Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | May 20, 2019 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | Akers Biosciences, Inc. | |
Entity Central Index Key | 0001321834 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business Flag | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Common Stock, Shares Outstanding | 12,497,708 | |
Trading symbol | AKER | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2019 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Current Assets | ||
Cash | $ 275,522 | $ 181,755 |
Marketable Securities | 4,477,525 | 5,272,998 |
Trade Receivables, net | 324,524 | 176,326 |
Deposits and other receivables | 9,347 | |
Inventories, net | 601,300 | 585,267 |
Prepaid expenses | 283,435 | 444,435 |
Total Current Assets | 5,962,306 | 6,670,128 |
Non-Current Assets | ||
Prepaid expenses | 276,601 | 298,256 |
Restricted Cash | 480,000 | 500,000 |
Property, Plant and Equipment, net | 78,021 | 83,456 |
Intangible Assets, net | 233,409 | 243,411 |
Other Assets | 12,002 | 12,002 |
Total Non-Current Assets | 1,080,033 | 1,137,125 |
Total Assets | 7,042,339 | 7,807,253 |
Current Liabilities | ||
Trade and Other Payables | 2,076,421 | 1,973,500 |
Total Liabilities | 2,076,421 | 1,973,500 |
Commitments and Contingencies | ||
SHAREHOLDERS' EQUITY | ||
Convertible Preferred Stock, No par value, 50,000,000 shares authorized, 0 and 0 shares issued and outstanding as of March 31, 2019 and December 31, 2018 | ||
Common Stock, No par value, 500,000,000 shares authorized, 12,497,708 and 12,482,708 issued and outstanding as of March 31, 2019 and December 31, 2018 | 121,574,327 | 121,554,547 |
Comprehensive Loss | 3,430 | (25,913) |
Accumulated Deficit | (116,611,839) | (115,694,881) |
Total Shareholders' Equity | 4,965,918 | 5,833,753 |
Total Liabilities and Shareholders' Equity | $ 7,042,339 | $ 7,807,253 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2019 | Dec. 31, 2018 |
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 | 0 |
Convertible preferred stock, shares outstanding | 0 | 0 |
Common stock, no par value | ||
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 12,497,708 | 12,482,708 |
Common stock, shares outstanding | 12,497,708 | 12,482,708 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Income Statement [Abstract] | ||
Product Revenue | $ 612,123 | $ 302,475 |
Product Cost of Sales | (245,937) | (297,500) |
Gross Income | 366,186 | 4,975 |
Administrative Expenses | 982,953 | 915,533 |
Sales and Marketing Expenses | 149,841 | 500,152 |
Compliance, Research and Development Expenses | 88,391 | 439,970 |
Litigation Settlement Expenses | 75,000 | |
Amortization of Non-Current Assets | 10,003 | 42,777 |
Loss from Operations | (940,002) | (1,893,457) |
Other (Income)/Expenses | ||
Foreign Currency Transaction Loss | 4,659 | 2,875 |
Loss on Investments | 3,718 | |
Interest and Dividend Income | (31,421) | (36,341) |
Total Other Income | (23,044) | (33,466) |
Loss Before Income Taxes | (916,958) | (1,859,991) |
Income Tax Benefit | ||
Net Loss | (916,958) | (1,859,991) |
Other Comprehensive Gain/(Loss) | ||
Net Unrealized Gain/(Loss) on Marketable Securities | 29,343 | (16,843) |
Total Other Comprehensive Gain/(Loss) | 29,343 | (16,843) |
Comprehensive Income (Loss) | $ (887,615) | $ (1,876,834) |
Basic and Diluted loss per common share | $ (0.07) | $ (0.21) |
Weighted average basic and diluted common shares outstanding | 12,483,209 | 8,956,279 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Shareholder's Equity (Unaudited) - USD ($) | Preferred Stock [Member] | Common Stock [Member] | Deferred Compensation [Member] | Accumulated Deficit [Member] | Accumulated Other Comprehensive Income/(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 | 5,534,692 | ||||
Net loss | (1,859,991) | (1,859,991) | ||||
Exercise of warrants for common stock | $ 5,717,325 | 5,717,325 | ||||
Exercise of warrants for common stock, shares | 3,811,509 | |||||
Conversion of preferred stock to common stock | $ (1,755,000) | $ 1,755,000 | ||||
Conversion of preferred stock to common stock, shares | (1,755) | 1,464,930 | ||||
Amortization of deferred compensation | 3,469 | 3,469 | ||||
Issuance of unrestricted stock to a key employee | $ 5,175 | 5,175 | ||||
Issuance of unrestricted stock to a key employee, shares | 3,125 | |||||
Issuance of non-qualified stock options to key employees | $ 2,712 | 2,712 | ||||
Issuance of restricted stock for services for non-employees | $ 12,545 | 12,545 | ||||
Issuance of restricted stock for services for non-employees, shares | ||||||
Net unrealized gain on marketable securities | (16,843) | (16,843) | ||||
Balance at Mar. 31, 2018 | $ 118,139,926 | (106,705,838) | (16,843) | 11,417,245 | ||
Balance, shares at Mar. 31, 2018 | 10,814,256 | |||||
Balance at Dec. 31, 2018 | $ 121,554,547 | (115,694,881) | (25,913) | 5,833,753 | ||
Balance, shares at Dec. 31, 2018 | 12,482,708 | |||||
Net loss | (916,958) | (916,958) | ||||
Issuance of unrestricted stock to a key employee | $ 15,874 | 15,874 | ||||
Issuance of unrestricted stock to a key employee, shares | 15,000 | |||||
Issuance of restricted stock units to directors for services | $ 3,906 | 3,906 | ||||
Issuance of restricted stock units to directors for services, shares | ||||||
Net unrealized gain on marketable securities | 29,343 | 29,343 | ||||
Balance at Mar. 31, 2019 | $ 121,574,327 | $ (116,611,839) | $ 3,430 | $ 4,965,918 | ||
Balance, shares at Mar. 31, 2019 | 12,497,708 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash flows from operating activities | ||
Net loss | $ (916,958) | $ (1,859,991) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Accrued income on marketable securities | 2,314 | (13,955) |
Depreciation and amortization | 15,437 | 56,452 |
Reserve for obsolete inventory | 24,460 | |
Reserve for doubtful accounts | 4,247 | |
Amortization of deferred compensation | 3,469 | |
Share based compensation to employees - options | 2,712 | |
Share based compensation to an employee | 11,636 | |
Share based compensation to directors - restricted stock units | 3,906 | 5,175 |
Share based compensation to non-employees - restricted stock | 12,545 | |
Changes in assets and liabilities: | ||
(Increase)/decrease in trade receivables | (152,445) | 547,773 |
(Increase)/decrease in deposits and other receivables | 9,347 | (46,148) |
