Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Aug. 13, 2018 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | Akers Biosciences, Inc. | |
Entity Central Index Key | 1,321,834 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 94,106,292 | |
Trading symbol | AKER | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,018 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Current Assets | ||
Cash | $ 275,963 | $ 438,432 |
Marketable Securities | 7,977,575 | 5,011,607 |
Trade Receivables, net | 412,623 | 964,671 |
Deposits and other receivables | 30,288 | 16,590 |
Deposits and other receivables - Related Party | 30,243 | |
Inventories, net | 1,014,549 | 947,612 |
Prepaid expenses | 693,632 | 145,488 |
Prepaid expenses - Related Party | 136,751 | 251,499 |
Total Current Assets | 10,571,624 | 7,775,899 |
Non-Current Assets | ||
Prepaid expenses - Related Party | 208,398 | 120,118 |
Property, Plant and Equipment, net | 245,462 | 235,113 |
Intangible Assets, net | 1,045,113 | 1,130,667 |
Restricted cash | 500,000 | |
Other Assets | 76,093 | 76,093 |
Total Non-Current Assets | 2,075,066 | 1,561,991 |
Total Assets | 12,646,690 | 9,337,890 |
Current Liabilities | ||
Trade and Other Payables | 1,835,180 | 1,745,216 |
Trade and Other Payables - Related Party | 16,701 | 39,821 |
Total Current Liabilities | 1,851,881 | 1,785,037 |
Total Liabilities | 1,851,881 | 1,785,037 |
SHAREHOLDERS' EQUITY | ||
Convertible Preferred Stock, No par value, 50,000,000 shares authorized, 0 and 1,755 shares issued and outstanding as of June 30, 2018 and December 31, 2017 | 1,755,000 | |
Common Stock, No par value, 500,000,000 shares authorized, 94,106,292 and 44,220,552 issued and outstanding as of June 30, 2018 and December 31, 2017 | 119,580,543 | 110,647,169 |
Deferred Compensation | (3,469) | |
Comprehensive Loss | (12,443) | |
Accumulated Deficit | (108,773,291) | (104,845,847) |
Total Shareholders' Equity | 10,794,809 | 7,552,853 |
Total Liabilities and Shareholders' Equity | $ 12,646,690 | $ 9,337,890 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Convertible preferred stock, no par value | ||
Convertible preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Convertible preferred stock, shares issued | 0 | 1,755 |
Convertible preferred stock, shares outstanding | 0 | 1,755 |
Common stock, no par value | ||
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 94,106,292 | 44,220,552 |
Common stock, shares outstanding | 94,106,292 | 44,220,552 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Revenues: | ||||
Total Revenues | $ 526,601 | $ 1,072,861 | $ 829,076 | $ 1,740,111 |
Cost of Sales: | ||||
Product Cost of Sales | (302,826) | (290,591) | (600,326) | (549,312) |
Gross Income | 223,775 | 782,270 | 228,750 | 1,190,799 |
Administrative Expenses | 1,565,602 | 829,929 | 2,481,134 | 1,620,457 |
Sales and Marketing Expenses | 442,387 | 354,889 | 910,849 | 911,545 |
Sales and Marketing Expenses - Related Party | 27,082 | 61,502 | 58,771 | 93,781 |
Research and Development Expenses | 253,371 | 290,841 | 644,752 | 639,283 |
Research and Development Expenses - Related Party | 5,753 | 22,994 | 54,342 | 22,994 |
Amortization of Non-Current Assets | 42,777 | 42,777 | 85,554 | 85,554 |
Loss from Operations | (2,113,197) | (820,662) | (4,006,652) | (2,182,815) |
Other (Income)/Expenses | ||||
Foreign Currency Transaction (Gain)/Loss | 3,029 | 978 | 5,905 | (9,367) |
Interest and Dividend Income | (48,773) | (3,632) | (85,113) | (6,169) |
Total Other Income | (45,744) | (2,654) | (79,208) | (15,536) |
Loss Before Income Taxes | (2,067,453) | (818,008) | (3,927,444) | (2,167,279) |
Income Tax Benefit | ||||
Net Loss Attributable to Common Shareholders | (2,067,453) | (818,008) | (3,927,444) | (2,167,279) |
Other Comprehensive Income/(Loss) | ||||
Net Unrealized Gain/(Loss) on Marketable Securities | 4,401 | 852 | (12,443) | 1,009 |
Total Other Comprehensive Income/(Loss) | 4,401 | 852 | (12,443) | 1,009 |
Comprehensive Loss | $ (2,063,052) | $ (817,156) | $ (3,939,887) | $ (2,166,270) |
Basic and Diluted loss per common share | $ (0.02) | $ (0.09) | $ (0.05) | $ (0.27) |
Weighted average basic and diluted common shares outstanding | 93,254,241 | 8,882,326 | 82,348,494 | 7,943,168 |
Product Revenue [Member] | ||||
Revenues: | ||||
Total Revenues | $ 526,601 | $ 1,096,925 | $ 829,076 | $ 1,740,111 |
Product Revenue Related Party [Member] | ||||
Revenues: | ||||
Total Revenues | $ (24,064) |
Condensed Consolidated Stateme5
Condensed Consolidated Statement of Changes in Shareholder's Equity - 6 months ended Jun. 30, 2018 - USD ($) | Preferred Stock [Member] | Common Stock [Member] | Deferred Compensation [Member] | Accumulated Deficit [Member] | Accumulated Other Comprehensive Loss [Member] | Total |
Balance at Dec. 31, 2017 | $ 1,755,000 | $ 110,647,169 | $ (3,469) | $ (104,845,847) | $ 7,552,853 | |
Balance, shares at Dec. 31, 2017 | 1,755 | 44,220,552 | ||||
Net loss | (3,927,444) | (3,927,444) | ||||
Exercise of warrants for common stock | $ 7,155,200 | 7,155,200 | ||||
Exercise of warrants for common stock, shares | 38,160,738 | |||||
Conversion of preferred stock to common stock | $ (1,755,000) | $ 1,755,000 | ||||
Conversion of preferred stock to common stock, shares | (1,755) | 11,700,002 | ||||
Amortization of deferred compensation | 3,469 | 3,469 | ||||
Issuance of restricted stock to key employees | $ 5,175 | 5,175 | ||||
Issuance of restricted stock to key employees, shares | 25,000 | |||||
Issuance of non-qualified stock options to key employees | $ 5,454 | 5,454 | ||||
Issuance of restricted stock for services for non-employees | 12,545 | 12,545 | ||||
Net unrealized loss on marketable securities | (12,443) | (12,443) | ||||
Balance at Jun. 30, 2018 | $ 119,580,543 | $ (108,773,291) | $ (12,443) | $ 10,794,809 | ||
Balance, shares at Jun. 30, 2018 | 94,106,292 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Cash flows from operating activities | ||
Net loss | $ (3,927,444) | $ (2,167,279) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Accrued income on marketable securities | (16,332) | (1,001) |
Depreciation and amortization | 112,903 | 121,381 |
Reserve and write-off for obsolete inventory | 32,283 | 21,542 |
Reserve for doubtful accounts | 97,000 | 46,239 |
Amortization of deferred compensation | 3,469 | 15,864 |
Share based compensation to employees - options | 5,454 | 10,184 |
Share based compensation to employees - restricted stock | 5,175 | |
Share based compensation to non-employees - options | 2,183 | |
Share based compensation to non-employees - restricted stock | 12,545 | |
Changes in assets and liabilities: | ||
(Increase)/decrease in trade receivables | 455,048 | (372,502) |
Decrease in trade receivables - related party | 31,892 | |
(Increase)/decrease in deposits and other receivables | (13,698) | 10,692 |
Increase in deposit and other receivables - related party | (30,243) | |
Increase in inventories | (99,220) | (213,860) |
(Increase)/decrease in prepaid expenses | (548,144) | 20,752 |
Decrease in prepaid expenses - related party | 26,468 | 46,890 |
Increase in other assets | (4,330) | |
Increase in trade and other payables | 89,964 | 38,278 |
Decrease in trade and other payables - related party | (23,120) | (200,156) |
Net cash used in operating activities | (3,817,892) | (2,593,231) |
Cash flows from investing activities | ||
Purchases of property, plant and equipment | (37,698) | (37,191) |
Purchases of marketable securities | (5,268,754) | (2,705,168) |
Proceeds from sale of marketable securities | 2,306,675 | 1,745,554 |
Net cash used in investing activities | (2,999,777) | (996,805) |
Cash flows from financing activities | ||
Net proceeds from issuance of common stock | 3,413,311 | |
Net proceeds from exercise of warrants for common stock | 7,155,200 | 301,200 |
Net cash provided by financing activities | 7,155,200 | 3,714,511 |
Net increase in cash and restricted cash | 337,531 | 124,475 |
Cash and restricted cash at beginning of period | 438,432 | 72,700 |
Cash and restricted cash at end of period | 775,963 | 197,175 |
Supplemental Schedule of Non-Cash Financing and Investing Activities | ||
Net unrealized gains/(losses) on marketable securities | (12,443) | 1,009 |
Issuance of a restricted common stock grant for services | 5,455 | |
Conversion of Series B Preferred Stock to common shares | $ 1,755,000 |
Organization and Description of
Organization and Description of Business | 6 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business | Note 1 – Organization and Description of Business Akers Biosciences, Inc. (“Akers”), is a New Jersey corporation. These condensed consolidated financial statements include two wholly owned subsidiaries, Akers Acquisition Sub, Inc. and Bout Time Marketing Corporation, (together, the “Company”). All material intercompany transactions have been eliminated in consolidation. The Company’s primary focus is the development and sale of disposable diagnostic testing devices that can be performed in minutes, to facilitate time sensitive therapeutic decisions. The Company’s main products are a disposable breathalyzer test that measures the blood alcohol content of the user, a rapid test detecting the antibody causing an allergic reaction to Heparin and a disposable breathalyzer test that measures Free Radical activity in the human body. |
Significant Accounting Policies
Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Note 2 - Significant Accounting Policies (a) Basis of Presentation The Condensed Consolidated Financial Statements of the Company are prepared in U.S. Dollars and in accordance with accounting principles generally accepted in the United States of America (US GAAP). Certain information and note disclosures normally included in the financial statements prepared in accordance with US GAAP have been condensed. As such, the information included in these financial statements should be read in conjunction with the audited financial statements as of and for the years ended December 31, 2017 and 2016 included in the Company’s 2017 Form 10-K/ The Company is an emerging growth company as the term is used in The Jumpstart Our Business Startups Act enacted on April 5, 2012 and has elected to comply with certain reduced public company reporting requirements. (b) Use of Estimates and Judgments The preparation of financial statements in conformity with US GAAP requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected. Information about significant areas of estimation, uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amounts recognized in the financial statements is included in the following notes for revenue recognition, allowances for doubtful accounts, inventory write-downs, impairment of intangible assets and valuation of share-based payments. (c) Functional and Presentation Currency These condensed consolidated financial statements are presented in U.S. Dollars, which is the Company’s functional currency. All financial information presented in U.S. Dollars has been rounded to the nearest dollar. Foreign Currency Transaction Gains or Losses, resulting from loans and cash balances denominated in Foreign Currencies, are recorded in the Condensed Consolidated Statement of Operations and Comprehensive Loss. (d) Comprehensive Income (Loss) The Company follows Financial Accounting Standards Board Accounting Standards Codification (FASB ASC) 220 in reporting comprehensive income (loss). Comprehensive income is a more inclusive financial reporting methodology that includes disclosure of certain financial information that historically has not been recognized in the calculation of net income. (e) Cash and Cash Equivalents Cash and cash equivalents comprise cash balances. The Company considers all highly liquid investments, which include short-term bank deposits (up to 3 months from date of deposit) that are not restricted as to withdrawal date or use, to be cash equivalents. Bank overdrafts are shown as part of trade and other payables in the Condensed Consolidated Balance Sheet. (f) Restricted Cash At June 30, 2018, restricted cash included in non-current assets on the Company’s condensed consolidated balance sheet was $500,000 representing cash in trust for the purpose of funding legal fees for certain threatened litigation. (g) Fair Value of Financial Instruments The Company’s financial instruments consist of cash and cash equivalents, marketable securities, receivables and trade and other payables. The carrying value of cash and cash equivalents, receivables and trade and other payables approximate their fair value because of their short maturities. The framework for measuring fair value provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1) and the lowest priority to unobservable inputs (level 3). The three levels of the fair value hierarchy under FASB ASC 820 are described as follows: Level 1 Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Company has the ability to access. Level 2 Inputs to the valuation methodology include: ● quoted prices for similar assets or liabilities in active markets; ● quoted prices for identical or similar assets or liabilities in inactive markets; ● inputs other than quoted prices that are observable for the asset or liability; ● inputs that are derived principally from or corroborated by observable market data by correlation or other means If the asset or liability has a specified (contractual) term, the level 2 input must be observable for substantially the full term of the asset or liability. Level 3 Inputs to the valuation methodology are unobservable and significant to the fair value measurement. The asset or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. Valuation