Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Dec. 26, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | Rennova Health, Inc. | |
Entity Central Index Key | 0000931059 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business Flag | true | |
Entity Emerging Growth Company | false | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 9,648,936,775 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2019 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash | $ 107,472 | $ 6,870 |
Accounts receivable, net | 5,108,462 | 3,811,749 |
Inventory | 688,819 | 453,402 |
Prepaid expenses and other current assets | 77,646 | 78,820 |
Income tax refunds receivable | 631,077 | 631,077 |
Current assets of AMSG and HTS classified as held for sale | 362,146 | 140,352 |
Total current assets | 6,975,622 | 5,122,270 |
Property and equipment, net | 8,467,887 | 8,526,904 |
Right-of-use operating lease assets | 328,615 | |
Intangibles, net | 509,443 | 259,443 |
Deposits | 281,523 | 278,864 |
Non-current assets of AMSG and HTS classified as held for sale | 10,975 | 11,819 |
Total assets | 16,574,065 | 14,199,300 |
Current liabilities: | ||
Accounts payable (includes related parties amount of $0.5 million and $0.4 million, respectively) | 13,076,160 | 8,155,955 |
Checks issued in excess of bank account balance | 121,947 | 109,695 |
Accrued expenses (includes related parties amount of $1.8 million and $0.4 million, respectively) | 10,542,219 | 10,711,281 |
Income taxes payable | 1,355,651 | 1,400,651 |
Current portion of notes payable | 3,605,532 | 7,083,505 |
Current portion of notes payable, related party | 14,968,104 | 800,000 |
Current portion of right-of-use operating lease obligations | 141,830 | |
Current portion of finance lease obligations | 589,457 | 730,665 |
Current portion of debentures | 28,690,240 | 12,776,316 |
Derivative liabilities | 455,336 | 350,260 |
Current liabilities of AMSG and HTS classified as held for sale | 2,701,459 | 2,297,846 |
Total current liabilities | 76,247,935 | 44,416,174 |
Other liabilities: | ||
Right-of-use operating lease obligations, net of current portion | 186,785 | |
Finance lease obligations, net of current portion | 28,821 | 31,543 |
Total liabilities | 76,463,541 | 44,447,717 |
Commitments and contingencies | ||
Stockholders' deficit: | ||
Common stock, $0.0001 par value, 10,000,000,000 shares authorized, 8,398,936,775 and 128,567,273 shares issued and outstanding | 839,894 | 12,857 |
Additional paid-in-capital | 509,515,347 | 375,845,883 |
Accumulated deficit | (578,040,192) | (415,046,606) |
Total stockholders' deficit | (67,664,949) | (39,167,864) |
Total liabilities and stockholders' deficit | 16,574,065 | 14,199,300 |
Redeemable Preferred Stock I-1 [Member] | ||
Other liabilities: | ||
Redeemable Preferred Stock | 5,835,294 | 5,835,294 |
Redeemable Preferred Stock I-2 [Member] | ||
Other liabilities: | ||
Redeemable Preferred Stock | 1,940,179 | 3,084,153 |
Series G Preferred Stock [Member] | ||
Stockholders' deficit: | ||
Preferred stock value | 2 | 2 |
Series H Preferred Stock [Member] | ||
Stockholders' deficit: | ||
Preferred stock value | ||
Series F Preferred Stock [Member] | ||
Stockholders' deficit: | ||
Preferred stock value | 17,500 | 17,500 |
Series J Preferred Stock [Member] | ||
Stockholders' deficit: | ||
Preferred stock value | $ 2,500 | $ 2,500 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Accounts payable related parties | $ 500,000 | $ 400,000 |
Accrued expenses related parties | $ 180,000 | $ 400,000 |
Preferred stock par value | $ 0.01 | |
Preferred stock shares authorized | 5,000,000 | |
Common stock par value | $ 0.0001 | $ 0.0001 |
Common stock shares authorized | 10,000,000,000 | 10,000,000,000 |
Common stock shares issued | 8,398,936,775 | 128,567,273 |
Common stock shares outstanding | 8,398,936,775 | 128,567,273 |
Series G Preferred Stock [Member] | ||
Preferred stock par value | $ 0.01 | $ 0.01 |
Preferred stock shares authorized | 14,000 | 14,000 |
Preferred stock shares issued | 215 | 215 |
Preferred stock shares outstanding | 215 | 215 |
Series H Preferred Stock [Member] | ||
Preferred stock par value | $ 0.01 | $ 0.01 |
Preferred stock shares authorized | 14,202 | 14,202 |
Preferred stock shares issued | 10 | 60 |
Preferred stock shares outstanding | 10 | 60 |
Series F Preferred Stock [Member] | ||
Preferred stock par value | $ 0.01 | $ 0.01 |
Preferred stock shares authorized | 1,750,000 | 1,750,000 |
Preferred stock shares issued | 1,750,000 | 1,750,000 |
Preferred stock shares outstanding | 1,750,000 | 1,750,000 |
Series J Preferred Stock [Member] | ||
Preferred stock par value | $ 0.01 | $ 0.01 |
Preferred stock shares authorized | 250,000 | 250,000 |
Preferred stock shares issued | 250,000 | 250,000 |
Preferred stock shares outstanding | 250,000 | 250,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Statement [Abstract] | ||||
Net revenues | $ 3,885,977 | $ 5,039,112 | $ 13,137,816 | $ 9,932,989 |
Operating expenses: | ||||
Direct costs of revenue | 3,227,709 | 3,350,286 | 12,072,442 | 7,809,465 |
General and administrative | 3,163,624 | 4,351,576 | 12,730,695 | 10,240,434 |
Depreciation and amortization | 199,996 | 152,825 | 609,818 | 804,074 |
Total operating expenses | 6,591,329 | 7,854,687 | 25,412,955 | 18,853,973 |
Loss from continuing operations before other income (expense) and income taxes | (2,705,352) | (2,815,575) | (12,275,139) | (8,920,984) |
Other (expense) income: | ||||
Other (expense) income | (5,784,873) | 188,658 | (6,980,616) | 609,719 |
Gain on bargain purchase | 250,000 | 7,732,302 | ||
Change in fair value of derivative instruments | 109,305,331 | (105,076) | 13,688,678 | |
Interest expense | (3,637,467) | (9,322,333) | (19,229,232) | (17,075,437) |
Total other(expense) income, net | (9,422,340) | 100,171,656 | (26,064,924) | 4,955,262 |
Net (loss) income from continuing operations before income taxes | (12,127,692) | 97,356,081 | (38,340,063) | (3,965,722) |
Provision for income taxes | 76 | |||
Net (loss) income from continuing operations | (12,127,692) | 97,356,081 | (38,340,063) | (3,965,798) |
Net (loss) income from discontinued operations | (138,076) | (159,430) | (791,936) | 115,787 |
Net (loss) income | (12,265,768) | 97,196,651 | (39,131,999) | (3,850,011) |
Deemed dividend from trigger of down round provision feature | (17,942,578) | (123,861,587) | (17,942,578) | |
Net (loss) income to common shareholders | $ (12,265,768) | $ 79,254,073 | $ (162,993,586) | $ (21,792,589) |
Net (loss) income per common share: | ||||
Basic continuing operations | $ 0 | $ 17.6 | $ (0.01) | $ (1.55) |
Diluted continuing operations | 0 | (0.08) | (0.01) | (1.55) |
Basic discontinued operations | 0 | (0.03) | 0 | 0.05 |
Diluted discontinued operations | 0 | 0 | 0 | 0.05 |
Basic net (loss) income | 0 | 14.33 | (0.04) | (8.54) |
Diluted net loss | $ 0 | $ (0.08) | $ (0.04) | $ (8.54) |
Weighted average number of common shares outstanding during the period: | ||||
Basic | 6,634,045,471 | 5,531,767 | 4,461,922,587 | 2,550,632 |
Diluted | 6,634,045,471 | 254,654,217 | 4,461,922,587 | 2,550,632 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Stockholders' Deficit (Unaudited) - USD ($) | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2017 | $ 17,502 | $ 4 | $ 128,549,458 | $ (169,180,425) | $ (40,613,461) |
Balance, shares at Dec. 31, 2017 | 1,750,275 | 39,502 | |||
Common stock issued in cashless exercise of warrants | $ 15 | (15) | |||
Common stock issued in cashless exercise of warrants, shares | 151,200 | ||||
Conversion of debentures into common stock | $ 67 | 3,056,607 | 3,056,674 | ||
Conversion of debentures into common stock, shares | 666,621 | ||||
Stock-based compensation | 24,196 | 24,196 | |||
Restricted stock issued to employees | $ 14 | 641,096 | 641,110 | ||
Restricted stock issued to employees, shares | 142,667 | ||||
Shares returned to treasury | |||||
Shares returned to treasury, shares | (5) | ||||
Beneficial conversion feature of preferred stock | (651,562) | (651,562) | |||
Net income (loss) | (146,364,582) | (146,364,582) | |||
Balance at Mar. 31, 2018 | $ 17,502 | $ 100 | 131,619,780 | (315,545,007) | (183,907,625) |
Balance, shares at Mar. 31, 2018 | 1,750,275 | 999,985 | |||
Balance at Dec. 31, 2017 | $ 17,502 | $ 4 | 128,549,458 | (169,180,425) | (40,613,461) |
Balance, shares at Dec. 31, 2017 | 1,750,275 | 39,502 | |||
Modification of warrants | |||||
Net income (loss) | (3,850,011) | ||||
Balance at Sep. 30, 2018 | $ 20,002 | $ 737 | 160,817,543 | (190,973,013) | (30,134,731) |
Balance, shares at Sep. 30, 2018 | 2,000,225 | 7,365,881 | |||
Balance at Mar. 31, 2018 | $ 17,502 | $ 100 | 131,619,780 | (315,545,007) | (183,907,625) |
Balance, shares at Mar. 31, 2018 | 1,750,275 | 999,985 | |||
Common stock issued in cashless exercise of warrants | $ 57 | 3,957,710 | 3,957,767 | ||
Common stock issued in cashless exercise of warrants, shares | 572,480 | ||||
Conversion of debentures into common stock | $ 157 | 4,036,932 | 4,037,089 | ||
Conversion of debentures into common stock, shares | 1,571,000 | ||||
Stock-based compensation | 24,197 | 24,197 | |||
Shares returned to treasury | (28,217) | (28,217) | |||
Shares returned to treasury, shares | (116) | ||||
Beneficial conversion feature of preferred stock | 651,562 | 651,562 | |||
Conversion of Series H Preferred Stock into common stock | $ 4 | (4) | |||
Conversion of Series H Preferred Stock into common stock, shares | (50) | 40,000 | |||
Exchange of debentures into Series I-2 Preferred Stock | 1,331 | 1,331 | |||
Net income (loss) | 45,317,921 | 45,317,921 | |||
Balance at Jun. 30, 2018 | $ 17,502 | $ 318 | 140,263,291 | (270,227,086) | (129,945,975) |
Balance, shares at Jun. 30, 2018 | 1,750,225 | 3,183,349 | |||
Common stock issued in cashless exercise of warrants | $ 77 | 661,304 | 661,381 | ||
Common stock issued in cashless exercise of warrants, shares | 768,548 | ||||
Conversion of debentures into common stock | $ 165 | 991,413 | 991,578 | ||
Conversion of debentures into common stock, shares | 1,649,059 | ||||
Stock-based compensation | 78,444 | 78,444 | |||
Exchange of debentures into Series I-2 Preferred Stock | 89 | 89 | |||
Deemed dividend from trigger of down round provision feature | 17,942,578 | (17,942,578) | |||
Exchange of note payable and accrued expenses for Series J Preferred Stock | $ 2,500 | 247,500 | 250,000 | ||
Exchange of note payable and accrued expenses for Series J Preferred Stock, shares | 250,000 | ||||
Common stock issued for conversion of Series I-2 Preferred Stock | $ 177 | 632,924 | 633,101 | ||
Common stock issued for conversion of Series I-2 Preferred Stock, shares | 1,764,927 | ||||
Adjust treasury shares | |||||
Adjust treasury shares, shares | (2) | ||||
Net income (loss) | 97,196,651 | 97,196,651 | |||
Balance at Sep. 30, 2018 | $ 20,002 | $ 737 | 160,817,543 | (190,973,013) | (30,134,731) |
Balance, shares at Sep. 30, 2018 | 2,000,225 | 7,365,881 | |||
Balance at Dec. 31, 2018 | $ 20,002 | $ 12,857 | 375,845,883 | (415,046,606) | (39,167,864) |
Balance, shares at Dec. 31, 2018 | 2,000,225 | 128,567,273 | |||
Common stock issued in cashless exercise of warrants | $ 11,961 | (11,961) | |||
Common stock issued in cashless exercise of warrants, shares | 119,615,384 | ||||
Stock-based compensation | 8,650 | 8,650 | |||
Conversion of Series I-2 Preferred stock into common stock | $ 325,570 | 318,310 | 643,880 | ||
Conversion of Series I-2 Preferred stock into common stock, shares | 3,255,700,000 | ||||
Deemed dividend from trigger of down round provision feature | 123,861,587 | (123,861,587) | |||
Modification of warrants | 4,056,425 | 4,056,425 | |||
Net income (loss) | (13,441,404) | (13,441,404) | |||
Balance at Mar. 31, 2019 | $ 20,002 | $ 350,388 | 504,078,894 | (552,349,597) | (47,900,313) |
Balance, shares at Mar. 31, 2019 | 2,000,225 | 3,503,882,657 | |||
Balance at Dec. 31, 2018 | $ 20,002 | $ 12,857 | 375,845,883 | (415,046,606) | (39,167,864) |
Balance, shares at Dec. 31, 2018 | 2,000,225 | 128,567,273 | |||
Common stock issued in cashless exercise of warrants, shares | 119,615,384 | ||||
Modification of warrants | 9,464,991 | ||||
Net income (loss) | (39,131,999) | ||||
Balance at Sep. 30, 2019 | $ 20,002 | $ 839,894 | 509,515,347 | (578,040,192) | (67,664,949) |
Balance, shares at Sep. 30, 2019 | 2,000,225 | 8,398,936,775 | |||
Balance at Mar. 31, 2019 | $ 20,002 | $ 350,388 | 504,078,894 | (552,349,597) | (47,900,313) |
Balance, shares at Mar. 31, 2019 | 2,000,225 | 3,503,882,657 | |||
Stock-based compensation | 8,650 | 8,650 | |||
Conversion of Series I-2 Preferred stock into common stock | $ 250,506 | 10,587 | 261,093 | ||
Conversion of Series I-2 Preferred stock into common stock, shares | 2,505,054,118 | ||||
Modification of warrants | 5,408,566 | 5,408,566 | |||
Net income (loss) | (13,424,827) | (13,424,827) | |||
Balance at Jun. 30, 2019 | $ 20,002 | $ 600,894 | 509,506,697 | (565,774,424) | (55,646,831) |
Balance, shares at Jun. 30, 2019 | 2,000,225 | 6,008,936,775 | |||
Stock-based compensation | 8,650 | 8,650 | |||
Conversion of Series I-2 Preferred stock into common stock | $ 239,000 | 239,000 | |||
Conversion of Series I-2 Preferred stock into common stock, shares | 2,390,000,000 | ||||
Net income (loss) | (12,265,768) | (12,265,768) | |||
Balance at Sep. 30, 2019 | $ 20,002 | $ 839,894 | $ 509,515,347 | $ (578,040,192) | $ (67,664,949) |
Balance, shares at Sep. 30, 2019 | 2,000,225 | 8,398,936,775 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Cash flows from operating activities: | ||
Net loss from continuing operations | $ (38,340,063) | $ (3,965,798) |
Adjustments to reconcile net loss to net cash (used in) provided by operations: | ||
Depreciation and amortization | 609,818 | 804,074 |
Stock-based compensation | 25,950 | 739,729 |
Amortization of debt discount | 6,386,305 | 16,080,270 |
Modification of warrants | 9,464,991 | |
Penalty for non-payment of debentures | 5,710,440 | |
Change in fair value of derivative instruments | 105,076 | (13,688,678) |
Loss on sale of receivables to factor | 1,361,053 | |
Gain on disposal of equipment under finance leases | (549,524) | |
Bargain purchase gain for hospitals and medical center | (250,000) | (7,732,302) |
(Loss) income from discontinued operations | (791,936) | 115,787 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (3,525,152) | (5,648,343) |
Inventory | 82,010 | 25,066 |
Prepaid expenses and other current assets | (1,485) | 113,042 |
Accounts payable and checks issued in excess of bank balance | 4,932,457 | 3,497,210 |
Accrued expenses | (327,953) | 3,728,038 |
Income tax assets and liabilities | (45,000) | (12,243) |
Net cash used in operating activities of continuing operations | (14,603,489) | (6,493,672) |
Net cash provided by (used in) operating activities of discontinued operations | 182,663 | (628,154) |
Net cash used in operating activities | (14,420,826) | (7,121,826) |
Cash flows from investing activities: | ||
Purchase of hospitals and medical center | (658,537) | (668,983) |
Proceeds from the sale of equipment under finance leases | 433,612 | |
Purchase of property and equipment | (50,801) | (103,387) |
Net cash used in investing activities of continuing operations | (709,338) | (338,758) |
Net cash provided by investing activities of discontinued operations | 800,000 | |
Net cash (used in) provided by investing activities | (709,338) | 461,242 |
Cash flows from financing activities: | ||
Proceeds from issuance of related party note payable and advances | 16,478,104 | 3,582,500 |
Payments on related party note payable and advances | (2,310,000) | (4,011,000) |
Proceeds from issuance of debentures | 3,845,000 | 8,000,000 |
Payments on notes payable | (5,005,794) | (256,481) |
Proceeds from issuance of note payable | 1,500,000 | |
Proceeds from receivables sold to factors | 2,650,000 | |
Receivables paid to factors | (1,782,614) | |
Payments on finance lease obligations | (143,930) | (654,435) |
Net cash provided by financing activities of continuing operations | 15,230,766 | 6,660,584 |
Net cash used in financing activities of discontinued operations | ||
Net cash provided by financing activities | 15,230,766 | 6,660,584 |
Net increase in cash | 100,602 | |
Cash at beginning of period | 6,870 | |
Cash at end of period | $ 107,472 |
Organization and Summary of Sig
Organization and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Organization and Summary of Significant Accounting Policies | Note 1 – Organization and Summary of Significant Accounting Policies Description of Business Rennova Health, Inc. (“Rennova”), together with its subsidiaries (the “Company”, “we”, “us” or “our”), is a vertically integrated provider of healthcare related products and services. The Company’s principal lines of business are (i) Hospital Operations; and (ii) Clinical Laboratory Operations. The Company presents its financial results based upon these two business segments, which are more fully discussed in Note 16. Reverse Stock Split On November 5, 2018, the Company’s Board of Directors approved an amendment to the Company’s Certificate of Incorporation to effect a 1-for-500 reverse stock split effective November 12, 2018 (the “Reverse Stock Split”). The stockholders of the Company had approved the amendment to the Company’s Certificate of Incorporation on August 22, 2018 for the Reverse Stock Split. The Company’s stockholders had granted authorization to the Board of Directors to determine in its discretion the specific ratio, subject to limitations, and the timing of the reverse split within certain specified effective dates. As a result of the Reverse Stock Split, every 500 shares of the Company’s then outstanding common stock was combined and automatically converted into one share of the Company’s common stock on November 12, 2018. In addition, the conversion and exercise prices of all of the Company’s outstanding preferred stock, common stock purchase warrants, stock options, restricted stock, equity incentive plans and convertible notes payable were proportionately adjusted at the applicable reverse split ratio in accordance with the terms of such instruments. In addition, proportionate voting rights and other rights of common stockholders were not affected by the Reverse Stock Split, other than as a result of cash paid in lieu of fractional shares as no fractional shares were issued in connection with the Reverse Stock Split. All share, per share and capital stock amounts as of and for the three and nine months ended September 30, 2018 have been restated to give effect to the Reverse Stock Split. In addition, on September 18, 2018, the Company amended its Certificate of Incorporation to have the authority to issue 10,000,000,000 shares of common stock and the par value of the Company’s common stock was decreased from $0.01 per share to $0.0001 per share. No additional change was made to the terms of the Company’s common stock as a result of the November 12, 2018 reverse stock split and no change was made to the authorized preferred stock, which remains at 5,000,000 shares of preferred stock, par value $0.01 per share. The Reverse Stock Split provided sufficient authorized and unissued shares to allow for the Company’s outstanding and otherwise equity classified instruments to be classified in equity. As a result, the fair value of these instruments was evaluated for reclassification and, as a result, during the third quarter of 2018, the Company reclassified its derivative liabilities previously reported as a current liability to derivative income. On October 4, 2019, the Board of Directors authorized the issuance and sale of certain shares of its Series K Convertible Preferred Stock (“Series K Preferred Stock”) to Alcimede LLC (“Alcimede”), a related party, as more fully discussed in Note 19. The Board considered all options to secure additional financing required to continue operations and determined this authorization to be necessary to secure needed financing in the required time frame. As a result of this authorization, as of the date of filing this report, the Company believes that it has the ability to have sufficient authorized shares of its common stock to cover all potentially dilutive common shares outstanding. Jamestown Regional Medical Center Medicare Agreement Following an inspection at Jamestown Regional Medical Center on February 5, 2019, the hospital was informed on February 15 that several conditions of participation in its Medicare agreement were deficient. The hospital was informed that if the deficiencies where not corrected by May 16 the Medicare agreement would terminate. A follow-up inspection on May 15 resulted in the determination that the hospital had failed to adequately correct the deficiencies highlighted and a notice of involuntary termination was issued that was effective on June 12, 2019. A significant percentage of patients at Jamestown Regional Medical Center are covered by Medicare and without any ability to get paid for these services the Company suspended operations at the hospital. The hospital received initial approval of its application to reactivate the Medicare agreement in August of 2019 and is currently planning the reopening of the hospital. Basis of Presentation The accompanying unaudited condensed consolidated financial statements were prepared using generally accepted accounting principles for interim financial information and the instructions to Form 10-Q and Regulation S-X. Accordingly, these financial statements do not include all information or notes required by generally accepted accounting principles for annual financial statements and should be read in conjunction with the consolidated financial statements as filed on the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, filed with the Securities and Exchange Commission on October 21, 2019. In the opinion of management, the unaudited condensed consolidated financial statements included herein contain all adjustments necessary to present fairly the Company’s consolidated financial position as of September 30, 2019, and the results of its operations, changes in stockholders’ deficit and cash flows for the three and nine months ended September 30, 2019 and 2018. Such adjustments are of a normal recurring nature. The results of operations for the three and nine months ended September 30, 2019 may not be indicative of results for the year ending December 31, 2019. Principles of Consolidation The accompanying condensed consolidated financial statements which have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) include the accounts of Rennova and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in the consolidation. Reclassification For the nine months ended September 30, 2018, the Company has presented the proceeds from related party notes payable and advances that were previously netted against payments on related party notes payable and advances as a separate line item on the Statement of Cash Flows. This reclassification did not have an effect on total cash flow from financing activities for the nine months ended September 30, 2018. Comprehensive Loss During the three and nine months ended September 30, 2019 and 2018, comprehensive loss was equal to the net loss amounts presented in the accompanying condensed consolidated statements of operations. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates and assumptions include the estimates of fair values of assets acquired and liabilities assumed in business combinations, including hospital acquisitions, reserves, contractual allowances and write-downs related to receivables and inventories, the recoverability of long-lived assets, stock based compensation, the valuation allowance relating to the Company’s deferred tax assets, valuation of equity and derivative instruments, including modifications thereof, deemed dividends and debt discounts, among others. Actual results could differ from those estimates and would impact future results of operations and cash flows. Cash and Cash Equivalents The Company considers all highly liquid temporary cash investments with an original maturity of three months or less to be cash equivalents. The Company had minimal cash equivalents at September 30, 2019 and December 31, 2018. Revenue Recognition Hospital Operations Our revenues generally relate to contracts with patients in which our performance obligations are to provide health care services to the patients. Revenues are recorded during the period our obligations to provide health care services are satisfied. Our performance obligations for inpatient services are generally satisfied over periods that average approximately five days, and revenues are recognized based on charges incurred in relation to total expected charges. Our performance obligations for outpatient services are generally satisfied over a period of less than one day. The contractual relationships with patients, in most cases, also involve a third-party payer (Medicare, Medicaid, managed care health plans and commercial insurance companies, including plans offered through the health insurance exchanges) and the transaction prices for the services provided are dependent upon the terms provided by (Medicare and Medicaid) or negotiated with (managed care health plans and commercial insurance companies) the third-party payers. The payment arrangements with third-party payers for the services we provide to the related patients typically specify payments at amounts less than our standard charges. Medicare generally pays for inpatient and outpatient services at prospectively determined rates based on clinical, diagnostic and other factors. Services provided to patients having Medicaid coverage are generally paid at prospectively determined rates per discharge, per identified service or per covered member. Agreements with commercial insurance carriers, managed care and preferred provider organizations generally provide for payments based upon predetermined rates per diagnosis, per diem rates or discounted fee-for-service rates. Management continually reviews the contractual estimation process to consider and incorporate updates to laws and regulations and the frequent changes in managed care contractual terms resulting from contract renegotiations and renewals. Our revenues are based upon the estimated amounts we expect to be entitled to receive from patients and third-party payers. Estimates of contractual allowances under managed care and commercial insurance plans are based upon the payment terms specified in the related contractual agreements. Revenues related to uninsured patients and uninsured copayment and deductible amounts for patients who have health care coverage may have discounts applied (uninsured discounts and contractual discounts). We also record estimated implicit price concessions (based primarily on historical collection experience) related to uninsured accounts to record self-pay revenues at the estimated amounts we expect to collect. Laws and regulations governing the Medicare and Medicaid programs are complex and subject to interpretation. Estimated reimbursement amounts are adjusted in subsequent periods as cost reports are prepared and filed and as final settlements are determined (in relation to certain government programs, primarily Medicare, this is generally referred to as the “cost report” filing and settlement process). There were no adjustments to estimated Medicare and Medicaid reimbursement amounts and disproportionate-share funds related primarily to cost reports filed during the three and nine months ended September 30, 2019 and 2018. The Emergency Medical Treatment and Labor Act (“EMTALA”) requires any hospital participating in the Medicare program to conduct an appropriate medical screening examination of every person who presents to the hospital’s emergency room for treatment and, if the individual is suffering from an emergency medical condition, to either stabilize the condition or make an appropriate transfer of the individual to a facility able to handle the condition. The obligation to screen and stabilize emergency medical conditions exists regardless of an individual’s ability to pay for treatment. Federal and state laws and regulations require, and our commitment to providing quality patient care encourages, us to provide services to patients who are financially unable to pay for the health care services they receive. The federal poverty level is established by the federal government and is based on income and family size. The Company considers the poverty level in determining whether patients qualify for free or reduced cost of care. Because we do not pursue collection of amounts determined to qualify as charity care, they are not reported in revenues. We provide discounts to uninsured patients who do not qualify for Medicaid or charity care. In implementing the uninsured discount policy, we may first attempt to provide assistance to uninsured patients to help determine whether they may qualify for Medicaid, other federal or state assistance, or charity care. If an uninsured patient does not qualify for these programs, the uninsured discount is applied. The collection of outstanding receivables for Medicare, Medicaid, managed care payers, other third-party