Increase in inventories | (16,033) | (50,795) |
(Increase)/decrease in prepaid expenses | 182,655 | (76,570) |
Increase/(decrease) in trade and other payables | 107,159 | (405,499) |
Net cash used in operating activities | (748,735) | (1,800,372) |
Cash flows from investing activities | ||
Purchases of property, plant and equipment | (37,827) | |
Purchases of marketable securities | (30,018) | (3,972,386) |
Proceeds from sale of marketable securities | 852,520 | 302,095 |
Net cash provided by/(used in) investing activities | 822,502 | (3,708,118) |
Cash flows from financing activities | ||
Net proceeds from exercise of warrants for common stock | 5,717,325 | |
Net cash provided by financing activities | 5,717,325 | |
Net increase in cash and restricted cash | 73,767 | 208,835 |
Cash and restricted cash at beginning of period | 681,755 | 438,432 |
Cash and restricted cash at end of period | 755,522 | 647,267 |
Cash paid for: | ||
Interest | ||
Income Taxes | ||
Supplemental Schedule of Non-Cash Financing and Investing Activities | ||
Net unrealized gains/(losses) on marketable securities | 29,343 | (16,843) |
Conversion of Series B Preferred Stock to common shares | $ 1,755,000 |
Organization and Description of
Organization and Description of Business | 3 Months Ended |
Mar. 31, 2019 | |
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. On November 7, 2018, the Company announced its intention to explore strategic alternatives in order to maximize shareholder value. As announced, this process will consider a range of potential strategic alternatives including, but not limited to, business combinations, while simultaneously supporting the Company’s management and employees in the execution of the Company’s current business activities. Furthermore, the Company has undertaken steps to reduce its expenses, including reducing the number of personnel, reducing its office footprint, eliminating services from non-critical vendors and has withdrawn its shares from registration on the AIM exchange in the United Kingdom. The Company’s medical device business has as its current focus the production and sale of disposable diagnostic testing devices that can be performed in minutes, to facilitate time sensitive therapeutic decisions. The Company’s principal products are a rapid test detecting the antibody causing an allergic reaction to Heparin, breath alcohol detectors used for health and safety and a consumer product used to screen for levels of cholesterols. |
Significant Accounting Policies
Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2019 | |
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, 2018 and 2017 included in the Company’s 2018 Form 10-K, as filed on April 1, 2019. In the opinion of the management, these condensed consolidated financial statements include all adjustments, consisting of only normal recurring nature, necessary for a fair statement of the financial position of the Company as of March 31, 2019 and its results of operations and cash flows for the three months ended March 31, 2019 and 2018. The results of operations for the three months ended March 31, 2019 are not necessarily indicative of the results to be expected for the full fiscal year ending December 31, 2019. 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 cash balances denominated in Foreign Currencies, are recorded in the Condensed Consolidated Statements 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 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. (f) Restricted Cash At March 31, 2019, restricted cash included in non-current assets on the Company’s consolidated balance sheet was $480,000 representing cash in trust for the purpose of funding legal fees for certain litigations. (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 March 31, 2019 and December 31, 2018. U.S. Agency 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 March 31, 2019 $ - $ 4,477,525 $ - Marketable securities at December 31, 2018 $ - $ 5,272,998 $ - Marketable securities include U.S. agency 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 (loss) income. These amounts were $29,343 in unrealized gain for the three months ended March 31, 2019 and $16,843 in unrealized loss for the three months ended March 31, 2018. Gains and losses resulting from the sales of marketable securities were a loss of $3,718 and $0 for the three months ended March 31, 2019 and 2018, respectively. (h) Trade Receivables 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 March 31, 2019 and December 31, 2018, allowances for doubtful accounts for trade receivables were $611,082 and $606,835. Bad debt expenses for trade receivables were $4,247 and $0 for the three months ended March 31, 2019 and 2018, 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 two banks. Major Customers For the three months ended March 31, 2019, two customers generated 45% and 44%, or 89% in the aggregate, of the Company’s revenue. For the three months ended March 31, 2018, one customer generated 10% or more of the Company’s revenue. Three customers accounted for 49%, 17% and 14%, or 80% in the aggregate, of gross trade receivables, before accounting for allowance for doubtful accounts, as of March 31, 2019. As of March 31, 2019, the Company had $458,902, $156,988 and $137,102 in trade receivables, respectively, from these customers. These concentrations make the Company vulnerable to a near-term severe impact should these relationships be terminated. The largest of these customer balances was fully reserved as of March 31, 2019. Two customers accounted for 59% and 14%, or 73% in the aggregate, of gross trade receivables, before accounting for allowance for doubtful accounts, as of December 31, 2018. As of December 31, 2018, the Company had $458,902 and $111,037 in trade receivables, respectively, from these customers. These concentrations make the Company vulnerable to a near-term severe impact should these relationships be terminated. The largest of these customer balances was fully reserved as of December 31, 2018. To limit such risks, the Company performs ongoing credit evaluations of its customers’ financial condition. Major Suppliers For the three months ended March 31, 2019, two suppliers accounted for 31% and 13%, or 44%, in the aggregate, of the Company’s purchases. For the three months ended March 31, 2018, one supplier accounted for 10% or more of the Company’s purchases. Two vendors accounted for 51% in the aggregate, of trade payables as of March 31, 2019. One vendor accounted for 10% of the Company’s trade payables as of March 31, 2018. (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 $5,435 and $13,675 for the three months ended March 31, 2019 and 2018, 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 March 31, 2019 and December 31, 2018 were $233,409 and $243,411, respectively. Intangible assets at March 31, 2019 consisted of patents, trademarks and customer lists of $3,897,635 net of accumulated amortization and impairment of $3,664,226. 