techniques maximize the use of relevant observable inputs and minimize the use of unobservable inputs. Following is a description of the valuation methodologies used for assets measured at fair value as of June 30, 2018 and December 31, 2017. U.S. Agency Securities and Corporate and Municipal Securities: Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1) Quoted Prices for Similar Assets or Liabilities in Active Markets (Level 2) Significant Unobservable Inputs (Level 3) Marketable securities at June 30, 2018 $ - $ 7,977,575 $ - Marketable securities at December 31, 2017 $ - $ 5,011,607 $ - Marketable securities include U.S. agency securities, corporate securities, and municipal securities, which are classified as available for sale. The securities are valued at fair market value. Maturities of the securities are less than one year. Unrealized gains and losses relating to the available for sale investment securities were recorded in the Condensed Consolidated Statement of Changes in Shareholders’ Equity as comprehensive income. These amounts were a decrease of $4,401 and an increase of $12,443 in unrealized losses for the three and six months ended June 30, 2018. These amounts were an increase of $852 and $1,009 in unrealized gains for the three and six months ended June 30, 2017. Proceeds from the sale of marketable securities in the three and six months ended June 30, 2018 were $2,004,580 and $2,306,675. Proceeds from the sale of marketable securities in the three and six months ended June 30, 2017 were $650,336 and $1,745,554. Gross gains and losses, resulting from these sales, amounted to a loss of $4,401 and a gain of $605 for the three months ended June 30, 2018 and 2017 and a loss of $4,401 and $1,656 for the six months ended June 30, 2018 and 2017. (h) Trade Receivables, Trade Receivables – Related Party and Allowance for Doubtful Accounts The carrying amounts of current trade receivables is stated at cost, net of allowance for doubtful accounts and approximate their fair value given their short-term nature. The normal credit terms extended to customers ranges between 30 and 90 days. Credit terms longer than these may be extended after considering the credit worthiness of the customers and the business requirements. The Company reviews all receivables that exceed terms and establishes an allowance for doubtful accounts based on management’s assessment of the collectability of trade and other receivables. A considerable amount of judgment is required in assessing the amount of allowance. The Company considers the historical level of credit losses, makes judgments about the credit worthiness of each customer based on ongoing credit evaluations and monitors current economic trends that might impact the level of credit losses in the future. As of June 30, 2018 and December 31, 2017, allowances for doubtful accounts for trade receivables were $693,196 and $596,196. Bad debt expenses for trade receivables were $125,500 and $5,380 for the three months ended June 30, 2018 and 2017, respectively, and $125,500 and $47,741 for the six months ended June 30, 2018 and 2017, respectively. (i) Concentrations Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash on deposit with financial institutions and accounts receivable. At times, the Company’s cash in banks is in excess of the FDIC insurance limit. The Company has not experienced any loss as a result of these cash deposits. These cash balances are maintained with four banks. Major Customers For the three months ended June 30, 2018, three customers generated 33%, 27% and 12%, or 72% in the aggregate, of the Company’s revenue. For the six months ended June 30, 2018, two customers generated 49% and 17%, or 66% in the aggregate, of the Company’s revenue. As of June 30, 2018, the amount due from these customers was $291,220. This concentration makes the Company vulnerable to a near-term severe impact should these relationships be terminated. For the three months ended June 30, 2017, two customers generated 47% and 27%, or 74% in the aggregate, of the Company’s revenue. For the six months ended June 30, 2017, three customers generated 31%, 29% and 13%, or 73% in the aggregate, of the Company’s revenue. Three customers accounted for 41%, 13%, and 13% or 67%, in the aggregate, of gross trade receivables, before accounting for allowance for doubtful accounts, as of June 30, 2018. To limit such risks, the Company performs ongoing credit evaluations of its customers’ financial condition. As of June 30, 2018, the Company had $457,881, $146,195 and $142,293 in trade receivables, respectively, from these customers. Major Suppliers For the three months ended June 30, 2018, two suppliers accounted for 13% and 11%, or 24% in the aggregate, of the Company’s purchases. For the six months ended June 30, 2018, no supplier accounted for 10% or more of the Company’s purchases. For the three months ended June 30, 2017, two suppliers accounted for 15% and 13%, or 28% in the aggregate, of the Company’s purchases. For the six months ended June 30, 2017, one supplier accounted for 14% of the Company’s purchases. Two vendors accounted for 29% and 12%, or 41%, in the aggregate, of trade payables as of June 30, 2018. As of June 30, 2018, the Company had $298,634 and $121,327 in trade payables, respectively, from these vendors. (j) Property, Plant and Equipment Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses. Costs include expenditures that are directly attributable to the acquisition of the asset. Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment and are recognized within “other income” in the Condensed Consolidated Statement of Operations and Comprehensive Loss. Depreciation is recognized in profit and loss on the accelerated basis over the estimated useful lives of the property, plant and equipment. Leased assets are depreciated over the shorter of the lease term or their useful lives. Depreciation expense totaled $13,675 and $17,885 for the three months ended June 30, 2018 and 2017, respectively, and $27,350 and $35,827 for the six months ended June 30, 2018 and 2017, respectively. (k) Intangible Assets The Company’s long-lived intangible assets, other than goodwill, are assessed for impairment when events or circumstances indicate there may be an impairment. These assets were initially recorded at their estimated fair value at the time of acquisition and assets not acquired in acquisitions were recorded at historical cost. However, if their estimated fair value is less than the carrying amount, other intangible assets with indefinite life are reduced to their estimated fair value through an impairment charge to our condensed consolidated statements of income. Intangible assets as of June 30, 2018 and December 31, 2017 were $1,045,113 and $1,130,667, respectively. Intangible assets at June 30, 2018 consisted of patents, trademarks and customer lists of $3,897,635 net of accumulated amortization and impairment of $2,852,522. Amortization is recognized on a straight-line basis over the estimated useful lives of intangible assets, other than goodwill, from the date that they are available for use. Amortization expense was $42,777 for the three months ended June 30, 2018 and 2017 and $85,553 for the six months ended June 30, 2018 and 2017. The following is an annual schedule of approximate future amortization of the Company’s intangible assets: Period Amount 2018 (six months) $ 85,554 2019 171,108 2020 149,298 2021 147,315 2022 147,315 2023 147,315 (l) Revenue Recognition In accordance with FASB ASC 605, the Company recognizes revenue when (i) persuasive evidence of a customer or distributor arrangement exists, (ii) a retailer, distributor or wholesaler receives the goods and acceptance occurs, (iii) the price is fixed or determinable, and (iv) the collectability of the revenue is reasonably assured. Subject to these criteria, the Company recognizes revenue from product sales when title passes to the customer based on shipping terms. The Company typically does not accept returns nor offer charge backs or rebates except for certain distributors. Revenue recorded is net of any discount, rebate or sales return. The accrual for estimated sales returns was $- as of June 30, 2018 and December 31, 2017. In cases where the right of return is granted, and the Company does not have historical experience to reasonably estimate the sales returns, the revenue is recognized when the return privilege has substantially expired. The Company may provide for rebates to the distributors under limited circumstances. The Company established an accrual of $54,228 and $126,471 as of June 30, 2018 and December 31, 2017. Accounts receivable will be reduced when the rebates are applied by the customer. The Company recognized $6,350 and $67,855 during the three months ended June 30, 2018 and 2017, respectively, for rebates and $43,894 and $170,678 during the six months ended June 30, 2018 and 2017, respectively, which is included as a reduction of product revenue in the Condensed Consolidated Statement of Operations and Comprehensive Loss. License fee revenue is recognized on a straight-line basis over the term of the license agreement. When the Company enters into arrangements that contain more than one deliverable, the Company allocates revenue to the separate elements under the arrangement based on their relative selling prices in accordance with FASB ASC 605-25. (m) Income Taxes The Company utilizes an asset and liability approach for financial accounting and reporting for income taxes. The provision for income taxes is based upon income or loss after adjustment for those permanent items that are not considered in the determination of taxable income. Deferred income taxes represent the tax effects of differences between the financial reporting and tax basis of the Company’s assets and liabilities at the enacted tax rates in effect for the years in which the differences are expected to reverse. The Company evaluates the recoverability of deferred tax assets and establishes a valuation allowance when it is more likely than not that some portion or all the deferred tax assets will not be realized. Management makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liability. In management’s opinion, adequate provisions for income taxes have been made. If actual taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary. Tax benefits are recognized only for tax positions that are more likely than not to be sustained upon examination by tax authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely to be realized upon settlement. A liability for “unrecognized tax benefits” is recorded for any tax benefits claimed in the Company’s tax returns that do not meet these recognition and measurement standards. As of June 30, 2018 and 2017, no liability for unrecognized tax benefits was required to be reported. There was no income tax expense for the three and six months ended June 30, 2018 and 2017. There is no income tax benefit for the losses for the three and six months ended June 30, 2018 and 2017 since management has determined that the realization of the net deferred assets is not assured and has created a valuation allowance for the entire amount of such tax benefits. The Company’s policy for recording interest and penalties associated with tax audits is to record such items as a component of general and administrative expense. There were no amounts accrued for penalties and interest for the six months ended June 30, 2018 and 2017. The Company does not expect its uncertain tax position to change during the next twelve months. Management is currently unaware of any issues under review that could result in significant payments, accruals or material deviations from its position. The Company has identified its federal tax return and its state tax returns in New Jersey and California as its “major” tax jurisdictions, and such returns for the years 2014 through 2017 remain subject to examination. The Tax Cuts and Jobs Act (the “Tax Act”) was enacted on December 22, 2017. The Tax Act reduced the U.S. federal corporate tax rate from 35% to 21%. As December 31, 2017, the Company had made a reasonable estimate of the effects of the Tax Act. This estimate incorporates assumptions made based upon the Company’s current interpretation of the Tax Act and may change as the Company may receive additional clarification and implementation guidance and as the interpretation of the Tax Act evolves. In accordance with Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (“SAB 118”), which allows us to record provisional amounts during a measurement period not to extend beyond one year form the enactment date. SAB 118 was codified by the FASB as part of ASU No. 2018-05, Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 (n) Shipping and Handling Fees and Costs The Company charges actual shipping plus a handling fee to customers, which amounted to $18,739 and $12,016 for the three months ended June 30, 2018 and 2017, respectively, and $32,380 and $30,436 for the six months ended June 30, 2018 and 2017, respectively. These fees are classified as part of product revenue in the Condensed Consolidated Statement of Operations and Comprehensive Loss. Shipping and other related delivery costs, including those for incoming raw materials consumed are classified as part of the cost of sales, which amounted to $37,993 and $31,393 for the three months ended June 30, 2018 and 2017, respectively, and $64,937 and $47,569 for the six months ended June 30, 2018 and 2017, respectively. (o) Basic and Diluted Earnings per Share of Common Stock Basic earnings per common share are based on the weighted average number of shares outstanding during the periods presented. Diluted earnings per share are computed using the weighted average number of common shares plus dilutive common share equivalents outstanding during the period. Potential common shares that would have the effect of increasing diluted earnings per share are considered anti-dilutive, i.e. the exercise prices of the outstanding stock options were greater than the market price of the common stock. The calculation of basic and diluted loss per share for the three months ended June 30, 2018 and 2017 was based on the loss attributable to common shareholders of $2,067,453 and $818,008, respectively, and $3,927,444 and $2,167,279 for the six months ended June 30, 2018 and 2017, respectively. The basic and diluted weighted average number of common shares outstanding for the three months ended June 30, 2018 and 2017 was 93,254,241 and 8,882,326, respectively, and 82,348,494 and 7,943,168 for the six months ended June 30, 2018 and 2017, respectively. Diluted net loss per share is computed using the weighted average number of common and dilutive potential common shares outstanding during the period. The following securities are excluded from the calculation of weighted average dilutive common shares because their inclusion would have been anti-dilutive: For the Three and Six Months Ended June 30, 2018 2017 Incentive and Award Stock Options 202,000 259,000 Unvested Restricted Shares of Common Stock - 9,166 Warrants 11,329,833 1,490,570 Total potentially dilutive shares 11,531,833 1,758,736 (p) Recently Issued Accounting Pronouncements Recently Issued Accounting Pronouncements Adopted As the Company is an emerging growth company, it has elected to adopt recently issued accounting pronouncements based on effective dates applicable to other than public business entities. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230), Restricted Cash. The amendments in this Update require that a statement of cash flows explains the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of period and end-of-period total amounts shown on the statement of cash flows. The amendments in this Update do not provide a definition of restricted cash or restricted cash equivalents. The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019. Early adoption is permitted. The Company adopted this as of January 1, 2018. Recently Issued Accounting Pronouncements Not Adopted In May 2014 and April 2016, the FASB issued ASU No. 2014-09 and ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606). The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In August 2015, FASB issued ASU 2015-14 which deferred the effective date of Update 2014-09 to annual reporting periods beginning after December 15, 2018 and for entities other than public business entities, and to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period for public business entities. Early application is permitted as of annual reporting periods beginning after December 15, 2016 including interim reporting periods within that reporting period. The Company is currently evaluating the effect of the amendments, but it does not anticipate a material impact of its financial statements. The Company expects to use the modified retrospective adoption method and will adopt this Update as of January 1, 2019. In June 2018, the FASB issued ASU 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, which expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. The guidance is effective for public business entities, certain not-for-profit entities, and certain employee benefit plans for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. For all other entities, ASU 2018-07 is effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted, but no earlier than an entity’s adoption date of Topic 606. The Company is evaluating the impact of adopting this pronouncement. In July 2018, the FASB issued ASU No. 2018-09, Codification Improvements |
Key Recent Events and Managemen
Key Recent Events and Management Plans | 6 Months Ended |
Jun. 30, 2018 | |
Key Recent Events And Management Plans | |
Key Recent Events and Management Plans | Note 3 – Key Recent Events and Management Plans On April 25, 2018, the Board of Directors of the Company terminated Dr. Raymond F. Akers from his position as Executive Chairman of the Board and from each of his officer positions as Chief Scientific Director and Secretary of the Company. Dr. Raymond F. Akers continued as a member of the Board of Directors until his resignation on May 27, 2018. On April 25, 2018, the Board appointed Richard Carlyle Tarbox III, a current director of the Company as the interim Non-Executive Chairman of the Board, to hold that position until his successor is appointed, and to the position of Secretary of the Company. By way of a letter dated May 22, 2018, the Listing Qualifications Department of the NASDAQ advised the Company that it did not comply with NASDAQ Listing Rule 5250(c)(1) for continued listing because NASDAQ has not received the Company’s Quarterly Report. NASDAQ has informed the Company that the Company is required to submit a plan to regain compliance with NASDAQ’s filing requirements for continued listing within 60 calendar days of the date of the Notice. NASDAQ has informed the Company that it is in Compliance with NASDAQ Listing Rule 5250(c)(1) on July 12, 2018. On June 11, 2018, the Company received a letter from the Listing Qualifications Department NASDAQ notifying the Company that it has determined that the Company violated the shareholder approval requirements of Listing Rule 5635(c). Listing Rule 5635(c) requires shareholder approval prior to the issuance of securities when a stock option or purchase plan is to be established or materially amended or other equity compensation arrangement made or materially amended, pursuant to which stock may be acquired by officers, directors, employees or consultants. Prior to the Company’s public offering and listing on NASDAQ, the Company’s 2013 Incentive Stock and Award Plan (the “2013 Plan”) was approved by its Board of Directors. NASDAQ has concluded that the 2013 Plan was materially amended on two occasions after the Company’s public offering and listing on NASDAQ. The first amendment, as approved by the Board on January 9, 2015, increased the number of shares available under the 2013 Plan from 400,000 to 800,000 shares and the second amendment, as approved by the Board on October 5, 2016, increased the number of shares under the 2013 Plan from 800,000 to 830,000 shares (the “2013 Plan Amendments”). During the first quarter of 2018, the Company promptly notified NASDAQ, as required by Listing Rule 5625, when it became aware of its potential non-compliance with Listing Rule 5635(c). On May 4, 2018, the Staff requested additional information from the Company with respect to such non-compliance and on May 31, 2018, the Company responded. On June 25, 2018, the Company submitted a plan to NASDAQ to remediate this matter (the “5635 Compliance Plan”). The 5635 Compliance Plan included that a proposal for shareholders of the Company to ratify the 2013 Plan Amendments be included in the proxy statement for the Company’s 2018 annual meeting of the shareholders of the Company and that the Company shall suspend the trading of each share granted, and each share granted upon the exercise of any option granted, in excess of 400,000 shares under the 2013 Plan (the number of shares properly approved pursuant to the 2013 Plan prior to the 2013 Plan Amendments until shareholder ratification). The 5635 Compliance Plan also proposes to prevent the exercise of any option granted under the 2013 Plan until shareholder ratification. On July 12, 2018, NASDAQ approved of the 5635 Compliance Plan and granted the Company until December 10, 2018, to regain compliance with Listing Rule 5635. On or about June 15, 2018, certain parties brought certain class action lawsuits against the Company. See Note 10 - Contingencies for details. Historically, the Company has relied upon public offerings and private placements of Common Stock to raise operating capital. During the year ended December 31, 2017, the Company raised $9,478,897, net of expenses, in public and private offerings and an additional $981,948, net of expenses, from the exercise of warrants. During the six months ended June 30, 2018, the Company raised an additional $7,155,200 from the exercise of warrants (Note 7). As of August 2, 2018, the Company had cash and marketable securities of approximately $7.5 million and working capital of approximately $8.4 million. The Company is not yet able to determine the impact of the key events during June and July of 2018 may have on the Company’s ability to raise capital, nor the impact that these matters might have on its business operations. The Company believes that its current working capital position will be sufficient to meet its obligations as they fall due within one year after these financial statements are issued. |
Inventories
Inventories | 6 Months Ended |
Jun. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Inventories | Note 4 - Inventories Inventories are measured at the lower of cost or net realizable value. The cost of inventories is based on the weighted-average principle, and includes expenditures incurred in acquiring the inventories, production or conversion costs and other costs incurred in bringing them to their existing location and condition. In the case of manufactured inventories and work in progress, costs include an appropriate share of production overhead based on normal operating capacity. Inventories consist of the following: June 30, 2018 December 31, 2017 Raw Materials $ 544,637 $ 458,441 Sub-Assemblies 937,222 886,274 Finished Goods 745,298 815,505 Reserve for Obsolescence (1,212,608 ) (1,212,608 ) $ 1,014,549 $ 947,612 Obsolete inventory charged to cost of goods during the three months ended June 30, 2018 and 2017 totaled $7,823 and $21,542, respectively, and $32,283 and $21,542 during the six months ended June 30, 2018 and 2017, respectively. |
Trade and Other Payables
Trade and Other Payables | 6 Months Ended |
Jun. 30, 2018 | |
Payables and Accruals [Abstract] | |
Trade and Other Payables | Note 5 - Trade and Other Payables Trade and other payables consist of the following: June 30, 2018 December 31, 2017 Trade Payables $ 1,024,413 $ 948,951 Accrued Expenses 751,017 736,515 Deferred Compensation 59,750 59,750 $ 1,835,180 $ 1,745,216 Trade and other payables – related party are as follows: June 30, 2018 December 31, 2017 Trade Payables $ 16,701 $ 39,821 $ 16,701 $ 39,821 |
Share-based Payments
Share-based Payments | 6 Months Ended |
Jun. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-based Payments | Note 6 - Share-based Payments On January 23, 2014, upon effectiveness of the registration statement filed with the SEC, the Company adopted the 2013 Stock Incentive Plan (the “Plan”) which will provide for the issuance of up to 400,000 shares. The purpose of the Plan is to provide additional incentive to those officers, employees, consultants and non-employee directors of the Company and its parents, subsidiaries and affiliates whose contributions are essential to the growth and success of the Company’s business. On January 9, 2015, the Board of Directors of the Company approved, upon recommendation from the Compensation Committee of the Board, by unanimous written consent the Amended and Restated 2013 Incentive Stock and Award Plan (the “Amended Plan”), which increases the number of authorized shares of Common Stock subject to the Plan to 800,000 shares (Note 3) On September 30, 2016, the Board of Directors increased the number of authorized shares of Common Stock subject to the Amended Plan to 830,000 shares. As of June 30, 2018, grants of restricted stock and options to purchase 202,000 shares of Common Stock have been issued, pursuant to the Amended Plan, and are unvested or unexercised and 60,292 shares of Common Stock remain available for grants under the Amended Plan. On August 7, 2017, the Shareholders approved and the Company adopted the 2017 Equity Incentive Plan (the “Plan”) which will provide for the issuance of up to 1,350,000 shares. The purpose of the Plan is to provide additional incentive to those officers, employees, consultants and non-employee directors of the Company and its parents, subsidiaries and affiliates whose contributions are essential to the growth and success of the Company’s business. As of June 30, 2018, grants totaling 320,107 shares of restricted Common Stock have been issued pursuant to the Plan and 1,029,893 shares of Common Stock remain available for grants under the Plan. The Plan is administered by the Board or a Board-appointed committee. Eligible recipients of option awards are employees, officers, consultants or directors (including non-employee directors) of the Company or of any parent, subsidiary or affiliate of the Company. The Board has the authority to grant to any eligible recipient any options, restricted stock or other awards valued in whole or in part by reference to, or otherwise based on, the Company’s Common Stock. The Company did not issue any options or warrants under the above plan during the six months ended June 30, 2018. Stock Options The following table summarizes the option activities for the six months ended June 30, 2018: Weighted Weighted Average Weighted Average Remaining Number Average Grant Contractual Aggregate of Exercise Date Term Intrinsic Shares Price Fair Value (years) Value Balance at December 31, 2017 255,000 $ 4.25 $ 2.56 2.02 $ - Granted - - - - - Exercised - - - - - Forfeited (53,000 ) - 2.69 1.30 - Canceled/Expired - - - - - Balance at June 30, 2018 202,000 $ 4.27 $ 2.53 1.59 $ - Exercisable as of June 30, 2018 197,334 $ 4.30 $ 2.53 1.55 $ - The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the closing stock price of $0.387 for the Company’s common shares on June 30, 2018. The numbers of non-vested employee stock options as of June 30, 2018 remained the same as that as of the year ended December 31, 2017 with 4,666 units and a weighted-average grant date fair value of $2.36. Unrecognized compensation cost related to non-vested employee stock options totaled $1,477 as of June 30, 2018. The cost is to be recognized over a weighted average period of 0.13 years. During the three months ended June 30, 2018 and 2017, the Company incurred stock option expenses totaling $2,742 and $7,275, respectively, and $5,454 and $12,367 during the six months ended June 30, 2018 and 2017, respectively. Stock Warrants The table below summarizes the warrant activity for the six months ended June 30, 2018: Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Warrants Price Term (years) Value Balance at December 31, 2017 49,490,571 $ 0.22 4.95 $ - Granted - - - Exercised (38,160,738 ) 0.19 - Forfeited - - - Canceled/Expired - - - Balance at June 30, 2018 11,329,833 $ 0.35 4.40 $ - Exercisable as of June 30, 2018 11,329,833 $ 0.35 4.40 $ - The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the closing stock price of $0.387 for the Company’s common shares on June 30, 2018. All warrants were vested on date of grant. |