payers and patients is our primary source of cash and is critical to our operating performance. The primary collection risks relate to uninsured patient accounts, including patient accounts for which the primary insurance carrier has paid the amounts covered by the applicable agreement, but patient responsibility amounts (deductibles and copayments) remain outstanding. Implicit price concessions relate primarily to amounts due directly from patients. Estimated implicit price concessions are recorded for all uninsured accounts, regardless of the aging of those accounts. Accounts are written off when all reasonable internal and external collection efforts have been performed. The estimates for implicit price concessions are based upon management’s assessment of historical write-offs and expected net collections, business and economic conditions, trends in federal, state and private employer health care coverage and other collection indicators. Management relies on the results of detailed reviews of historical write-offs and collections at facilities that represent a majority of our revenues and accounts receivable (the “hindsight analysis”) as a primary source of information in estimating the collectability of our accounts receivable. We perform the hindsight analysis quarterly, utilizing rolling twelve-months accounts receivable collection and write-off data. We believe our quarterly updates to the estimated contractual allowance amounts at each of our hospital facilities provide reasonable estimates of our revenues and valuations of our accounts receivable. Clinical Laboratory Operations Laboratory testing services include chemical diagnostic tests such as blood analysis and urine analysis. Laboratory service revenues are recognized at the time the testing services are performed and billed and are reported at their estimated net realizable amounts. Net service revenues are determined utilizing gross service revenues net of contractual adjustments and discounts. Even though it is the responsibility of the patient to pay for laboratory service bills, most individuals in the U.S. have an agreement with a third-party payer such as a commercial insurance provider, Medicaid or Medicare to pay all or a portion of their healthcare expenses; most of the services provided by us are to patients covered under a third-party payer contract. In most cases, the Company is provided the third-party billing information and seeks payment from the third party in accordance with the terms and conditions of the third-party payer for health service providers like us. Each of these third-party payers may differ not only in terms of rates, but also with respect to terms and conditions of payment and providing coverage (reimbursement) for specific tests. Estimated revenues are established based on a series of procedures and judgments that require industry specific healthcare experience and an understanding of payer methods and trends. Despite follow up billing efforts, the Company does not currently anticipate collection of a significant portion of self-pay billings, including the patient responsibility portion of the billing for patients covered by third party payers. The Company currently does not have any capitated agreements. We review our calculations for the realizability of gross service revenues monthly to make certain that we are properly allowing for the uncollectable portion of our gross billings and that our estimates remain sensitive to variances and changes within our payer groups. The contractual allowance calculation is made based on historical allowance rates for the various specific payer groups monthly with a greater weight being given to the most recent trends; this process is adjusted based on recent changes in underlying contract provisions. This calculation is routinely analyzed by us based on actual allowances issued by payers and the actual payments made to determine what adjustments, if any, are needed. Bad Debt and Contractual Allowances Total gross revenues for Hospital and Clinical Laboratory Operations were reduced in the aggregate by approximately $0.9 million and $1.8 million for bad debt for the three months ended September 30, 2019 and 2018, respectively. After bad debt and contractual and related allowance adjustments to revenues of $21.9 million and $25.1 million, for the three months ended September 30, 2019 and 2018, respectively, we reported net revenues of $3.9 million and $5.0 million, respectively. Total gross revenues for Hospital and Clinical Operations were reduced in the aggregate by approximately $4.8 million and $3.1 million for bad debt for the nine months ended September 30, 2019 and 2018, respectively. After bad debt and contractual and related allowance adjustments to revenues of $86.7 million and $43.8 million, for the nine months ended September 30, 2019 and 2018, respectively, we reported net revenues of $13.1 million and $9.9 million, respectively. We continue to review the provision for bad debt and contractual and related allowances. Leases, Including the Adoption of ASU No. 2016-02 We adopted ASU No. 2016-02, Leases (Topic 842) Derivative Financial Instruments and Fair Value, Including the Adoption of ASU 2017-11 We account for warrants issued in conjunction with the issuance of common stock and certain convertible debt instruments in accordance with the guidance contained in Accounting Standards Codification (“ASC”) Topic 815, Derivatives and Hedging (“ASC 815”) and ASC Topic 480, Distinguishing Liabilities from Equity (“ASC 480”). For warrant instruments and conversion options embedded in promissory notes that are not deemed to be indexed to the Company’s own stock, we classified such instruments as liabilities at their fair values at the time of issuance and adjusted the instruments to fair value at each reporting period. These liabilities were subject to re-measurement at each balance sheet date until extinguished either through conversion or exercise, and any change in fair value was recognized in our statement of operations. The fair values of these derivative and other financial instruments had been estimated using a Black-Scholes model and other valuation techniques. In July 2017, the FASB issued ASU 2017-11 “Earnings Per Share (Topic 260) Distinguishing Liabilities from Equity (Topic 480) Derivatives and Hedging (Topic 815).” The amendments in Part I of this Update change the classification analysis of certain equity-linked financial instruments (or embedded features) with down round features. When determining whether certain financial instruments should be classified as liabilities or equity instruments, a down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock. The amendments also clarify existing disclosure requirements for equity-classified instruments. As a result, a freestanding equity-linked financial instrument (or embedded conversion option) no longer would be accounted for as a derivative liability at fair value as a result of the existence of a down round feature. For freestanding equity classified financial instruments, the amendments require entities that present earnings per share (EPS) in accordance with Topic 260 to recognize the effect of the down round feature when it is triggered. That effect is treated as a dividend and as a reduction of income available to common shareholders in basic EPS. Convertible instruments with embedded conversion options that have down round features are now subject to the specialized guidance for contingent beneficial conversion features (in Subtopic 470-20, Debt—Debt with Conversion and Other Options), including related EPS guidance (in Topic 260). The amendments in Part II of this Update re-characterize the indefinite deferral of certain provisions of Topic 480 that now are presented as pending content in the Codification, to a scope exception. Those amendments do not have an accounting effect. When the down round feature is included in an equity-classified freestanding financial instrument, the value of the effect of the down round feature is treated as a dividend when it is triggered and as a numerator adjustment in the basic EPS calculation. This reflects the occurrence of an economic transfer of value to the holder of the instrument, while alleviating the complexity and income statement volatility associated with fair value measurement on an ongoing basis. The Company has early adopted this accounting standard update. The cumulative effect of the adoption of ASU 2017-11 resulted in the reclassification of the derivative liability recorded of $56 million and the reversal of $41 million of interest expense recorded in the Company’s first fiscal quarter of 2017. The remaining $16 million was offset to additional paid-in-capital (discount on convertible debenture). Additionally, the Company recognized a deemed dividend from the trigger of the down round provision feature of $53.3 million of which $51 million of the deemed dividend was recorded retrospectively as of the beginning of the issuance of the debentures issued in March 2017 where the initial derivative liability was recorded as a result of the down round provision feature. A deemed dividend of $231.8 million was recorded for the year ended December 31, 2018, a deemed dividend of $123.9 million was recorded during the nine months ended September 30, 2019 and a deemed dividend of $17.9 million and $17.9 million was recorded for the three and nine months ended September 30, 2018, respectively, as a result of down round provision features. See Note 11 for an additional discussion of derivative financial instruments. Earnings (Loss) Per Share The Company reports earnings (loss) per share in accordance with ASC Topic 260, “Earnings Per Share”, which establishes standards for computing and presenting earnings per share. Basic earnings (loss) per share of common stock is calculated by dividing net (loss) earnings allocable to common shareholders by the weighted-average shares of common stock outstanding during the period, without consideration of common stock equivalents. Diluted earnings (loss) per share is calculated by adjusting the weighted-average shares of common stock outstanding for the dilutive effect of common stock equivalents, including stock options and warrants outstanding for the period as determined using the treasury stock method. For purposes of the diluted net loss per share calculation, common stock equivalents are excluded from the calculation when their effect would be anti-dilutive. Therefore, basic and diluted net loss per share applicable to common shareholders is the same for periods with a net loss. See Note 3 for the computation of earnings (loss) per share for the three and nine months ended September 30, 2019 and 2018. |
Liquidity and Financial Conditi
Liquidity and Financial Condition | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Liquidity and Financial Condition | Note 2 – Liquidity and Financial Condition Under ASU, 2014-15 , Presentation of Financial Statements—Going Concern (Subtopic 205-40) The Company had a working capital deficit, an accumulated deficit and a stockholders’ deficit of $69.3 million, $578.0 million and $67.7 million, respectively, at September 30, 2019. In addition, the Company had a net loss of approximately $39.1 million and cash used in operating activities of $14.4 million for the nine months ended September 30, 2019. The continued losses and other related factors raise substantial doubt about the Company’s ability to continue as a going concern for twelve months from the filing date of this report. The Company’s unaudited condensed consolidated financial statements are prepared assuming the Company can continue as a going concern, which contemplates continuity of operations through realization of assets, and the settling of liabilities in the normal course of business. Initial cost savings were realized by reducing the number of laboratory facilities to one for most of its toxicology diagnostics, thereby reducing the number of employees and associated operating expenses. The Company intends to spin off its Advanced Molecular Services Group (“AMSG”) and Health Technology Solutions, Inc. (“HTS”), as independent publicly traded companies by way of tax-free distributions to its shareholders. While these spin offs have taken longer than anticipated, completion of these spin offs is now expected to occur during the first quarter of 2020. The spin offs are subject to numerous conditions, including effectiveness of Registration Statements on Form 10 to be filed with the Securities and Exchange Commission and consents, including under various funding agreements previously entered by the Company. The intent of the spin offs of AMSG and HTS is to create three public companies, each of which can focus on its own strengths and operational plans. In accordance with ASC 205-20 and having met the criteria for “held for sale”, the Company has reflected amounts relating to AMSG and HTS as disposal groups classified as held for sale and included as part of discontinued operations. AMSG and HTS are no longer included in the segment reporting following the reclassification to discontinued operations. The discontinued operations of AMSG and HTS are described further in Note 17. The Company’s core business is now rural hospitals which is a specialized marketplace with a requirement for capable and knowledgeable management. The Company’s current financial condition may make it difficult to attract and maintain adequate expertise in its management team to successfully operate the Company’s hospitals. There can be no assurance that the Company will be able to achieve its business plan, which is to acquire and operate clusters of rural hospitals, raise any additional capital or secure the additional financing necessary to implement its current operating plan. The ability of the Company to continue as a going concern is dependent upon its ability to significantly reduce its operating costs, increase its revenues, and eventually achieve profitable operations. The accompanying condensed consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) Per Share | Note 3 – Earnings (Loss) Per Share Basic and diluted earnings (loss) per share is computed by dividing (i) loss available to common shareholders, by (ii) the weighted-average number of shares of common stock outstanding during the period. Basic loss per share excludes dilution and is computed by dividing loss attributable to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted loss per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the income of the Company. The loss per share for the three and nine months ended September 30, 2019 and the nine months ended September 30, 2018 excluded securities or other contracts to issue the Company’s common stock because the results were anti-dilutive. The following table sets forth the computation of the Company’s basic and diluted net income (loss) per share for each of the three and nine months ended September 30, 2019 and 2018: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Numerator: Net (loss) income from continuing operations $ (12,127,692 ) $ 97,356,081 $ (38,340,063 ) $ (3,965,798 ) Net (loss) income from discontinued operations (138,076 ) (159,430 ) (791,936 ) 115,787 Deemed dividends — (17,942,578 ) (123,861,587 ) (17,942,578 ) Net loss (income) to common shareholders -basic $ (12,265,768 ) $ 79,254,073 $ (162,993,586 ) $ (21,792,589 ) Adjustments for diluted calculations: Deduct change in fair value of derivative liabilities — (109,305,331 ) — — Amortize discounts associated with conversion of dilutive convertible debentures — (7,303,912 ) — — Remove change in warrant value for diluted — (11,376 ) — — Add back deemed dividends — 17,942,578 — — Net loss to common shareholders - diluted $ (12,265,768 ) $ (19,423,968 ) $ (162,993,586 ) $ (21,792,589 ) Denominator: Weighted average number of common shares outstanding during the period: Basic 6,634,045,471 5,531,767 4,461,922,587 2,550,632 Common stock equivalents: Warrants — 64,315,740 — — Convertible preferred stock — 9,505,156 — — Convertible debentures — 175,301,554 — — Diluted 6,634,045,471 254,654,217 4,461,922,587 2,550,632 Net (loss) income per common share- continuing operations: Basic $ (0.00 ) $ 17.60 $ (0.01 ) $ (1.55 ) Diluted $ (0.00 ) $ (0.08 ) $ (0.01 ) $ (1.55 ) Net (loss) income per common share- discontinued operations: Basic $ (0.00 ) $ (0.03 ) $ (0.00 ) $ 0.05 Diluted $ (0.00 ) $ (0.00 ) $ (0.00 ) $ 0.05 Total per share net (loss) income to common shareholders: Basic $ (0.00 ) $ 14.33 $ (0.04 ) $ (8.54 ) Diluted $ (0.00 ) $ (0.08 ) $ (0.04 ) $ (8.54 ) Diluted loss per share as reflected in the table above excludes all dilutive potential shares if their effect is anti-dilutive. For the nine months ended September 30, 2019 and 2018, the following table sets forth the computation of the following potential common stock equivalents excluded from the calculation of diluted loss per share as their effect was anti-dilutive: Nine Months Ended September 30, 2019 2018 Warrants 634,525,355,377 463,449,767 Convertible preferred stock 82,901,785,590 68,344,495 Convertible debentures 30,634,784,339 214,222,495 Stock options 77 77 748,061,925,383 746,016,834 The terms of certain of the warrants, convertible preferred stock and convertible debentures issued by the Company provide for reductions in the per share exercise prices of the warrants and the per share conversion prices of the debentures and preferred stock (if applicable and subject to a floor in certain cases), in the event that the Company issues common stock or common stock equivalents (as that term is defined in the agreements) at an effective exercise/conversion price that is less than the then exercise/conversion prices of the outstanding warrants, preferred stock or debentures, as the case may be. In addition, many of these equity-based securities contain exercise or conversion prices that vary based upon the price of the Company’s common stock on the date of exercise/conversion (see Notes 12 and 13). These provisions have resulted in significant dilution of the Company’s common stock and have given rise to reverse splits of the Company’s common stock. As a result of these down round provisions, the outstanding common stock and potential common stock equivalents totaled 753.9 billion at December 26, 2019. See Notes 13 and 19 regarding a discussion of the Company’s common stock and potential common stock equivalents. |
Accounts Receivable
Accounts Receivable | 9 Months Ended |
Sep. 30, 2019 | |
Receivables [Abstract] | |
Accounts Receivable | Note 4 – Accounts Receivable Accounts receivable at September 30, 2019 (unaudited) and December 31, 2018 consisted of the following: September 30, December 31, 2019 2018 Accounts receivable - Clinical Laboratory Operations $ 41,750 $ 622,009 Accounts receivable - Hospital Operations 45,804,056 31,607,644 Accounts receivable - Other (52,296 ) - Total accounts receivable 45,793,510 32,229,653 Less: Amount purchased by factors (1,572,000 ) - Allowance for discounts - Clinical Laboratory Operations (26,182 ) (573,584 ) Allowance for discounts - Hospital Operations (36,298,972 ) (25,066,799 ) Allowance for bad debts (2,787,894 ) (2,777,521 ) Accounts receivable, net $ 5,108,462 $ 3,811,749 Accounts Receivable Factoring Arrangements During the nine months ended September 30, 2019, the Company entered into five accounts receivable factoring arrangements. Under the terms of the arrangements, the aggregate amount of accounts receivable sold on a non-recourse basis, was $3.9 million. The aggregate purchase price paid to the Company was $2.7 million, the total origination and other fees incurred by the Company were $0.1 million and the Company recorded a loss on sale of the receivables of $1.2 million. As of September 30, 2019, $1.6 million of the outstanding accounts receivable were purchased but not yet paid to the factors. |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
Acquisitions | Note 5 – Acquisitions Purchase Agreement Re Jamestown Regional Medical Center On June 1, 2018, the Company acquired a business engaging in acute hospital care located in Jamestown, Tennessee under an asset purchase agreement. The acquisition also included a separate physician practice referred to as Mountain View Physician Practice, Inc. This acquisition was made as part of the Company’s business plan to acquire and operate clusters of rural hospitals. Pursuant to the asset purchase agreement, by and among the Company and Jamestown TN Medical Center, Inc., and HMA Fentress County Hospital, LLC, Jamestown HMA Physician Management, LLC and CHS/Community Health Systems, Inc. (the “Sellers”), the purchase price paid for the transaction was an aggregate of $635,096, which includes closing costs of $35,735, legal costs of approximately $115,000, and other diligence related costs, which were expensed in 2018. The fair value of the purchase consideration paid to the Sellers was allocated to the net tangible and intangible assets acquired. The Company accounted for the acquisition as a business combination under U.S. GAAP. In accordance with the acquisition method of accounting under ASC Topic 805, “Business Combinations,” The fair value of the assets acquired, net of the liabilities assumed, was approximately $8.2 million. The excess of the aggregate fair value of the net tangible assets acquired over the purchase price was $7.6 million and has been treated as a gain on bargain purchase in accordance with ASC 805. The following table shows the allocation of the purchase price of Jamestown Regional Medical Center to the acquired identifiable assets acquired, and liabilities assumed: Total purchase price $ 635,096 Tangible and intangible assets acquired, and liabilities assumed at fair value: Cash $ 375 Inventories 450,682 Prepaids and deposits 310,385 Property and equipment 7,129,484 Intangible assets 504,806 Accrued expenses (193,966 ) Net tangible and intangible assets acquired $ 8,201,766 Gain on bargain purchase (1) $ 7,566,670 (1) Gain was adjusted in the fourth quarter of 2018 from $7,732,302 to $7,566,670 to reflect an adjustment of the value of the property and equipment acquired. As reflected in the table above, the total value of intangible assets acquired in the Jamestown acquisition was $504,806, which included a certificate of need valued at $259,443 and a non-compete intangible asset valued at $245,363. The certificate of need has an indefinite life. During the year ended December 31, 2018, the Company determined that the fair value of the non-compete intangible asset, which was being amortized over two years, was fully impaired and, accordingly, the Company recorded an impairment of approximately $0.2 million in December 31, 2018. Purchase Agreement re Jellico Community Hospital and CarePlus Center Effective March 5, 2019, the Company acquired certain assets related to Jellico Community Hospital and CarePlus Center. Jellico Community Hospital is a fully operational 54-bed acute care facility that offers comprehensive services, including diagnostic imaging, radiology, surgery (general, gynecological and vascular), nuclear medicine, wound care and hyperbaric medicine, intensive care, emergency care and physical therapy. The CarePlus Center offers sophisticated testing capabilities and compassionate care, all in a modern, patient-friendly environment. Services include diagnostic imaging services, x-ray, mammography, bone densitometry, computed tomography (CT), ultrasound, physical therapy and laboratory services on a walk-in basis. The purchase price was $658,537. This purchase price was made available by Mr. Diamantis, a director of the Company. The total cost of the acquisition is estimated to be $908,537, including $250,000 of diligence, legal and other costs associated with the acquisition. The acquisition costs were fully expensed in 2019. The preliminary fair value of the purchase consideration paid to the sellers was allocated to the net tangible and intangible assets acquired. The Company accounted for the acquisition as a business combination under U.S. GAAP. In accordance with the acquisition method of accounting under ASC 805 the assets acquired, and liabilities assumed were recorded as of the acquisition date, at their respective fair values and consolidated with those of the Company. The Company is currently undertaking a valuation study to determine the fair value of the assets acquired. The preliminary estimated fair value of the assets acquired, net of the liabilities assumed, was approximately $0.9 million. The excess of the aggregate fair value of the net tangible assets acquired over the purchase price is currently estimated to be $0.3 million and has been treated as a gain on bargain purchase in accordance with ASC 805. The gain is primarily due to the value of the intangible assets acquired. In addition, the provisional amounts used for the purchase price allocation are subject to adjustments for a period not to exceed one year from the acquisition date. As a result, upon completion of a valuation study, the gain on bargain purchase presented below may be increased or decreased. The preliminary purchase price allocation was based, in part, on management’s knowledge of hospital operations. The following table shows the preliminary allocation of the purchase price of Jellico Community Hospital and CarePlus Center to the acquired identifiable assets acquired, and liabilities assumed: Total purchase price $ 658,537 Tangible and intangible assets acquired, and liabilities assumed at estimated fair value: Inventories $ 317,427 Property and equipment 500,000 Intangible asset- certificate of need 250,000 Accrued expenses (158,890 ) Net tangible and intangible assets acquired $ 908,537 Gain on bargain purchase $ 250,000 The following presents the unaudited pro-forma combined results of operations of the Company and Jamestown Regional Medical Center and Jellico Community Hospital and CarePlus Center as if the acquisitions had occurred on January 1, 2018. The unaudited pro-forma results of operations are presented for information purposes only. The unaudited pro-forma results of operations are not intended to present actual results that would have been attained had the acquisitions been completed as of January 1, 2018 or to project potential operating results as of any future date or for any future periods. Three Months Ended September 30, 2018 Nine Months Ended September 30, 2019 Nine Months Ended September 30, 2018 Net revenue $ 8,276,112 $ 14,855,436 $ 25,499,677 Net income (loss) from continuing operations 96,879,012 (38,537,422 ) (8,151,239 ) Deemed dividend from trigger of down round provision feature (17,942,578 ) (123,861,587 ) (17,942,578 ) Net (loss) income from discontinued operations (159,430 ) (791,936 ) 115,787 Net income (loss) to common shareholders - basic 78,777,004 (163,190,945 ) (25,978,030 ) Adjustments for diluted loss to common shareholders (98,678,041 ) — — Net loss to common shareholders - diluted $ (19,901,037 ) $ (163,190,945 ) $ (25,978,030 ) Net income (loss) per common share: Basic continuing operations $ 17.51 $ (0.01 ) $ (3.20 ) Diluted continuing operations $ (0.02 ) $ (0.01 ) $ (3.20 ) Basic net income (loss) to common shareholders $ 14.24 $ (0.04 ) $ (10.18 ) Diluted net loss to common shareholders $ (0.24 ) $ (0.04 ) $ (10.18 ) |
Accrued Expenses
Accrued Expenses | 9 Months Ended |
Sep. 30, 2019 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | Note 6 – Accrued Expenses Accrued expenses at September 30, 2019 (unaudited) and December 31, 2018 consisted of the following: September 30, December 31, 2019 2018 Commissions payable $ 19,113 $ 19,113 Sales tax payable 8,009 8,016 Accrued payroll and related liabilities 6,761,173 3,400,052 Accrued property tax 41,784 47,396 Accrued interest 2,586,652 5,464,837 Other accrued expenses 1,125,488 1,771,867 Accrued expenses $ 10,542,219 $ 10,711,281 Accrued expenses at December 31, 2018 included $4.9 million of interest due under the terms of a settlement agreement for a prepaid forward purchase contract related to an accounts receivable financing, which was paid by Mr. Diamantis on behalf of the Company during the nine months ended September 30, 2019, as more fully discussed in Note 7. Accrued expenses at September 30, 2019 and December 31, 2018 included $1.8 million and $0.3 million, respectively, of accrued interest due to Mr. Diamantis related to loans made by Mr. Diamantis to the Company as more fully discussed in Note 7. |
Notes Payable