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 $10,002 and $42,777 for the three months ended March 31, 2019 and 2018, respectively. The following is an annual schedule of approximate future amortization of the Company’s intangible assets: Period Amount 2019 (nine months) 30,006 2020 40,008 2021 40,008 2022 40,008 2023 40,008 Thereafter 43,371 $ 233,409 (l) Revenue Recognition Beginning on January 1, 2019, the Company recognizes revenue under ASC 606, Revenue from Contracts with Customers. The core principle of the revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the goods and services transferred to the customer. The following five steps are applied to achieve that core principle: Step 1: Identify the contract with the customer Step 2: Identify the performance obligations in the contract Step 3: Determine the transaction price Step 4: Allocate the transaction price to the performance obligations in the contract Step 5: Recognize revenue when the company satisfies a performance obligation The Company does not have any significant contracts with customers requiring performance beyond delivery. Shipping and handling activities are performed before the customer obtains control of the goods and therefore represent a fulfillment activity rather than a promised service to the customer. Revenue and costs of sales are recognized when control of the product transfers to our customer, which generally occurs upon delivery to the customer but can also occur when goods are shipped by the Company, depending on the shipment terms of the contract. The Company’s performance obligations are satisfied at that time. The Company uses the most likely amount approach to determine the variable consideration of the transaction price in order to account for the contractual rebates and incentives that are estimated and adjusted for over time. The Company provides for rebates to its distributors. The Company had accrued for rebates and incentives of $19,504 and $23,179, as of March 31, 2019 and December 31, 2018. Accounts receivable will be reduced when the rebates are applied by the customer. The Company recognized $8,698 and $37,544 during the three months ended March 31, 2019 and 2018 for rebates, which is included as a reduction of product revenue in the Condensed Consolidated Statement of Operations and Comprehensive Loss. (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 March 31, 2019 and December 31, 2018, no liability for unrecognized tax benefits was required to be reported. There is no income tax benefit for the losses for the three months ended March 31, 2019 and 2018 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 three months ended March 31, 2019 and 2018. 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. (o) Shipping and Handling Fees and Costs The Company charges actual shipping costs plus a handling fee to customers, which amounted to $12,486 and $13,641 for the three months ended March 31, 2019 and 2018. 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 are classified as part of the cost of net revenue, which amounted to $11,919 and $26,944 for the three months ended March 31, 2019 and 2018, respectively. (p) 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. The calculation of basic and diluted loss per share for the three months ended March 31, 2019 and 2018 was based on the loss attributable to common shareholders of $916,958 and $1,859,991, respectively. The basic and diluted weighted average number of common shares outstanding for the three months ended March 31, 2019 and 2018 was 12,483,209 and 8,956,279, 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 months ended March 31, 2019 2018 Stock Options 6,877 31,875 RSUs 374,481 - Warrants 2,110,737 2,374,813 Total potentially dilutive shares 2,492,095 2,406,688 (q) 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 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 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. The Company has elected to apply the modified retrospective method and the impact was determined to be immaterial on the condensed consolidated financial statements. Accordingly, the new revenue standard was applied prospectively in our condensed consolidated financial statements from January 1, 2019 forward and reported financial information for historical comparable periods will not be revised and will continue to be reported under the accounting standards in effect during those historical periods. The Company has performed an analysis and identified its revenues and costs that are within the scope of the new guidance. The Company has determined that its methods of recognizing revenues will not be significantly impacted by the new guidance. 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 early adopted ASC 2018-07 effective January 1, 2019. There was no material impact on the Company’s condensed consolidated financial statements upon this adoption. In July 2018, the FASB issued ASU No. 2018-09, Codification Improvements, to makes changes to a variety of topics to clarify, correct errors in, or make minor improvements to the Accounting Standards Codification. Certain items of the amendments in ASU 2018-09 will be effective for the Company in annual periods beginning after December 15, 2018. The adoption of ASU 2018-09 did not have a material impact on the Company’s condensed consolidated financial statements. Recently Issued Accounting Pronouncements Not Adopted In February 2016, the FASB issued ASU 2016-02—Leases (Topic 842) (“ASU-2016-02”), which requires an entity to recognize right-of-use assets and lease liabilities on its balance sheet and disclose key information about leasing arrangements. ASU 2016-02 offers specific accounting guidance for a lessee, a lessor, and sale and leaseback transactions. Lessees and lessors are required to disclose qualitative and quantitative information about leasing arrangements to enable a user of the financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. ASU 2016-02 is effective for annual reporting periods beginning after December 15, 2019, including interim periods within that reporting period, and requires a modified retrospective adoption, with early adoption permitted. The Company is currently evaluating the effect this guidance will have on its condensed consolidated financial statements and related disclosure, and anticipates the guidance to result in increases in its assets and liabilities as most of its operating lease commitments will be subject to the new standard and recognized as right-of-use assets and lease liabilities. |