Equity
Equity | 6 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
Equity | Note 7 – Equity The holders of common shares are entitled to one vote per share at meetings of the Company. Holders of Series B convertible preferred shares have no voting rights at meetings of the Company. A restricted stock award is an award of common shares that are subject to certain restrictions during a specified period. Restricted stock awards are independent of option grants and are generally subject to forfeiture if employment terminates prior to the release of the restrictions. The grantee cannot transfer the shares before the restricted shares vest. Shares on non-vested restricted stock have the same voting rights as Common Stock, are entitled to receive dividends and other distributions thereon and are considered to be currently issued and outstanding. The Company expenses the cost of the restricted stock awards, which is determined to be the fair market value of the shares at the date of grant, straight-line over the period during which the restrictions lapse. For these purposes, the fair market value of the restricted stock is determined based on the closing price of the Company’s Common Stock on the grant date. On April 11, 2017, the Company issued 10,000 restricted shares to a consultant for services to be rendered during the year ending December 31, 2017. These shares vested on the date of the grant. The fair value of these shares was $18,000 and was based on the share price on the date of the grant. During the year ended December 31, 2017, $5,455 was recognized as stock-based compensation expense. The remaining $12,545 fair value of restricted shares issued was recognized during the three months ended March 31, 2018 as sales and marketing expenses on the Condensed Consolidated Statement of Operations and Comprehensive Loss. On January 16, 2018, the Board of Directors issued 25,000 restricted shares of Common Stock to a key employee of the Company as part of the Plan. The fair value of the shares was $5,175 and was based on the closing share price of $0.2070 per share. The share grants vested immediately. The Company recorded the expense as sales and marketing expenses on the Condensed Consolidated Statement of Operations and Comprehensive Loss for the six months ended June 30, 2018. During the six months ended June 30, 2018, 1,755 shares of the Company’s Series B Preferred Stock, no par value, were converted into 11,700,002 shares of Common Stock. During the six months ended June 30, 2018, warrant holders from the December 21, 2017 public offering exercised 38,160,738 warrants with an exercise price of $0.1875 per common share, raising net proceeds of $7,155,200. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 8 - Related Party Transactions On June 19, 2012, the Company entered into a 3-year exclusive License & Supply Agreement with ChubeWorkx Guernsey Limited (as successor to SONO International Limited) (“ChubeWorkx”) for the purchase and distribution of Akers’ proprietary breathalyzers outside North America. ChubeWorkx paid a licensing fee of $1,000,000 which was recognized over the term of the agreement through September 30, 2015. On June 13, 2013, the Company announced an expansion of the License and Supply Agreement with ChubeWorkx to include worldwide marketing and distribution of the “Be CHUBE” program using the Company’s breathalyzer. On August 17, 2016, the Company entered into a Settlement Agreement (the “Settlement Agreement”) with ChubeWorkx Guernsey Limited (“ChubeWorkx”), a major shareholder, which settled all pending claims between the Company and ChubeWorkx. Specifically, the Company and ChubeWorkx agreed to voluntarily dismiss (i) the action in the United States Federal Court, District of New Jersey brought by the Company against ChubeWorkx for outstanding amounts due to the Company under a promissory note and (ii) the action in The High Court of Justice, Queen’s Bench Division Commercial Court, Royal Courts of Justice, United Kingdom brought by ChubeWorkx against the Company arising from an exclusive licensing agreement between ChubeWorkx and the Company (“Licensing Agreement”). Under the terms of the Settlement Agreement, the Company would receive the full outstanding principal amount in the year ended December 31, 2016 in the form of $750,000 of BreathScan® Alcohol Detector inventory and the balance of $549,609 as prepaid royalty. Akers’ established an allowance for this doubtful note in the Company’s financial statements for the year ended December 31, 2015. As a result of the Settlement Agreement, the Company reversed the allowance for doubtful note in the amount of $1,299,609 which was included in the Consolidated Statement of Operations and Comprehensive Loss for the year ended December 31, 2016. In addition to addressing the promissory note described above, the Settlement Agreement also allows the Company to market and sell all of the Company’s breath technology tests worldwide, unencumbered by any past/future claims by ChubeWorkx under the Licensing Agreement (entered into with ChubeWorkx in 2012 and subsequently amended in 2013). Under the terms of the Settlement Agreement, ChubeWorkx no longer holds any rights pertaining to Akers’ BreathScan® technology, which serves as the basis for several commercialized products including BreathScan® Alcohol Detector and BreathScan OxiChek™; and a number of products in development. In return for the Company regaining the full rights to sell breath technology products, under the terms of the Settlement Agreement, ChubeWorkx is entitled to receive a royalty of 5% of the Company’s gross revenues (the “ChubeWorkx Royalty”) until ChubeWorkx has earned an aggregate $5,000,000, after which point ChubeWorkx will no longer be entitled to receive any royalties from the Company and the Company shall have no further obligation to ChubeWorkx. The Settlement Agreement further allows the Company to retain 50% of the ChubeWorkx Royalty until the full $549,609 cash component of the monies owed by ChubeWorkx to the Company as described above has been satisfied. The Company recorded royalty expenses of $27,082 and $61,502 for the three months ended June 30, 2018 and 2017, respectively, and $58,771 and $93,781 for the six months ended June 30, 2018 and 2017, respectively, which are included in sales and marketing expenses – related party on the Condensed Consolidated Statement of Operations and Comprehensive Loss. Other terms of the Settlement include: 1) the pledge as security of all earned but unpaid royalties by the Company to ChubeWorkx all Company assets, worthy to satisfy its obligations, including all inventory and receivables, with the exception of (i) distribution contracts of the Company or any of its affiliates, (ii) customer lists, (iii) manufacturing processes (including all intellectual property required to use those processes and exploit products made thereby), and (iv) all equipment required to perform said manufacturing processes and other equipment; 2) the pledge as security of the settlement sum which remains unpaid by the Company to ChubeWorkx all Company (i) distribution contracts of the Company or any of its affiliates, (ii) customer lists, (iii) manufacturing processes (including all intellectual property required to use those processes and exploit products made thereby), and (iv) all equipment required to perform said manufacturing processes and other equipment; and 3) the grant of voting proxy by ChubeWorkx to the Company which allows the Company to vote ChubeWorkx’s shares for corporate formalities under certain conditions. The pledged assets are only at risk in the event that the Company cannot satisfy any outstanding royalty payment obligations subject to various cure periods and/or through a restructuring and/or liquidation under the United States Bankruptcy laws of the Company in favor of payment of said obligation. During the three months ended June 30, 2018 and 2017, the Company recognized sales of $20,265 and $-, respectively, for the BreathScan Breath Alcohol products acquired from the Settlement and $20,265 and $- during the six months ended June 30, 2018 and 2017, respectively. As of June 30, 2018, the Company owed ChubeWorkx Guernsey Limited, previously a major shareholder, royalties of $13,541 which is included in trade and other payables – related party on the condensed consolidated financial statements. The Company began purchasing manufacturing molds, plastic components and the assembled BreathScan Lync™ device through Hainan and its related party during the year ended December 31, 2016. The Company purchased a total of $522 and $- during the three months ended June 30, 2018 and 2017, respectively, and $4,636 and $16,774 during the six months ended June 30, 2018 and 2017, respectively. As of June 30, 2018, the Company owed Hainan and its related party $3,160 which is included in trade and other payables – related party on the Condensed Consolidated Balance Sheet. As of June 30, 2018, the Company owed Hainan $670. Senior management at Hainan are actively involved in Shenzhen Savy-Akers Biosciences (“Shenzhen”) which is therefore being included as a related party. The Company owed Shenzhen $2,490 as of June 30, 2018. On January 31, 2018, the Company engaged Medical Horizons, Inc. (“Medical Horizons”), a company owned and operated by the spouse of a member of the Company’s leadership team, to provide engineering and design services. The Company recorded $5,753 and $54,342 during the three and six months ended June 30, 2018, respectively, related to the engagement of Medical Horizons which is included in research and development – related party on the Condensed Consolidated Statement of Operations and Comprehensive Loss. Product revenue – related party for the three months ended June 30, 2018 and 2017 were $- and credit of $24,064, respectively, and $- for each of the six months ended June 30, 2018 and 2017, respectively. The credit of $24,064 was the result of an adjustment to sales to Hainan and its related party. |
Commitments
Commitments | 6 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments | Note 9 – Commitments The Company leases its facility in West Deptford, New Jersey under an operating lease (“Thorofare Lease”) with annual rentals of $132,000 plus common area maintenance (CAM) charges. The lease, which took effect on January 1, 2008, reduced the CAM charges allowing the Company to reach their own agreements with utilities and other maintenance providers. On January 7, 2013, the Company extended its lease agreement for a term of 7 years, expiring December 31, 2019. Rent expense for the Thorofare Lease, including related CAM charges for the three months ended June 30, 2018 and 2017 totaled $40,928 and $40,440, respectively, and $83,144 and $80,927 for the six months ended June 30, 2018 and 2017, respectively. The Company entered into a 24-month lease for a satellite office located in Ramsey, New Jersey (“Ramsey Lease”) with annual rents of $25,980 plus common area maintenance (CAM) charges. The lease took effect on June 1, 2017 and runs through May 31, 2019. Rent expenses for the Ramsey Lease, including related CAM charges totaled $6,495 and $2,165 for the three months ended June 30, 2018 and 2017, respectively, and $12,990 and $2,165 for the six months ended June 30, 2018 and 2017, respectively. The Company posted a security deposit of $4,330 which is included in other assets on the Condensed Consolidated Balance Sheet. The Company entered into a 29-month lease for warehouse space located in Pitman, New Jersey (“Pitman Lease”) with annual rents of $39,650. The lease took effect on August 1, 2017 and runs through December 31, 2019. Rent expenses for the Pitman Lease totaled $9,913 and $- for the three months ended June 30, 2018 and 2017, respectively, and $19,825 and $- for the six months ended June 30, 2018 and 2017, respectively. A security deposit of $4,950 is included in other assets on the Condensed Consolidated Balance Sheet. The Company entered into a 60-month operating lease for equipment with annual rentals of $6,156 on September 29, 2014. The lease commenced on October 21, 2014 upon the delivery of the equipment. The Company entered into a 36-month contract with Oracle Corporation for the NetSuite accounting platform in March 2018 at an annual cost of $64,938. Implementation of the platform began in April with a go-live target of January 1, 2019. The schedule of lease commitments is as follows: Thorofare Ramsey Pitman Equipment Oracle Lease Lease Lease Lease NetSuite Total Next 12 Months $ 132,000 $ 23,815 $ 39,650 $ 6,156 $ 64,938 $ 266,559 Next 13-24 Months 66,000 - 19,824 2,052 64,938 152,814 Next 25-36 Months - - - - 43,292 43,292 |