Notes Payable | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Notes Payable | Note 7 – Notes Payable The Company and its subsidiaries are party to a number of loans with affiliates and unrelated parties. At September 30, 2019 (unaudited) and December 31, 2018, notes payable consisted of the following: Notes Payable – Third Parties September 30, December 31, 2019 2018 Loan payable under prepaid forward purchase contract (1) $ - $ 5,000,000 Loan payable to TCA Global Master Fund, LP (“TCA”) in the original principal amount of $3 million at 16% interest (the “TCA Debenture”). Principal and interest payments due in various installments through December 31, 2017 1,741,893 1,741,893 Notes payable to CommerceNet and Jay Tenenbaum in the original principal amount of $500,000, bearing interest at 6% per annum (the “Tegal Notes”). Principal and interest payments due annually from July 12, 2015 through July 12, 2017 335,818 341,612 Note payable to Anthony O’Killough dated September 27, 2019 in the original principal amount of $1.9 million. Interest is due only upon event of default. Issued net of $0.3 million of debt discount and $0.1 million of financing fees with $1.0 million of principal due on November 8, 2019 and $0.9 million of principal due December 26, 2019 1,527,821 - 3,605,532 7,083,505 Less current portion (3,605,532 ) (7,083,505 ) Notes payable - third parties, net of current portion $ - $ - (1) The loan payable under prepaid forward purchase contract has been fully settled during the nine months ended September 2019 as more fully discussed below under the heading “ Notes Payable –Related Party”. The Company did not make the required monthly principal and interest payments due under the TCA Debenture for the period from October 2016 through March 2017. On February 2, 2017, the Company made a payment to TCA in the amount of $0.4 million, which was applied to accrued and unpaid interest and fees, including default interest, as of the date of payment. On March 21, 2017, the Company made a payment to TCA in the amount of $0.75 million, of which approximately $0.1 million was applied to accrued and unpaid interest and fees in accordance with the terms of the TCA Debenture. Also on March 21, 2017, the Company entered into a letter agreement with TCA, which (i) waived any payment defaults through March 21, 2017; (ii) provided for the $0.75 million payment discussed above; (iii) set forth a revised repayment schedule whereby the remaining principal plus interest aggregating to approximately $2.6 million was to be repaid in various monthly installments from April of 2017 through September of 2017; and (iv) provided for payment of an additional service fee in the amount of $150,000, which was due on June 27, 2017, the day after the effective date of the registration statement filed by the Company; which amount is reflected in accrued expenses at December 31, 2018. In addition, TCA entered into an inter-creditor agreement with the purchasers of the convertible debentures (see Note 8) which sets forth rights, preferences and priorities with respect to the security interests in the Company’s assets. On September 19, 2017, the Company entered into a new agreement with TCA, which extended the repayment schedule through December 31, 2017. The remaining debt to TCA remains outstanding and TCA has made a demand for payment. The parties are currently working to amend the TCA Debenture to extend the maturity although there can be no assurance that the parties will agree to any such extension. The Company did not make the principal payments under the Tegal Notes that were due on July 12, 2016. On November 3, 2016, the Company received a default notice from the holders of the Tegal Notes demanding immediate repayment of the outstanding principal of $341,612 and accrued interest of $43,000. On December 7, 2016, the Company received a breach of contract complaint with a request for the entry of a default judgment (see Note 15). On April 23, 2018, the holders of the Tegal Notes received a judgment against the Company. To date, the Company has yet to repay this amount. On September 27, 2019, the Company issued a promissory note to a lender in the principal amount of $1.9 million and received proceeds of $1.5 million, which is net of a $0.3 million original issue discount and $0.1 million in financing fees. The first principal payment of $1.0 million was due on November 8, 2019 and has not yet been made and the remaining $0.9 million is due on December 26, 2019. The note does not bear interest except upon the occurrence of an event of default (as defined in the note). The note is unsecured and is guaranteed by Mr. Diamantis. Notes Payable – Related Party September 30, 2019 December 31, 2018 Loan payable to Christopher Diamantis $ 14,968,104 $ 800,000 Total notes payable, related party 14,968,104 800,000 Less current portion of notes payable, related party (14,968,104 ) (800,000 ) Total notes payable, related party, net of current portion $ - $ - On March 31, 2016, the Company entered into an agreement to pledge certain of its accounts receivable as collateral against a prepaid forward purchase contract whereby the Company received consideration in the amount of $5.0 million. The receivables had an estimated collectable value of $8.7 million which had been adjusted down to $0 as of December 31, 2017. In exchange for the consideration received, the counterparty received the right to: (i) a 20% per annum investment return from the Company on the consideration, with a minimum repayment term of six months and minimum return of $0.5 million, (ii) all payments recovered from the accounts receivable up to $5.25 million, if paid in full within six months, or $5.5 million, if not paid in full within six months, and (iii) 20% of all payments of the accounts receivable in excess of amounts received in (i) and (ii). On March 31, 2017, to the extent that the counterparty had not been paid $6.0 million, the Company was required to pay the difference. Christopher Diamantis, a director of the Company, guaranteed the Company’s obligation. On March 24, 2017, the Company, the counterparty and Mr. Diamantis, as guarantor, entered into an amendment to extend the Company’s obligation to March 31, 2018. Also, what the counterparty was to receive was amended to equal (a) the $5,000,000 purchase price plus a 20% per annum investment return thereon, plus (b) $500,000, plus (c) the product of (i) the proceeds received from the accounts receivable, minus the amount set forth in clauses (a) and (b), multiplied by (ii) 40%. In connection with the extension, the counterparty received a fee of $1,000,000. On April 2, 2018, the Company, the counterparty and Mr. Diamantis, as guarantor, entered into a second amendment to extend further the Company’s obligation to May 30, 2018. In connection with this further extension, the counterparty received a fee of $100,000. The counterparty instituted an arbitration proceeding under the agreement with regard to the outstanding balance. In December 2018, the Company, Mr. Diamantis and the counterparty entered into a preliminary settlement agreement in connection with the arbitration, with the terms of the settlement agreement revised on March 31, 2019. The Company and Mr. Diamantis agreed to pay the counterparty $2,000,000 on or before April 5, 2019 and an additional $7,694,685 plus interest at 10% per annum on or before May 20, 2019, which date was subsequently amended. On April 5, 2019 and May 31, 2019, Mr. Diamantis made payments totaling $5.0 million on behalf of the Company. The final payment of $4,937,105 was due on or before July 28, 2019. Mr. Diamantis made that payment on behalf of the Company on July 26, 2019. The Company and Mr. Diamantis have now complied with all of their obligations under the settlement agreement. As a result, the Company is obligated to repay Mr. Diamantis a total of $9,937,105. During the nine months ended September 30, 2019, in addition to the $9,937,105 that Mr. Diamantis loaned the Company in connection with the settlement of the prepaid forward purchase contract discussed above, Mr. Diamantis advanced the Company: (i) $0.7 million for the purchase of Jellico Community Hospital as more fully discussed in Note 5; $1.9 million for fees and expenses incurred in connection with the settlement of the prepaid forward purchase contract; and $4.7 million for working capital purposes. During the three and nine months ended September 30, 2019, we accrued interest of $0.7 million and $1.5 million, respectively, on the advances from Mr. Diamantis. During the nine months ended September 30, 2019, we repaid $2.3 million of principal to Mr. Diamantis. Interest accrues on advances from Mr. Diamantis at a flat rate of 10%. Therefore, the total amount of loans and accrued interest payable to Mr. Diamantis at September 30, 2019 and December 31, 2018, were $16.7 million and $1.1 million, respectively. See Note 19 for the discussion of additional advances made by Mr. Diamantis to the Company subsequent to September 30, 2019. |
Debentures
Debentures | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Debentures | Note 8 – Debentures The carrying amount of all outstanding debentures as of September 30, 2019 (unaudited), and December 31, 2018 is as follows: September 30, 2019 December 31, 2018 Debentures $ 28,690,240 $ 19,034,800 Discount on Debentures - (6,247,469 ) Deferred financing fees - (11,015 ) 28,690,240 12,776,316 Less current portion (28,690,240 ) (12,776,316 ) Debentures, long-term $ - $ - As of September 30, 2019, $2.0 million of outstanding debentures issued in March 2017 were not paid as of March 21, 2019, the maturity date and $17.1 million of outstanding debentures issued during 2017 and 2018 were not paid as of September 19, 2019, the maturity date. The Company has accrued penalties in connection with these non-payments in the amount of $5.7 million as of September 30, 2019. These debentures have still not been paid and remain outstanding, and the Company has been accruing interest on these debentures at the default rate of 18% per annum since the dates of the payment defaults. Debentures Issued in the Nine Months Ended September 30, 2019 The Company issued debentures on February 24, 2019 in the aggregate principal amount of $300,000 and on March 27, 2019 in the aggregate principal amount of $300,000. Both of these debentures were guaranteed by Mr. Diamantis and were originally due on June 3, 2019. The maturity dates of these debentures were extended to December 31, 2019 and the terms were changed so that commencing on August 17, 2019 the debentures bear interest on the outstanding principal amount at a rate of 2.5% per month (increasing to 5% per month on October 12, 2019), payable quarterly beginning on October 1, 2019. All overdue accrued and unpaid interest shall entail a late fee equal to the lesser of 24% per annum or the maximum rate permitted by applicable law. The Company issued debentures on May 12, 2019 in the aggregate principal amount of $500,000. These debentures were guaranteed by Mr. Diamantis and were due on June 3, 2019. In addition, the Company issued debentures on June 5, 2019 in the aggregate principal amount of $125,000 and on June 7, 2019 in the aggregate principal amount of $200,000. These debentures were also guaranteed by Mr. Diamantis and were due on July 20, 2019. The maturity dates of these debentures were extended to December 31, 2019 and the terms were changed so that commencing on August 17, 2019 the debentures bear interest on the outstanding principal amount at a rate of 2.5% per month (increasing to 5% per month on October 12, 2019), payable quarterly beginning on October 1, 2019. All overdue accrued and unpaid interest shall entail a late fee equal to the lesser of 24% per annum or the maximum rate permitted by applicable law. On June 13, 2019, the Company closed an offering of $1,250,000 aggregate principal amount of debentures with certain existing institutional investors pursuant to the terms of a Bridge Debenture Agreement, dated as of June 13, 2019 (the “June 13 Agreement”) and received proceeds of $1,250,000. The June 13 Agreement provided that on or prior to June 30, 2019, at the mutual election of the Company and the investors, the investors could purchase an additional $1,250,000 principal amount on the same terms and conditions as provided in the June 13 Agreement. Under the June 13 Agreement, the maturity date of the debentures issued on February 24, 2019, March 27, 2019, May 12, 2019, June 5, 2019 and June 7, 2019 were extended to December 31, 2019 and the terms were changed such that they have the same interest terms as contained in the June 13, 2019 debentures, as more fully discussed below. On June 21, 2019, the Company and the investors agreed that the Company would issue, and the investors would purchase, $250,000 principal amount of debentures and on June 24, 2019 the Company and the investors agreed that the Company would issue, and the investors would purchase, an additional $1,020,000 aggregate principal amount of debentures. In connection with the issuances of the June 21, 2019 and June 24, 2019 debentures, the Company received total proceeds of $1,270,000. The June 13, 2019, June 21, 2019 and June 24, 2019 debentures (collectively, the “June 2019 Debentures”) are secured and guaranteed by the Company’s subsidiaries on the same terms as provided in the Purchase Agreement, dated as of August 31, 2017, which is more fully described in Note 9 to the Company’s audited consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2018. At the Company’s option, the June 2019 Debentures may also be exchanged for shares of the Company’s Series I-2 Convertible Preferred Stock under the terms of the previously-announced Exchange Agreement, dated as of October 30, 2017. Commencing on August 17, 2019, the June 2019 Debentures bear interest on the outstanding principal amount at a rate of 2.5% per month (increasing to 5% per month on October 12, 2019), payable quarterly beginning on October 1, 2019. All overdue accrued and unpaid interest entail a late fee equal to the lesser of 24% per annum or the maximum rate permitted by applicable law. Christopher Diamantis is a guarantor of the June 2019 Debentures. In addition to the debentures issued in the nine months ended September 30, 2019, during the years ending December 31, 2017 and 2018, the Company issued convertible debentures, which are more fully described in Note 9 to the Company’s audited consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2018. Certain of these convertible debentures were issued with warrants to purchase shares of the Company’s common stock. Outstanding warrants are more fully discussed in Note 13. The debentures issued during the nine months ended September 30, 2019 and 2018, were issued at discounts of $0.1 million and $2.9 million, respectively, and accordingly, the Company realized a total of $3.8 million and $8.0 million, respectively, in proceeds from the issuances of the debentures. At September 30, 2019, these discounts have been fully amortized. These discounts represented original issue discounts, the relative fair value of the warrants issued with the debentures and the relative fair value of the beneficial conversion features of the debentures. During the three months ended September 30, 2019 and 2018, the Company recorded approximately $1.4 million and approximately $9.0 million, respectively, of non-cash interest and amortization of debt discount expense in connection with the debentures and warrants. During the nine months ended September 30, 2019 and 2018, the Company recorded approximately $15.8 million and approximately $16.1 million, respectively, of non-cash interest and amortization of debt discount expense primarily in connection with the debentures and warrants. These amounts include non-cash interest expense and debt discount amortization, which resulted from the modification of warrants as more fully discussed in Notes 11 and 13. See Note 13 for summarized information related to warrants issued and the activity during the nine months ended September 30, 2019. See Notes 3, 13 and 19 for a discussion of the dilutive effect of the outstanding convertible debentures, warrants and convertible preferred stock as of September 30, 2019. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 9 – Related Party Transactions Alcimede billed $0.1 million and $0.1 million for consulting fees for the three months ended September 30, 2019 and 2018, respectively, and $0.3 million and $0.3 million for the nine months ended September 30, 2019 and 2018, respectively. Seamus Lagan, the Company’s President and Chief Executive Officer, is the sole manager of Alcimede (see Note 13). See Notes 5, 7 and 19 for a discussion of amounts advanced to the Company by Mr. Diamantis. The terms of the foregoing transactions, including those discussed in Notes 5, 7, 12 and 19, are not necessarily indicative of those that would have been agreed to with unrelated parties for similar transactions. |
Finance and Operating Lease Obl
Finance and Operating Lease Obligations | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Finance and Operating Lease Obligations | Note 10 – Finance and Operating Lease Obligations As more fully discussed in Note 1, we adopted ASU No. 2016-02, Leases (Topic 842) Generally, we use our estimated weighted average cost of capital at lease commencement as our interest rate, as most of our operating leases do not provide a readily determinable implicit interest rate. The following table presents our lease-related assets and liabilities at September 30, 2019: Balance Sheet Classification September 30, 2019 Assets: Operating leases Right-of-use operating lease assets $ 328,615 Finance leases Property and equipment, net 618,278 Total lease assets $ 946,893 Liabilities: Current: Operating leases Right-of-use operating lease assets $ 141,830 Finance leases Current liabilities 589,457 Noncurrent: Operating leases Right-of-use operating lease obligations 186,785 Finance leases Long-term debt 28,821 Total lease liabilities $ 946,893 Weighted-average remaining term: Operating leases 1.98 years Finance leases 0.19 years Weighted-average discount rate: Operating leases (1) 13.0 % Finance leases 5.122 % (1) Upon adoption of the new lease standard, discount rates used for existing operating leases were established at January 1, 2019. The following table presents certain information related to lease expense for finance and operating leases for the three and nine months ended September 30, 2019: Three Months Ended September 30, 2019 Nine Months Ended Finance lease expense: Depreciation/amortization of leased assets (1) $ 15,004 $ (30,055 ) Interest on lease liabilities 704 5,804 Operating leases: Short-term lease expense (2) 76,312 263,713 Total lease expense $ 92,020 $ 239,462 (1) The depreciation for the nine months ended September 30, 2019 has been adjusted for depreciation recorded in the prior year. (2) Expenses are included in general and administrative expenses in our condensed consolidated statements of operations. Other Information The following table presents supplemental cash flow information for the nine months ended September 30, 2019: 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 214,357 Operating cash flows for finance leases $ 5,800 Financing cash flows for finance leases payments $ 143,930 Aggregate future minimum rentals under right-to-use operating and finance leases are as follows: Right-to-Use Operating Leases Finance Leases October 1, 2019 to September 30, 2020 $ 107,457 $ 604,080 October 1, 2020 to September 30, 2021 134,776 32,611 October 1, 2021 to September 30, 2022 110,062 — October 1, 2022 to September 30, 2023 29,247 — October 1, 2023 to September 30, 2024 2,437 — Total 383,979 636,691 Less interest (55,364 ) (18,413 ) Present value of minimum lease payments 328,615 618,278 Less current portion of lease obligations (141,830 ) (589,457 ) Lease obligations, net of current portion $ 186,785 $ 28,821 As of September 30, 2019, the Company is in default of substantially all its finance lease obligations, therefore the aggregate future minimum rentals and accrued interest under finance leases in the amount of $0.6 million are deemed to be immediately due. |
Derivative Financial Instrument
Derivative Financial Instruments and Fair Value | 9 Months Ended |
Sep. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments and Fair Value | Note 11 – Derivative Financial Instruments and Fair Value The following table sets forth the financial assets and liabilities carried at fair value measured on a recurring basis as of September 30, 2019 and December 31, 2018: Level 1 Level 2 Level 3 Total As of December 31, 2018: Embedded conversion options $ - $ - $ 350,260 $ 350,260 Total $ - $ - $ 350,260 $ 350,260 As of September 30, 2019: Embedded conversion options $ - $ - $ 455,336 $ 455,336 Total $ - $ - $ 455,336 $ 455,336 The Company utilized the following methods to value its derivative liabilities as of September 30, 2019 and December 31, 2018, for embedded conversion options valued at $455,336 and $350,260, respectively. The Company determined the fair value by comparing the discounted conversion price per share (85% of market price, subject to a floor in certain cases) multiplied by the number of shares issuable at the balance sheet date to the actual price per share of the Company’s common stock multiplied by the number of shares issuable at that date with the difference in value recorded as a liability. All inputs for the derivative liabilities are observable and, therefore, there is no sensitivity in the valuation to unobservable inputs. The following table reconciles the changes in the liabilities categorized within Level 3 of the fair value hierarchy for the nine months ended September 30, 2019: Balance at December 31, 2018 $ 350,260 Change in fair value of debentures 105,076 Balance at September 30, 2019 $ 455,336 During the nine months ended September 30, 2019 and the three and nine months ended September 30, 2018, the conversions of preferred stock triggered a further reduction in the exercise prices of any debentures and warrants containing ratchet features that had not already ratcheted down to their floor. In accordance with U.S. GAAP, the incremental fair value of the debentures and warrants was measured, ignoring the down round provision, using Black Scholes. The following assumptions were utilized in the Black Scholes valuation models in the nine months ended September 30, 2019: risk free rates ranging from 2.4% to 2.6% and volatility ranging from 189.5% to 273.1% and weighted average life of 0.3 to 3.2 years. The following assumptions were utilized in the Black Scholes valuation models in the three and nine months ended September 30, 2018: risk free rates ranging from 2.36% to 2.88% and volatility ranging from 163.8% to 234.7% and weighted average life of .73 to 3.5 years. The incremental value of $123.9 million was recorded as a deemed dividend for the nine months ended September 30, 2019 and the incremental value of $17.9 million and $17.9 million was recorded as a deemed dividend in the three and nine months ended September 30, 2018, respectively. Deemed dividends are also discussed in Notes 1 and 3. During the nine months ended September 30, 2019, the Company recorded interest expense of $9.5 million, which represented the fair value of the modification of warrants during the period as more fully discussed in Note 13. The Company used the Black Scholes model to calculate the fair value of the warrants as of the modification dates. Using the pre-modification terms and related assumptions of risk free rates ranging from 2.44% to 2.46%, volatility ranging from 182.9% to 204.4% and weighted average remaining lives of .24 years to .36 years, and the post-modification terms and related assumptions of risk free rates ranging from 2.23% to 2.49%, volatility ranging from 198.3% to 259.4% and weighted average remaining lives of .48 years to 2.89 years, the changes in the fair value of the warrant instruments as a result of the modifications were estimated. During the three and nine months ended September 30, 2018, the Company extended the exercise period of outstanding warrants twice, once to March 21, 2019 and the second time to June 21, 2019 and recorded an additional discount on the debenture issued in connection with the warrants of approximately $8.3 million and $0.3 million as a result of the extensions. The Company amortized approximately $6.4 million of the discount as non-cash interest expense in the nine months ended September 30, 2018. This amount was included in the cash flow statement for the nine months ended September 30, 2018 in amortization of debt discount. The Company used the Black Scholes model to calculate the fair value of the warrants as of the modification dates. Using the pre-modification term and related assumptions of risk free rates ranging from 1.91-2.32%, volatility ranging from 184.0-296.3% and weighted average remaining life of .33 years, and the post-modification term and related assumptions of risk free rates ranging from 2.09-2.56%, volatility ranging from 208.2-249.1% and weighted average remaining life of .65 years, the change in the fair value of the warrant instruments as a result of the modifications was estimated on each date. For the three and nine months ended September 30, 2018, the Company realized income of $109.3 million and $13.7 million, respectively, on instruments valued using Level 3 valuations. On September 23, 2018, the Company’s board of directors approved a reverse split of its common stock, which would provide sufficient authorized and unissued shares to allow for otherwise equity classified instruments to be classified in equity. As of September 23, 2018, the fair value of these instruments was evaluated for reclassification. As a result of the evaluation, the Company reclassified the derivative liability previously reported as a current liability to derivative income. All inputs for the derivative liabilities are observable and, therefore, there is no sensitivity in the valuation to unobservable inputs. On October 4, 2019, the Board of Directors authorized the issuance and sale of certain shares of Series K Preferred Stock to Alcimede LLC pursuant to the terms of an Exchange Agreement. The Board considered all options to secure additional financing required to continue operations and determined this authorization to be necessary to secure needed financing in the required time frame. As a result of this authorization, as of the date of filing this report, the Company believes that it has the ability to have sufficient authorized shares of its common stock to cover all potentially dilutive common shares outstanding. The Series K Preferred Stock is more fully described in Note 19. |
Redeemable Preferred Stock