Recent Developments and Managem
Recent Developments and Management's Plans | 3 Months Ended |
Mar. 31, 2019 | |
Recent Developments And Managements Plans | |
Recent Developments and Management's Plans | Note 3 – Recent Developments and Management’s Plans On December 19, 2018, the Company announced its intent to delist from the AIM Market of the London Stock Exchange. The Company believes that due to the relatively low liquidity in the Company’s common stock, reaming listed does not merit the ongoing costs and regulatory complexities associated with maintaining the AIM listing. On March 5, 2019, the Company held a special meeting of shareholders who then voted in favor of the Company delisting from the AIM Market. The delisting took effect on March 29, 2019. On November 7, 2018, the Company announced that its board of directors had initiated a process to evaluate strategic alternatives to maximize shareholder value. This process will consider a range of potential strategic alternatives including, but not limited to, business combinations, while simultaneously supporting the Company’s management and employees in the execution of the Company’s current business activities. On November 19, 2018, the Company further announced that in its evaluation of strategic alternatives it will consider a range of potential strategic alternatives including, but not limited to, business combinations in sectors different than that currently engaged in, including cannabis and hemp related industries. By way of a letter dated May 10, 2019, the Listing Qualifications Department of NASDAQ advised the Company that it did not comply with NASDAQ Listing Rule 5550(a)(2) for continued listing, because the Company’s common stock did not meet NASDAQ’s minimum $1.00 bid price requirement (the "Price Requirement"). The Company intends to monitor the closing bid price of the common stock and may, if appropriate, consider implementing available options to regain compliance with the Price Requirement under the NASDAQ Listing Rules. Historically, the Company has relied upon public offerings and private placements of common stock to raise operating capital. As of May 10, 2019, the Company had cash and marketable securities of approximately $4.22 million (excluding restricted cash of $480,000) and working capital of approximately $3.67 million. 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 | 3 Months Ended |
Mar. 31, 2019 | |
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: March 31, 2019 December 31, 2018 Raw Materials $ 489,330 $ 542,761 Sub-Assemblies 737,805 711,181 Finished Goods 608,610 635,565 Reserve for Obsolescence (1,234,445 ) (1,304,240 ) $ 601,300 $ 585,267 Obsolete inventory charged to cost of goods during the three months ended March 31, 2019 and 2018 totaled $0 and $24,460, respectively. |
Trade and Other Payables
Trade and Other Payables | 3 Months Ended |
Mar. 31, 2019 | |
Payables and Accruals [Abstract] | |
Trade and Other Payables | Note 5 - Trade and Other Payables Trade and other payables consists of the following: March 31, 2019 December 31, 2018 Trade Payables $ 1,147,529 $ 686,578 Accrued Expenses 869,142 1,227,172 Deferred Compensation 59,750 59,750 $ 2,076,421 $ 1,973,500 See also Note 9 for related party information. |
Share-based Payments
Share-based Payments | 3 Months Ended |
Mar. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Share-based Payments | Note 6 - Share-based Payments Equity incentive Plans 2013 Stock Incentive Plan On January 23, 2014, the Company adopted the 2013 Stock Incentive Plan (“2013 Plan”). The 2013 Plan was amended by the Board on January 9, 2015 and September 30, 2016, and such amendments were ratified by shareholders on December 7, 2018. The 2013 Plan provides for the issuance of up to 103,750 shares of the Company’s common stock. As of March 31, 2019, grants of restricted stock and options to purchase 74,403 shares of Common Stock have been issued pursuant to the 2013 Plan, and 29,347 shares of Common Stock remain available for issuance. 2017 Stock Incentive Plan On August 7, 2017, the shareholders approved and the Company adopted the 2017 Stock Incentive Plan (“2017 Plan”). The 2017 Plan provides for the issuance of up to 168,750 shares of the Company’s common stock. As of March 31, 2019, grants of restricted stock and options to purchase 51,032 shares of Common Stock have been issued pursuant to the 2017 Plan, and 117,718 shares of Common Stock remain available for issuance. 