Contingencies
Contingencies | 6 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Note 10 – Contingencies On October 17, 2016 the Company was served with a notice that Pulse Health LLC (“Pulse”) filed a lawsuit against the Company on September 30, 2016 in United States Federal District Court, District of Oregon, alleging a breach of contract under the settlement agreement entered into by the Company and Pulse on April 8, 2011 which settled all claims and disputes between the Company and Pulse arising from a previously executed Technology Development Agreement entered into by the Company and Pulse and damages resulting from said alleged breach. Additionally, Pulse alleges false advertising and unlawful trade practices in connection with the Company’s sales activities related to the Company’s OxiChek™ products. The Company filed a series of motions with the Court seeking (1) to dismiss the Pulse complaint for lack of jurisdiction or, in the alternative, transfer the matter to the District Court for the District of New Jersey, Camden Vicinage and (2) to dismiss the unfair competition claims for failure to state a claim on which relief could be granted. Oral arguments on these motions were heard by the Court on March 10, 2017. The Court decided by order dated April 14, 2017 in favor of the Company and has dismissed with prejudice the claims brought by Pulse for unfair competition (both federal and state counts). The court decided against the Company in its motions for transfer of venue and for lack of jurisdiction. As such, the case shall proceed in the District Court of Oregon. The Company filed a Motion for Summary Judgment on January 24, 2018. On June 21, 2018, the Court ruled in favor of the Company on some issues and determined that other issues warranted a trial. As part of its ruling on the Motion for Summary Judgment, the Court held “While it seems likely that Plaintiff did suffer some amount of damages, Plaintiff has so far failed to provide a sufficient evidentiary foundation from which the trier of fact could reasonably calculate the value of its injury.” The Court stated that it was “reasonably certain that Plaintiff suffered some damage” and found that Pulse Health “may be entitled to nominal damages.” The Court further determined that equitable relief, such as an injunction, “may be warranted.” Following such rulings, the Company discovered certain deficiencies in its discovery responses and is taking the appropriate steps to supplement the record and correct these deficiencies. In addition, the Court has ordered a settlement conference in front of a U.S. magistrate to be held on August 31, 2018. Trial has been set for November 13, 2018 in Portland, Oregon. On or about June 15, 2018, certain parties brought certain class action lawsuits against the Company. Faulkner v. Akers Biosciences, Inc., No. 2:18-cv-10521 (D.N.J.) On June 13, 2018, Plaintiff Tim Faulkner filed a class action complaint alleging securities violations against Akers Biosciences, Inc. (“Akers”), John J. Gormally, and Gary M. Rauch (“Individual Defendants”) (together with Akers, “Defendants”) on behalf of all persons and entities who purchased publicly traded Akers securities from May 15, 2017 through June 5, 2018. The complaint alleges violations of Section 10(b) of the Exchange Act and Rule 10b-5 against all Defendants, and violations of Section 20(a) of the Exchange Act against the Individual Defendants. In particular, the complaint alleges that Defendants made false and/or misleading statements and/or failed to disclose in its first, second, and third quarter 2017 10-Qs and its 2017 10-K that: (1) Akers was improperly recognizing revenue for the fiscal year ended December 31, 2017; and, (2) Akers had downplayed weaknesses in its internal controls over financial reporting and failed to disclose the true extent of those weaknesses. On July 10, 2018, Plaintiff and Defendants entered into a stipulation that Defendants are not required to respond to the complaint until the court appoints a lead plaintiff and lead counsel for the class, and then after the lead plaintiff chooses whether to file an amended complaint or whether to designate the complaint as the operative complaint. Gleason v. Akers Biosciences, Inc., No. 2:18-cv-10805 (D.N.J.) On June 20, 2018, Plaintiff David Gleason filed a class action complaint alleging securities violations against Akers Biosciences, Inc. (“Akers”), John J. Gormally, and Gary M. Rauch (“Individual Defendants”) (together with Akers, “Defendants”) on behalf of all persons and entities who purchased publicly traded Akers securities from May 15, 2017 through June 5, 2018. The complaint alleges violations of Section 10(b) of the Exchange Act and Rule 10b-5 against all Defendants, and violations of Section 20(a) of the Exchange Act against the Individual Defendants. In particular, the complaint alleges that Defendants made false and/or misleading statements and/or failed to disclose in its first, second, and third quarter 2017 10-Qs and its 2017 10-K that: (1) Akers was improperly recognizing revenue for the fiscal year ended December 31, 2017; and, (2) Akers had downplayed weaknesses in its internal controls over financial reporting and failed to disclose the true extent of those weaknesses. No Defendant has been served yet, and no response is due at this time. Other class action lawsuits have been threatened against the Company and may be filed shortly. Although there are currently two separate actions pending, we anticipate that the two actions will be consolidated into one action. The Company maintains D&O liability insurance coverage, insuring both the Company and the Directors and Officers for covered defense and indemnification, and has noticed these matters thereunder. Additionally, a former executive has threatened to sue the Company, Board members, and executives under CEPA over the termination of his employment. That statute prohibits any retaliatory action against an employee who discloses, or threatens to disclose to a supervisor or to a public entity any activity, policy or practice of the employer that is a violation of a law, or a rule or regulation. Remedies may include a counter claim for back pay, reinstatement, compensatory and punitive damages and attorneys’ fees if appropriate. The Company will vigorously defend any litigation brought by this former executive. The Company intends to establish a rigorous defense of all claims. The Company is unable to assess the potential outcome, so no accrual for losses was made as of June 30, 2018. All legal fees were expensed as and when incurred. |
Revenue Information
Revenue Information | 6 Months Ended |
Jun. 30, 2018 | |
Segment Reporting [Abstract] | |
Revenue Information | Note 11 – Revenue Information Revenue by product lines was as follows: Three months ended Six months ended June 30, June 30, Product Line 2018 2017 2018 2017 MicroParticle Catalyzed Biosensor (“MPC”) $ 106,680 $ 69,848 $ 125,630 $ 155,507 Particle ImmunoFiltration Assay (“PIFA”) 356,082 426,747 616,066 987,668 Rapid Enzymatic Assay (“REA”) 45,100 - 55,000 - Other 18,739 576,266 32,380 596,936 Total Revenue $ 526,601 $ 1,072,861 $ 829,076 $ 1,740,111 The total revenue by geographic area determined based on the location of the customers was as follows: Three Months Ended Six Months Ended June 30, June 30, Geographic Region 2018 2017 2018 2017 United States $ 462,383 $ 512,257 $ 757,116 $ 1,129,482 People’s Republic of China - 478,205 - 502,268 Rest of World 64,218 82,399 71,960 108,361 Total Revenue $ 526,601 $ 1,072,861 $ 829,076 $ 1,740,111 The Company had long-lived assets totaling $66,847 and $59,830 located in the People’s Republic of China and $1,223,728 and $1,305,950 located in the United States as of June 30, 2018 and December 31, 2017, respectively. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 12 - Subsequent Events On July 26, 2018, the Company implemented a reduction in workforce plan which resulted in the elimination of six staff positions in four operating departments. |
Significant Accounting Polici19
Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | (a) Basis of Presentation The Condensed Consolidated Financial Statements of the Company are prepared in U.S. Dollars and in accordance with accounting principles generally accepted in the United States of America (US GAAP). Certain information and note disclosures normally included in the financial statements prepared in accordance with US GAAP have been condensed. As such, the information included in these financial statements should be read in conjunction with the audited financial statements as of and for the years ended December 31, 2017 and 2016 included in the Company’s 2017 Form 10-K/ The Company is an emerging growth company as the term is used in The Jumpstart Our Business Startups Act enacted on April 5, 2012 and has elected to comply with certain reduced public company reporting requirements. |
Use of Estimates and Judgments | (b) Use of Estimates and Judgments The preparation of financial statements in conformity with US GAAP requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected. Information about significant areas of estimation, uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amounts recognized in the financial statements is included in the following notes for revenue recognition, allowances for doubtful accounts, inventory write-downs, impairment of intangible assets and valuation of share-based payments. |
Functional and Presentation Currency | (c) Functional and Presentation Currency These condensed consolidated financial statements are presented in U.S. Dollars, which is the Company’s functional currency. All financial information presented in U.S. Dollars has been rounded to the nearest dollar. Foreign Currency Transaction Gains or Losses, resulting from loans and cash balances denominated in Foreign Currencies, are recorded in the Condensed Consolidated Statement of Operations and Comprehensive Loss. |
Comprehensive Income (Loss) | (d) Comprehensive Income (Loss) The Company follows Financial Accounting Standards Board Accounting Standards Codification (FASB ASC) 220 in reporting comprehensive income (loss). Comprehensive income is a more inclusive financial reporting methodology that includes disclosure of certain financial information that historically has not been recognized in the calculation of net income. |
Cash and Cash Equivalents | (e) Cash and Cash Equivalents Cash and cash equivalents comprise cash balances. The Company considers all highly liquid investments, which include short-term bank deposits (up to 3 months from date of deposit) that are not restricted as to withdrawal date or use, to be cash equivalents. Bank overdrafts are shown as part of trade and other payables in the Condensed Consolidated Balance Sheet. |
Restricted Cash | (f) Restricted Cash At June 30, 2018, restricted cash included in non-current assets on the Company’s condensed consolidated balance sheet was $500,000 representing cash in trust for the purpose of funding legal fees for certain threatened litigation. |
Fair Value of Financial Instruments | (g) Fair Value of Financial Instruments The Company’s financial instruments consist of cash and cash equivalents, marketable securities, receivables and trade and other payables. The carrying value of cash and cash equivalents, receivables and trade and other payables approximate their fair value because of their short maturities. The framework for measuring fair value provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1) and the lowest priority to unobservable inputs (level 3). The three levels of the fair value hierarchy under FASB ASC 820 are described as follows: Level 1 Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Company has the ability to access. Level 2 Inputs to the valuation methodology include: ● quoted prices for similar assets or liabilities in active markets; ● quoted prices for identical or similar assets or liabilities in inactive markets; ● inputs other than quoted prices that are observable for the asset or liability; ● inputs that are derived principally from or corroborated by observable market data by correlation or other means If the asset or liability has a specified (contractual) term, the level 2 input must be observable for substantially the full term of the asset or liability. Level 3 Inputs to the valuation methodology are unobservable and significant to the fair value measurement. The asset or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. Valuation techniques maximize the use of relevant observable inputs and minimize the use of unobservable inputs. Following is a description of the valuation methodologies used for assets measured at fair value as of June 30, 2018 and December 31, 2017. U.S. Agency Securities and Corporate and Municipal Securities: Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1) Quoted Prices for Similar Assets or Liabilities in Active Markets (Level 2) Significant Unobservable Inputs (Level 3) Marketable securities at June 30, 2018 $ - $ 7,977,575 $ - Marketable securities at December 31, 2017 $ - $ 5,011,607 $ - Marketable securities include U.S. agency securities, corporate securities, and municipal securities, which are classified as available for sale. The securities are valued at fair market value. Maturities of the securities are less than one year. Unrealized gains and losses relating to the available for sale investment securities were recorded in the Condensed Consolidated Statement of Changes in Shareholders’ Equity as comprehensive income. These amounts were a decrease of $4,401 and an increase of $12,443 in unrealized losses for the three and six months ended June 30, 2018. These amounts were an increase of $852 and $1,009 in unrealized gains for the three and six months ended June 30, 2017. Proceeds from the sale of marketable securities in the three and six months ended June 30, 2018 were $2,004,580 and $2,306,675. Proceeds from the sale of marketable securities in the three and six months ended June 30, 2017 were $650,336 and $1,745,554. Gross gains and losses, resulting from these sales, amounted to a loss of $4,401 and a gain of $605 for the three months ended June 30, 2018 and 2017 and a loss of $4,401 and $1,656 for the six months ended June 30, 2018 and 2017. |