Redeemable Preferred Stock | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Redeemable Preferred Stock | Note 12 – Redeemable Preferred Stock The Company has 5,000,000 authorized shares of Preferred Stock at a par value of $0.01. Issuances of the Company’s Preferred Stock included as part of stockholders’ deficit are discussed in Note 13. The following is a summary of the issuances of the Company’s Redeemable Preferred Stock. Series I-1 Convertible Preferred Stock On October 30, 2017, the Company closed an offering of $4,960,000 stated value of 4,960 shares of a newly-authorized Series I-1 Convertible Preferred Stock (the “Series I-1 Preferred Stock”). Each share of Series I-1 Preferred Stock has a stated value of $1,000. The offering was pursuant to the terms of the Securities Purchase Agreement, dated as of October 30, 2017 (the “Purchase Agreement”), between the Company and certain existing institutional investors of the Company. The Company received proceeds of $4.0 million from the offering. The Purchase Agreement gives the investors the right to participate in up to 50% of any offering of common stock or common stock equivalents by the Company. In the event of any such offering, the investors may also exchange all or some of their Series I-1 Preferred Stock for such new securities on an $0.80 stated value of Series I-1 Preferred Stock for $1.00 of new subscription amount basis. Each share of Series I-1 Preferred Stock is convertible into shares of the Company’s common stock at any time at the option of the holder at a conversion price equal to the lesser of (i) $1.00, subject to adjustment, and (ii) 85% of the lesser of the volume weighted average market price of the common stock on the day prior to conversion or on the day of conversion. The conversion price is subject to “full ratchet” and other customary anti-dilution protections as more fully described in the Certificate of Designation of the Series I-1 Preferred Stock. Upon the occurrence of certain Triggering Events, as defined in the Certificate of Designation of the Series I-1 Preferred Stock, the holder shall, in addition to any other right it may have, have the right, at its option, to require the Company to either redeem the Series I-1 Preferred Stock in cash or in certain circumstances in shares of common stock at the redemption prices set forth in the Certificate of Designation. Series I-2 Convertible Preferred Stock On October 30, 2017, the Company entered into Exchange Agreements with the holders of the September Debentures to provide that the holders may, from time to time, exchange their September Debentures for shares of a newly-authorized Series I-2 Preferred Stock. The Exchange Agreements permitted the holders of the September Debentures to exchange specified principal amounts of the September Debentures on various closing dates starting on December 2, 2017 (debentures are more fully discussed in Note 9 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K). At the holder’s option each holder could reduce the principal amount of September Debentures exchanged on any particular closing date, or elect not to exchange any September Debentures at all on a closing date. If a holder chose to exchange less principal amount of September Debentures, or no September Debentures at all, it could carry forward such lesser amount to a future closing date and then exchange more than the originally specified principal amount for that later closing date. For each $0.80 of principal amount of September Debenture surrendered to the Company at any closing date, the Company will issue the holder a share of Series I-2 Preferred Stock with a stated value of $1.00. Each share of Series I-2 Preferred Stock is convertible into shares of the Company’s common stock at any time at the option of the holder at a conversion price equal to the lesser of (i) $1.00, subject to adjustment, and (ii) 85% of the lesser of the volume weighted average market price of the common stock on the day prior to conversion or on the day of conversion. The conversion price is subject to “full ratchet” and other customary anti-dilution protections as more fully described in the Certificate of Designation of the Series I-2 Preferred Stock. From December 2, 2017 through March 1, 2018, any exchange under the Exchange Agreements was at the option of the holder. Subsequent to March 2018, any exchange is at the option of the Company. The Company’s board of directors has designated up to 21,346 shares of the 5,000,000 authorized shares of preferred stock as the Series I-2 Preferred Stock. Each share of Series I-2 Preferred Stock has a stated value of $1,000. Upon the occurrence of certain Triggering Events (as defined in the Certificate of Designation of the Series I-2 Preferred Stock), the holder shall, in addition to any other right it may have, have the right, at its option, to require the Company to either redeem the Series I-2 Preferred Stock in cash or in certain circumstances in shares of common stock at the redemption prices set forth in the Certificate of Designation. On February 9, 2018, the holders exercised their right to exchange a portion of the September Debentures for shares of the Series I-2 Preferred Stock for the first time. On that date, the holders exchanged an aggregate of $1,384,556 principal amount of September Debentures and the Company issued an aggregate 1,730.7 shares of its Series I-2 Preferred Stock. On July 16, 2018, under the Exchange Agreements with the holders of the September Debentures, the holders exchanged a portion of the September Debentures for shares of the Company’s Series I-2 Preferred Stock. On that date, the holders exchanged an aggregate of $1,741,580 principal amount of the September Debentures and the Company issued an aggregate of 2,176.975 shares of its Series I-2 Preferred Stock. During the nine months ended September 30, 2018, the Company recorded a loss on these exchanges of convertible debentures into shares of its Series I-2 Preferred Stock in the aggregate amount of $1.5 million. In 2018, the holder converted 1,286.141 shares of Series I-2 Preferred Stock into 106,335,991 shares of the Company’s common stock and during the nine months ended September 30, 2019, the holder converted 982.101 shares of Series I-2 Preferred Stock into 8,150,754,118 shares of the Company’s common stock. See Notes 3 and 19 for a discussion of the dilutive effect of the Series I-1 Preferred Stock and the Series I-2 Preferred Stock as of September 30, 2019 and December 26, 2019, respectively. |
Stockholders' Deficit
Stockholders' Deficit | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Stockholders' Deficit | Note 13 – Stockholders’ Deficit Authorized Capital The Company has 10,000,000,000 authorized shares of Common Stock at $0.0001 par value and 5,000,000 authorized shares of Preferred Stock at a par value of $0.01. Preferred Stock The Company has 5,000,000 shares, par value $0.01, of preferred stock authorized. As of September 30, 2019, the Company had outstanding shares of preferred stock consisting of shares of its Series I-1 Preferred Stock and shares of Series I-2 Preferred Stock (both of which are more fully discussed in Note 12), 215 shares of its Series G Preferred Stock, 10 shares of its Series H Preferred Stock, 1,750,000 shares of its Series F Convertible Preferred Stock and 250,000 shares of its Series J Convertible Preferred Stock. The 215 shares of the Series G Preferred Stock have a stated value of $1,000 per share and are convertible into shares of the Company’s common stock at a price equal to 85% of the volume weighted average price of the Company’s common stock at the time of conversion. See Note 19 regarding the redemption of these shares. The Series H Preferred Stock has a stated value of $1,000 per share and is convertible into shares of the Company’s common stock at a conversion price of 85% of the volume weighted average price of the Company’s common stock at the time of conversion. In September 2017, the Company issued 1,750,000 shares of its Series F Preferred Stock valued at $174,097 in connection with the acquisition of Genomas Inc. Genomas Inc. is included in the Company’s discontinued operations, which are discussed in Note 17. Each share of the Series F Preferred Stock is convertible into shares of our common stock (subject to adjustment as provided in the related certificate of designation) at any time after the first anniversary of the issuance date at the option of the holder at a conversion price equal to the greater of $14,625 or the average closing price of the Company’s common stock for the 10 trading days immediately preceding the conversion. The maximum number of shares of common stock issuable upon the conversion of the Series F Preferred Stock is 120. Any shares of Series F Preferred Stock outstanding on the fifth anniversary of the issuance date will be mandatorily converted into common stock at the applicable conversion price on such date. At any time, from time to time after the first anniversary of the issuance date, the Company has the right to redeem all or any portion of the outstanding Series F Preferred Stock at a price per share equal to $1.95 plus any accrued but unpaid dividends. The Series F Preferred Stock has voting rights. Each share of Series F Preferred Stock has one vote, and the holders of the Series F Preferred Stock shall vote together with the holders of the Company’s common stock as a single class. On July 20, 2018, the Company filed a Certificate of Designation with the Secretary of State of the State of Delaware to authorize the issuance of up to 250,000 shares of its Series J Convertible Preferred Stock (the “Series J Preferred Stock”). On July 23, 2018, the Company entered into an Exchange Agreement (the “Agreement”) with Alcimede, of which Seamus Lagan, our Chief Executive Officer, is the sole manager. Pursuant to the Agreement, the Company issued to Alcimede 250,000 shares of the Series J Preferred Stock in exchange for the cancellation of the outstanding principal and interest owed by the Company to Alcimede under the Note, dated February 5, 2015, and the cancellation of certain amounts owed by the Company to Alcimede under a consulting agreement between the parties. The total amount of consideration paid by Alcimede to the Company equaled $250,000. Each share of the Series J Preferred Stock has a stated value of $1.00. The conversion price is equal to the average closing price of the Company’s common stock on the 10 trading days immediately prior to the conversion date. Each holder of the Series J Preferred Stock is entitled to vote on all matters submitted to a vote of the holders of the Company’s common stock. From and after October 1, 2018, each share of the Series J Preferred Stock is entitled to the whole number of votes equal to the number of common shares into which it is then convertible. The full terms of the Series J Preferred Stock are listed in the Certificate of Designations filed as Exhibit 3.16 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 24, 2018. The Series J Preferred Stock is entitled to 8% per annum cumulative dividends at the discretion of the Company’s board of directors. No dividends have been declared by the board as of September 30, 2019. On October 4, 2019, the Board of Directors authorized the issuance and sale of certain shares of Series K Preferred Stock to Alcimede LLC pursuant to the terms of an Exchange Agreement, as more fully described in Note 19. Common Stock The Company has authorized 10,000,000,000 shares of Common Stock, par value $0.0001 per share. The Company had 8,398,936,775 and 128,567,273 shares of common stock issued and outstanding at September 30, 2019 and December 31, 2018, respectively. During the nine months ended September 30, 2019, the Company: ● Issued 119,615,384 shares of common stock upon exercise of 755,000,000 warrants, on a cashless basis; and ● Issued 8,150,754,118 shares of common stock upon the conversion of 982.101 shares of its Series I-2 Preferred Stock; Restricted Stock On August 14, 2017, the Board of Directors, based on the recommendation of the Compensation Committee of the Board and in accordance with the provisions of the 2007 Equity Plan, approved grants to employees and directors of the Company of an aggregate of 364 shares of restricted common stock of the Company. The grants fully vested on the first anniversary of the date of grant, subject to the grantee’s continued status as an employee or director on the vesting date. During the nine months ended September 30, 2019, 123 shares of the restricted stock were forfeited by their terms and returned to treasury. During the nine months ended September 30, 2018, the Company issued an aggregate of 142,667 shares of restricted stock to employees and directors, based upon the recommendation of the Compensation Committee of the Board of Directors. The grants fully vested immediately. During the nine months ended September 30, 2018, the Company recognized stock-based compensation in the amount of $477,933 for the grant of such restricted stock based on a valuation of $3.35 per share. The value of the common stock issued was based on the fair value of the stock at the time of issuance. Common Stock and Common Stock Equivalents The Company has outstanding options, warrants, convertible preferred stock and convertible debentures. Exercise of the options and warrants, and conversions of the convertible preferred stock and debentures could result in substantial dilution of our common stock and a decline in its market price. In addition, the terms of certain of the warrants, convertible preferred stock and convertible debentures issued by us provide for reductions in the per share exercise prices of the warrants and the per share conversion prices of the debentures and preferred stock (if applicable and subject to a floor in certain cases), in the event that we issue common stock or common stock equivalents (as that term is defined in the agreements) at an effective exercise/conversion price that is less than the then exercise/conversion prices of the outstanding warrants, preferred stock or debentures, as the case may be. These provisions, as well as the issuances of debentures and preferred stock with conversion prices that vary based upon the price of our common stock on the date of conversion, have resulted in significant dilution of our common stock and have given rise to reverse splits of our common stock. On October 4, 2019, the Board of Directors authorized the issuance and sale of certain shares of Series K Preferred Stock to Alcimede LLC pursuant to the terms of an Exchange Agreement. The Series K Preferred Stock is more fully described in Note 19. The Board considered all options to secure additional financing required to continue operations and determined this authorization to be necessary to secure needed financing in the required time frame. As a result of this authorization, as of the date of filing this report, the Company believes that it has the ability to have sufficient authorized shares of its common stock to cover all potentially dilutive common shares. These potentially dilutive shares are presented in Note 19. The Company maintained and sponsored the Tegal Corporation 2007 Incentive Award Plan (the “2007 Equity Plan”). Tegal Corporation is the prior name of the Company. The 2007 Equity Plan, as amended, provided for the issuance of stock options and other equity awards to the Company’s officers, directors, employees and consultants. The 2007 Equity Plan terminated pursuant to its terms in September 2017. The following table summarizes the stock option activity for the nine months ended September 30, 2019: Stock Options Number of options Weighted-average exercise price Weighted-average contractual term Outstanding at December 31, 2018 77 $ 1,036,375 7.33 Granted - Expired - Forfeit - Outstanding at September 30, 2019 77 $ 1,036,375 6.50 Exercisable at September 30, 2019 68 $ 1,152,616 The Company recognized stock option expense of approximately $25,950 and $72,590 for the nine months ended September 30, 2019 and 2018, respectively. As of September 30, 2019, the weighted average remaining contractual life was 6.50 years for options outstanding and exercisable. The intrinsic value of options exercisable at September 30, 2019 was $0. As of September 30, 2019, the remaining compensation expense of approximately $8,650 will be amortized over the remaining vesting period, which is approximately three months. Warrants The Company, as part of various debt and equity financing transactions, has issued warrants to purchase shares of the Company’s common stock. During the nine months ended September 30, 2019, the number of shares issuable pursuant to outstanding warrants increased by 582.2 billion as a result of the anti-dilution provisions of outstanding warrants that were issued in connection with the issuances of debentures as more fully discussed in Note 9 to the Company’s consolidated financial statements included in its Annual Report on Form 10-K. The number of shares issued and issuable as well as the exercise prices of the warrants reflected in the table below have been adjusted to reflect the full ratchet and other dilutive and down round provisions pursuant to the warrant agreements. As a result of the current exercise prices for the majority of the outstanding warrants (subject to a floor in some cases), as well as the full ratchet provisions of the majority of the outstanding warrants (again, subject to a floor in some cases), subsequent decreases in the price of the Company’s common stock and subsequent issuances of the Company’s common stock or common stock equivalents at prices below the current exercise prices of the warrants will result in increases in the number of shares issuable pursuant to the warrants and decreases in the exercise prices. The following summarizes the information related to warrants issued and the activity during the nine months ended September 30, 2019: Number of shares issuable pursuant to warrants Weighted average exercise price Balance at December 31, 2018 53,130,510,439 $ 0.00172 Increase during the period as a result of down round provisions 582,209,844,938 Shares issued pursuant to Warrants exercised during the period (755,000,000 ) $ 0.00034 Balance at September 30, 2019 634,585,355,377 $ 0.00014 On March 27, 2019, the expiration dates of certain warrants issued in March 2017 and September 2017 with convertible debentures, referred to as the March 2017 Series B Warrants and the September 2017 Series B Warrants, were extended from June 2019 to September 2019. On May 12, 2019, the expiration date of these warrants was further extended to March 31, 2022. The Company used the Black Scholes model to calculate the fair value of the warrants as of the modification date. Using the pre-modification terms and related assumptions, and the post-modification terms and related assumptions, the Company determined that the change in fair value of the warrants as a result of the March 27 th th During the three and nine months ended September 30, 2018, the Company extended the exercise period of outstanding warrants twice, once to March 21, 2019 and the second time to June 21, 2019 and recorded an additional discount on the debenture issued in connection with the warrants of approximately $8.3 million and $0.3 million as a result of the extensions. The Company amortized approximately $6.4 million of the discount as non-cash interest expense in the nine months ended September 30, 2018. This amount was included in the cash flow statement for the nine months ended September 30, 2018 in amortization of debt discount. See Note 11 for the assumptions used in the Black Scholes valuation models. See Note 19 for a discussion of the dilutive effect of the outstanding warrants as of December 26, 2019. |
Supplemental Disclosure of Cash
Supplemental Disclosure of Cash Flow Information | 9 Months Ended |
Sep. 30, 2019 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Disclosure of Cash Flow Information | Note 14 – Supplemental Disclosure of Cash Flow Information Nine Months Ended September 30, 2019 2018 Cash paid for interest $ - $ 303,208 Cash paid for income taxes 45,000 20,000 Acquisitions of Hospitals and Medical Center: Cash $ - $ 375 Inventory 317,427 450,682 Prepaid expenses and other current assets - 310,385 Property and equipment 500,000 7,129,484 Intangible assets 250,000 504,806 Accrued expenses 158,890 193,966 Non-cash investing and financing activities: Exchange of Series I-2 Preferred Stock for common stock $ 1,143,974 $ 633,101 Cashless exercise of warrants 11,961 4,619,150 Debentures converted into common stock - 8,085,342 Common stock issued in cashless exercise of warrants 11,961 - Exchange of debentures into Series I-2 Preferred Stock - 1,420 Conversions of Series H Preferred Stock into common stock - 50,000 Original issue discount of debentures and notes payable 400,000 1,920,000 Deemed dividend for trigger of down round provision features 123,861,587 17,942,578 Issuance of Series J Preferred Stock in settlement of note payable to related party - 250,000 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 15 – Commitments and Contingencies Concentration of Credit Risk Credit risk with respect to accounts receivable is generally diversified due to the large number of patients comprising the client base. The Company does have significant receivable balances with government payers and various insurance carriers. Generally, the Company does not require collateral or other security to support customer receivables. However, the Company continually monitors and evaluates its client acceptance and collection procedures to minimize potential credit risks associated with its accounts receivable and establishes an allowance for uncollectible accounts and as a consequence, believes that its accounts receivable credit risk exposure beyond such allowance is not material to the financial statements. A number of proposals for legislation continue to be under discussion which could substantially reduce Medicare and Medicaid (CMS) reimbursements to hospitals and clinical laboratories. Depending upon the nature of regulatory action, and the content of legislation, the Company could experience a significant decrease in revenues from Medicare and Medicaid (CMS), which could have a material adverse effect on the Company. The Company is unable to predict, however, the extent to which such actions will be taken. The Company maintains its cash balances in high credit quality financial institutions. The Company’s cash balances may, at times, exceed the deposit insurance limits provided by the Federal Deposit Insurance Corporation. Legal Matters From time-to-time, the Company may be involved in a variety of claims, lawsuits, investigations and proceedings related to contractual disputes, employment matters, regulatory and compliance matters, intellectual property rights and other litigation arising in the ordinary course of business. The Company operates in a highly regulated industry which may inherently lend itself to legal matters. Management is aware that litigation has associated costs and that results of adverse litigation verdicts could have a material effect on the Company’s financial position or results of operations. The Company’s policy is to expense legal fees and expenses incurred in connection with the legal proceedings in the period in which the expense is incurred. Management, in consultation with legal counsel, has addressed known assertions and predicted unasserted claims below. Biohealth Medical Laboratory, Inc. and PB Laboratories, LLC (the “Companies”) filed suit against CIGNA Health in 2015 alleging that CIGNA failed to pay claims for laboratory services the Companies provided to patients pursuant to CIGNA - issued and CIGNA - administered plans. In 2016, the U.S. District Court dismissed part of the Companies’ claims for lack of standing. The Companies appealed that decision to the Eleventh Circuit Court of Appeals, which in late 2017 reversed the District Court’s decision and found that the Companies have standing to raise claims arising out of traditional insurance plans as well as self-funded plans. In July 2019, the Companies and EPIC Reference Labs, Inc. filed suit against Cigna Health for failure to pay claims for laboratory services provided. Cigna Health, in turn, sued for improper billing practices. Both cases are in the early stages. The Company’s Epinex Diagnostics Laboratories, Inc. subsidiary was sued in a California state court by two former employees who alleged that they were wrongfully terminated, as well as for a variety of unpaid wage claims. The parties entered into a settlement agreement of this matter on July 29, 2016 for approximately $0.2 million, and the settlement was consummated on August 25, 2016. In October of 2016, the plaintiffs in this matter filed a motion with the court seeking payment for attorneys’ fees in the approximate amount of $0.7 million. On March 24, 2017, the court granted plaintiffs’ motion for payment of attorneys’ fees in the amount of $0.3 million, and the Company accrued this amount in its consolidated financial statements. Additionally, the Company is seeking indemnification for these amounts from Epinex Diagnostics, Inc., the seller of Epinex Diagnostic Laboratories, Inc., pursuant to a Stock Purchase Agreement entered into by and among the parties. In February 2016, the Company received notice that the Internal Revenue Service (the “IRS”) placed a lien against Medytox Solutions, Inc. and its subsidiaries relating to unpaid 2014 taxes due, plus penalties and interest, in the amount of $5.0 million. The Company paid $0.1 million toward its 2014 tax liability in March 2016. The Company filed its 2015 Federal tax return on March 15, 2016 and the accompanying election to carryback the reported net operating losses was filed in April 2016. On August 24, 2016, the lien was released, and in September of 2016 the Company received a refund from the IRS in the amount of $1.9 million. In November of 2016, the IRS commenced an audit of the Company’s 2015 Federal tax return. Based upon the audit results, the Company has made provisions of approximately $1.0 million as a liability in its financial statements as well as an estimated $0.6 million of receivables for an additional refund that it believes is due. On September 27, 2016, a tax warrant was issued against the Company by the Florida Department of Revenue (the “DOR”) for unpaid 2014 state income taxes in the approximate amount of $0.9 million, including penalties and interest. The Company entered into a Stipulation Agreement with the DOR allowing the Company to make monthly installments until July 2019. The Company has made payments to reduce the amount owed to approximately $$0.4 million as of September 30, 2019. The Company intends to renegotiate another Stipulation agreement. However, there can be no assurance the Company will be successful. The remaining balance accrued of approximately $0.4 million remained outstanding to the DOR at September 30, 2019. In December of 2016, TCS-Florida, L.P. (“Tetra”), filed suit against the Company for failure to make the required payments under an equipment leasing contract that the Company had with Tetra (see Note 10). On January 3, 2017, Tetra received a Default Judgment against the Company in the amount of $2.6 million, representing the balance owed on the leases, as well as additional interest, penalties and fees. In January and February of 2017, the Company made payments to Tetra relating to this judgment aggregating $0.7 million, and on February 15, 2017, the Company entered into a forbearance agreement with Tetra whereby the remaining $1.9 million due would be paid in 24 equal monthly installments. The Company has not maintained the payment schedule to Tetra. As a result of this default, in May 2018, Tetra and the Company agreed to dispose of certain equipment and the proceeds from the sale have been applied to the outstanding balance. The balance owed to Tetra at September 30, 2019 was $0.3 million and the Company remains in default. In December of 2016, DeLage Landen Financial Services, Inc. (“DeLage”), filed suit against the Company for failure to make the required payments under an equipment leasing contract that the Company had with DeLage (see Note 10). On January 24, 2017, DeLage received a default judgment against the Company in the approximate amount of $1.0 million, representing the balance owed on the lease, as well as additional interest, penalties and fees. The Company recognized this amount in its consolidated financial statements as of December 31, 2016. On February 8, 2017, a Stay of Execution was filed and under its terms the balance due was to be paid in variable monthly installments through January of 2019, with an implicit interest rate of 4.97%. The Company and DeLage have now disposed of certain equipment and reduced the balance owed to DeLage. A balance of $0.2 million remained outstanding at September 30, 2019. On December 7, 2016, the holders of the Tegal Notes (see Note 7) filed suit against the Company seeking payment for the amounts due under the notes in the aggregate of the principal of $341,612, and accrued interest of $43,000. A request for entry of default judgment was filed on January 24, 2017. On April 23, 2018, the holders of the Tegal Notes received a judgment against the Company. To date, the Company has repaid $5,513 of this amount. In November 2017, a former shareholder of Genomas, Inc., Phenomas, LLC, filed suit against the Company for payment of a $200,000 note payable by the Company’s subsidiary, Genomas. This note is recorded in the financial statements of the subsidiary and is not payable directly from the Company. The Company has made payments totaling $120,000 against this note and agreed to a payment schedule in order to dismiss the legal action. On November 12, 2018, Phenomas, LLC filed a motion to voluntarily dismiss the suit without prejudice. The counterparty to the prepaid forward purchase agreement entered into by the Company on March 31, 2016, as amended, filed an arbitration proceeding under the agreement with regard to the outstanding balance. During the nine months ended September 30, 2019, Mr. Diamantis advanced the Company $9.9 million, which was used to repay all obligations under the prepaid forward purchase agreement, as more fully discussed in Note 7. Two former employees of the Company’s CollabRx, Inc. subsidiary have filed suits in a California state court in connection with amounts claimed to be owed under their respective employment agreements with the subsidiary. One former employee received a judgment in October 2018 for approximately $253,000. The other former employee’s claim is for approximately $110,000. The Company is considering its options to refute these matters and believes the claims against the Company to be frivolous and outside of entitlement and contractual agreements. The Company, as well as many of our subsidiaries, are defendants in a case filed in Broward County Circuit Court by TCA Global Credit Master Fund, L.P. The plaintiff alleges a breach by Medytox Solutions, Inc. of its obligations under a debenture and claims damages of approximately $2,030,000 plus interest, costs and fees. The Company and the other subsidiaries are sued as alleged guarantors of the debenture. The complaint was filed on August 1, 2018. The Company has recorded the principal balance and interest owed under the debenture agreement for the period ended September 30, 2019. The Company and all defendants have filed a motion to dismiss the complaint, but have not recorded any potential liability related to any further damages. On September 13, 2018, Laboratory Corporation of America sued EPIC Reference Labs, Inc., a subsidiary of the Company, in Palm Beach County Circuit Court for amounts claimed to be owed of approximately $148,000. The Company has recorded the amount owed in accrued expenses at September 30, 2019. The court awarded a judgment against EPIC Reference Labs, Inc. in May 2019 for approximately $155,000. In July 2019, Roche Diagnostics Corporation sued EPIC Reference Labs, Inc. in the Circuit Court for Palm Beach County claiming approximately $240,000 under an agreement to purchase laboratory supplies. This suit is in the early stages. In August 2019, EPIC Reference Labs, Inc. and Medytox Diagnostics, Inc. were sued by Beckman Coulter, Inc. in the same court under an agreement to purchase laboratory supplies. The plaintiff claims damages of approximately $106,000. This case is in the early stages. In July 2019, the landlord of Medytox Solutions, Inc. received a judgment in the amount of approximately $413,000 in connection with failure to pay under an office lease in West Palm Beach, Florida. In February 2018, Techlogix, Inc. received a judgment of approximately $72,000 against the Company and HTS in the Superior Court of Middlesex County Massachusetts. Following the Company’s decision to suspend operations at Jamestown Regional Medical Center in June 2019 a number of vendors remain unpaid. A number have initiated or threatened legal actions. The Company believes it will come to satisfactory arrangements with these parties as it works towards reopening the hospital. On June 10, 2019, the Company hired a new CEO to oversee the reopening of the hospital and took steps to re-enter the Medicare program. The hospital received initial approval of its application to reactivate the Medicare agreement in August and is currently planning the reopening of the hospital. Negotiations with vendors are ongoing. |