2018 Stock Incentive Plan On December 7, 2018, the shareholders approved and the Company adopted the 2018 Stock Incentive Plan (“2018 Plan”). The 2018 Plan provides for the issuance of up to 1,875,000 shares of the Company’s common stock. As of March 31, 2019, grants of RSUs to purchase 374,481 shares of Common Stock have been issued pursuant to the 2018 Plan, and 1,500,519 shares of Common Stock remain available for issuance. Stock Options The following table summarizes the option activities for the three months ended March 31, 2019: Weighted Weighted Weighted Average Average Average Remaining Aggregate Number of Exercise Grant Date Contractual Intrinsic Shares Price Fair Value Term (years) Value Balance at December 31, 2018 10,502 $ 30.41 $ 17.42 1.43 $ - Granted - - - - - Exercised - - - - - Forfeited (3,625 ) 29.02 22.40 - - Canceled/Expired - - - - - Balance at March 31, 2019 6,877 $ 31.14 $ 14.80 1.14 $ - Exercisable as of March 31, 2019 6,877 $ 31.14 $ 14.80 1.14 $ - The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the closing stock price of $0.97 for the Company’s common shares on March 31, 2019. As of March 31, 2019, all of the Company’s outstanding stock options were fully vested and exercisable. During the three months ended March 31, 2019 and 2018, the Company incurred stock option expenses totaling $0 and $2,712, respectively. Restricted Stock Units On March 29, 2019, the Compensation Committee of the Board of Directors approved the grant of 124,827 Restricted Stock Units (“RSU”) to each of the three directors. Each RSU had a grant date fair value of $0.97 which shall be amortized on a straight-line basis over the vesting period into administrative expenses within the Condensed Consolidated Statement of Operations and Comprehensive Loss. Such RSUs were granted under the 2018 Plan, and shall vest on January 1, 2020, with vesting accelerated upon a change of control. Upon vesting, such RSUs are settled with the issuance of common stock, including on a net of tax basis, at the discretion of the holder. At March 31, 2019, the unamortized value of the RSU’s was $359,341. The unamortized amount will be expensed over a weighted average period of 10 months. A summary of activity related to RSUs for the three months ended March 31, 2019 is presented below: Weighted Average Number of Grant Date RSUs Fair Value Balance at December 31, 2018 - $ - Granted 374,481 $ 0.97 Exercised - - Forfeited - - Canceled/Expired - - Balance at March 31, 2019 374,481 $ 0.97 Exercisable as of March 31, 2019 - - During the three months ended March 31, 2019, the Company incurred RSU expense of $3,906. Stock Warrants The table below summarizes the warrant activity for the year ended March 31, 2019: Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Warrants Price Term (years) Value Balance at December 31, 2018 2,110,737 $ 3.10 4.21 $ - Granted - - - - Exercised - - - - Forfeited - - - - Canceled/Expired - - - - Balance at March 31, 2019 2,110,737 $ 3.10 3.96 $ - Exercisable as of March 31, 2019 2,110,737 $ 3.10 3.96 $ - The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the closing stock price of $0.97 for the Company’s common shares on March 31, 2019. All warrants were vested on date of grant. |
Equity
Equity | 3 Months Ended |
Mar. 31, 2019 | |
Equity [Abstract] | |
Equity | Note 7 – Equity During the three months ended March 31, 2019, the Company issued 15,000 shares of Common Stock to Mr. Yeaton pursuant to his employment agreement. These shares had a fair value of $15,874 on the date of grant, in which $4,238 was recorded in trade and other payables in the consolidated balance sheet as of December 31, 2018 and the remaining $11,636 was recorded as an expense in the condensed consolidated statement of operations for the three months ended March 31, 2019. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 8 – Commitments and Contingencies Lease 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 March 31, 2019 and 2018 totaled $41,365 and $42,218, respectively. The Company entered into a 29-month lease for warehouse space located in Pitman, New Jersey (“Pitman Lease”) with annual rents of $40,839. The lease took effect on August 1, 2017 and runs through December 31, 2019. Rent expenses for the Pitman Lease totaled $10,210 and $9,913 for the three months ended March 31, 2019 and 2018, 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 schedule of lease commitments is as follows: Thorofare Pitman Equipment Lease Lease Lease Total Next 9 Months $ 99,000 $ 29,736 $ 4,617 $ 133,353 ChubeWorkx On August 17, 2016, pursuant to a Settlement Agreement (the “Settlement Agreement”) with ChubeWorkx Guernsey Limited (“ChubeWorkx”), 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”). 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 $31,284 and $31,689 for the three months ended March 31, 2019 and 2018, respectively, which are included in sales and marketing expenses on the Condensed Consolidated Statement of Operations and Comprehensive Loss. As of March 31, 2019, the Company owed ChubeWorkx royalties of $15,642 which is included in trade and other payables. Other terms of the Settlement included: 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. Litigation and Settlements Faulkner v. Akers Biosciences, Inc., No. 2:18-cv-10521 (D.N.J.) and Gleason v. Akers Biosciences, Inc., No. 2:18-cv-10805 (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 “Faulkner Action”). 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 June 20, 2018, Plaintiff David Gleason filed a class action complaint under the caption Gleason v. Akers Biosciences, Inc., No. 2:18-cv-10805 (D.N.J.) based on the same allegations and causes of action (the “Gleason Action”). On November 21, 2018, the Faulkner and Gleason Actions were consolidated under the Faulkner Action docket. The parties conducted a mediation on January 10, 2019, and agreed to a settlement in principle disposing of the consolidated action as to all Defendants, including the Individual Defendants. On March 8, 2019, the parties signed a settlement agreement, subject to approval by the Court, whereby the Company agreed to pay $2,250,000 in exchange for full releases and discharge of all claims against the Company. On the same day, Lead Plaintiffs filed a motion for preliminary approval of the settlement and to establish notice procedures. That motion remains pending. Watts v. Gormally, et al., No. 2:18-15992 (D.N.J.) On November 9, 2018, Plaintiff Cale Watts filed a verified shareholder derivative complaint alleging violations of the Securities Exchange Act of 1934, breach of fiduciary duty, unjust enrichment, and waste of corporate assets based on alleged material weaknesses in controls, management, and documentation (the “Watts Action”). On January 14, 2019, the parties reached an agreement in principle to settle the Watts Action that included corporate reforms and a payment of attorneys’ fees of $200,000. The parties finalized a Stipulation of Settlement on March 4, 2019. On March 22, 2019, Plaintiffs filed a motion for preliminary approval of the proposed Settlement, approving the proposed form and method of providing notice of the settlement, scheduling a hearing for final approval of the