Trade Receivables, Trade Receivables - Related Party and Allowance for Doubtful Accounts | (h) Trade Receivables, Trade Receivables – Related Party and Allowance for Doubtful Accounts The carrying amounts of current trade receivables is stated at cost, net of allowance for doubtful accounts and approximate their fair value given their short-term nature. The normal credit terms extended to customers ranges between 30 and 90 days. Credit terms longer than these may be extended after considering the credit worthiness of the customers and the business requirements. The Company reviews all receivables that exceed terms and establishes an allowance for doubtful accounts based on management’s assessment of the collectability of trade and other receivables. A considerable amount of judgment is required in assessing the amount of allowance. The Company considers the historical level of credit losses, makes judgments about the credit worthiness of each customer based on ongoing credit evaluations and monitors current economic trends that might impact the level of credit losses in the future. As of June 30, 2018 and December 31, 2017, allowances for doubtful accounts for trade receivables were $693,196 and $596,196. Bad debt expenses for trade receivables were $125,500 and $5,380 for the three months ended June 30, 2018 and 2017, respectively, and $125,500 and $47,741 for the six months ended June 30, 2018 and 2017, respectively. |
Concentrations | (i) Concentrations Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash on deposit with financial institutions and accounts receivable. At times, the Company’s cash in banks is in excess of the FDIC insurance limit. The Company has not experienced any loss as a result of these cash deposits. These cash balances are maintained with four banks. Major Customers For the three months ended June 30, 2018, three customers generated 33%, 27% and 12%, or 72% in the aggregate, of the Company’s revenue. For the six months ended June 30, 2018, two customers generated 49% and 17%, or 66% in the aggregate, of the Company’s revenue. As of June 30, 2018, the amount due from these customers was $291,220. This concentration makes the Company vulnerable to a near-term severe impact should these relationships be terminated. For the three months ended June 30, 2017, two customers generated 47% and 27%, or 74% in the aggregate, of the Company’s revenue. For the six months ended June 30, 2017, three customers generated 31%, 29% and 13%, or 73% in the aggregate, of the Company’s revenue. Three customers accounted for 41%, 13%, and 13% or 67%, in the aggregate, of gross trade receivables, before accounting for allowance for doubtful accounts, as of June 30, 2018. To limit such risks, the Company performs ongoing credit evaluations of its customers’ financial condition. As of June 30, 2018, the Company had $457,881, $146,195 and $142,293 in trade receivables, respectively, from these customers. Major Suppliers For the three months ended June 30, 2018, two suppliers accounted for 13% and 11%, or 24% in the aggregate, of the Company’s purchases. For the six months ended June 30, 2018, no supplier accounted for 10% or more of the Company’s purchases. For the three months ended June 30, 2017, two suppliers accounted for 15% and 13%, or 28% in the aggregate, of the Company’s purchases. For the six months ended June 30, 2017, one supplier accounted for 14% of the Company’s purchases. Two vendors accounted for 29% and 12%, or 41%, in the aggregate, of trade payables as of June 30, 2018. As of June 30, 2018, the Company had $298,634 and $121,327 in trade payables, respectively, from these vendors. |
Property, Plant and Equipment | (j) Property, Plant and Equipment Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses. Costs include expenditures that are directly attributable to the acquisition of the asset. Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment and are recognized within “other income” in the Condensed Consolidated Statement of Operations and Comprehensive Loss. Depreciation is recognized in profit and loss on the accelerated basis over the estimated useful lives of the property, plant and equipment. Leased assets are depreciated over the shorter of the lease term or their useful lives. Depreciation expense totaled $13,675 and $17,885 for the three months ended June 30, 2018 and 2017, respectively, and $27,350 and $35,827 for the six months ended June 30, 2018 and 2017, respectively. |
Intangible Assets | (k) Intangible Assets The Company’s long-lived intangible assets, other than goodwill, are assessed for impairment when events or circumstances indicate there may be an impairment. These assets were initially recorded at their estimated fair value at the time of acquisition and assets not acquired in acquisitions were recorded at historical cost. However, if their estimated fair value is less than the carrying amount, other intangible assets with indefinite life are reduced to their estimated fair value through an impairment charge to our condensed consolidated statements of income. Intangible assets as of June 30, 2018 and December 31, 2017 were $1,045,113 and $1,130,667, respectively. Intangible assets at June 30, 2018 consisted of patents, trademarks and customer lists of $3,897,635 net of accumulated amortization and impairment of $2,852,522. Amortization is recognized on a straight-line basis over the estimated useful lives of intangible assets, other than goodwill, from the date that they are available for use. Amortization expense was $42,777 for the three months ended June 30, 2018 and 2017 and $85,553 for the six months ended June 30, 2018 and 2017. The following is an annual schedule of approximate future amortization of the Company’s intangible assets: Period Amount 2018 (six months) $ 85,554 2019 171,108 2020 149,298 2021 147,315 2022 147,315 2023 147,315 |
Revenue Recognition | (l) Revenue Recognition In accordance with FASB ASC 605, the Company recognizes revenue when (i) persuasive evidence of a customer or distributor arrangement exists, (ii) a retailer, distributor or wholesaler receives the goods and acceptance occurs, (iii) the price is fixed or determinable, and (iv) the collectability of the revenue is reasonably assured. Subject to these criteria, the Company recognizes revenue from product sales when title passes to the customer based on shipping terms. The Company typically does not accept returns nor offer charge backs or rebates except for certain distributors. Revenue recorded is net of any discount, rebate or sales return. The accrual for estimated sales returns was $- as of June 30, 2018 and December 31, 2017. In cases where the right of return is granted, and the Company does not have historical experience to reasonably estimate the sales returns, the revenue is recognized when the return privilege has substantially expired. The Company may provide for rebates to the distributors under limited circumstances. The Company established an accrual of $54,228 and $126,471 as of June 30, 2018 and December 31, 2017. Accounts receivable will be reduced when the rebates are applied by the customer. The Company recognized $6,350 and $67,855 during the three months ended June 30, 2018 and 2017, respectively, for rebates and $43,894 and $170,678 during the six months ended June 30, 2018 and 2017, respectively, which is included as a reduction of product revenue in the Condensed Consolidated Statement of Operations and Comprehensive Loss. License fee revenue is recognized on a straight-line basis over the term of the license agreement. When the Company enters into arrangements that contain more than one deliverable, the Company allocates revenue to the separate elements under the arrangement based on their relative selling prices in accordance with FASB ASC 605-25. |
Income Taxes | (m) Income Taxes The Company utilizes an asset and liability approach for financial accounting and reporting for income taxes. The provision for income taxes is based upon income or loss after adjustment for those permanent items that are not considered in the determination of taxable income. Deferred income taxes represent the tax effects of differences between the financial reporting and tax basis of the Company’s assets and liabilities at the enacted tax rates in effect for the years in which the differences are expected to reverse. The Company evaluates the recoverability of deferred tax assets and establishes a valuation allowance when it is more likely than not that some portion or all the deferred tax assets will not be realized. Management makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liability. In management’s opinion, adequate provisions for income taxes have been made. If actual taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary. Tax benefits are recognized only for tax positions that are more likely than not to be sustained upon examination by tax authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely to be realized upon settlement. A liability for “unrecognized tax benefits” is recorded for any tax benefits claimed in the Company’s tax returns that do not meet these recognition and measurement standards. As of June 30, 2018 and 2017, no liability for unrecognized tax benefits was required to be reported. There was no income tax expense for the three and six months ended June 30, 2018 and 2017. There is no income tax benefit for the losses for the three and six months ended June 30, 2018 and 2017 since management has determined that the realization of the net deferred assets is not assured and has created a valuation allowance for the entire amount of such tax benefits. The Company’s policy for recording interest and penalties associated with tax audits is to record such items as a component of general and administrative expense. There were no amounts accrued for penalties and interest for the six months ended June 30, 2018 and 2017. The Company does not expect its uncertain tax position to change during the next twelve months. Management is currently unaware of any issues under review that could result in significant payments, accruals or material deviations from its position. The Company has identified its federal tax return and its state tax returns in New Jersey and California as its “major” tax jurisdictions, and such returns for the years 2014 through 2017 remain subject to examination. The Tax Cuts and Jobs Act (the “Tax Act”) was enacted on December 22, 2017. The Tax Act reduced the U.S. federal corporate tax rate from 35% to 21%. As December 31, 2017, the Company had made a reasonable estimate of the effects of the Tax Act. This estimate incorporates assumptions made based upon the Company’s current interpretation of the Tax Act and may change as the Company may receive additional clarification and implementation guidance and as the interpretation of the Tax Act evolves. In accordance with Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (“SAB 118”), which allows us to record provisional amounts during a measurement period not to extend beyond one year form the enactment date. SAB 118 was codified by the FASB as part of ASU No. 2018-05, Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 |
Shipping and Handling Fees and Costs | (n) Shipping and Handling Fees and Costs The Company charges actual shipping plus a handling fee to customers, which amounted to $18,739 and $12,016 for the three months ended June 30, 2018 and 2017, respectively, and $32,380 and $30,436 for the six months ended June 30, 2018 and 2017, respectively. These fees are classified as part of product revenue in the Condensed Consolidated Statement of Operations and Comprehensive Loss. Shipping and other related delivery costs, including those for incoming raw materials consumed are classified as part of the cost of sales, which amounted to $37,993 and $31,393 for the three months ended June 30, 2018 and 2017, respectively, and $64,937 and $47,569 for the six months ended June 30, 2018 and 2017, respectively. |