Segment Reporting
Segment Reporting | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Segment Reporting | Note 16– Segment Reporting Operating segments are defined under U.S. GAAP as components of an enterprise for which discrete financial information is available and are evaluated regularly by the enterprise’s chief operating decision maker in determining how to allocate resources and assess performance. The Company operates in two reportable business segments: ● Hospital Operations, ● Clinical Laboratory Operations The Company’s Corporate expenses reflect consolidated company-wide support services such as finance, legal counsel, human resources, and payroll. The Company’s Decision Support and Informatics segment and its Supportive Software Solutions segment are now included in discontinued operations as they have been classified as held for sale as of September 30, 2019. The accounting policies of the reportable segments are the same as those described in Note 1. Selected financial information for the Company’s operating segments is as follows: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Net revenues - External Hospital Operations $ 3,920,608 $ 5,021,543 $ 13,081,647 $ 9,755,099 Clinical Laboratory Operations (34,631 ) 17,569 56,169 177,890 $ 3,885,977 $ 5,039,112 $ 13,137,816 $ 9,932,989 (Loss) income from continuing operations before income taxes: Hospital Operations $ (1,769,400 ) $ (1,294,581 ) $ (8,946,720 ) (3,998,943 ) Clinical Laboratory Operations (295,908 ) (547,041 ) (701,466 ) (1,765,395 ) Corporate (640,044 ) (973,953 ) (2,626,953 ) (3,156,646 ) Other income (expense), net (9,422,340 ) 100,171,656 (26,064,924 ) 4,955,262 $ (12,127,692 ) $ 97,356,081 $ (38,340,063 ) $ (3,965,722 ) Depreciation and amortization Hospital Operations 182,832 $ 39,669 $ 532,979 $ 177,386 Clinical Laboratory Operations 10,036 112,908 69,381 625,877 Corporate 7,128 248 7,458 811 $ 199,996 $ 152,825 $ 609,818 $ 804,074 Capital expenditures Hospital Operations $ 7,086 $ 103,387 $ 50,801 $ 103,387 Clinical Laboratory Operations - - - - $ 7,086 $ 103,387 $ 50,801 $ 103,387 As of September 30, 2019 December 31, 2018 Total assets Hospital Operations $ 16,831,443 $ 13,568,933 Clinical Laboratory Operations 356,854 271,426 Corporate 1,821,952 2,707,416 Assets of AMSG and HTS classified as held for sale 373,121 152,171 Eliminations (2,809,305 ) (2,500,646 ) $ 16,574,065 $ 14,199,300 |
Discontinued Operations
Discontinued Operations | 9 Months Ended |
Sep. 30, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Note 17 – Discontinued Operations On July 12, 2017, the Company announced plans to spin off AMSG and in the third quarter of 2017, the Company’s Board of Directors voted unanimously to spin off HTS as independent publicly traded companies by way of tax-free distributions to the Company’s stockholders. While the spin offs have taken longer than anticipated, completion of these spin offs is now expected to occur in the first quarter of 2020. The spin offs are subject to numerous conditions, including effectiveness of Registration Statements on Form 10 to be filed with the Securities and Exchange Commission, and consents, including under various funding agreements previously entered into by the Company. A record date to determine those stockholders entitled to receive shares in the spin offs should be approximately 30 to 60 days prior to the dates of the spin offs. The strategic goal of the spin offs is to create three public companies, each of which can focus on its own strengths and operational plans. In accordance with ASC 205-20 and having met the criteria for “held for sale”, as the Company reached this decision prior to December 31, 2017, the Company has reflected amounts relating to AMSG and HTS as disposal groups classified as held for sale and included as part of discontinued operations. Prior to being classified as “held for sale,” AMSG had been the Company’s Decision Support and Informatics segment, except for the Company’s subsidiary, Alethea Laboratories, Inc., which had been included in the Clinical Laboratory Operations segment and now is part of AMSG, and HTS had been the Company’s Supportive Software Solutions segment. Segment disclosures in Note 16 no longer include amounts relating to AMSG and HTS following the reclassification to discontinued operations. Carrying amounts of major classes of assets and liabilities classified as held for sale and included as part of discontinued operations in the condensed consolidated balance sheets consisted of the following: AMSG Assets and Liabilities: September 30, 2019 December 31, 2018 (unaudited) (unaudited) Cash $ 220 $ 4,471 Accounts receivable, net 22,523 6,838 Prepaid expenses and other current assets - 25,477 Current assets classified as held for sale $ 22,743 $ 36,786 Accounts payable (includes related parties) $ 514,415 $ 532,858 Accrued expenses 493,356 418,932 Income taxes payable - - Current portion of notes payable 268,851 278,836 Current liabilities classified as held for sale $ 1,276,622 $ 1,230,626 Non-current liabilities classified as held for sale $ - $ - HTS Assets and Liabilities: September 30, 2019 December 31, 2018 (unaudited) (unaudited) Cash $ 2,298 $ 2,523 Accounts receivable, net 330,238 90,743 Prepaid expenses and other current assets 6,867 10,300 Current assets classified as held for sale $ 339,403 $ 103,566 Property and equipment, net $ 4,946 $ 5,790 Deposits 6,029 6,029 Non-current assets classified as held for sale $ 10,975 $ 11,819 Accounts payable (includes related parties) $ 710,709 $ 546,969 Accrued expenses 714,128 520,251 Current portion of notes payable - - Current liabilities classified as held for sale $ 1,424,837 $ 1,067,220 Total Discontinued Assets and Liabilities: September 30, 2019 December 31, 2018 (unaudited) (unaudited) Cash $ 2,518 $ 6,994 Accounts receivable, net 352,761 97,581 Prepaid expenses and other current assets 6,867 35,777 Current assets classified as held for sale $ 362,146 $ 140,352 Property and equipment, net $ 4,946 $ 5,790 Deposits 6,029 6,029 Non-current assets classified as held for sale $ 10,975 $ 11,819 Accounts payable (includes related parties) $ 1,225,124 $ 1,079,827 Accrued expenses 1,207,484 939,183 Current portion of notes payable 268,851 278,836 Current liabilities classified as held for sale $ 2,701,459 $ 2,297,846 Major line items constituting loss from discontinued operations in the condensed consolidated statements of operations for the three months ended September 30, 2019 and 2018 consisted of the following: AMSG Loss from Discontinued Operations: Three Months Ended September 30, 2019 September 30, 2018 (unaudited) (unaudited) Revenue from services $ 11,350 $ 13,249 Cost of services 5,878 15,559 Gross profit (loss) 5,472 (2,310 ) Operating expenses 60,424 93,059 Other income (expenses) 2,912 (5,748 ) Provision for income taxes - - Loss from discontinued operations $ (57,864 ) $ (89,621 ) HTS Loss from Discontinued Operations: Three Months Ended September 30, 2019 September 30, 2018 (unaudited) (unaudited) Revenue from services $ 235,326 $ 499,317 Cost of services 20,134 30,082 Gross profit 215,192 469,235 Operating expenses 295,404 532,892 Other income - 6,152 Provision for income taxes - - Loss from discontinued operations $ (80,212 ) $ (69,809 ) Consolidated Loss from Discontinued Operations: Three Months Ended September 30, 2019 September 30, 2018 (unaudited) (unaudited) Revenue from services $ 246,676 $ 512,566 Cost of services 26,012 45,641 Gross profit 220,664 466,925 Operating expenses 355,828 625,951 Other expense 2,912 404 Provision for income taxes - - Loss from discontinued operations $ (138,076 ) $ (159,430 ) Major line items constituting (loss) income from discontinued operations in the condensed consolidated statements of operations for the nine months ended September 30, 2019 and 2018 consisted of the following: AMSG (Loss) Income from Discontinued Operations: Nine Months Ended September 30, 2019 September 30, 2018 (unaudited) (unaudited) Revenue from services $ 59,832 $ 92,090 Cost of services 29,638 37,773 Gross profit 30,194 54,317 Operating expenses 237,042 363,944 Other (income) expense 31,874 (819,258 ) Provision for income taxes - - (Loss) income from discontinued operations $ (238,722 ) $ 509,631 HTS Loss from Discontinued Operations: Nine Months Ended September 30, 2019 September 30, 2018 (unaudited) (unaudited) Revenue from services $ 706,795 $ 1,291,288 Cost of services 83,628 95,965 Gross profit 623,167 1,195,323 Operating expenses 1,176,381 1,577,046 Other income - 12,121 Provision for income taxes - - Loss from discontinued operations $ (553,214 ) $ (393,844 ) Consolidated (Loss) Income from Discontinued Operations: Nine Months Ended September 30, 2019 September 30, 2018 (unaudited) (unaudited) Revenue from services $ 766,627 $ 1,383,378 Cost of services 113,266 133,738 Gross profit 653,361 1,249,640 Operating expenses 1,413,423 1,940,990 Other (income) expense 31,874 (807,137 ) Provision for income taxes - - (Loss) income from discontinued operations $ (791,936 ) $ 115,787 |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | Note 18 – Recent Accounting Pronouncements Accounting Pronouncements Adopted In addition to the adoption of pronouncements related to derivative liabilities discussed in Note 1, and ASU 2018-02 , Leases (Topic 842) In February 2018, the FASB issued ASU 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. In February 2018, the FASB issued ASU 2018-03; Technical Corrections and Improvements to Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities In March 2018, the FASB issued ASU 2018-05; “Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 (SEC Update)”, In June 2018, the FASB issued ASU 2018-07 to expand the scope of ASC Topic 718, Compensation - Stock Compensation Accounting Pronouncements Not Yet Adopted In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement In August 2018, the FASB issued ASU 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract Other recent accounting standards issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the SEC did not or are not believed by management to have a material impact on the Company’s present or future consolidated financial statements. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 19 – Subsequent Events Loans From Mr. Diamantis Subsequent to September 30, 2019 and through November 30, 2019, Mr. Diamantis advanced the Company $0.7 million for working capital purposes. The Company incurred interest of $65,000 on the advance. Issuance of Common Stock Subsequent to September 30, 2019 and through December 26, 2019, the Company issued an aggregate of 1,250,000,000 shares of common stock for conversions of preferred stock. The following table presents the dilutive effect of our various potential common shares as of December 26, 2019. December 26, 2019 Common shares outstanding 9,648,936,775 Dilutive potential shares: Stock options 77 Warrants 634,525,355,377 Convertible debt 30,634,784,339 Convertible preferred stock 79,122,373,825 Total dilutive potential common shares, including outstanding common stock 753,931,450,393 On October 4, 2019, the Board of Directors authorized the issuance and sale of certain shares of Series K Preferred Stock to Alcimede LLC pursuant to the terms of an Exchange Agreement. The Board considered all options to secure additional financing required to continue operations and determined this authorization to be necessary to secure needed financing in the required time frame. As a result of this authorization, as of the date of filing this report, the Company believes that it has the ability to have sufficient authorized shares of its common stock to cover all potentially dilutive common shares outstanding. Following is a summary of certain terms of the Series K Preferred Stock: General Voting Rights Dividends Rank Conversion Liquidation Preference Redemption Exchange of Series J Preferred Stock for Series K Preferred Stock On December 23, 2019, the Company entered into an Exchange Agreement (the “Agreement”) with Alcimede. Pursuant to the Agreement, the Company issued to Alcimede 250,000 shares of its Series K Preferred Stock in exchange for the 250,000 shares of the Company’s Series J Preferred Stock. The holder of the Series J Preferred Stock was entitled to receive, when and as declared by the Board of Directors of the Company, but only out of funds that were legally available therefore, cumulative cash dividends at the rate of 8% of the stated value per annum on each share of Series J Preferred Stock. The Series J Preferred Stock had been issued to Alcimede on July 23, 2018 and upon the issuance of the Series K Preferred Stock to Alcimede, the shares of Series J Preferred Stock were cancelled. Under the Agreement, Alcimede relinquished all rights to any cumulative dividends on the Series J Preferred Stock. The terms of the Series K Preferred Stock do not provide for cumulative dividends. Redemption of Series G Preferred Stock On December 9, 2019, the Company redeemed all 215 shares of its Series G Preferred Stock that were outstanding. |
Organization and Summary of S_2
Organization and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Description of Business | Description of Business Rennova Health, Inc. (“Rennova”), together with its subsidiaries (the “Company”, “we”, “us” or “our”), is a vertically integrated provider of healthcare related products and services. The Company’s principal lines of business are (i) Hospital Operations; and (ii) Clinical Laboratory Operations. The Company presents its financial results based upon these two business segments, which are more fully discussed in Note 16. |
Reverse Stock Split | Reverse Stock Split On November 5, 2018, the Company’s Board of Directors approved an amendment to the Company’s Certificate of Incorporation to effect a 1-for-500 reverse stock split effective November 12, 2018 (the “Reverse Stock Split”). The stockholders of the Company had approved the amendment to the Company’s Certificate of Incorporation on August 22, 2018 for the Reverse Stock Split. The Company’s stockholders had granted authorization to the Board of Directors to determine in its discretion the specific ratio, subject to limitations, and the timing of the reverse split within certain specified effective dates. As a result of the Reverse Stock Split, every 500 shares of the Company’s then outstanding common stock was combined and automatically converted into one share of the Company’s common stock on November 12, 2018. In addition, the conversion and exercise prices of all of the Company’s outstanding preferred stock, common stock purchase warrants, stock options, restricted stock, equity incentive plans and convertible notes payable were proportionately adjusted at the applicable reverse split ratio in accordance with the terms of such instruments. In addition, proportionate voting rights and other rights of common stockholders were not affected by the Reverse Stock Split, other than as a result of cash paid in lieu of fractional shares as no fractional shares were issued in connection with the Reverse Stock Split. All share, per share and capital stock amounts as of and for the three and nine months ended September 30, 2018 have been restated to give effect to the Reverse Stock Split. In addition, on September 18, 2018, the Company amended its Certificate of Incorporation to have the authority to issue 10,000,000,000 shares of common stock and the par value of the Company’s common stock was decreased from $0.01 per share to $0.0001 per share. No additional change was made to the terms of the Company’s common stock as a result of the November 12, 2018 reverse stock split and no change was made to the authorized preferred stock, which remains at 5,000,000 shares of preferred stock, par value $0.01 per share. The Reverse Stock Split provided sufficient authorized and unissued shares to allow for the Company’s outstanding and otherwise equity classified instruments to be classified in equity. As a result, the fair value of these instruments was evaluated for reclassification and, as a result, during the third quarter of 2018, the Company reclassified its derivative liabilities previously reported as a current liability to derivative income. On October 4, 2019, the Board of Directors authorized the issuance and sale of certain shares of its Series K Convertible Preferred Stock (“Series K Preferred Stock”) to Alcimede LLC (“Alcimede”), a related party, as more fully discussed in Note 19. The Board considered all options to secure additional financing required to continue operations and determined this authorization to be necessary to secure needed financing in the required time frame. As a result of this authorization, as of the date of filing this report, the Company believes that it has the ability to have sufficient authorized shares of its common stock to cover all potentially dilutive common shares outstanding. |
Jamestown Regional Medical Center Medicare Agreement | Jamestown Regional Medical Center Medicare Agreement Following an inspection at Jamestown Regional Medical Center on February 5, 2019, the hospital was informed on February 15 that several conditions of participation in its Medicare agreement were deficient. The hospital was informed that if the deficiencies where not corrected by May 16 the Medicare agreement would terminate. A follow-up inspection on May 15 resulted in the determination that the hospital had failed to adequately correct the deficiencies highlighted and a notice of involuntary termination was issued that was effective on June 12, 2019. A significant percentage of patients at Jamestown Regional Medical Center are covered by Medicare and without any ability to get paid for these services the Company suspended operations at the hospital. The hospital received initial approval of its application to reactivate the Medicare agreement in August of 2019 and is currently planning the reopening of the hospital. |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements were prepared using generally accepted accounting principles for interim financial information and the instructions to Form 10-Q and Regulation S-X. Accordingly, these financial statements do not include all information or notes required by generally accepted accounting principles for annual financial statements and should be read in conjunction with the consolidated financial statements as filed on the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, filed with the Securities and Exchange Commission on October 21, 2019. In the opinion of management, the unaudited condensed consolidated financial statements included herein contain all adjustments necessary to present fairly the Company’s consolidated financial position as of September 30, 2019, and the results of its operations, changes in stockholders’ deficit and cash flows for the three and nine months ended September 30, 2019 and 2018. Such adjustments are of a normal recurring nature. The results of operations for the three and nine months ended September 30, 2019 may not be indicative of results for the year ending December 31, 2019. |
Principles of Consolidation | Principles of Consolidation The accompanying condensed consolidated financial statements which have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) include the accounts of Rennova and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in the consolidation. |
Reclassification | Reclassification For the nine months ended September 30, 2018, the Company has presented the proceeds from related party notes payable and advances that were previously netted against payments on related party notes payable and advances as a separate line item on the Statement of Cash Flows. This reclassification did not have an effect on total cash flow from financing activities for the nine months ended September 30, 2018. |
Comprehensive Loss | Comprehensive Loss During the three and nine months ended September 30, 2019 and 2018, comprehensive loss was equal to the net loss amounts presented in the accompanying condensed consolidated statements of operations. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates and assumptions include the estimates of fair values of assets acquired and liabilities assumed in business combinations, including hospital acquisitions, reserves, contractual allowances and write-downs related to receivables and inventories, the recoverability of long-lived assets, stock based compensation, the valuation allowance relating to the Company’s deferred tax assets, valuation of equity and derivative instruments, including modifications thereof, deemed dividends and debt discounts, among others. Actual results could differ from those estimates and would impact future results of operations and cash flows. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid temporary cash investments with an original maturity of three months or less to be cash equivalents. The Company had minimal cash equivalents at September 30, 2019 and December 31, 2018. |
Revenue Recognition | Revenue Recognition Hospital Operations Our revenues generally relate to contracts with patients in which our performance obligations are to provide health care services to the patients. Revenues are recorded during the period our obligations to provide health care services are satisfied. Our performance obligations for inpatient services are generally satisfied over periods that average approximately five days, and revenues are recognized based on charges incurred in relation to total expected charges. Our performance obligations for outpatient services are generally satisfied over a period of less than one day. The contractual relationships with patients, in most cases, also involve a third-party payer (Medicare, Medicaid, managed care health plans and commercial insurance companies, including plans offered through the health insurance exchanges) and the transaction prices for the services provided are dependent upon the terms provided by (Medicare and Medicaid) or negotiated with (managed care health plans and commercial insurance companies) the third-party payers. The payment arrangements with third-party payers for the services we provide to the related patients typically specify payments at amounts less than our standard charges. Medicare generally pays for inpatient and outpatient services at prospectively determined rates based on clinical, diagnostic and other factors. Services provided to patients having Medicaid coverage are generally paid at prospectively determined rates per discharge, per identified service or per covered member. Agreements with commercial insurance carriers, managed care and preferred provider organizations generally provide for payments based upon predetermined rates per diagnosis, per diem rates or discounted fee-for-service rates. Management continually reviews the contractual estimation process to consider and incorporate updates to laws and regulations and the frequent changes in managed care contractual terms resulting from contract renegotiations and renewals. Our revenues are based upon the estimated amounts we expect to be entitled to receive from patients and third-party payers. Estimates of contractual allowances under managed care and commercial insurance plans are based upon the payment terms specified in the related contractual agreements. Revenues related to uninsured patients and uninsured copayment and deductible amounts for patients who have health care coverage may have discounts applied (uninsured discounts and contractual discounts). We also record estimated implicit price concessions (based primarily on historical collection experience) related to uninsured accounts to record self-pay revenues at the estimated amounts we expect to collect. Laws and regulations governing the Medicare and Medicaid programs are complex and subject to interpretation. Estimated reimbursement amounts are adjusted in subsequent periods as cost reports are prepared and filed and as final settlements are determined (in relation to certain government programs, primarily Medicare, this is generally referred to as the “cost report” filing and settlement process). There were no adjustments to estimated Medicare and Medicaid reimbursement amounts and disproportionate-share funds related primarily to cost reports filed during the three and nine months ended September 30, 2019 and 2018. The Emergency Medical Treatment and Labor Act (“EMTALA”) requires any hospital participating in the Medicare program to conduct an appropriate medical screening examination of every person who presents to the hospital’s emergency room for treatment and, if the individual is suffering from an emergency medical condition, to either stabilize the condition or make an appropriate transfer of the individual to a facility able to handle the condition. The obligation to screen and stabilize emergency medical conditions exists regardless of an individual’s ability to pay for treatment. Federal and state laws and regulations require, and our commitment to providing quality patient care encourages, us to provide services to patients who are financially unable to pay for the health care services they receive. The federal poverty level is established by the federal government and is based on income and family size. The Company considers the poverty level in determining whether patients qualify for free or reduced cost of care. Because we do not pursue collection of amounts determined to qualify as charity care, they are not reported in revenues. We provide discounts to uninsured patients who do not qualify for Medicaid or charity care. In implementing the uninsured discount policy, we may first attempt to provide assistance to uninsured patients to help determine whether they may qualify for Medicaid, other federal or state assistance, or charity care. If an uninsured patient does not qualify for these programs, the uninsured discount is applied. The collection of outstanding receivables for Medicare, Medicaid, managed care payers, other third-party payers and patients is our primary source of cash and is critical to our operating performance. The primary collection risks relate to uninsured patient accounts, including patient accounts for which the primary insurance carrier has paid the amounts covered by the applicable agreement, but patient responsibility amounts (deductibles and copayments) remain outstanding. Implicit price concessions relate primarily to amounts due directly from patients. Estimated implicit price concessions are recorded for all uninsured accounts, regardless of the aging of those accounts. Accounts are written off when all reasonable internal and external collection efforts have been performed. The estimates for implicit price concessions are based upon management’s assessment of historical write-offs and expected net collections, business and economic conditions, trends in federal, state and private employer health care coverage and other collection indicators. Management relies on the results of detailed reviews of historical write-offs and collections at facilities that represent a majority of our revenues and accounts receivable (the “hindsight analysis”) as a primary source of information in estimating the collectability of our accounts receivable. We perform the hindsight analysis quarterly, utilizing rolling twelve-months accounts receivable collection and write-off data. We believe our quarterly updates to the estimated contractual allowance amounts at each of our hospital facilities provide reasonable estimates of our revenues and valuations of our accounts receivable. Clinical Laboratory Operations Laboratory testing services include chemical diagnostic tests such as blood analysis and urine analysis. Laboratory service revenues are recognized at the time the testing services are performed and billed and are reported at their estimated net realizable amounts. Net service revenues are determined utilizing gross service revenues net of contractual adjustments and discounts. Even though it is the responsibility of the patient to pay for laboratory service bills, most individuals in the U.S. have an agreement with a third-party payer such as a commercial insurance provider, Medicaid or Medicare to pay all or a portion of their healthcare expenses; most of the services provided by us are to patients covered under a third-party payer contract. In most cases, the Company is provided the third-party billing information and seeks payment from the third party in accordance with the terms and conditions of the third-party payer for health service providers like us. Each of these third-party payers may differ not only in terms of rates, but also with respect to terms and conditions of payment and providing coverage (reimbursement) for specific tests. Estimated revenues are established based on a series of procedures and judgments that require industry specific healthcare experience and an understanding of payer methods and trends. Despite follow up billing efforts, the Company does not currently anticipate collection of a significant portion of self-pay billings, including the patient responsibility portion of the billing for patients covered by third party payers. The Company currently does not have any capitated agreements. We review our calculations for the realizability of gross service revenues monthly to make certain that we are properly allowing for the uncollectable portion of our gross billings and that our estimates remain sensitive to variances and changes within our payer groups. The contractual allowance calculation is made based on historical allowance rates for the various specific payer groups monthly with a greater weight being given to the most recent trends; this process is adjusted based on recent changes in underlying contract provisions. This calculation is routinely analyzed by us based on actual allowances issued by payers and the actual payments made to determine what adjustments, if any, are needed. |
