrestricted, fully vested common stock shares | 16,667 | |||||||
Share based compensation arrangement cash | $ 22,000 | |||||||
Cash and equity issuances | $ 286,000 | |||||||
Settlement and Release Agreement [Member] | ||||||||
Warrants to purchase common stock | 325,000 | |||||||
Aggregate purchase price | $ 300,000 | |||||||
Warrant description | In consideration of such withdrawal and releases, the members of the Stockholder Group have received: (i) an aggregate of 300,000 shares of Company common stock and (ii) warrants to purchase an aggregate of 325,000 shares of common stock (see Note 9). Such warrants (x) will be exercisable on a cash only basis at a strike price of 125% of the public offering price per share in a Company qualified public offering of more than $10 million, (y) will be exercisable for a period of 36 months, beginning six months after the consummation of a qualified public offering and ending on the forty-second month anniversary of a Company qualified public offering. | |||||||
Warrant strike price | 125.00% | |||||||
Settlement and Release Agreement [Member] | Maximum [Member] | ||||||||
Legal fees | $ 50,000 | |||||||
Series B Preferred Stock [Member] | Separation Agreements [Member] | ||||||||
Stock options granted | 13,575 | |||||||
Series A Preferred Stock [Member] | ||||||||
Number of redeemed shares | 730,000 | 70,000 | ||||||
Number of redeemed shares, value | $ 3,650,000 | $ 350,000 | ||||||
2019 Notes [Member] | ||||||||
Monthly fee | 75,000 | |||||||
2019 Notes [Member] | Series B Preferred Stock [Member] | ||||||||
Debt conversion of share value | $ 200,000 | |||||||
Debt conversion of shares | 45,252 | |||||||
Former Secretary and Director [Member] | ||||||||
Number of shares issued | 254,902 | |||||||
Directors [Member] | ||||||||
Shares issued price per share | $ 7.50 | |||||||
Stock options granted | 33,334 | |||||||
Unrestricted, fully vested common stock shares | 16,667 | |||||||
Share based compensation arrangement cash | $ 47,000 | |||||||
Legal fees | $ 25,000 | |||||||
Directors [Member] | Series A Preferred Stock [Member] | ||||||||
Number of redeemed shares | 730,000 | 70,000 | ||||||
Shares issued price per share | $ 5 | $ 5 | ||||||
Number of redeemed shares, value | $ 3,650,000 | $ 350,000 | ||||||
Employee [Member] | ||||||||
Pre-purchase amount | $ 30,000 | |||||||
Employee [Member] | Thirteen Vouchers [Member] | ||||||||
Sale of voucher | 390,000 | |||||||
Vouchers redeemed amount | 390,000 | |||||||
Upeva, Inc [Member] | ||||||||
Monthly fee | 10,000 | |||||||
Owed amount | $ 10,000 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Statutory income tax rates | 21.00% | |
Valuation allowance | $ 5,837,312 | $ 4,771,500 |
Change in valuation allowance | 1,065,812 | $ 2,323,979 |
Net operating loss carry forwards | $ 22,380,564 | |
Operating loss expire term | 2036 | |
Remaining federal net operating losses | $ 19,048,093 | |
Expire in 2036 [Member] | ||
Net operating loss carry forwards | $ 3,332,471 |
Income Taxes - Schedule of Loss
Income Taxes - Schedule of Loss Before Income Tax (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Domestic | $ (12,071,603) | $ (10,768,069) |
Foreign | 14,726 | 13,750 |
Total | $ (12,056,877) | $ (10,754,319) |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income Tax Expense (Benefit) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Federal | ||
States | ||
Total current income taxes | (12,056,877) | (10,754,319) |
Federal | ||
States | ||
Total deferred income taxes | ||
Total income tax expense (benefit) |
Income Taxes - Schedule of In_2
Income Taxes - Schedule of Income tax Expense (Benefit) Differed from Loss Before Income Taxes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
U.S. statutory income tax expense (benefit) | $ (2,507,484) | $ (2,258,407) |
Permanent differences | 1,622,396 | 509,514 |
State tax expenses | (180,724) | (575,086) |
Change in valuation allowance | 1,065,812 | 2,323,979 |
Income tax expense |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carry forwards | $ 5,105,063 | $ 4,372,081 |
Stock based compensation | 609,587 | 323,572 |
Others | 335,882 | 181,700 |
Total deferred tax assets before valuation allowance | 6,050,532 | 4,877,353 |
Valuation allowance | (5,837,312) | (4,771,500) |
Total deferred tax assets after valuation allowance | 213,220 | 105,853 |
Property, equipment and intangibles | (213,220) | (105,853) |
Total deferred tax liabilities | (213,220) | (105,853) |
Net deferred tax assets and liabilities |
Commitments and Contingencies_2
Commitments and Contingencies (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Rent lease expense | $ 458,497 | $ 309,086 |
IPO [Member] | ||
Common stock issued for services | 40,000 | |
Consulting Agreement [Member] | Pro Player Health Alliance, LLC [Member] | ||
Total expense | $ 0 | $ 151,000 |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Future Rental Payments of Leases (Details) | Dec. 31, 2020USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2021 | $ 337,000 |
2022 | 417,415 |
2023 | 390,500 |
2024 | 403,542 |
2025 | 537,511 |
Thereafter | 1,109,257 |
Total | $ 3,195,225 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Mar. 15, 2021 | Jan. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Debt instrument face amount | $ 25,000 | $ 25,000 | ||
Subsequent Event [Member] | ||||
Debt instrument face amount | $ 25,000 | |||
Debt instrument periodic payment interest | 4,741 | |||
Subsequent Event [Member] | Officer [Member] | ||||
Number of shares issued | 145,000 | |||
Subsequent Event [Member] | Series A Preferred Stock [Member] | ||||
Preferred stock reedemable | $ 1,500,000 |