Basic and Diluted Earnings Per Share of Common Stock | (o) Basic and Diluted Earnings per Share of Common Stock Basic earnings per common share are based on the weighted average number of shares outstanding during the periods presented. Diluted earnings per share are computed using the weighted average number of common shares plus dilutive common share equivalents outstanding during the period. Potential common shares that would have the effect of increasing diluted earnings per share are considered anti-dilutive, i.e. the exercise prices of the outstanding stock options were greater than the market price of the common stock. The calculation of basic and diluted loss per share for the three months ended June 30, 2018 and 2017 was based on the loss attributable to common shareholders of $2,067,453 and $818,008, respectively, and $3,927,444 and $2,167,279 for the six months ended June 30, 2018 and 2017, respectively. The basic and diluted weighted average number of common shares outstanding for the three months ended June 30, 2018 and 2017 was 93,254,241 and 8,882,326, respectively, and 82,348,494 and 7,943,168 for the six months ended June 30, 2018 and 2017, respectively. Diluted net loss per share is computed using the weighted average number of common and dilutive potential common shares outstanding during the period. The following securities are excluded from the calculation of weighted average dilutive common shares because their inclusion would have been anti-dilutive: For the Three and Six Months Ended June 30, 2018 2017 Incentive and Award Stock Options 202,000 259,000 Unvested Restricted Shares of Common Stock - 9,166 Warrants 11,329,833 1,490,570 Total potentially dilutive shares 11,531,833 1,758,736 |
Recently Issued Accounting Pronouncements | (p) Recently Issued Accounting Pronouncements Recently Issued Accounting Pronouncements Adopted As the Company is an emerging growth company, it has elected to adopt recently issued accounting pronouncements based on effective dates applicable to other than public business entities. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230), Restricted Cash. The amendments in this Update require that a statement of cash flows explains the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of period and end-of-period total amounts shown on the statement of cash flows. The amendments in this Update do not provide a definition of restricted cash or restricted cash equivalents. The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019. Early adoption is permitted. The Company adopted this as of January 1, 2018. Recently Issued Accounting Pronouncements Not Adopted In May 2014 and April 2016, the FASB issued ASU No. 2014-09 and ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606). The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In August 2015, FASB issued ASU 2015-14 which deferred the effective date of Update 2014-09 to annual reporting periods beginning after December 15, 2018 and for entities other than public business entities, and to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period for public business entities. Early application is permitted as of annual reporting periods beginning after December 15, 2016 including interim reporting periods within that reporting period. The Company is currently evaluating the effect of the amendments, but it does not anticipate a material impact of its financial statements. The Company expects to use the modified retrospective adoption method and will adopt this Update as of January 1, 2019. In June 2018, the FASB issued ASU 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, which expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. The guidance is effective for public business entities, certain not-for-profit entities, and certain employee benefit plans for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. For all other entities, ASU 2018-07 is effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted, but no earlier than an entity’s adoption date of Topic 606. The Company is evaluating the impact of adopting this pronouncement. In July 2018, the FASB issued ASU No. 2018-09, Codification Improvements |
Significant Accounting Polici20
Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Schedule of Marketable Securities | This includes basing value on yields currently available on comparable securities of issuers with similar credit ratings. Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1) Quoted Prices for Similar Assets or Liabilities in Active Markets (Level 2) Significant Unobservable Inputs (Level 3) Marketable securities at June 30, 2018 $ - $ 7,977,575 $ - Marketable securities at December 31, 2017 $ - $ 5,011,607 $ - |
Schedule of Future Amortization Expense of Intangible Assets | The following is an annual schedule of approximate future amortization of the Company’s intangible assets: Period Amount 2018 (six months) $ 85,554 2019 171,108 2020 149,298 2021 147,315 2022 147,315 2023 147,315 |
Schedule of Anti-dilutive Securities Excluded from Computation of Earnings Per Share | The following securities are excluded from the calculation of weighted average dilutive common shares because their inclusion would have been anti-dilutive: For the Three and Six Months Ended June 30, 2018 2017 Incentive and Award Stock Options 202,000 259,000 Unvested Restricted Shares of Common Stock - 9,166 Warrants 11,329,833 1,490,570 Total potentially dilutive shares 11,531,833 1,758,736 |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories consist of the following: June 30, 2018 December 31, 2017 Raw Materials $ 544,637 $ 458,441 Sub-Assemblies 937,222 886,274 Finished Goods 745,298 815,505 Reserve for Obsolescence (1,212,608 ) (1,212,608 ) $ 1,014,549 $ 947,612 |
Trade and Other Payables (Table
Trade and Other Payables (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Payables and Accruals [Abstract] | |
Schedule of Trade and Other Payables | Trade and other payables consist of the following: June 30, 2018 December 31, 2017 Trade Payables $ 1,024,413 $ 948,951 Accrued Expenses 751,017 736,515 Deferred Compensation 59,750 59,750 $ 1,835,180 $ 1,745,216 |
Schedule of Trade and Other Payables - Related Party | Trade and other payables – related party are as follows: June 30, 2018 December 31, 2017 Trade Payables $ 16,701 $ 39,821 $ 16,701 $ 39,821 |
Share-based Payments (Tables)
Share-based Payments (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of Stock Options Activity | The following table summarizes the option activities for the six months ended June 30, 2018: Weighted Weighted Average Weighted Average Remaining Number Average Grant Contractual Aggregate of Exercise Date Term Intrinsic Shares Price Fair Value (years) Value Balance at December 31, 2017 255,000 $ 4.25 $ 2.56 2.02 $ - Granted - - - - - Exercised - - - - - Forfeited (53,000 ) - 2.69 1.30 - Canceled/Expired - - - - - Balance at June 30, 2018 202,000 $ 4.27 $ 2.53 1.59 $ - Exercisable as of June 30, 2018 197,334 $ 4.30 $ 2.53 1.55 $ - |
Summary of Warrant Activity | The table below summarizes the warrant activity for the six months ended June 30, 2018: Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Warrants Price Term (years) Value Balance at December 31, 2017 49,490,571 $ 0.22 4.95 $ - Granted - - - Exercised (38,160,738 ) 0.19 - Forfeited - - - Canceled/Expired - - - Balance at June 30, 2018 11,329,833 $ 0.35 4.40 $ - Exercisable as of June 30, 2018 11,329,833 $ 0.35 4.40 $ - |
Commitments (Tables)
Commitments (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Lease Commitments | The schedule of lease commitments is as follows: Thorofare Ramsey Pitman Equipment Oracle Lease Lease Lease Lease NetSuite Total Next 12 Months $ 132,000 $ 23,815 $ 39,650 $ 6,156 $ 64,938 $ 266,559 Next 13-24 Months 66,000 - 19,824 2,052 64,938 152,814 Next 25-36 Months - - - - 43,292 43,292 |
Revenue Information (Tables)
Revenue Information (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Revenue by Geographic Area Determined Based On Location of Customers | Revenue by product lines was as follows: Three months ended Six months ended June 30, June 30, Product Line 2018 2017 2018 2017 MicroParticle Catalyzed Biosensor (“MPC”) $ 106,680 $ 69,848 $ 125,630 $ 155,507 Particle ImmunoFiltration Assay (“PIFA”) 356,082 426,747 616,066 987,668 Rapid Enzymatic Assay (“REA”) 45,100 - 55,000 - Other 18,739 576,266 32,380 596,936 Total Revenue $ 526,601 $ 1,072,861 $ 829,076 $ 1,740,111 |
Schedule of Revenue by product lines | The total revenue by geographic area determined based on the location of the customers was as follows: Three Months Ended Six Months Ended June 30, June 30, Geographic Region 2018 2017 2018 2017 United States $ 462,383 $ 512,257 $ 757,116 $ 1,129,482 People’s Republic of China - 478,205 - 502,268 Rest of World 64,218 82,399 71,960 108,361 Total Revenue $ 526,601 $ 1,072,861 $ 829,076 $ 1,740,111 |
Significant Accounting Polici26
Significant Accounting Policies (Details Narrative) | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
Dec. 22, 2017 | Jun. 30, 2018USD ($)Breathalyzersshares | Jun. 30, 2017USD ($)Breathalyzersshares | Jun. 30, 2018USD ($)Breathalyzersshares | Jun. 30, 2017USD ($)Breathalyzersshares | Dec. 31, 2017USD ($) | |
Restricted cash | $ 500,000 | $ 500,000 | ||||
Unrealized loss on securities | 4,401 | 12,443 | ||||
Unrealized gain on securities | 852 | 1,009 | ||||
Income tax expense | ||||||
Proceeds from the sale of marketable securities | 2,004,580 | 650,336 | 2,306,675 | 1,745,554 | ||
Marketable securities, loss | 4,401 | 605 | ||||
Marketable securities, gain | 4,401 | 1,656 | ||||
Allowances for doubtful accounts for trade receivables | 693,196 | 693,196 | 596,196 | |||
Bad debt expenses | 125,500 | 5,380 | 125,500 | 47,741 | ||
Due from customers | 291,220 | 291,220 | ||||
Trade receivables | 412,623 | 412,623 | 964,671 | |||
Trade payables | 1,835,180 | 1,835,180 | 1,745,216 | |||
Depreciation | 13,675 | 17,885 | 27,350 | 35,827 | ||
Intangible assets, net | 1,045,113 | 1,045,113 | 1,130,667 | |||
Intangible assets, accumulated amortization | 3,897,635 | 3,897,635 | ||||
Impairment of intangible assets | 2,852,522 | |||||
Amortization expense | 42,777 | 42,777 | 85,553 | 85,553 | ||
Accrued liabilities | 54,228 | 54,228 | 126,471 | |||
Deferred revenue, recognized | 6,350 | 67,855 | 43,894 | 170,678 | ||
Unrecognized tax benefits | ||||||
Income tax rate, percentage | 35.00% | 21.00% | ||||
Cost of goods and services sold | 302,826 | 290,591 | $ 600,326 | 549,312 | ||
Cost of net revenue | 37,993 | 31,393 | 64,937 | 47,569 | ||
Net loss attributable to common shareholders | $ 2,067,453 | $ 818,008 | $ 3,927,444 | $ 2,167,279 | ||
Weighted average basic and diluted common shares outstanding | shares | 93,254,241 | 8,882,326 | 82,348,494 | 7,943,168 | ||
Shipping and Handling [Member] | ||||||
Cost of goods and services sold | $ 18,739 | $ 12,016 | $ 32,380 | $ 30,436 | ||
Supplier One [Member] | ||||||
Concentration risk percentage | 13.00% | |||||
Supplier Two [Member] | ||||||
Concentration risk percentage | 11.00% | |||||
Two Suppliers [Member] | ||||||
Concentration risk percentage | 24.00% | 28.00% | ||||
No Suppliers [Member] | ||||||
Concentration risk percentage | 10.00% | |||||
Suppliers One [Member] | ||||||
Concentration risk percentage | 15.00% | |||||
Suppliers Two [Member] | ||||||
Concentration risk percentage | 13.00% | |||||
One Supplier [Member] | ||||||
Concentration risk percentage | 14.00% | |||||
Sales Revenue, Net [Member] | ||||||
Concentration risk percentage | 72.00% | 74.00% | 66.00% | 73.00% | ||
Concentration risk, number of customer | Breathalyzers | 3 | 2 | 2 | 3 | ||
Sales Revenue, Net [Member] | Customer One [Member] | ||||||
Concentration risk percentage | 33.00% | 47.00% | 49.00% | 31.00% | ||
Sales Revenue, Net [Member] | Customer Two [Member] | ||||||
Concentration risk percentage | 27.00% | 27.00% | 17.00% | 29.00% | ||
Sales Revenue, Net [Member] | Customer Three [Member] | ||||||
Concentration risk percentage | 12.00% | 13.00% | ||||
Trade Receivable [Member] | ||||||
Concentration risk, number of customer | Breathalyzers | 3 | |||||
Trade Receivable [Member] | Customer One [Member] | ||||||
Concentration risk percentage | 41.00% | |||||
Trade receivables | $ 457,881 | $ 457,881 | ||||
Trade Receivable [Member] | Customer Two [Member] | ||||||
Concentration risk percentage | 13.00% | |||||
Trade receivables | 146,195 | $ 146,195 | ||||
Trade Receivable [Member] | Customer Three [Member] | ||||||
Concentration risk percentage | 13.00% | |||||
Trade receivables | 142,293 | $ 142,293 | ||||
Trade Payables [Member] | ||||||
Concentration risk percentage | 41.00% | |||||
Trade Payables [Member] | Vendor One [Member] | ||||||
Concentration risk percentage | 29.00% | |||||
Trade payables | 298,634 | $ 298,634 | ||||
Trade Payables [Member] | Vendor Two [Member] | ||||||
Concentration risk percentage | 12.00% | |||||
Trade payables | $ 121,327 | $ 121,327 | ||||
Maximum [Member] | ||||||
Maturities of securities | 1 year | |||||
Normal credit terms extended to customers | 90 days | |||||
Minimum [Member] | ||||||
Normal credit terms extended to customers | 30 days |
Significant Accounting Polici27
Significant Accounting Policies - Schedule of Marketable Securities (Details) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Level 1 [Member] | ||
Marketable securities | ||
Level 2 [Member] | ||
Marketable securities | 7,977,575 | 5,011,607 |
Level 3 [Member] | ||
Marketable securities |
Significant Accounting Polici28
Significant Accounting Policies - Schedule of Future Amortization Expense of Intangible Assets (Details) | Jun. 30, 2018USD ($) |
Accounting Policies [Abstract] | |
2,018 | $ 85,554 |
2,019 | 171,108 |
2,020 | 149,298 |
2,021 | 147,315 |
2,022 | 147,315 |
2,023 | $ 147,315 |
Significant Accounting Polici29
Significant Accounting Policies - Schedule of Anti-dilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Total potentially dilutive shares | 11,531,833 | 1,758,736 | 11,531,833 | 1,758,736 |
Incentive and Award Stock Options [Member] | ||||
Total potentially dilutive shares | 202,000 | 259,000 | 202,000 | 259,000 |