Bad Debt and Contractual Allowances | Bad Debt and Contractual Allowances Total gross revenues for Hospital and Clinical Laboratory Operations were reduced in the aggregate by approximately $0.9 million and $1.8 million for bad debt for the three months ended September 30, 2019 and 2018, respectively. After bad debt and contractual and related allowance adjustments to revenues of $21.9 million and $25.1 million, for the three months ended September 30, 2019 and 2018, respectively, we reported net revenues of $3.9 million and $5.0 million, respectively. Total gross revenues for Hospital and Clinical Operations were reduced in the aggregate by approximately $4.8 million and $3.1 million for bad debt for the nine months ended September 30, 2019 and 2018, respectively. After bad debt and contractual and related allowance adjustments to revenues of $86.7 million and $43.8 million, for the nine months ended September 30, 2019 and 2018, respectively, we reported net revenues of $13.1 million and $9.9 million, respectively. We continue to review the provision for bad debt and contractual and related allowances. |
Leases, Including the Adoption of ASU No. 2016-02 | Leases, Including the Adoption of ASU No. 2016-02 We adopted ASU No. 2016-02, Leases (Topic 842) |
Derivative Financial Instruments and Fair Value, Including the Adoption of ASU 2017-11 | Derivative Financial Instruments and Fair Value, Including the Adoption of ASU 2017-11 We account for warrants issued in conjunction with the issuance of common stock and certain convertible debt instruments in accordance with the guidance contained in Accounting Standards Codification (“ASC”) Topic 815, Derivatives and Hedging (“ASC 815”) and ASC Topic 480, Distinguishing Liabilities from Equity (“ASC 480”). For warrant instruments and conversion options embedded in promissory notes that are not deemed to be indexed to the Company’s own stock, we classified such instruments as liabilities at their fair values at the time of issuance and adjusted the instruments to fair value at each reporting period. These liabilities were subject to re-measurement at each balance sheet date until extinguished either through conversion or exercise, and any change in fair value was recognized in our statement of operations. The fair values of these derivative and other financial instruments had been estimated using a Black-Scholes model and other valuation techniques. In July 2017, the FASB issued ASU 2017-11 “Earnings Per Share (Topic 260) Distinguishing Liabilities from Equity (Topic 480) Derivatives and Hedging (Topic 815).” The amendments in Part I of this Update change the classification analysis of certain equity-linked financial instruments (or embedded features) with down round features. When determining whether certain financial instruments should be classified as liabilities or equity instruments, a down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock. The amendments also clarify existing disclosure requirements for equity-classified instruments. As a result, a freestanding equity-linked financial instrument (or embedded conversion option) no longer would be accounted for as a derivative liability at fair value as a result of the existence of a down round feature. For freestanding equity classified financial instruments, the amendments require entities that present earnings per share (EPS) in accordance with Topic 260 to recognize the effect of the down round feature when it is triggered. That effect is treated as a dividend and as a reduction of income available to common shareholders in basic EPS. Convertible instruments with embedded conversion options that have down round features are now subject to the specialized guidance for contingent beneficial conversion features (in Subtopic 470-20, Debt—Debt with Conversion and Other Options), including related EPS guidance (in Topic 260). The amendments in Part II of this Update re-characterize the indefinite deferral of certain provisions of Topic 480 that now are presented as pending content in the Codification, to a scope exception. Those amendments do not have an accounting effect. When the down round feature is included in an equity-classified freestanding financial instrument, the value of the effect of the down round feature is treated as a dividend when it is triggered and as a numerator adjustment in the basic EPS calculation. This reflects the occurrence of an economic transfer of value to the holder of the instrument, while alleviating the complexity and income statement volatility associated with fair value measurement on an ongoing basis. The Company has early adopted this accounting standard update. The cumulative effect of the adoption of ASU 2017-11 resulted in the reclassification of the derivative liability recorded of $56 million and the reversal of $41 million of interest expense recorded in the Company’s first fiscal quarter of 2017. The remaining $16 million was offset to additional paid-in-capital (discount on convertible debenture). Additionally, the Company recognized a deemed dividend from the trigger of the down round provision feature of $53.3 million of which $51 million of the deemed dividend was recorded retrospectively as of the beginning of the issuance of the debentures issued in March 2017 where the initial derivative liability was recorded as a result of the down round provision feature. A deemed dividend of $231.8 million was recorded for the year ended December 31, 2018, a deemed dividend of $123.9 million was recorded during the nine months ended September 30, 2019 and a deemed dividend of $17.9 million and $17.9 million was recorded for the three and nine months ended September 30, 2018, respectively, as a result of down round provision features. See Note 11 for an additional discussion of derivative financial instruments. |
Earnings (Loss) Per Share | Earnings (Loss) Per Share The Company reports earnings (loss) per share in accordance with ASC Topic 260, “Earnings Per Share”, which establishes standards for computing and presenting earnings per share. Basic earnings (loss) per share of common stock is calculated by dividing net (loss) earnings allocable to common shareholders by the weighted-average shares of common stock outstanding during the period, without consideration of common stock equivalents. Diluted earnings (loss) per share is calculated by adjusting the weighted-average shares of common stock outstanding for the dilutive effect of common stock equivalents, including stock options and warrants outstanding for the period as determined using the treasury stock method. For purposes of the diluted net loss per share calculation, common stock equivalents are excluded from the calculation when their effect would be anti-dilutive. Therefore, basic and diluted net loss per share applicable to common shareholders is the same for periods with a net loss. See Note 3 for the computation of earnings (loss) per share for the three and nine months ended September 30, 2019 and 2018. |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share | The following table sets forth the computation of the Company’s basic and diluted net income (loss) per share for each of the three and nine months ended September 30, 2019 and 2018: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Numerator: Net (loss) income from continuing operations $ (12,127,692 ) $ 97,356,081 $ (38,340,063 ) $ (3,965,798 ) Net (loss) income from discontinued operations (138,076 ) (159,430 ) (791,936 ) 115,787 Deemed dividends — (17,942,578 ) (123,861,587 ) (17,942,578 ) Net loss (income) to common shareholders -basic $ (12,265,768 ) $ 79,254,073 $ (162,993,586 ) $ (21,792,589 ) Adjustments for diluted calculations: Deduct change in fair value of derivative liabilities — (109,305,331 ) — — Amortize discounts associated with conversion of dilutive convertible debentures — (7,303,912 ) — — Remove change in warrant value for diluted — (11,376 ) — — Add back deemed dividends — 17,942,578 — — Net loss to common shareholders - diluted $ (12,265,768 ) $ (19,423,968 ) $ (162,993,586 ) $ (21,792,589 ) Denominator: Weighted average number of common shares outstanding during the period: Basic 6,634,045,471 5,531,767 4,461,922,587 2,550,632 Common stock equivalents: Warrants — 64,315,740 — — Convertible preferred stock — 9,505,156 — — Convertible debentures — 175,301,554 — — Diluted 6,634,045,471 254,654,217 4,461,922,587 2,550,632 Net (loss) income per common share- continuing operations: Basic $ (0.00 ) $ 17.60 $ (0.01 ) $ (1.55 ) Diluted $ (0.00 ) $ (0.08 ) $ (0.01 ) $ (1.55 ) Net (loss) income per common share- discontinued operations: Basic $ (0.00 ) $ (0.03 ) $ (0.00 ) $ 0.05 Diluted $ (0.00 ) $ (0.00 ) $ (0.00 ) $ 0.05 Total per share net (loss) income to common shareholders: Basic $ (0.00 ) $ 14.33 $ (0.04 ) $ (8.54 ) Diluted $ (0.00 ) $ (0.08 ) $ (0.04 ) $ (8.54 ) |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | Diluted loss per share as reflected in the table above excludes all dilutive potential shares if their effect is anti-dilutive. For the nine months ended September 30, 2019 and 2018, the following table sets forth the computation of the following potential common stock equivalents excluded from the calculation of diluted loss per share as their effect was anti-dilutive: Nine Months Ended September 30, 2019 2018 Warrants 634,525,355,377 463,449,767 Convertible preferred stock 82,901,785,590 68,344,495 Convertible debentures 30,634,784,339 214,222,495 Stock options 77 77 748,061,925,383 746,016,834 |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Receivables [Abstract] | |
Schedule of Accounts Receivable | Accounts receivable at September 30, 2019 (unaudited) and December 31, 2018 consisted of the following: September 30, December 31, 2019 2018 Accounts receivable - Clinical Laboratory Operations $ 41,750 $ 622,009 Accounts receivable - Hospital Operations 45,804,056 31,607,644 Accounts receivable - Other (52,296 ) - Total accounts receivable 45,793,510 32,229,653 Less: Amount purchased by factors (1,572,000 ) - Allowance for discounts - Clinical Laboratory Operations (26,182 ) (573,584 ) Allowance for discounts - Hospital Operations (36,298,972 ) (25,066,799 ) Allowance for bad debts (2,787,894 ) (2,777,521 ) Accounts receivable, net $ 5,108,462 $ 3,811,749 |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
Schedule of Assets Acquired and Liabilities Assumed | The following table shows the allocation of the purchase price of Jamestown Regional Medical Center to the acquired identifiable assets acquired, and liabilities assumed: Total purchase price $ 635,096 Tangible and intangible assets acquired, and liabilities assumed at fair value: Cash $ 375 Inventories 450,682 Prepaids and deposits 310,385 Property and equipment 7,129,484 Intangible assets 504,806 Accrued expenses (193,966 ) Net tangible and intangible assets acquired $ 8,201,766 Gain on bargain purchase (1) $ 7,566,670 (1) Gain was adjusted in the fourth quarter of 2018 from $7,732,302 to $7,566,670 to reflect an adjustment of the value of the property and equipment acquired. The following table shows the preliminary allocation of the purchase price of Jellico Community Hospital and CarePlus Center to the acquired identifiable assets acquired, and liabilities assumed: Total purchase price $ 658,537 Tangible and intangible assets acquired, and liabilities assumed at estimated fair value: Inventories $ 317,427 Property and equipment 500,000 Intangible asset- certificate of need 250,000 Accrued expenses (158,890 ) Net tangible and intangible assets acquired $ 908,537 Gain on bargain purchase $ 250,000 |
Schedule of Unaudited Pro-forma of Results of Operations | The following presents the unaudited pro-forma combined results of operations of the Company and Jamestown Regional Medical Center and Jellico Community Hospital and CarePlus Center as if the acquisitions had occurred on January 1, 2018. The unaudited pro-forma results of operations are presented for information purposes only. The unaudited pro-forma results of operations are not intended to present actual results that would have been attained had the acquisitions been completed as of January 1, 2018 or to project potential operating results as of any future date or for any future periods. Three Months Ended September 30, 2018 Nine Months Ended September 30, 2019 Nine Months Ended September 30, 2018 Net revenue $ 8,276,112 $ 14,855,436 $ 25,499,677 Net income (loss) from continuing operations 96,879,012 (38,537,422 ) (8,151,239 ) Deemed dividend from trigger of down round provision feature (17,942,578 ) (123,861,587 ) (17,942,578 ) Net (loss) income from discontinued operations (159,430 ) (791,936 ) 115,787 Net income (loss) to common shareholders - basic 78,777,004 (163,190,945 ) (25,978,030 ) Adjustments for diluted loss to common shareholders (98,678,041 ) — — Net loss to common shareholders - diluted $ (19,901,037 ) $ (163,190,945 ) $ (25,978,030 ) Net income (loss) per common share: Basic continuing operations $ 17.51 $ (0.01 ) $ (3.20 ) Diluted continuing operations $ (0.02 ) $ (0.01 ) $ (3.20 ) Basic net income (loss) to common shareholders $ 14.24 $ (0.04 ) $ (10.18 ) Diluted net loss to common shareholders $ (0.24 ) $ (0.04 ) $ (10.18 ) |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses | Accrued expenses at September 30, 2019 (unaudited) and December 31, 2018 consisted of the following: September 30, December 31, 2019 2018 Commissions payable $ 19,113 $ 19,113 Sales tax payable 8,009 8,016 Accrued payroll and related liabilities 6,761,173 3,400,052 Accrued property tax 41,784 47,396 Accrued interest 2,586,652 5,464,837 Other accrued expenses 1,125,488 1,771,867 Accrued expenses $ 10,542,219 $ 10,711,281 |
Notes Payable (Tables)
Notes Payable (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Notes Payable | Notes Payable – Third Parties September 30, December 31, 2019 2018 Loan payable under prepaid forward purchase contract (1) $ - $ 5,000,000 Loan payable to TCA Global Master Fund, LP (“TCA”) in the original principal amount of $3 million at 16% interest (the “TCA Debenture”). Principal and interest payments due in various installments through December 31, 2017 1,741,893 1,741,893 Notes payable to CommerceNet and Jay Tenenbaum in the original principal amount of $500,000, bearing interest at 6% per annum (the “Tegal Notes”). Principal and interest payments due annually from July 12, 2015 through July 12, 2017 335,818 341,612 Note payable to Anthony O’Killough dated September 27, 2019 in the original principal amount of $1.9 million. Interest is due only upon event of default. Issued net of $0.3 million of debt discount and $0.1 million of financing fees with $1.0 million of principal due on November 8, 2019 and $0.9 million of principal due December 26, 2019 1,527,821 - 3,605,532 7,083,505 Less current portion (3,605,532 ) (7,083,505 ) Notes payable - third parties, net of current portion $ - $ - (1) The loan payable under prepaid forward purchase contract has been fully settled during the nine months ended September 2019 as more fully discussed below under the heading “ Notes Payable –Related Party”. |
Schedule of Notes Payable - Related Parties | Notes Payable – Related Party September 30, 2019 December 31, 2018 Loan payable to Christopher Diamantis $ 14,968,104 $ 800,000 Total notes payable, related party 14,968,104 800,000 Less current portion of notes payable, related party (14,968,104 ) (800,000 ) Total notes payable, related party, net of current portion $ - $ - |
Debentures (Tables)
Debentures (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Debentures | The carrying amount of all outstanding debentures as of September 30, 2019 (unaudited), and December 31, 2018 is as follows: September 30, 2019 December 31, 2018 Debentures $ 28,690,240 $ 19,034,800 Discount on Debentures - (6,247,469 ) Deferred financing fees - (11,015 ) 28,690,240 12,776,316 Less current portion (28,690,240 ) (12,776,316 ) Debentures, long-term $ - $ - |
Finance and Operating Lease O_2
Finance and Operating Lease Obligations (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Schedule of Lease-related Assets and Liabilities | The following table presents our lease-related assets and liabilities at September 30, 2019: Balance Sheet Classification September 30, 2019 Assets: Operating leases Right-of-use operating lease assets $ 328,615 Finance leases Property and equipment, net 618,278 Total lease assets $ 946,893 Liabilities: Current: Operating leases Right-of-use operating lease assets $ 141,830 Finance leases Current liabilities 589,457 Noncurrent: Operating leases Right-of-use operating lease obligations 186,785 Finance leases Long-term debt 28,821 Total lease liabilities $ 946,893 Weighted-average remaining term: Operating leases 1.98 years Finance leases 0.19 years Weighted-average discount rate: Operating leases (1) 13.0 % Finance leases 5.122 % (1) Upon adoption of the new lease standard, discount rates used for existing operating leases were established at January 1, 2019. |
Schedule of Information Related to Lease Expense for Finance and Operating Leases | The following table presents certain information related to lease expense for finance and operating leases for the three and nine months ended September 30, 2019: Three Months Ended September 30, 2019 Nine Months Ended Finance lease expense: Depreciation/amortization of leased assets (1) $ 15,004 $ (30,055 ) Interest on lease liabilities 704 5,804 Operating leases: Short-term lease expense (2) 76,312 263,713 Total lease expense $ 92,020 $ 239,462 (1) The depreciation for the nine months ended September 30, 2019 has been adjusted for depreciation recorded in the prior year. (2) Expenses are included in general and administrative expenses in our condensed consolidated statements of operations. |
Schedule of Supplemental Cash Flow Information | The following table presents supplemental cash flow information for the nine months ended September 30, 2019: 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 214,357 Operating cash flows for finance leases $ 5,800 Financing cash flows for finance leases payments $ 143,930 |
Schedule of Future Minimum Rentals Under Right-to-use Operating and Capital Leases | Aggregate future minimum rentals under right-to-use operating and finance leases are as follows: Right-to-Use Operating Leases Finance Leases October 1, 2019 to September 30, 2020 $ 107,457 $ 604,080 October 1, 2020 to September 30, 2021 134,776 32,611 October 1, 2021 to September 30, 2022 110,062 — October 1, 2022 to September 30, 2023 29,247 — October 1, 2023 to September 30, 2024 2,437 — Total 383,979 636,691 Less interest (55,364 ) (18,413 ) Present value of minimum lease payments 328,615 618,278 Less current portion of lease obligations (141,830 ) (589,457 ) Lease obligations, net of current portion $ 186,785 $ 28,821 |
Derivative Financial Instrume_2
Derivative Financial Instruments and Fair Value (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Fair Value of Assets and Liabilities Measured on Recurring Basis | The following table sets forth the financial assets and liabilities carried at fair value measured on a recurring basis as of September 30, 2019 and December 31, 2018: Level 1 Level 2 Level 3 Total As of December 31, 2018: Embedded conversion options $ - $ - $ 350,260 $ 350,260 Total $ - $ - $ 350,260 $ 350,260 As of September 30, 2019: Embedded conversion options $ - $ - $ 455,336 $ 455,336 Total $ - $ - $ 455,336 $ 455,336 |
Schedule of Changes in Liabilities with Level 3 of Fair Value | The following table reconciles the changes in the liabilities categorized within Level 3 of the fair value hierarchy for the nine months ended September 30, 2019: Balance at December 31, 2018 $ 350,260 Change in fair value of debentures 105,076 Balance at September 30, 2019 $ 455,336 |
Stockholders' Deficit (Tables)
Stockholders' Deficit (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Schedule of Stock Option Activity | Number of options Weighted-average exercise price Weighted-average contractual term Outstanding at December 31, 2018 77 $ 1,036,375 7.33 Granted - Expired - Forfeit - Outstanding at September 30, 2019 77 $ 1,036,375 6.50 Exercisable at September 30, 2019 68 $ 1,152,616 |
Schedule of Warrants Activity | The following summarizes the information related to warrants issued and the activity during the nine months ended September 30, 2019: Number of shares issuable pursuant to warrants Weighted average exercise price Balance at December 31, 2018 53,130,510,439 $ 0.00172 Increase during the period as a result of down round provisions 582,209,844,938 Shares issued pursuant to Warrants exercised during the period (755,000,000 ) $ 0.00034 Balance at September 30, 2019 634,585,355,377 $ 0.00014 |
Supplemental Disclosure of Ca_2
Supplemental Disclosure of Cash Flow Information (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of Supplemental Cash Flow Information | Nine Months Ended September 30, 2019 2018 Cash paid for interest $ - $ 303,208 Cash paid for income taxes 45,000 20,000 Acquisitions of Hospitals and Medical Center: Cash $ - $ 375 Inventory 317,427 450,682 Prepaid expenses and other current assets - 310,385 Property and equipment 500,000 7,129,484 Intangible assets 250,000 504,806 Accrued expenses 158,890 193,966 Non-cash investing and financing activities: Exchange of Series I-2 Preferred Stock for common stock $ 1,143,974 $ 633,101 Cashless exercise of warrants 11,961 4,619,150 Debentures converted into common stock - 8,085,342 Common stock issued in cashless exercise of warrants 11,961 - Exchange of debentures into Series I-2 Preferred Stock - 1,420 Conversions of Series H Preferred Stock into common stock - 50,000 Original issue discount of debentures and notes payable 400,000 1,920,000 Deemed dividend for trigger of down round provision features 123,861,587 17,942,578 Issuance of Series J Preferred Stock in settlement of note payable to related party - 250,000 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Schedule of Segment Information | Selected financial information for the Company’s operating segments is as follows: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Net revenues - External Hospital Operations $ 3,920,608 $ 5,021,543 $ 13,081,647 $ 9,755,099 Clinical Laboratory Operations (34,631 ) 17,569 56,169 177,890 $ 3,885,977 $ 5,039,112 $ 13,137,816 $ 9,932,989 (Loss) income from continuing operations before income taxes: Hospital Operations $ (1,769,400 ) $ (1,294,581 ) $ (8,946,720 ) (3,998,943 ) Clinical Laboratory Operations (295,908 ) (547,041 ) (701,466 ) (1,765,395 ) Corporate (640,044 ) (973,953 ) (2,626,953 ) (3,156,646 ) Other income (expense), net (9,422,340 ) 100,171,656 (26,064,924 ) 4,955,262 $ (12,127,692 ) $ 97,356,081 $ (38,340,063 ) $ (3,965,722 ) Depreciation and amortization Hospital Operations 182,832 $ 39,669 $ 532,979 $ 177,386 Clinical Laboratory Operations 10,036 112,908 69,381 625,877 Corporate 7,128 248 7,458 811 $ 199,996 $ 152,825 $ 609,818 $ 804,074 Capital expenditures Hospital Operations $ 7,086 $ 103,387 $ 50,801 $ 103,387 Clinical Laboratory Operations - - - - $ 7,086 $ 103,387 $ 50,801 $ 103,387 As of September 30, 2019 December 31, 2018 Total assets Hospital Operations $ 16,831,443 $ 13,568,933 Clinical Laboratory Operations 356,854 271,426 Corporate 1,821,952 2,707,416 Assets of AMSG and HTS classified as held for sale 373,121 152,171 Eliminations (2,809,305 ) (2,500,646 ) $ 16,574,065 $ 14,199,300 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Discontinued Operation of Balance Sheet and Operation Statement | Carrying amounts of major classes of assets and liabilities classified as held for sale and included as part of discontinued operations in the condensed consolidated balance sheets consisted of the following: AMSG Assets and Liabilities: September 30, 2019 December 31, 2018 (unaudited) (unaudited) Cash $ 220 $ 4,471 Accounts receivable, net 22,523 6,838 Prepaid expenses and other current assets - 25,477 Current assets classified as held for sale $ 22,743 $ 36,786 Accounts payable (includes related parties) $ 514,415 $ 532,858 Accrued expenses 493,356 418,932 Income taxes payable - - Current portion of notes payable 268,851 278,836 Current liabilities classified as held for sale $ 1,276,622 $ 1,230,626 Non-current liabilities classified as held for sale $ - $ - HTS Assets and Liabilities: September 30, 2019 December 31, 2018 (unaudited) (unaudited) Cash $ 2,298 $ 2,523 Accounts receivable, net 330,238 90,743 Prepaid expenses and other current assets 6,867 10,300 Current assets classified as held for sale $ 339,403 $ 103,566 Property and equipment, net $ 4,946 $ 5,790 Deposits 6,029 6,029 Non-current assets classified as held for sale $ 10,975 $ 11,819 Accounts payable (includes related parties) $ 710,709 $ 546,969 Accrued expenses 714,128 520,251 Current portion of notes payable - - Current liabilities classified as held for sale $ 1,424,837 $ 1,067,220 Total Discontinued Assets and Liabilities: September 30, 2019 December 31, 2018 (unaudited) (unaudited) Cash $ 2,518 $ 6,994 Accounts receivable, net 352,761 97,581 Prepaid expenses and other current assets 6,867 35,777 Current assets classified as held for sale $ 362,146 $ 140,352 Property and equipment, net $ 4,946 $ 5,790 Deposits 6,029 6,029 Non-current assets classified as held for sale $ 10,975 $ 11,819 Accounts payable (includes related parties) $ 1,225,124 $ 1,079,827 Accrued expenses 1,207,484 939,183 Current portion of notes payable 268,851 278,836 Current liabilities classified as held for sale $ 2,701,459 $ 2,297,846 Major line items constituting loss from discontinued operations in the condensed consolidated statements of operations for the three months ended September 30, 2019 and 2018 consisted of the following: AMSG Loss from Discontinued Operations: Three Months Ended September 30, 2019 September 30, 2018 (unaudited) (unaudited) Revenue from services $ 11,350 $ 13,249 Cost of services 5,878 15,559 Gross profit (loss) 5,472 (2,310 ) Operating expenses 60,424 93,059 Other income (expenses) 2,912 (5,748 ) Provision for income taxes - - Loss from discontinued operations $ (57,864 ) $ (89,621 ) HTS Loss from Discontinued Operations: Three Months Ended September 30, 2019 September 30, 2018 (unaudited) (unaudited) Revenue from services $ 235,326 $ 499,317 Cost of services 20,134 30,082 Gross profit 215,192 469,235 Operating expenses 295,404 532,892 Other income - 6,152 Provision for income taxes - - Loss from discontinued operations $ (80,212 ) $ (69,809 ) Consolidated Loss from Discontinued Operations: Three Months Ended September 30, 2019 September 30, 2018 (unaudited) (unaudited) Revenue from services $ 246,676 $ 512,566 Cost of services 26,012 45,641 Gross profit 220,664 466,925 Operating expenses 355,828 625,951 Other expense 2,912 404 Provision for income taxes - - Loss from discontinued operations $ (138,076 ) $ (159,430 ) Major line items constituting (loss) income from discontinued operations in the condensed consolidated statements of operations for the nine months ended September 30, 2019 and 2018 consisted of the following: AMSG (Loss) Income from Discontinued Operations: Nine Months Ended September 30, 2019 September 30, 2018 (unaudited) (unaudited) Revenue from services $ 59,832 $ 92,090 Cost of services 29,638 37,773 Gross profit 30,194 54,317 Operating expenses 237,042 363,944 Other (income) expense 31,874 (819,258 ) Provision for income taxes - - (Loss) income from discontinued operations $ (238,722 ) $ 509,631 HTS Loss from Discontinued Operations: Nine Months Ended September 30, 2019 September 30, 2018 (unaudited) (unaudited) Revenue from services $ 706,795 $ 1,291,288 Cost of services 83,628 95,965 Gross profit 623,167 1,195,323 Operating expenses 1,176,381 1,577,046 Other income - 12,121 Provision for income taxes - - Loss from discontinued operations $ (553,214 ) $ (393,844 ) Consolidated (Loss) Income from Discontinued Operations: Nine Months Ended September 30, 2019 September 30, 2018 (unaudited) (unaudited) Revenue from services $ 766,627 $ 1,383,378 Cost of services 113,266 133,738 Gross profit 653,361 1,249,640 Operating expenses 1,413,423 1,940,990 Other (income) expense 31,874 (807,137 ) Provision for income taxes - - (Loss) income from discontinued operations $ (791,936 ) $ 115,787 |