settlement. (“Motion for Preliminary Approval”). On April 1, 2019, Proposed Intervenors Tiffany Chan, Jasmine Henderson, and Don Danesh Wijesekera (the “Proposed Intervenors”) filed an Opposition to the Motion for Preliminary Approval and a Motion to Intervene and Stay Proceedings (“Motion to Intervene and Stay”). Defendants’ Opposition to the Motion to Intervene and Stay is due June 17, 2019, and its Reply to the Opposition to the Motion for Preliminary Approval is due June 24, 2019. The motion day for the Motion for Preliminary Approval and the Motion to Intervene and Stay is July 1, 2019. Chan v. Gormally, et al., No. 2:19-cv-4989 (D.N.J.) On February 7, 2019, Tiffany Chan, Jasmine Henderson, and Don Danesh filed a verified shareholder derivative complaint alleging violations of Section 14(a) of the Exchange Act and SEC Rule 14a-9, breach of fiduciary duty, unjust enrichment, and waste of corporate assets based on the same circumstances as the Watts Action. The Chan Action further alleges that the Company should not have settled the Watts Action because the Watts Action plaintiffs lacked standing and the settlement would cause irreparable harm to the Company and its shareholders. On April 4, 2019, the Court entered the parties’ stipulation and consent order to extend Defendants’ time to answer, move, or otherwise respond to the Complaint until 20 days after the Court decides the Motion for Preliminary Approval of the Watts’ Settlement and the Motions in Opposition to the Watts’ Settlement, or Stays the Watts Action. Faulkner, Gleason, Watts and Chan Matters As of December 31, 2018, with regard to the Faulkner, Gleason, Watts and Chan matters, the Company believes that other than the Company’s retention requirement under its D&O liability insurance coverage of $500,000, the Company has no additional liability. The D&O liability insurance coverage provides insurance coverage to both the Company and the Directors and Officers for covered defense and indemnification. Furthermore, during the year ended December 31, 2018, the Company recorded a charge of $500,000, representing the full amount of such retention requirement. Therefore, assuming that the settlements are approved, as discussed above, the Company believes it has no further liability with respect to these matters. Typenex Medical, LLC v. Akers Biosciences, Inc., JAMS Ref. No. 1450005929 On November 15, 2018, Typenex Medical LLC (“Typenex”), a telemarketing entity with whom the Company had entered into a marketing and commission agreement dated September 30, 2016 (the “Marketing Contract”), filed an arbitration against the Company before JAMS ADR (the “Arbitration”), and an arbiter was appointed to the Arbitration on December 14, 2018. In the Arbitration, Typenex has stated that it seeks “at least” $220,500 based on the allegation that the Marketing Contract entitles Typenex to a commission on sales of certain of the Company’s heparin-related products in the period two years from the Marketing Contract’s expiration, and in the alternative, Typenex seeks relief for breach of the implied covenant of good faith and fair dealing, and/or unjust enrichment. The Company vigorously opposes Typenex’s interpretation of the Marketing Contract and will continue to defend this action in the Arbitration. The parties are currently in discovery and are next scheduled to meet on May 29, 2019 for a court ordered hearing. Other A former executive has threatened to sue the Company and executives over the termination of executive’s employment and for contractual severance pay. The executive asserts that the Company terminated the executive for using sick leave in violation of New Jersey law and that the termination was without cause within the meaning of an employment agreement which provides for severance of one year’s salary in the event of termination without cause. With respect to this matter, the Company believes that the ultimate liability from the settlement of this matter will not be material to the Company’s condensed consolidated financial statements. A former executive has threatened to sue the Company over the termination of the executive’s employment. The executive contends that the termination was in retaliation for complaints to the employer protected under the California whistleblower protection laws. The executive also contends that the Company failed to pay a bonus in violation of an employment contract. The Company’s management and legal counsel believes it is too early to determine the probable outcome of this matter. The Company intends to establish a rigorous defense of all claims. All legal fees were expensed as and when incurred. |
Related Parties
Related Parties | 3 Months Ended |
Mar. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related Parties | Note 9 – Related Parties CEO and Interim CFO Effective on October 5, 2018, the Board appointed Howard R. Yeaton, to serve as the Chief Executive Officer and interim Chief Financial Officer of the Company. Mr. Yeaton is the managing principal of FCS and the Company’s relationship with FCS shall continue, with FCS continuing to provide accounting services to the Company. FCS is considered to be a related party. During the three months ended March 31, 2019, the Company incurred costs of $ with FCS in connection with these services. As of March 31, 2019, the Company owed FCS $52,913 |
Revenue Information
Revenue Information | 3 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
Revenue Information | Note 10 – Revenue Information Revenue by product lines was as follows: Three Months Ended March 31, Product Line 2019 2018 MicroParticle Catalyzed Biosensor (“MPC”) $ 23,320 $ 18,950 Particle ImmunoFiltration Assay (“PIFA”) 576,317 259,983 Rapid Enzymatic Assay (“REA”) - 9,900 Other 12,486 13,642 Total Revenue $ 612,123 $ 302,475 The total revenue by geographic area determined based on the location of the customers was as follows: Three Months Ended March 31, Geographic Region 2019 2018 United States $ 612,123 $ 294,733 Rest of World - 7,742 Total Revenue $ 612,123 $ 302,475 The Company had long-lived assets totaling $14,760 and $74,339 located in the People’s Republic of China and $296,670 and $1,272,816 located in the United States as of March 31, 2019 and December 31, 2018, respectively. |
Employee Benefit Plan
Employee Benefit Plan | 3 Months Ended |