Unvested Restricted Shares of Common Stock [Member] | ||||
Total potentially dilutive shares | 9,166 | 9,166 | ||
Warrants [Member] | ||||
Total potentially dilutive shares | 11,329,833 | 1,490,570 | 11,329,833 | 1,490,570 |
Key Recent Events and Managem30
Key Recent Events and Management Plans (Details Narrative) - USD ($) | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2018 | Dec. 31, 2017 | Oct. 05, 2016 | Jan. 09, 2015 | |
Number of shares granted | ||||
Proceeds from public offering | $ 9,478,897 | |||
Additional expenses from exercise of warrants | $ 7,155,200 | $ 981,948 | ||
August 2, 2018 [Member] | ||||
Cash and marketable securities | 7,500,000 | |||
Working capital | $ 8,400,000 | |||
2013 Plan [Member] | ||||
Number of shares granted | 400,000 | |||
2013 Plan [Member] | Minimum [Member] | ||||
Number of shares available under stock plan | 800,000 | 400,000 | ||
2013 Plan [Member] | Maximum [Member] | ||||
Number of shares available under stock plan | 830,000 | 800,000 |
Inventories (Details Narrative)
Inventories (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Inventory Disclosure [Abstract] | ||||
Cost of goods sold for obsolete inventory | $ 7,823 | $ 21,542 | $ 32,283 | $ 21,542 |
Inventories - Schedule of Inven
Inventories - Schedule of Inventories (Details) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Inventory Disclosure [Abstract] | ||
Raw Materials | $ 544,637 | $ 458,441 |
Sub-Assemblies | 937,222 | 886,274 |
Finished Goods | 745,298 | 815,505 |
Reserve for Obsolescence | (1,212,608) | (1,212,608) |
Total Inventory, Net | $ 1,014,549 | $ 947,612 |
Trade and Other Payables - Sche
Trade and Other Payables - Schedule of Trade and Other Payables (Details) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Payables and Accruals [Abstract] | ||
Trade Payables | $ 1,024,413 | $ 948,951 |
Accrued Expenses | 751,017 | 736,515 |
Deferred Compensation | 59,750 | 59,750 |
Trade and Other Payables, Total | $ 1,835,180 | $ 1,745,216 |
Trade and Other Payables - Sc34
Trade and Other Payables - Schedule of Trade and Other Payables - Related Party (Details) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Payables and Accruals [Abstract] | ||
Trade Payables | $ 16,701 | $ 39,821 |
Trade and Other Payables - Related Party | $ 16,701 | $ 39,821 |
Share-based Payments (Details N
Share-based Payments (Details Narrative) - USD ($) | Apr. 11, 2018 | Aug. 07, 2017 | Jan. 23, 2014 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Sep. 30, 2016 | Jan. 09, 2015 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of stock option issued | |||||||||
Number of grants totaling shares of restricted common stock | 10,000 | ||||||||
Closing stock price per share | $ 0.387 | $ 0.387 | |||||||
Numbers of non-vested employee stock options | 4,666 | 4,666 | |||||||
Weighted-average grant date fair value | $ 2.36 | ||||||||
Unrecognized compensation cost | $ 1,477 | $ 1,477 | |||||||
Unrecognized compensation weighted average period | 1 month 16 days | ||||||||
Stock options expenses | $ 5,455 | $ 2,742 | $ 7,275 | $ 5,454 | $ 12,367 | ||||
Board of Directors [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of shares authorized during period | 830,000 | ||||||||
Amended and Restated 2013 Incentive Stock And Award Plan [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of shares authorized during period | 800,000 | ||||||||
Amended Plan [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of available for grants | 60,292 | 60,292 | |||||||
Amended Plan [Member] | Restricted Stock [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of stock option to purchase shares of common stock | 202,000 | ||||||||
2017 Equity Incentive Plan [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of available for grants | 1,029,893 | 1,029,893 | |||||||
Number of grants totaling shares of restricted common stock | 320,107 | ||||||||
Maximum [Member] | 2013 Stock Incentive Plan [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of stock option issued | 400,000 | ||||||||
Maximum [Member] | 2017 Equity Incentive Plan [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of stock option issued | 1,350,000 |
Share-based Payments - Summary
Share-based Payments - Summary of Stock Options Activity (Details) | 6 Months Ended |
Jun. 30, 2018USD ($)$ / sharesshares | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Number of Shares, Beginning Balance | shares | 255,000 |
Number of Shares, Granted | shares | |
Number of Shares, Exercised | shares | |
Number of Shares, Forfeited | shares | (53,000) |
Number of Shares, Cancelled/Expired | shares | |
Number of Shares, Ending Balance | shares | 202,000 |
Number of Shares, Exercisable | shares | 197,334 |
Weighted Average Exercise Price, Beginning Balance | $ 4.25 |
Weighted Average Exercise Price, Granted | |
Weighted Average Exercise Price, Exercised | |
Weighted Average Exercise Price, Forfeited | |
Weighted Average Exercise Price, Cancelled/Expired | |
Weighted Average Exercise Price, Ending Balance | 4.27 |
Weighted Average Exercise Price, Exercisable | 4.30 |
Weighted Average Grant Date Fair Value, Beginning | 2.56 |
Weighted Average Grant Date Fair Value, Granted | |
Weighted Average Grant Date Fair Value, Exercised | |
Weighted Average Grant Date Fair Value, Forfeited | 2.36 |
Weighted Average Grant Date Fair Value, Cancelled/Expired | |
Weighted Average Grant Date Fair Value, Ending | 2.53 |
Weighted Average Grant Date Fair Value, Exercisable | $ 2.53 |
Weighted Average Remaining Contractual Term (Years), Beginning | 2 years 7 days |
Weighted Average Remaining Contractual Term (Years), Granted | 0 years |
Weighted Average Remaining Contractual Term (Years), Exercised | 0 years |
Weighted Average Remaining Contractual Term (Years), Forfeited | 1 year 3 months 19 days |
Weighted Average Remaining Contractual Term (Years), Cancelled/Expired | 0 years |
Weighted Average Remaining Contractual Term (Years), Ending | 1 year 7 months 2 days |
Weighted Average Remaining Contractual Term (Years), Exercisable | 1 year 6 months 18 days |
Aggregate Intrinsic Value, Beginning Balance | $ | |
Aggregate Intrinsic Value, Ending Balance | $ | |
Aggregate Intrinsic Value, Exercisable | $ |
Share-based Payments - Summar37
Share-based Payments - Summary of Warrant Activity (Details) - Warrants [Member] | 6 Months Ended |
Jun. 30, 2018USD ($)$ / sharesshares | |
Number of Warrants, Beginning Balance | shares | 49,490,571 |
Number of Warrants, Granted | shares | |
Number of Warrants, Exercised | shares | (38,160,738) |
Number of Warrants, Forfeited | shares | |
Number of Warrants, Cancelled/Expired | shares | |
Number of Warrants, Ending Balance | shares | 11,329,833 |
Number of Warrants, Exercisable | shares | 11,329,833 |
Weighted Average Exercise Price, Beginning Balance | $ / shares | $ 0.22 |
Weighted Average Exercise Price, Granted | $ / shares | |
Weighted Average Exercise Price, Exercised | $ / shares | 0.19 |
Weighted Average Exercise Price, Forfeited | $ / shares | |
Weighted Average Exercise Price, Cancelled/Expired | $ / shares | |
Weighted Average Exercise Price, Ending Balance | $ / shares | 0.35 |
Weighted Average Exercise Price, Exercisable | $ / shares | $ 0.35 |
Weighted Average Remaining Contractual Term (years), Beginning | 4 years 11 months 12 days |
Weighted Average Remaining Contractual Term (years), Ending | 4 years 4 months 24 days |
Weighted Average Remaining Contractual Term (years), Exercisable | 4 years 4 months 24 days |
Aggregate Intrinsic Value, Beginning | $ | |
Aggregate Intrinsic Value, Ending | $ | |
Aggregate Intrinsic Value, Exercisable | $ |
Equity (Details Narrative)
Equity (Details Narrative) - USD ($) | Apr. 11, 2018 | Jan. 16, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 |
Restricted common shares issued | 10,000 | |||||||
Issuance of common stock | $ 18,000 | $ 12,545 | $ 5,175 | |||||
Share based compensation expenses | $ 5,455 | $ 2,742 | $ 7,275 | $ 5,454 | $ 12,367 | |||
Preferred stock, par value | ||||||||
December 21, 2017 [Member] | Public Offering [Member] | ||||||||
Number of warrant issued during period | 38,160,737 | 38,160,737 | ||||||
Warrant exercise price | $ 0.1875 | $ 0.1875 | ||||||
Proceeds from issuance of warrants | $ 7,155,200 | |||||||
Series B Preferred Stock [Member] | ||||||||
Preferred stock, par value | ||||||||
Common Stock [Member] | ||||||||
Issuance of common stock | $ 5,175 | |||||||
Conversion of stock | 1,755 | |||||||
Conversion of stock, shares issued | 11,700,002 | |||||||
Key Employees [Member] | Restricted Stock [Member] | ||||||||
Number of common shares | 25,000 | |||||||
Issuance of common stock | $ 5,175 | |||||||
Shares issued, price per share | $ 0.2070 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | Jun. 19, 2012 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2016 |
Related Party Transaction [Line Items] | ||||||
Exclusive license and supply agreement term | 3 years | |||||
License fees received | $ 302,826 | $ 290,591 | $ 600,326 | $ 549,312 | ||
Due to related parties owned | 2,490 | 2,490 | ||||
Royalty expenses | 27,082 | 61,502 | 58,771 | 93,781 | ||
Revenue recognized | 526,601 | 1,072,861 | 829,076 | 1,740,111 | ||
Payments to acquire plastic and electronic components | 522 | 4,636 | 16,774 | |||
Research and development expenses - related party | 5,753 | 22,994 | 54,342 | 22,994 | ||
Product revenue from related party | 24,064 | |||||
Settlement Agreement [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Recover full outstanding principal amount | $ 750,000 | |||||
Proceeds from notes payable | 549,609 | |||||
Allowance for doubtful note | $ 1,299,609 | |||||
Settlement Agreement [Member] | ChubeWorkx [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Percentage of royalty received | 5.00% | |||||
Percentage of royalty retain | 50.00% | |||||
Due to related parties owned | 549,609 | $ 549,609 | ||||
Accrued royalties | 13,541 | 13,541 | ||||
Settlement Agreement [Member] | BreathScan Breath Alcohol [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Revenue recognized | $ 20,265 | 20,565 | $ 670 | |||
License [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
License fees received | $ 1,000,000 | |||||
Royalty [Member] | Settlement Agreement [Member] | ChubeWorkx [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Royalty revenue | 5,000,000 | |||||
Adjustmet to Sales [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Product revenue from related party | $ 24,064 |
Commitments (Details Narrative)
Commitments (Details Narrative) - USD ($) | Aug. 02, 2017 | Jun. 02, 2017 | Sep. 29, 2014 | Jan. 07, 2013 | Jan. 01, 2008 | Mar. 31, 2018 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 |
Operating leases rent expense, net | $ 39,650 | $ 25,980 | $ 6,156 | $ 132,000 | ||||||
Lease agreement term | 29 months | 24 months | 60 months | 7 years | ||||||
Lease expiration date | Dec. 31, 2019 | May 31, 2019 | Dec. 31, 2019 | |||||||
Thorofare Lease [Member] | ||||||||||
Rent expense, including related CAM charges | $ 40,928 | $ 40,440 | $ 83,144 | $ 80,927 | ||||||
Ramsey Lease [Member] | ||||||||||
Rent expense, including related CAM charges | 6,495 | 2,165 | 12,990 | 2,165 | ||||||
Security deposit | 4,330 | 4,330 | ||||||||
Pitman Lease [Member] | ||||||||||
Rent expense, including related CAM charges | 9,913 | 19,825 | ||||||||
Security deposit | $ 4,950 | $ 4,950 | ||||||||
Oracle Net Suite [Member] | ||||||||||
Operating leases rent expense, net | $ 64,938 | |||||||||
Lease agreement term | 36 months |
Commitments - Schedule of Lease
Commitments - Schedule of Lease Commitments (Details) | Jun. 30, 2018USD ($) |
Next 12 Months | $ 266,559 |
Next 13-24 Months | 152,814 |
Next 25-36 Months | 43,292 |
Thorofare Lease [Member] | |
Next 12 Months | 132,000 |
Next 13-24 Months | 66,000 |
Next 25-36 Months | |
Ramsey Lease [Member] | |
Next 12 Months | 23,815 |
Next 13-24 Months | |
Next 25-36 Months | |
Pitman Lease [Member] | |
Next 12 Months | 39,650 |
Next 13-24 Months | 19,824 |
Next 25-36 Months | |
Equipment Lease [Member] | |
Next 12 Months | 6,156 |
Next 13-24 Months | 2,052 |
Next 25-36 Months | |
Oracle Net Suite [Member] | |
Next 12 Months | 64,938 |
Next 13-24 Months | 64,938 |
Next 25-36 Months | $ 43,292 |
Revenue Information (Details Na
Revenue Information (Details Narrative) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
People's Republic of China [Member] | ||
Long-lived assets | $ 66,847 | $ 59,830 |
United States [Member] | ||
Long-lived assets | $ 1,223,728 | $ 1,305,950 |
Segment Information - Schedule
Segment Information - Schedule of Revenue by Geographic Area Determined Based On Location of Customers (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Total Revenue | $ 526,601 | $ 1,072,861 | $ 829,076 | $ 1,740,111 |
United States [Member] | ||||
Total Revenue | 462,383 | 512,257 | 757,116 | 1,129,482 |
People's Republic of China [Member] | ||||
Total Revenue | 478,205 | 502,268 | ||
Rest of World [Member] | ||||
Total Revenue | $ 64,218 | $ 82,399 | $ 71,960 | $ 108,361 |
Revenue Information - Schedule
Revenue Information - Schedule of Revenue by product lines (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Total Revenues | $ 526,601 | $ 1,072,861 | $ 829,076 | $ 1,740,111 |
MicroParticle Catalyzed Biosensor ("MPC") [Member] | ||||
Total Revenues | 106,680 | 69,848 | 125,630 | 155,507 |
Particle ImmunoFiltration Assay ("PIFA") [Member] | ||||
Total Revenues | 356,082 | 426,747 | 616,066 | 987,668 |
Rapid Enzymatic Assay ("REA") [Member] | ||||
Total Revenues | 45,100 | 55,000 | ||
Other [Member] | ||||
Total Revenues | $ 18,739 | $ 576,266 | $ 32,380 | $ 596,936 |