Subsequent Events (Tables)
Subsequent Events (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Subsequent Events [Abstract] | |
Schedule of Dilutive Effect of Potential Common Shares | The following table presents the dilutive effect of our various potential common shares as of December 26, 2019. December 26, 2019 Common shares outstanding 9,648,936,775 Dilutive potential shares: Stock options 77 Warrants 634,525,355,377 Convertible debt 30,634,784,339 Convertible preferred stock 79,122,373,825 Total dilutive potential common shares, including outstanding common stock 753,931,450,393 |
Organization and Summary of S_3
Organization and Summary of Significant Accounting Policies (Details Narrative) | Nov. 05, 2018 | Sep. 30, 2019USD ($)$ / sharesshares | Sep. 30, 2018USD ($) | Mar. 31, 2017USD ($) | Sep. 30, 2019USD ($)Segment$ / sharesshares | Sep. 30, 2018USD ($) | Dec. 31, 2018USD ($)$ / sharesshares | Sep. 18, 2018$ / sharesshares | Sep. 17, 2018$ / shares |
Number of operating segment | Segment | 2 | ||||||||
Reserve stock split, description | 1-for-500 reverse stock split | ||||||||
Common stock conversion description | As a result of the Reverse Stock Split, every 500 shares of the Company's then outstanding common stock was combined and automatically converted into one share of the Company's common stock on November 12, 2018. | ||||||||
Common stock shares authorized | shares | 10,000,000,000 | 10,000,000,000 | 10,000,000,000 | 10,000,000,000 | |||||
Common stock par value | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.01 | ||||
Preferred stock shares authorized | shares | 5,000,000 | 5,000,000 | 5,000,000 | ||||||
Preferred stock par value | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | ||||||
Bad debts | $ 900,000 | $ 1,800,000 | $ 4,800,000 | $ 3,100,000 | |||||
Allowance for adjustment of revenue | 21,900,000 | 25,100,000 | 86,700,000 | 43,800,000 | |||||
Net revenues | 3,885,977 | 5,039,112 | 13,137,816 | 9,932,989 | |||||
Derivative liabilities | $ 56,000,000 | ||||||||
Reversal of interest expense | 41,000,000 | ||||||||
Discount on convertible debenture | $ 6,247,469 | ||||||||
Deemed dividend, down round feature | 53,300,000 | ||||||||
Deemed dividend | $ 17,900,000 | $ 17,900,000 | 51,000,000 | $ 123,900,000 | $ 17,900,000 | $ 231,800,000 | |||
Additional Paid-in Capital [Member] | |||||||||
Discount on convertible debenture | $ 16,000,000 |
Liquidity and Financial Condi_2
Liquidity and Financial Condition (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||||||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||
Working capital deficit | $ 69,300,000 | $ 69,300,000 | ||||||||
Accumulated deficit | (578,040,192) | (578,040,192) | $ (415,046,606) | |||||||
Stockholders' deficit | (67,664,949) | $ (55,646,831) | $ (47,900,313) | $ (30,134,731) | $ (129,945,975) | $ (183,907,625) | (67,664,949) | $ (30,134,731) | $ (39,167,864) | $ (40,613,461) |
Net loss | $ (12,265,768) | $ (13,424,827) | $ (13,441,404) | $ 97,196,651 | $ 45,317,921 | $ (146,364,582) | (39,131,999) | (3,850,011) | ||
Cash used in operating activities | $ (14,420,826) | $ (7,121,826) |
Earnings (Loss) Per Share (Deta
Earnings (Loss) Per Share (Details Narrative) | Dec. 26, 2019shares |
Subsequent Event [Member] | |
Total dilutive potential common shares, including outstanding common stock | 753,900,000,000 |
Earnings (Loss) Per Share - Sch
Earnings (Loss) Per Share - Schedule of Earnings Per Share (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Earnings Per Share [Abstract] | ||||
Numerator: Net (loss) income from continuing operations | $ (12,127,692) | $ 97,356,081 | $ (38,340,063) | $ (3,965,798) |
Numerator: Net (loss) income from discontinued operations | (138,076) | (159,430) | (791,936) | 115,787 |
Numerator: Deemed dividends | (17,942,578) | (123,861,587) | (17,942,578) | |
Numerator: Net loss (income) to common shareholders -basic | (12,265,768) | 79,254,073 | (162,993,586) | (21,792,589) |
Adjustments for diluted calculations: Deduct change in fair value of derivative liabilities | (109,305,331) | |||
Adjustments for diluted calculations: Amortize discounts associated with conversion of dilutive convertible debentures | (7,303,912) | |||
Remove change in warrant value for diluted | (11,376) | |||
Add back deemed dividends | 17,942,578 | |||
Net (loss) income to common shareholders - diluted | $ (12,265,768) | $ (19,423,968) | $ (162,993,586) | $ (21,792,589) |
Denominator: Basic weighted average number of common shares outstanding | 6,634,045,471 | 5,531,767 | 4,461,922,587 | 2,550,632 |
Common stock equivalents: Warrants | 64,315,740 | |||
Common stock equivalents: Convertible preferred stock | 9,505,156 | |||
Common stock equivalents: Convertible debentures | 175,301,554 | |||
Diluted | 6,634,045,471 | 254,654,217 | 4,461,922,587 | 2,550,632 |
Net (loss) income per common share- continuing operations: Basic | $ 0 | $ 17.6 | $ (0.01) | $ (1.55) |
Net (loss) income per common share- continuing operations: Diluted | 0 | (0.08) | (0.01) | (1.55) |
Net (loss) income per common share- discontinued operations: Basic | 0 | (0.03) | 0 | 0.05 |
Net (loss) income per common share- discontinued operations: Diluted | 0 | 0 | 0 | 0.05 |
Total per share net (loss) income to common shareholders: Basic | 0 | 14.33 | (0.04) | (8.54) |
Total per share net (loss) income to common shareholders: Diluted | $ 0 | $ (0.08) | $ (0.04) | $ (8.54) |
Earnings (Loss) Per Share - S_2
Earnings (Loss) Per Share - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Dilutive potential shares | 748,061,925,383 | 746,016,834 |
Warrants [Member] | ||
Dilutive potential shares | 634,525,355,377 | 463,449,767 |
Convertible Preferred Stock [Member] | ||
Dilutive potential shares | 82,901,785,590 | 68,344,495 |
Convertible Debentures [Member] | ||
Dilutive potential shares | 30,634,784,339 | 214,222,495 |
Stock Options [Member] | ||
Dilutive potential shares | 77 | 77 |
Accounts Receivable (Details Na
Accounts Receivable (Details Narrative) | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Receivables [Abstract] | |
Accounts receivable sold | $ 3,900,000 |
Proceeds from sale of accounts receivable | 2,700,000 |
Origination and other fees | 100,000 |
Loss on sale of receivables | 1,200,000 |
Accounts receivable purchase | $ 1,600,000 |
Accounts Receivable - Schedule
Accounts Receivable - Schedule of Accounts Receivable (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Accounts receivable, gross | $ 45,793,510 | $ 32,229,653 |
Less: Amount purchased by factors | (1,572,000) | |
Less: Allowance for discounts | ||
Less: Allowance for bad debts | (2,787,894) | (2,777,521) |
Accounts receivable, net | 5,108,462 | 3,811,749 |
Clinical Laboratory Operations [Member] | ||
Accounts receivable, gross | 41,750 | 622,009 |
Less: Allowance for discounts | (26,182) | (573,584) |
Hospitals Operations [Member] | ||
Accounts receivable, gross | 45,804,056 | 31,607,644 |
Less: Allowance for discounts | (36,298,972) | (25,066,799) |
Other [Member] | ||
Accounts receivable, gross | $ (52,296) |
Acquisitions (Details Narrative
Acquisitions (Details Narrative) - USD ($) | Mar. 05, 2019 | Jun. 02, 2018 | Sep. 30, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Jun. 02, 2019 | |
Gain on bargain purchase | $ 250,000 | $ 7,732,302 | ||||||||
Fair value of intangible assets acquired | $ 259,443 | |||||||||
Jamestown Regional Medical Center [Member] | ||||||||||
Purchase price paid | 635,096 | |||||||||
Closing costs of acquisition | 35,735 | |||||||||
Legal costs | 115,000 | |||||||||
Fair value of assets acquired and liabilities assumed | 8,201,766 | |||||||||
Gain on bargain purchase | 7,566,670 | [1] | $ 7,732,302 | |||||||
Fair value of intangible assets acquired | $ 504,806 | |||||||||
Jamestown Regional Medical Center [Member] | Non Compete Intangible [Member] | ||||||||||
Fair value of intangible assets acquired | $ 245,363 | |||||||||
Remaining amortization period | 2 years | |||||||||
Impairment of intangible assets | $ 200,000 | |||||||||
Jellico Community Hospital and CarePlus Center [Member] | ||||||||||
Purchase price paid | $ 658,537 | |||||||||
Fair value of assets acquired and liabilities assumed | 908,537 | |||||||||
Gain on bargain purchase | 250,000 | |||||||||
Total cost of acquisition | 908,537 | |||||||||
Diligence, legal and other costs | $ 250,000 | |||||||||
[1] | Gain was adjusted in the fourth quarter of 2018 from $7,732,302 to $7,566,670 to reflect an adjustment of the value of the property and equipment acquired. |
Acquisitions - Schedule of Asse
Acquisitions - Schedule of Assets Acquired and Liabilities Assumed (Details) - USD ($) | Mar. 05, 2019 | Jun. 02, 2018 | Sep. 30, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Gain on bargain purchase | $ 250,000 | $ 7,732,302 | ||||||
Jamestown Regional Medical Center [Member] | ||||||||
Total purchase price | $ 635,096 | |||||||
Cash | 375 | |||||||
Inventories | 450,682 | |||||||
Prepaids and deposits | 310,385 | |||||||
Property and equipment | 7,129,484 | |||||||
Intangible Assets - certificate of need | 504,806 | |||||||
Accrued expenses | (193,966) | |||||||
Net tangible and intangible assets acquired | 8,201,766 | |||||||
Gain on bargain purchase | $ 7,566,670 | [1] | $ 7,732,302 | |||||
Jellico Community Hospital and CarePlus Center [Member] | ||||||||
Total purchase price | $ 658,537 | |||||||
Inventories | 317,427 | |||||||
Property and equipment | 500,000 | |||||||
Intangible Assets - certificate of need | 250,000 | |||||||
Accrued expenses | (158,890) | |||||||
Net tangible and intangible assets acquired | 908,537 | |||||||
Gain on bargain purchase | $ 250,000 | |||||||
[1] | Gain was adjusted in the fourth quarter of 2018 from $7,732,302 to $7,566,670 to reflect an adjustment of the value of the property and equipment acquired. |
Acquisitions - Schedule of As_2
Acquisitions - Schedule of Assets Acquired and Liabilities Assumed (Details) (Parenthetical) - USD ($) | Jun. 02, 2018 | [1] | Sep. 30, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 |
Gain on bargain purchase | $ 250,000 | $ 7,732,302 | |||||
Jamestown Regional Medical Center [Member] | |||||||
Gain on bargain purchase | $ 7,566,670 | $ 7,732,302 | |||||
[1] | Gain was adjusted in the fourth quarter of 2018 from $7,732,302 to $7,566,670 to reflect an adjustment of the value of the property and equipment acquired. |
Acquisitions - Schedule of Unau
Acquisitions - Schedule of Unaudited Pro-forma of Results of Operations (Details) - Jamestown Regional Medical Center and Jellico Community Hospital and Careplus Center [Member] - USD ($) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Net revenue | $ 8,276,112 | $ 14,855,436 | $ 25,499,677 |
Net income (loss) from continuing operations | 96,879,012 | (38,537,422) | (8,151,239) |
Deemed dividend from trigger of down round provision feature | (17,942,578) | (123,861,587) | (17,942,578) |
Net (loss) income from discontinued operations | $ (159,430) | $ (791,936) | $ 115,787 |
Net income (loss) to common shareholders - basic | 78,777,004 | (163,190,945) | (25,978,030) |
Adjustments for diluted loss to common shareholders | (98,678,041) | ||
Net loss to common shareholders - diluted | (19,901,037) | (163,190,945) | (25,978,030) |
Basic continuing operations | $ 17.51 | $ (0.01) | $ (3.20) |
Diluted continuing operations | (0.02) | (0.01) | (3.20) |
Basic net income (loss) to common shareholders | 14.24 | (0.04) | (10.18) |
Diluted net loss to common shareholders | $ (0.24) | $ (0.04) | $ (10.18) |
Accrued Expenses (Details Narra
Accrued Expenses (Details Narrative) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Accrued expenses | $ 10,542,219 | $ 10,711,281 |
Accrued interest | 2,586,652 | 5,464,837 |
Mr Diamantis [Member] | ||
Accrued interest | $ 1,800,000 | 300,000 |
Settlement Agreement [Member] | ||
Accrued expenses | $ 4,900,000 |
Accrued Expenses - Schedule of
Accrued Expenses - Schedule of Accrued Expenses (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Payables and Accruals [Abstract] | ||
Commissions payable | $ 19,113 | $ 19,113 |
Sales tax payable | 8,009 | 8,016 |
Accrued payroll and related liabilities | 6,761,173 | 3,400,052 |
Accrued property tax | 41,784 | 47,396 |
Accrued interest | 2,586,652 | 5,464,837 |
Other accrued expenses | 1,125,488 | 1,771,867 |
Accrued expenses | $ 10,542,219 | $ 10,711,281 |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) - USD ($) | Sep. 27, 2019 | Jul. 28, 2019 | May 31, 2019 | May 20, 2019 | Apr. 05, 2019 | Dec. 31, 2017 | Mar. 24, 2017 | Mar. 21, 2017 | Feb. 02, 2017 | Mar. 31, 2016 | Sep. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Nov. 03, 2016 | Jun. 30, 2016 |
Repayment of debt | $ 500,000 | |||||||||||||||
Debt instrument face amount | $ 341,612 | |||||||||||||||
Proceeds from issuance of debt | $ 3,845,000 | $ 8,000,000 | ||||||||||||||
Financing fees debt | $ 11,015 | |||||||||||||||
Accrued interest payable | $ 43,000 | |||||||||||||||
Estimated value of receivable | $ 8,700,000 | |||||||||||||||
Adjustment down value | $ 0 | |||||||||||||||
Investment return percentage | 20.00% | |||||||||||||||
Consideration received description | The consideration received, the counterparty received the right to: (i) a 20% per annum investment return from the Company on the consideration, with a minimum repayment term of six months and minimum return of $0.5 million, (ii) all payments recovered from the accounts receivable up to $5.25 million, if paid in full within six months, or $5.5 million, if not paid in full within six months, and (iii) 20% of all payments of the accounts receivable in excess of amounts received in (i) and (ii). On March 31, 2017, to the extent that the counterparty had not been paid $6.0 million, the Company was required to pay the difference. Christopher Diamantis, a director of the Company, guaranteed the Company's obligation. On March 24, 2017, the Company, the counterparty and Mr. Diamantis, as guarantor, entered into an amendment to extend the Company's obligation to March 31, 2018. Also, what the counterparty was to receive was amended to equal (a) the $5,000,000 purchase price plus a 20% per annum investment return thereon, plus (b) $500,000, plus (c) the product of (i) the proceeds received from the accounts receivable, minus the amount set forth in clauses (a) and (b), multiplied by (ii) 40%. In connection with the extension, the counterparty received a fee of $1,000,000. | |||||||||||||||
Consideration received | $ 5,000,000 | |||||||||||||||
Payments for related party | 2,310,000 | $ 4,011,000 | ||||||||||||||
Christopher Diamantis [Member] | ||||||||||||||||
Accrued and unpaid interest | 700,000 | 1,500,000 | ||||||||||||||
Repayment of debt | 700,000 | |||||||||||||||
Accrued interest payable | 1,100,000 | 1,100,000 | ||||||||||||||
Loan payable | $ 16,700,000 | $ 16,700,000 | ||||||||||||||
Debt instrument interest rate | 10.00% | 10.00% | ||||||||||||||
Payments for related party | $ 2,300,000 | |||||||||||||||
Fees and expenses | 1,900,000 | |||||||||||||||
Working capital | 4,700,000 | |||||||||||||||
Counterparty [Member] | ||||||||||||||||
Amount of fee received | $ 100,000 | |||||||||||||||
Investment return percentage | 40.00% | |||||||||||||||
Purchase price | $ 500,000 | |||||||||||||||
Diamantis [Member] | ||||||||||||||||
Debt instrument periodic payment | $ 1,000,000 | |||||||||||||||
Debt instrument maturity date | Nov. 8, 2019 | |||||||||||||||
Debt instrument face amount | $ 1,900,000 | |||||||||||||||
Proceeds from issuance of debt | 1,500,000 | |||||||||||||||
Original issue discount | 300,000 | |||||||||||||||
Financing fees debt | 100,000 | |||||||||||||||
Remaining periodic principal payment | $ 900,000 | |||||||||||||||
Remaining periodic principal payment, due date | Dec. 26, 2019 | |||||||||||||||
Christopher Diamantis [Member] | ||||||||||||||||
Payments for related party | $ 5,000,000 | $ 5,000,000 | $ 9,937,105 | |||||||||||||
Christopher Diamantis [Member] | Counterparty [Member] | ||||||||||||||||
Amount of fee received | $ 1,000,000 | |||||||||||||||
Investment return percentage | 20.00% | |||||||||||||||
Purchase price | $ 5,000,000 | |||||||||||||||
Loan payable | $ 2,000,000 | |||||||||||||||
Additional payment for related party | $ 7,694,685 | |||||||||||||||
Debt instrument interest rate | 10.00% | |||||||||||||||
Final Payment [Member] | Christopher Diamantis [Member] | Counterparty [Member] | ||||||||||||||||
Payments for related party | $ 4,937,105 | |||||||||||||||
TCA Debenture [Member] | ||||||||||||||||
Accrued and unpaid interest | $ 100,000 | $ 400,000 | ||||||||||||||
Repayment of debt | 750,000 | |||||||||||||||
Amount of fee received | $ 150,000 | |||||||||||||||
Debt instrument maturity date | Jun. 27, 2017 | |||||||||||||||
TCA Debenture [Member] | April 2017 Through September 2017 [Member] | ||||||||||||||||
Debt instrument periodic payment | $ 2,600,000 |
Notes Payable - Schedule of Not
Notes Payable - Schedule of Notes Payable (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 | |
Note payable | $ 3,605,532 | $ 7,083,505 | |
Less current portion | (3,605,532) | (7,083,505) | |
Notes payable - third parties, net of current portion | |||
Notes Payable - Third Parties One [Member] | |||
Note payable | [1] | 5,000,000 | |
Notes Payable Third Parties Two [Member] | |||
Note payable | 1,741,893 | 1,741,893 | |
Notes Payable Third Parties Three [Member] | |||
Note payable | 335,818 | 341,612 | |
Notes Payable Third Parties Four [Member] | |||
Note payable | $ 1,527,821 | ||
[1] | The loan payable under prepaid forward purchase contract has been fully settled during the nine months ended September 2019 as more fully discussed below under the heading "Notes Payable - Related Party". |
Notes Payable - Schedule of N_2
Notes Payable - Schedule of Notes Payable (Details) (Parenthetical) - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | Nov. 03, 2016 | |
Financing fees debt | $ 11,015 | ||
Debt instrument face amount | $ 341,612 | ||
Notes Payable Third Parties Two [Member] | |||
Original principal amount | $ 3,000,000 | $ 3,000,000 | |
Debt instruments interest rate | 16.00% | 16.00% | |
Debt maturity description | Principal and interest payments due in various installments through December 31, 2017 | Principal and interest payments due in various installments through December 31, 2017 | |
Notes Payable Third Parties Three [Member] | |||
Original principal amount | $ 500,000 | $ 500,000 | |
Debt instruments interest rate | 6.00% | 6.00% | |
Debt maturity description | July 12, 2015 through July 12, 2017 | July 12, 2015 through July 12, 2017 | |
Notes Payable Third Parties Four [Member] | |||
Original principal amount | $ 1,900,000 | ||
Original issue discount | 300,000 | ||
Financing fees debt | 100,000 | ||
Notes Payable Third Parties Four [Member] | November 8, 2019 [Member] | |||
Debt instrument face amount | 1,000,000 | ||
Notes Payable Third Parties Four [Member] | December 26, 2019 [Member] | |||
Debt instrument face amount | $ 900,000 |
Notes Payable - Schedule of N_3
Notes Payable - Schedule of Notes Payable - Related Parties (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Less current portion of notes payable, related party | $ (14,968,104) | $ (800,000) |
Loan Payable to Christopher Diamantis [Member] | ||
Total notes payable, related party | 14,968,104 | 800,000 |
Notes Payable Related Parties [Member] | ||
Total notes payable, related party | 14,968,104 | 800,000 |
Less current portion of notes payable, related party | (14,968,104) | (800,000) |
Total notes payable, related party, net of current portion |
Debentures (Details Narrative)
Debentures (Details Narrative) - USD ($) | Aug. 31, 2019 | Jun. 24, 2019 | Jun. 21, 2019 | Jun. 13, 2019 | May 12, 2019 | Mar. 27, 2019 | Feb. 24, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Oct. 12, 2019 | Aug. 17, 2019 | Jun. 07, 2019 | Jun. 05, 2019 | Dec. 31, 2018 | Nov. 03, 2016 |
Outstanding debentures | $ 28,690,240 | $ 28,690,240 | $ 12,776,316 | ||||||||||||||
Accured penalty | 5,700,000 | ||||||||||||||||
Proceeds from debt | 3,845,000 | $ 8,000,000 | |||||||||||||||
Debt instrument principal amount | $ 341,612 | ||||||||||||||||
Non-cash interest and amortization of debt discount expense | 1,400,000 | $ 900,000 | 15,800,000 | 16,100,000 | |||||||||||||
Bridge Debenture Agreement [Member] | June Thirteen Two Thousand And Nineteen Offerings [Member] | |||||||||||||||||
Debt instrument maturity date | Dec. 31, 2019 | ||||||||||||||||
Debt instrument principal amount | $ 1,250,000 | ||||||||||||||||
Proceeds from offerings | $ 1,250,000 | ||||||||||||||||
Debt instrument maturity date description | Under the June 13 Agreement, the maturity date of the debentures issued on February 24, 2019, March 27, 2019, May 12, 2019, June 5, 2019 and June 7, 2019 were extended to December 31, 2019 and the terms were changed such that they have the same interest terms as contained in the June 13, 2019 debentures | ||||||||||||||||
Investors [Member] | Bridge Debenture Agreement [Member] | June Thirteen Two Thousand And Nineteen Offerings [Member] | |||||||||||||||||
Debt instrument principal amount | $ 1,250,000 | ||||||||||||||||
Debenture One [Member] | |||||||||||||||||
Outstanding debentures | $ 2,000,000 | $ 2,000,000 | |||||||||||||||
Debt instrument maturity date | Mar. 21, 2019 | ||||||||||||||||
Interest percentage | 18.00% | 18.00% | 2.50% | ||||||||||||||
Debenture One [Member] | Subsequent Event [Member] | Maximum [Member] | |||||||||||||||||
Interest percentage | 5.00% | ||||||||||||||||
Debenture Two [Member] | |||||||||||||||||
Outstanding debentures | $ 17,100,000 | $ 17,100,000 | |||||||||||||||
Debt instrument maturity date | Sep. 19, 2019 | ||||||||||||||||
Interest percentage | 18.00% | 18.00% | 2.50% | ||||||||||||||
Debenture Two [Member] | Subsequent Event [Member] | Maximum [Member] | |||||||||||||||||
Interest percentage | 5.00% | ||||||||||||||||
Debentures [Member] | |||||||||||||||||
Outstanding debentures | $ 1,020,000 | $ 250,000 | |||||||||||||||
Debt instrument maturity date | Dec. 31, 2019 | Dec. 31, 2019 | |||||||||||||||
Interest percentage | 24.00% | 24.00% | 24.00% | 2.50% | |||||||||||||
Debentures principal amount | $ 300,000 | $ 300,000 | $ 100,000 | $ 2,900,000 | $ 100,000 | $ 2,900,000 | |||||||||||
Interest rate, description | Commencing on August 17, 2019 the debentures bear interest on the outstanding principal amount at a rate of 2.5% per month (increasing to 5% per month on October 12, 2019), payable quarterly beginning on October 1, 2019. All overdue accrued and unpaid interest shall entail a late fee equal to the lesser of 24% per annum or the maximum rate permitted by applicable law. | ||||||||||||||||
Proceeds from debt | $ 1,270,000 | $ 1,270,000 | |||||||||||||||
Debt instrument principal amount | $ 500,000 | ||||||||||||||||
Debentures [Member] | Purchase Agreement [Member] | June 2019 Debentures [Member] | |||||||||||||||||
Interest percentage | 24.00% | ||||||||||||||||
Interest rate, description | Commencing on August 17, 2019, the June 2019 Debentures bear interest on the outstanding principal amount at a rate of 2.5% per month (increasing to 5% per month on October 12, 2019), payable quarterly beginning on October 1, 2019. | ||||||||||||||||
Debentures [Member] | Christopher Diamantis [Member] | |||||||||||||||||
Debt instrument maturity date | Jun. 3, 2019 | ||||||||||||||||
Interest rate, description | The maturity dates of these debentures were extended to December 31, 2019 and the terms were changed so that commencing on August 17, 2019 the debentures bear interest on the outstanding principal amount at a rate of 2.5% per month (increasing to 5% per month on October 12, 2019), payable quarterly beginning on October 1, 2019. | ||||||||||||||||
Debt instrument principal amount | $ 200,000 | $ 125,000 | |||||||||||||||
Debentures [Member] | Subsequent Event [Member] | Maximum [Member] | |||||||||||||||||
Interest percentage | 5.00% |
Debentures - Schedule of Debent
Debentures - Schedule of Debentures (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Debt Disclosure [Abstract] | ||
Debentures | $ 28,690,240 | $ 19,034,800 |
Discount on debentures | (6,247,469) | |
Deferred financing fees | (11,015) | |
Total debentures | 28,690,240 | 12,776,316 |
Less current portion | (28,690,240) | (12,776,316) |
Debentures, long-term |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Alcimede LLC [Member] | ||||
Consulting fee | $ 100,000 | $ 100,000 | $ 300,000 | $ 300,000 |
Finance and Operating Lease O_3
Finance and Operating Lease Obligations (Details Narrative) | Sep. 30, 2019USD ($) |
Leases [Abstract] | |
Minimum rentals and accrued interest | $ 600,000 |
Finance and Operating Lease O_4
Finance and Operating Lease Obligations - Schedule of Lease-related Assets and Liabilities (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 | |
Leases [Abstract] | |||
Operating leases, Assets | $ 328,615 | ||
Finance leases, Assets | 618,278 | ||
Total lease assets | 946,893 | ||
Operating leases Liabilities, Current | 141,830 | ||
Finance leases Liabilities, Current | 589,457 | 730,665 | |
Operating leases Liabilities, Non-current | 186,785 | ||
Finance leases Liabilities, Non-current | 28,821 | $ 31,543 | |
Total lease liabilities | $ 946,893 | ||
Weighted-average remaining term: Operating leases | 1 year 11 months 23 days | ||
Weighted-average remaining term: Finance leases | 2 months 8 days | ||
Weighted-average discount rate: Operating leases | [1] | 13.00% | |
Weighted-average discount rate: Finance leases | 5.122% | ||
[1] | Upon adoption of the new lease standard, discount rates used for existing operating leases were established at January 1, 2019. |
Finance and Operating Lease O_5
Finance and Operating Lease Obligations - Schedule of Information Related to Lease Expense for Finance and Operating Leases (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2019 | ||
Leases [Abstract] | |||
Finance lease expense: Depreciation/amortization of leased assets | [1] | $ 15,004 | $ (30,055) |
Finance lease expense: Interest on lease liabilities | 704 | 5,804 | |
Operating leases: Short-term lease expense | [2] | 76,312 | 263,713 |
Total lease expense | $ 92,020 | $ 239,462 | |
[1] | The depreciation for the nine months ended September 30, 2019 has been adjusted for depreciation recorded in the prior year. | ||
[2] | Expenses are included in general and administrative expenses in our condensed consolidated statements of operations. |
Finance and Operating Lease O_6
Finance and Operating Lease Obligations - Schedule of Supplemental Cash Flow Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Leases [Abstract] | ||
Operating cash flows for operating leases | $ 214,357 | |
Operating cash flows for finance leases | $ 704 | 5,804 |
Financing cash flows for finance leases payments | $ 143,930 |
Finance and Operating Lease O_7
Finance and Operating Lease Obligations - Schedule of Future Minimum Rentals Under Right-to-use Operating and Capital Leases (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Leases [Abstract] | ||
October 1, 2019 to September 30, 2020, Right-to-Use Operating Leases | $ 107,457 | |
October 1, 2020 to September 30, 2021, Right-to-Use Operating Leases | 134,776 | |
October 1, 2021 to September 30, 2022, Right-to-Use Operating Leases | 110,062 | |
October 1, 2022 to September 30, 2023, Right-to-Use Operating Leases | 29,247 | |
October 1, 2023 to September 30, 2024, Right-to-Use Operating Leases | 2,437 | |
Total, Right-to-Use Operating Leases | 383,979 | |
Less interest, Right-to-Use Operating Leases | (55,364) | |
Present value of minimum lease payments, Right-to-Use Operating Leases | 946,893 | |
Less current portion of lease obligations, Right-to-Use Operating Leases | (141,830) | |
Lease obligations, net of current portion, Right-to-Use Operating Leases | 186,785 | |