Mar. 31, 2019 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plan | Note 11 – Employee Benefit Plan The Company maintains a defined contribution benefit plan under section 401(k) of the Internal Revenue Code covering substantially all qualified employees of the Company (the “401(k) Plan”). Under the 401(k) Plan, the Company matches 100% up to a 3% contribution, and 50% over a 3% contribution, up to a maximum of 5%. During the three months ended March 31, 2019 and 2018, the Company made matching contributions to the 401(k) Plan of $9,464 and $13,802, respectively. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
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, 2018 and 2017 included in the Company’s 2018 Form 10-K, as filed on April 1, 2019. In the opinion of the management, these condensed consolidated financial statements include all adjustments, consisting of only normal recurring nature, necessary for a fair statement of the financial position of the Company as of March 31, 2019 and its results of operations and cash flows for the three months ended March 31, 2019 and 2018. The results of operations for the three months ended March 31, 2019 are not necessarily indicative of the results to be expected for the full fiscal year ending December 31, 2019. 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 cash balances denominated in Foreign Currencies, are recorded in the Condensed Consolidated Statements 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 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. |
Restricted Cash | (f) Restricted Cash At March 31, 2019, restricted cash included in non-current assets on the Company’s consolidated balance sheet was $480,000 representing cash in trust for the purpose of funding legal fees for certain litigations. |
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 March 31, 2019 and December 31, 2018. U.S. Agency 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 March 31, 2019 $ - $ 4,477,525 $ - Marketable securities at December 31, 2018 $ - $ 5,272,998 $ - Marketable securities include U.S. agency 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 (loss) income. These amounts were $29,343 in unrealized gain for the three months ended March 31, 2019 and $16,843 in unrealized loss for the three months ended March 31, 2018. Gains and losses resulting from the sales of marketable securities were a loss of $3,718 and $0 for the three months ended March 31, 2019 and 2018, respectively. |
Trade Receivables and Allowance for Doubtful Accounts | (h) Trade Receivables 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 March 31, 2019 and December 31, 2018, allowances for doubtful accounts for trade receivables were $611,082 and $606,835. Bad debt expenses for trade receivables were $4,247 and $0 for the three months ended March 31, 2019 and 2018, 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 two banks. Major Customers For the three months ended March 31, 2019, two customers generated 45% and 44%, or 89% in the aggregate, of the Company’s revenue. For the three months ended March 31, 2018, one customer generated 10% or more of the Company’s revenue. Three customers accounted for 49%, 17% and 14%, or 80% in the aggregate, of gross trade receivables, before accounting for allowance for doubtful accounts, as of March 31, 2019. As of March 31, 2019, the Company had $458,902, $156,988 and $137,102 in trade receivables, respectively, from these customers. These concentrations make the Company vulnerable to a near-term severe impact should these relationships be terminated. The largest of these customer balances was fully reserved as of March 31, 2019. Two customers accounted for 59% and 14%, or 73% in the aggregate, of gross trade receivables, before accounting for allowance for doubtful accounts, as of December 31, 2018. As of December 31, 2018, the Company had $458,902 and $111,037 in trade receivables, respectively, from these customers. These concentrations make the Company vulnerable to a near-term severe impact should these relationships be terminated. The largest of these customer balances was fully reserved as of December 31, 2018. To limit such risks, the Company performs ongoing credit evaluations of its customers’ financial condition. Major Suppliers For the three months ended March 31, 2019, two suppliers accounted for 31% and 13%, or 44%, in the aggregate, of the Company’s purchases. For the three months ended March 31, 2018, one supplier accounted for 10% or more of the Company’s purchases. Two vendors accounted for 51% in the aggregate, of trade payables as of March 31, 2019. One vendor accounted for 10% of the Company’s trade payables as of March 31, 2018. |
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 $5,435 and $13,675 for the three months ended March 31, 2019 and 2018, 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 March 31, 2019 and December 31, 2018 were $233,409 and $243,411, respectively. Intangible assets at March 31, 2019 consisted of patents, trademarks and customer lists of $3,897,635 net of accumulated amortization and impairment of $3,664,226. 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 $10,002 and $42,777 for the three months ended March 31, 2019 and 2018, respectively. The following is an annual schedule of approximate future amortization of the Company’s intangible assets: Period Amount 2019 (nine months) 30,006 2020 40,008 2021 40,008 2022 40,008 2023 40,008 Thereafter 43,371 $ 233,409 |