October 1, 2019 to September 30, 2020, Finance Leases | 604,080 | |
October 1, 2020 to September 30, 2021, Finance Leases | 32,611 | |
October 1, 2021 to September 30, 2022, Finance Leases | ||
October 1, 2022 to September 30, 2023, Finance Leases | ||
October 1, 2023 to September 30, 2024, Finance Leases | ||
Total, Finance Leases | 636,691 | |
Less interest, Finance Leases | (18,413) | |
Present value of minimum lease payments, Finance Leases | 618,278 | |
Less current portion of lease obligations, Finance Leases | (589,457) | (730,665) |
Lease obligations, net of current portion, Finance Leases | $ 28,821 | $ 31,543 |
Derivative Financial Instrume_3
Derivative Financial Instruments and Fair Value (Details Narrative) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($)Segment | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($)Segment | Dec. 31, 2018USD ($) | |
Derivative liabilities | $ 455,336 | $ 455,336 | $ 350,260 | ||
Conversion price percentage | 85.00% | ||||
Deemed dividends | $ 17,900,000 | $ 123,900,000 | $ 17,900,000 | ||
Interest expense | $ 5,400,000 | 9,500,000 | |||
Amortization of debt discount | $ 6,386,305 | 16,080,270 | |||
Gain loss realized on instrument | 109,300,000 | 13,700,000 | |||
Warrants [Member] | |||||
Discount on debentures | $ 8,300,000 | $ 300,000 | |||
Risk Free Interest Rate [Member] | Minimum [Member] | Pre-Modification [Member] | |||||
Warrants, measurement input, percentage | 2.44 | 1.91 | 2.44 | 1.91 | |
Risk Free Interest Rate [Member] | Minimum [Member] | Post-Modification [Member] | |||||
Warrants, measurement input, percentage | 2.23 | 2.09 | 2.23 | 2.09 | |
Risk Free Interest Rate [Member] | Maximum [Member] | Pre-Modification [Member] | |||||
Warrants, measurement input, percentage | 2.46 | 2.32 | 2.46 | 2.32 | |
Risk Free Interest Rate [Member] | Maximum [Member] | Post-Modification [Member] | |||||
Warrants, measurement input, percentage | 2.49 | 2.56 | 2.49 | 2.56 | |
Volatility [Member] | Minimum [Member] | Pre-Modification [Member] | |||||
Warrants, measurement input, percentage | 182.9 | 184 | 182.9 | 184 | |
Volatility [Member] | Minimum [Member] | Post-Modification [Member] | |||||
Warrants, measurement input, percentage | 198.3 | 208.2 | 198.3 | 208.2 | |
Volatility [Member] | Maximum [Member] | Pre-Modification [Member] | |||||
Warrants, measurement input, percentage | 204.4 | 296.3 | 204.4 | 296.3 | |
Volatility [Member] | Maximum [Member] | Post-Modification [Member] | |||||
Warrants, measurement input, percentage | 259.4 | 249.1 | 259.4 | 249.1 | |
Expected Term [Member] | Pre-Modification [Member] | |||||
Warrants term | 3 months 29 days | 3 months 29 days | |||
Expected Term [Member] | Post-Modification [Member] | |||||
Warrants term | 7 months 24 days | 7 months 24 days | |||
Expected Term [Member] | Minimum [Member] | Pre-Modification [Member] | |||||
Warrants term | 2 months 27 days | 2 months 27 days | |||
Expected Term [Member] | Minimum [Member] | Post-Modification [Member] | |||||
Warrants term | 5 months 23 days | 5 months 23 days | |||
Expected Term [Member] | Maximum [Member] | Pre-Modification [Member] | |||||
Warrants term | 4 months 9 days | 4 months 9 days | |||
Expected Term [Member] | Maximum [Member] | Post-Modification [Member] | |||||
Warrants term | 2 years 10 months 21 days | 2 years 10 months 21 days | |||
Derivative Liabilities [Member] | Risk Free Interest Rate [Member] | Minimum [Member] | |||||
Fair value assumptions, measurement input, percentage | 2.4 | 2.36 | 2.4 | 2.36 | |
Derivative Liabilities [Member] | Risk Free Interest Rate [Member] | Maximum [Member] | |||||
Fair value assumptions, measurement input, percentage | 2.6 | 2.88 | 2.6 | 2.88 | |
Derivative Liabilities [Member] | Volatility [Member] | Minimum [Member] | |||||
Fair value assumptions, measurement input, percentage | 189.5 | 163.8 | 189.5 | 163.8 | |
Derivative Liabilities [Member] | Volatility [Member] | Maximum [Member] | |||||
Fair value assumptions, measurement input, percentage | 273.1 | 234.7 | 273.1 | 234.7 | |
Derivative Liabilities [Member] | Expected Term [Member] | Minimum [Member] | |||||
Fair value assumptions, measurement input, weighted average remaining term | 8 months 23 days | 3 months 19 days | 8 months 23 days | ||
Derivative Liabilities [Member] | Expected Term [Member] | Maximum [Member] | |||||
Fair value assumptions, measurement input, weighted average remaining term | 3 years 6 months | 3 years 2 months 12 days | 3 years 6 months |
Derivative Financial Instrume_4
Derivative Financial Instruments and Fair Value - Schedule of Fair Value of Assets and Liabilities Measured on Recurring Basis (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Total | $ 455,336 | $ 350,260 |
Level 1 [Member] | ||
Total | ||
Level 2 [Member] | ||
Total | ||
Level 3 [Member] | ||
Total | 455,336 | 350,260 |
Embedded Conversion Options [Member] | ||
Total | 455,336 | 350,260 |
Embedded Conversion Options [Member] | Level 1 [Member] | ||
Total | ||
Embedded Conversion Options [Member] | Level 2 [Member] | ||
Total | ||
Embedded Conversion Options [Member] | Level 3 [Member] | ||
Total | $ 455,336 | $ 350,260 |
Derivative Financial Instrume_5
Derivative Financial Instruments and Fair Value - Schedule of Changes in Liabilities with Level 3 of Fair Value (Details) | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Balance at December 31, 2018 | $ 350,260 |
Change in fair value of debentures | 105,076 |
Balance at June 30, 2019 | $ 455,336 |
Redeemable Preferred Stock (Det
Redeemable Preferred Stock (Details Narrative) - USD ($) | Jul. 16, 2018 | Feb. 09, 2018 | Feb. 09, 2018 | Oct. 30, 2017 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Sep. 18, 2018 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | ||||||
Preferred stock, par value | $ 0.01 | $ 0.01 | ||||||
Common Stock [Member] | ||||||||
Number of shares converted | 8,150,754,118 | 106,335,991 | ||||||
September Debenture [Member] | ||||||||
Principal amount of debt converted into shares | $ 1,741,580 | $ 1,384,556 | ||||||
Series I-1 Preferred Stock [Member] | ||||||||
Preferred stock, shares authorized | 4,960 | |||||||
Preferred stock, par value | $ 1,000 | |||||||
Proceeds from offering | $ 4,960,000 | |||||||
Series I-1 Preferred Stock [Member] | Investor [Member] | ||||||||
Preferred stock, par value | $ 0.80 | |||||||
Preferred stock subscription amount | 1 | |||||||
Common stock conversion price per share | $ 1 | |||||||
Common stock weighted average market price percentage | 85.00% | |||||||
Series I-1 Preferred Stock [Member] | Purchase Agreement [Member] | ||||||||
Proceeds from offering | $ 4,000,000 | |||||||
Ownership percentage | 50.00% | |||||||
Series I-2 Convertible Preferred Stock [Member] | ||||||||
Preferred stock, shares authorized | 5,000,000 | |||||||
Preferred stock, par value | $ 1 | $ 1,000 | ||||||
Common stock conversion price per share | $ 1 | |||||||
Common stock weighted average market price percentage | 85.00% | |||||||
Debenture surrender value | $ 0.80 | |||||||
Series I-2 Convertible Preferred Stock [Member] | September Debenture [Member] | ||||||||
Number of shares issued for debenture exchange | 1,730.7 | |||||||
Series I-2 Convertible Preferred Stock [Member] | Board of Directors [Member] | ||||||||
Preferred stock, shares authorized | 21,346 | |||||||
Series I-2 Preferred Stock [Member] | ||||||||
Principal amount of debt converted into shares | $ 1,500,000 | |||||||
Number of shares issued for debenture exchange | 2,176.975 | |||||||
Number of shares converted | 982.101 | 1,286.141 |
Stockholders' Deficit (Details
Stockholders' Deficit (Details Narrative) - USD ($) | May 12, 2019 | Jul. 23, 2018 | Jul. 16, 2018 | Aug. 14, 2017 | Mar. 27, 2019 | Sep. 30, 2017 | Sep. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Sep. 18, 2018 | Sep. 17, 2018 | Jul. 20, 2018 |
Common stock shares authorized | 10,000,000,000 | 10,000,000,000 | 10,000,000,000 | 10,000,000,000 | |||||||||||||
Common stock par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.01 | ||||||||||||
Preferred stock shares authorized | 5,000,000 | 5,000,000 | 5,000,000 | ||||||||||||||
Preferred stock par value | $ 0.01 | $ 0.01 | $ 0.01 | ||||||||||||||
Number of common stock issued, value | $ 661,381 | $ 3,957,767 | |||||||||||||||
Stock conversion share price | $ 991,578 | $ 4,037,089 | $ 3,056,674 | ||||||||||||||
Common stock shares issued | 8,398,936,775 | 8,398,936,775 | 128,567,273 | ||||||||||||||
Common stock shares outstanding | 8,398,936,775 | 8,398,936,775 | 128,567,273 | ||||||||||||||
Recognized stock stock-based compensation | $ 8,650 | $ 25,950 | $ 739,729 | ||||||||||||||
Interest expense | 5,400,000 | 9,500,000 | |||||||||||||||
Amortization of debt discount | 6,386,305 | $ 16,080,270 | |||||||||||||||
Employees and Directors [Member] | Restricted Stock [Member] | |||||||||||||||||
Number of restricted stock issued | 142,667 | ||||||||||||||||
Recognized stock stock-based compensation | $ 477,933 | ||||||||||||||||
Stock issued price per share | $ 3.35 | $ 3.35 | |||||||||||||||
2007 Equity Plan [Member] | |||||||||||||||||
Stock option expense | $ 25,950 | $ 72,590 | |||||||||||||||
Weighted average period | 6 years 6 months | ||||||||||||||||
Intrinsic value of options exercisable | $ 0 | $ 0 | |||||||||||||||
2007 Equity Plan [Member] | Restricted Stock [Member] | |||||||||||||||||
Number of restricted stock issued were forfeited | 123 | ||||||||||||||||
2007 Equity Plan [Member] | Employees and Directors [Member] | Restricted Stock [Member] | |||||||||||||||||
Number of restricted stock issued | 364 | ||||||||||||||||
Common Stock [Member] | |||||||||||||||||
Number of common stock issued | 119,615,384 | 768,548 | 572,480 | 151,200 | 119,615,384 | ||||||||||||
Number of common stock issued, value | $ 11,961 | $ 77 | $ 57 | $ 15 | |||||||||||||
Stock conversion share price | $ 165 | $ 157 | $ 67 | ||||||||||||||
Conversion of stock into shares | 1,649,059 | 1,571,000 | 666,621 | ||||||||||||||
Cashless exercise warrants | 755,000,000 | 755,000,000 | |||||||||||||||
Number of shares converted | 8,150,754,118 | 106,335,991 | |||||||||||||||
Number of restricted stock issued | 142,667 | ||||||||||||||||
Warrants [Member] | |||||||||||||||||
Number of warrants issued as anti-dilution provision | 582,200,000,000 | ||||||||||||||||
Warrant expiration date | Mar. 31, 2022 | ||||||||||||||||
Change in fair value of warrants | $ 5,400,000 | $ 4,100,000 | |||||||||||||||
Discount on debentures | $ 8,300,000 | 300,000 | |||||||||||||||
Series G Preferred Stock [Member] | |||||||||||||||||
Preferred stock shares authorized | 14,000 | 14,000 | 14,000 | ||||||||||||||
Preferred stock par value | $ 0.01 | $ 0.01 | $ 0.01 | ||||||||||||||
Preferred stock shares outstanding | 215 | 215 | 215 | ||||||||||||||
Preferred stock, stated value | $ 1,000 | $ 1,000 | |||||||||||||||
Weighted average common stock price percentage | 85.00% | ||||||||||||||||
Series H Preferred Stock [Member] | |||||||||||||||||
Preferred stock shares authorized | 14,202 | 14,202 | 14,202 | ||||||||||||||
Preferred stock par value | $ 0.01 | $ 0.01 | $ 0.01 | ||||||||||||||
Preferred stock shares outstanding | 10 | 10 | 60 | ||||||||||||||
Preferred stock, stated value | $ 1,000 | $ 1,000 | |||||||||||||||
Weighted average common stock price percentage | 85.00% | ||||||||||||||||
Series F Convertible Preferred Stock [Member] | |||||||||||||||||
Preferred stock shares outstanding | 1,750,000 | 1,750,000 | |||||||||||||||
Series F Convertible Preferred Stock [Member] | Genomas, Inc [Member] | |||||||||||||||||
Number of common stock issued | 1,750,000 | ||||||||||||||||
Number of common stock issued, value | $ 174,097 | ||||||||||||||||
Stock conversion share price | $ 14,625 | ||||||||||||||||
Conversion of stock into shares | 120 | ||||||||||||||||
Preferred stock price per share for unpaid dividend | $ 1.95 | ||||||||||||||||
Series J Convertible Preferred Stock [Member] | |||||||||||||||||
Common stock shares authorized | 250,000 | ||||||||||||||||
Preferred stock shares outstanding | 250,000 | 250,000 | |||||||||||||||
Series J Convertible Preferred Stock [Member] | Exchange Agreement [Member] | Alcimede LLC [Member] | |||||||||||||||||
Number of shares issued upon conversion, value | $ 250,000 | ||||||||||||||||
Number of shares issued upon conversion | 250,000 | ||||||||||||||||
Conversion price, per share | $ 1 | ||||||||||||||||
Cumulative dividends percentage | 8.00% | ||||||||||||||||
Series I-2 Preferred Stock [Member] | |||||||||||||||||
Number of shares issued upon conversion, value | $ 1,500,000 | ||||||||||||||||
Number of shares issued upon conversion | 2,176.975 | ||||||||||||||||
Number of shares converted | 982.101 | 1,286.141 |
Stockholders' Deficit - Schedul
Stockholders' Deficit - Schedule of Stock Option Activity (Details) | 9 Months Ended |
Sep. 30, 2019$ / sharesshares | |
Equity [Abstract] | |
Number of Options Outstanding, Beginning balance | shares | 77 |
Number of Options Outstanding, Granted | shares | |
Number of Options Outstanding, Expired | shares | |
Number of Options Outstanding, Forfeited | shares | |
Number of Options Outstanding, Ending balance | shares | 77 |
Number of Options Exercisable, Ending balance | shares | 68 |
Weighted-average exercise price, Outstanding Beginning balance | $ / shares | $ 1,036,375 |
Weighted-average exercise price, Granted | $ / shares | |
Weighted-average exercise price, Expired | $ / shares | |
Weighted-average exercise price, Forfeited | $ / shares | |
Weighted-average exercise price, Outstanding, Ending balance | $ / shares | 1,036,375 |
Weighted-average exercise price, Exercisable, Endig balance | $ / shares | $ 1,152,616 |
Weighted-average contractual term, Beginning | 7 years 3 months 29 days |
Weighted-average contractual term, Ending | 6 years 6 months |
Stockholders' Deficit - Sched_2
Stockholders' Deficit - Schedule of Warrants Activity (Details) - Warrants [Member] | 9 Months Ended |
Sep. 30, 2019$ / sharesshares | |
Number of shares issuable pursuant to warrants, outstanding, beginning balance | 53,130,510,439 |
Number of shares issuable pursuant to warrants, Increase during the period as a result of down round provisions | 582,209,844,938 |
Number of shares issuable pursuant to warrants, Shares issued pursuant to Warrants exercised during the period | (755,000,000) |
Number of shares issuable pursuant to warrants, outstanding, ending balance | 634,585,355,377 |
Weighted average exercise price, warrants outstanding, beginning balance | $ / shares | $ 0.00172 |
Weighted average exercise price, Shares issued pursuant to Warrants exercised during the period | $ / shares | 0.00034 |
Weighted average exercise price, warrants outstanding, ending balance | $ / shares | $ 0.00014 |
Supplemental Disclosure of Ca_3
Supplemental Disclosure of Cash Flow Information - Schedule of Supplemental Cash Flow Information (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Cash paid for interest | $ 303,208 | |
Cash paid for income taxes | 45,000 | 20,000 |
Exchange of Series I-2 Preferred Stock for common stock | 1,143,974 | 633,101 |
Cashless exercise of warrants | 11,961 | 4,619,150 |
Debentures converted into common stock | 8,085,342 | |
Common stock issued in cashless exercise of warrants | 11,961 | |
Exchange of debentures for Series I-2 preferred stock | 1,420 | |
Conversions of Series H preferred stock into common stock | 50,000 | |
Original issue discount of debentures | 400,000 | 1,920,000 |
Deemed dividend for trigger of down round provision features | 123,861,587 | 17,942,578 |
Issuance of Series J Preferred Stock in settlement of note payable to related party | 250,000 | |
Acquisitions of Hospitals and Medical Center [Member] | ||
Cash | 375 | |
Inventory | 317,427 | 450,682 |
Prepaid expenses and other current assets | 310,385 | |
Property and equipment | 500,000 | 7,129,484 |
Intangible assets | 250,000 | 504,806 |
Accrued expenses | $ 158,890 | $ 193,966 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | Sep. 13, 2018 | Apr. 23, 2018 | Feb. 15, 2017 | Feb. 08, 2017 | Jan. 24, 2017 | Jan. 03, 2017 | Aug. 31, 2019 | Jul. 31, 2019 | May 31, 2019 | Feb. 28, 2019 | Nov. 30, 2017 | Feb. 28, 2017 | Jan. 31, 2017 | Nov. 30, 2016 | Feb. 29, 2016 | Sep. 30, 2019 | Sep. 30, 2018 | Mar. 24, 2017 | Dec. 07, 2016 | Nov. 03, 2016 | Oct. 31, 2016 | Sep. 30, 2016 | Sep. 27, 2016 | Jul. 29, 2016 | Mar. 31, 2016 |
Payment for related party debt | $ 2,310,000 | $ 4,011,000 | |||||||||||||||||||||||
Accrued interest | $ 43,000 | ||||||||||||||||||||||||
Payment for notes payable | 5,005,794 | $ 256,481 | |||||||||||||||||||||||
Holders of Tegal Notes [Member] | |||||||||||||||||||||||||
Equipment lease outstanding balance | $ 341,612 | ||||||||||||||||||||||||
Accrued interest | $ 43,000 | ||||||||||||||||||||||||
Payment for notes payable | $ 5,513 | ||||||||||||||||||||||||
Mr Diamantis [Member] | |||||||||||||||||||||||||
Due to related party | 9,900,000 | ||||||||||||||||||||||||
Florida Department of Revenue [Member] | |||||||||||||||||||||||||
Income tax penalties and interest accrued | $ 900,000 | ||||||||||||||||||||||||
Payment for related party debt | 400,000 | ||||||||||||||||||||||||
Due to related party | 400,000 | ||||||||||||||||||||||||
TCS-Florida, L.P [Member] | |||||||||||||||||||||||||
Due to related party | 300,000 | ||||||||||||||||||||||||
Litigation settlement in judgment | $ 2,600,000 | ||||||||||||||||||||||||
Payment in settlement of judgment | $ 700,000 | $ 700,000 | |||||||||||||||||||||||
DeLage Landen Financial Services, Inc. [Member] | |||||||||||||||||||||||||
Litigation settlement in judgment | $ 1,000,000 | ||||||||||||||||||||||||
Implicit interest rate | 4.97% | ||||||||||||||||||||||||
Equipment lease outstanding balance | 200,000 | ||||||||||||||||||||||||
Epinex Diagnostics Laboratories, Inc. [Member] | |||||||||||||||||||||||||
Payment of attorneys' fees | $ 300,000 | $ 700,000 | |||||||||||||||||||||||
Medytox Solutions, Inc [Member] | |||||||||||||||||||||||||
Discharge of payment | 2,030,000 | ||||||||||||||||||||||||
Amount awarded to other party in judgement | $ 413,000 | ||||||||||||||||||||||||
Medytox Solutions, Inc [Member] | Internal Revenue Service (IRS) [Member] | |||||||||||||||||||||||||
Settlement payable | $ 100,000 | ||||||||||||||||||||||||
Income tax penalties and interest paid | $ 5,000,000 | ||||||||||||||||||||||||
Income tax liability refund | $ 1,900,000 | ||||||||||||||||||||||||
Provision for liability | $ 1,000,000 | ||||||||||||||||||||||||
Commitments receivables | $ 600,000 | ||||||||||||||||||||||||
Genomas, Inc [Member] | |||||||||||||||||||||||||
Payment for notes payable | $ 200,000 | ||||||||||||||||||||||||
Discharge of payment | $ 120,000 | ||||||||||||||||||||||||
EPIC Reference Laboratories, Inc. [Member] | |||||||||||||||||||||||||
Litigation settlement in judgment | $ 155,000 | ||||||||||||||||||||||||
Discharge of payment | $ 148,000 | ||||||||||||||||||||||||
Roche Diagnostics Corporation [Member] | |||||||||||||||||||||||||
Discharge of payment | $ 240,000 | ||||||||||||||||||||||||
Beckman Coulter, Inc [Member] | |||||||||||||||||||||||||
Discharge of payment | $ 106,000 | ||||||||||||||||||||||||
Techlogix, Inc [Member] | |||||||||||||||||||||||||
Amount awarded to other party in judgement | $ 72,000 | ||||||||||||||||||||||||
Settlement Agreement [Member] | Epinex Diagnostics Laboratories, Inc. [Member] | |||||||||||||||||||||||||
Settlement payable | $ 200,000 | ||||||||||||||||||||||||
Forbearance Agreement [Member] | TCS-Florida, L.P [Member] | |||||||||||||||||||||||||
Monthly installment payment | $ 1,900,000 | ||||||||||||||||||||||||
Employment Agreements [Member] | Former Employee 1 [Member] | |||||||||||||||||||||||||
Litigation settlement in judgment | 253,000 | ||||||||||||||||||||||||
Employment Agreements [Member] | Former Employee 2 [Member] | |||||||||||||||||||||||||
Litigation settlement in judgment | $ 110,000 |
Segment Reporting (Details Narr
Segment Reporting (Details Narrative) | 9 Months Ended |
Sep. 30, 2019Segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
Segment Reporting - Schedule of
Segment Reporting - Schedule of Segment Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Net revenues - External | $ 3,885,977 | $ 5,039,112 | $ 13,137,816 | $ 9,932,989 | |
(Loss) income from continuing operations before income taxes: | (12,127,692) | 97,356,081 | (38,340,063) | (3,965,722) | |
Depreciation and amortization | 199,996 | 152,825 | 609,818 | 804,074 | |
Capital expenditures | 7,086 | 103,387 | 50,801 | 103,387 | |
Total assets | 16,574,065 | 16,574,065 | $ 14,199,300 | ||
Hospital Operations [Member] | |||||
Net revenues - External | 3,920,608 | 5,021,543 | 13,081,647 | 9,755,099 | |
(Loss) income from continuing operations before income taxes: | (1,769,400) | (1,294,581) | (8,946,720) | (3,998,943) | |
Depreciation and amortization | 182,832 | 39,669 | 532,979 | 177,386 | |
Capital expenditures | 7,086 | 103,387 | 50,801 | 103,387 | |
Total assets | 16,831,443 | 16,831,443 | 13,568,933 | ||
Clinical Laboratory Operations [Member] | |||||
Net revenues - External | (34,631) | 17,569 | 56,169 | 177,890 | |
(Loss) income from continuing operations before income taxes: | (295,908) | (547,041) | (701,466) | (1,765,395) | |
Depreciation and amortization | 10,036 | 112,908 | 69,381 | 625,877 | |
Capital expenditures | |||||
Total assets | 356,854 | 356,854 | 271,426 | ||
Corporate [Member] | |||||
(Loss) income from continuing operations before income taxes: | (640,044) | (973,953) | (2,626,953) | (3,156,646) | |
Depreciation and amortization | 7,128 | 248 | 7,458 | 811 | |
Total assets | 1,821,952 | 1,821,952 | 2,707,416 | ||
Other Income (Expense), Net [Member] | |||||
(Loss) income from continuing operations before income taxes: | (9,422,340) | $ 100,171,656 | (26,064,924) | $ 4,955,262 | |
Assets of AMSG And HTS Classified as Held for Sale [Member] | |||||
Total assets | 373,121 | 373,121 | 152,171 | ||
Eliminations [Member] | |||||
Total assets | $ (2,809,305) | $ (2,809,305) | $ (2,500,646) |
Discontinued Operations - Sched
Discontinued Operations - Schedule of Discontinued Operation of Balance Sheet and Operation Statement (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Cash | $ 2,518 | $ 2,518 | $ 6,994 | ||
Accounts receivable, net | 352,761 | 352,761 | 97,581 | ||
Prepaid expenses and other current assets | 6,867 | 6,867 | 35,777 | ||
Current assets classified as held for sale | 362,146 | 362,146 | 140,352 | ||
Property and equipment, net | 4,946 | 4,946 | 5,790 | ||
Deposits | 6,029 | 6,029 | 6,029 | ||
Non-current assets classified as held for sale | 10,975 | 10,975 | 11,819 | ||
Accounts payable (includes related parties) | 1,225,124 | 1,225,124 | 1,079,827 | ||
Accrued expenses | 1,207,484 | 1,207,484 | 939,183 | ||
Current portion of notes payable | 268,851 | 268,851 | 278,836 | ||
Current liabilities classified as held for sale | 2,701,459 | 2,701,459 | 2,297,846 | ||
Revenue from services | 246,676 | $ 512,566 | 766,627 | $ 1,383,378 | |
Cost of services | 26,012 | 45,641 | 113,266 | 133,738 | |
Gross profit (loss) | 220,664 | 466,925 | 653,361 | 1,249,640 | |
Operating expenses | 355,828 | 625,951 | 1,413,423 | 1,940,990 | |
Other (income) expense | 2,912 | 404 | 31,874 | (807,137) | |
Provision for income taxes | |||||
Loss from discontinued operations | (138,076) | (159,430) | (791,936) | 115,787 | |
Advanced Molecular Services Group [Member] | |||||
Cash | 220 | 220 | 4,471 | ||
Accounts receivable, net | 22,523 | 22,523 | 6,838 | ||
Prepaid expenses and other current assets | 25,477 | ||||
Current assets classified as held for sale | 22,743 | 22,743 | 36,786 | ||
Non-current assets classified as held for sale | |||||
Accounts payable (includes related parties) | 514,415 | 514,415 | 532,858 | ||
Accrued expenses | 493,356 | 493,356 | 418,932 | ||
Income taxes payable | |||||
Current portion of notes payable | 268,851 | 268,851 | 278,836 | ||
Current liabilities classified as held for sale | 1,276,622 | 1,276,622 | 1,230,626 | ||
Non-current liabilities classified as held for sale | |||||
Revenue from services | 11,350 | 13,249 | 59,832 | 92,090 | |
Cost of services | 5,878 | 15,559 | 29,638 | 37,773 | |
Gross profit (loss) | 5,472 | (2,310) | 30,194 | 54,317 | |
Operating expenses | 60,424 | 93,059 | 237,042 | 363,944 | |
Other (income) expense | 2,912 | (5,748) | 31,874 | (819,258) | |
Provision for income taxes | |||||
Loss from discontinued operations | (57,864) | (89,621) | (238,722) | 509,631 | |
Health Technology Solutions, Inc [Member] | |||||
Cash | 2,298 | 2,298 | 2,523 | ||
Accounts receivable, net | 330,238 | 330,238 | 90,743 | ||
Prepaid expenses and other current assets | 6,867 | 6,867 | 10,300 | ||
Current assets classified as held for sale | 339,403 | 339,403 | 103,566 | ||
Property and equipment, net | 4,946 | 4,946 | 5,790 | ||
Deposits | 6,029 | 6,029 | 6,029 | ||
Non-current assets classified as held for sale | 10,975 | 10,975 | 11,819 | ||
Accounts payable (includes related parties) | 710,709 | 710,709 | 546,969 | ||
Accrued expenses | 714,128 | 714,128 | 520,251 | ||
Current portion of notes payable | |||||
Current liabilities classified as held for sale | 1,424,837 | 1,424,837 | $ 1,067,220 | ||
Revenue from services | 235,326 | 499,317 | 706,795 | 1,291,288 | |
Cost of services | 20,134 | 30,082 | 83,628 | 95,965 | |
Gross profit (loss) | 215,192 | 469,235 | 623,167 | 1,195,323 | |
Operating expenses | 295,404 | 532,892 | 1,176,381 | 1,577,046 | |
Other (income) expense | 6,152 | 12,121 | |||
Provision for income taxes | |||||
Loss from discontinued operations | $ (80,212) | $ (69,809) | $ (553,214) | $ (393,844) |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Dec. 23, 2019 | Oct. 04, 2019 | Nov. 30, 2019 | Dec. 26, 2019 | Dec. 31, 2019 | Dec. 09, 2019 | Sep. 30, 2019 | Dec. 31, 2018 | Sep. 18, 2018 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | |||||||
Preferred stock, stated value | $ 0.01 | $ 0.01 | |||||||
Common stock, shares authorized | 10,000,000,000 | 10,000,000,000 | 10,000,000,000 | ||||||
Series J Preferred Stock [Member] | |||||||||
Preferred stock, shares authorized | 250,000 | 250,000 | |||||||
Preferred stock, stated value | $ 0.01 | $ 0.01 | |||||||
Preferred stock shares outstanding | 250,000 | 250,000 | |||||||
Series G Preferred Stock [Member] | |||||||||
Preferred stock, shares authorized | 14,000 | 14,000 | |||||||
Preferred stock, stated value | $ 0.01 | $ 0.01 | |||||||
Preferred stock shares outstanding | 215 | 215 | |||||||
Subsequent Event [Member] | |||||||||
Aggregate shares of common stock for conversions of preferred stock | 1,250,000,000 | ||||||||
Common stock, shares authorized | 12,500,000,000 | ||||||||
Preferred stock voting rights term | Each share of the Series K Preferred Stock shall be entitled to the whole number of votes equal to 40,000 shares of common stock. | ||||||||
Subsequent Event [Member] | Series K Preferred Stock [Member] | |||||||||
Preferred stock, shares authorized | 5,000,000 | ||||||||
Preferred stock, stated value | $ 1 | ||||||||
Common stock, shares authorized | 10,000,000,000 | ||||||||
Subsequent Event [Member] | Series K Preferred Stock [Member] | Exchange Agreement [Member] | Alcimede LLC [Member] | |||||||||
Number of shares issued | 250,000 | ||||||||
Subsequent Event [Member] | Series J Preferred Stock [Member] | |||||||||
Preferred stock cumulative dividend percentage | 8.00% | ||||||||
Subsequent Event [Member] | Series J Preferred Stock [Member] | Exchange Agreement [Member] | Alcimede LLC [Member] | |||||||||
Number of shares exchanged | 250,000 | ||||||||
Subsequent Event [Member] | Series G Preferred Stock [Member] | |||||||||
Preferred stock shares outstanding | 215 | ||||||||
Subsequent Event [Member] | Christopher Diamantis [Member] | |||||||||
Working capital | $ 700,000 | ||||||||
Incurred interest expenses | $ 65,000 | ||||||||
Subsequent Event [Member] | Board of Directors [Member] | Series K Preferred Stock [Member] | |||||||||
Preferred stock, shares authorized | 250,000 |
Subsequent Events - Schedule of
Subsequent Events - Schedule of Dilutive Effect of Potential Common Shares (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Dec. 26, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Common shares outstanding | 8,398,936,775 | 128,567,273 | ||
Dilutive potential shares | 748,061,925,383 | 746,016,834 | ||
Warrants [Member] | ||||
Dilutive potential shares | 634,525,355,377 | 463,449,767 | ||
Convertible Preferred Stock [Member] | ||||
Dilutive potential shares | 82,901,785,590 | 68,344,495 | ||
Subsequent Event [Member] | ||||
Common shares outstanding | 9,648,936,775 | |||
Total dilutive potential common shares, including outstanding common stock | 753,931,450,393 | |||
Subsequent Event [Member] | Stock Options [Member] | ||||
Dilutive potential shares | 77 | |||
Subsequent Event [Member] | Warrants [Member] | ||||
Dilutive potential shares | 634,525,355,377 | |||
Subsequent Event [Member] | Convertible Debt [Member] | ||||
Dilutive potential shares | 30,634,784,339 | |||
Subsequent Event [Member] | Convertible Preferred Stock [Member] | ||||
Dilutive potential shares | 79,122,373,825 |