Revenue Recognition | (l) Revenue Recognition Beginning on January 1, 2019, the Company recognizes revenue under ASC 606, Revenue from Contracts with Customers. The core principle of the revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the goods and services transferred to the customer. The following five steps are applied to achieve that core principle: Step 1: Identify the contract with the customer Step 2: Identify the performance obligations in the contract Step 3: Determine the transaction price Step 4: Allocate the transaction price to the performance obligations in the contract Step 5: Recognize revenue when the company satisfies a performance obligation The Company does not have any significant contracts with customers requiring performance beyond delivery. Shipping and handling activities are performed before the customer obtains control of the goods and therefore represent a fulfillment activity rather than a promised service to the customer. Revenue and costs of sales are recognized when control of the product transfers to our customer, which generally occurs upon delivery to the customer but can also occur when goods are shipped by the Company, depending on the shipment terms of the contract. The Company’s performance obligations are satisfied at that time. The Company uses the most likely amount approach to determine the variable consideration of the transaction price in order to account for the contractual rebates and incentives that are estimated and adjusted for over time. The Company provides for rebates to its distributors. The Company had accrued for rebates and incentives of $19,504 and $23,179, as of March 31, 2019 and December 31, 2018. Accounts receivable will be reduced when the rebates are applied by the customer. The Company recognized $8,698 and $37,544 during the three months ended March 31, 2019 and 2018 for rebates, which is included as a reduction of product revenue in the Condensed Consolidated Statement of Operations and Comprehensive Loss. |
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 March 31, 2019 and December 31, 2018, no liability for unrecognized tax benefits was required to be reported. There is no income tax benefit for the losses for the three months ended March 31, 2019 and 2018 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 three months ended March 31, 2019 and 2018. 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. |
Shipping and Handling Fees and Costs | (o) Shipping and Handling Fees and Costs The Company charges actual shipping costs plus a handling fee to customers, which amounted to $12,486 and $13,641 for the three months ended March 31, 2019 and 2018. 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 are classified as part of the cost of net revenue, which amounted to $11,919 and $26,944 for the three months ended March 31, 2019 and 2018, respectively. |
Basic and Diluted Earnings Per Share of Common Stock | (p) 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. The calculation of basic and diluted loss per share for the three months ended March 31, 2019 and 2018 was based on the loss attributable to common shareholders of $916,958 and $1,859,991, respectively. The basic and diluted weighted average number of common shares outstanding for the three months ended March 31, 2019 and 2018 was 12,483,209 and 8,956,279, 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 months ended March 31, 2019 2018 Stock Options 6,877 31,875 RSUs 374,481 - Warrants 2,110,737 2,374,813 Total potentially dilutive shares 2,492,095 2,406,688 |
Recently Issued Accounting Pronouncements | (q) 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 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 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. The Company has elected to apply the modified retrospective method and the impact was determined to be immaterial on the condensed consolidated financial statements. Accordingly, the new revenue standard was applied prospectively in our condensed consolidated financial statements from January 1, 2019 forward and reported financial information for historical comparable periods will not be revised and will continue to be reported under the accounting standards in effect during those historical periods. The Company has performed an analysis and identified its revenues and costs that are within the scope of the new guidance. The Company has determined that its methods of recognizing revenues will not be significantly impacted by the new guidance. 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 early adopted ASC 2018-07 effective January 1, 2019. There was no material impact on the Company’s condensed consolidated financial statements upon this adoption. In July 2018, the FASB issued ASU No. 2018-09, Codification Improvements, to makes changes to a variety of topics to clarify, correct errors in, or make minor improvements to the Accounting Standards Codification. Certain items of the amendments in ASU 2018-09 will be effective for the Company in annual periods beginning after December 15, 2018. The adoption of ASU 2018-09 did not have a material impact on the Company’s condensed consolidated financial statements. Recently Issued Accounting Pronouncements Not Adopted In February 2016, the FASB issued ASU 2016-02—Leases (Topic 842) (“ASU-2016-02”), which requires an entity to recognize right-of-use assets and lease liabilities on its balance sheet and disclose key information about leasing arrangements. ASU 2016-02 offers specific accounting guidance for a lessee, a lessor, and sale and leaseback transactions. Lessees and lessors are required to disclose qualitative and quantitative information about leasing arrangements to enable a user of the financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. ASU 2016-02 is effective for annual reporting periods beginning after December 15, 2019, including interim periods within that reporting period, and requires a modified retrospective adoption, with early adoption permitted. The Company is currently evaluating the effect this guidance will have on its condensed consolidated financial statements and related disclosure, and anticipates the guidance to result in increases in its assets and liabilities as most of its operating lease commitments will be subject to the new standard and recognized as right-of-use assets and lease liabilities. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
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 March 31, 2019 $ - $ 4,477,525 $ - Marketable securities at December 31, 2018 $ - $ 5,272,998 $ - |
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 2019 (nine months) 30,006 2020 40,008 2021 40,008 2022 40,008 2023 40,008 Thereafter 43,371 $ 233,409 |
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 months ended March 31, 2019 2018 Stock Options 6,877 31,875 RSUs 374,481 - Warrants 2,110,737 2,374,813 Total potentially dilutive shares 2,492,095 2,406,688 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories consist of the following: March 31, 2019 December 31, 2018 Raw Materials $ 489,330 $ 542,761 Sub-Assemblies 737,805 711,181 Finished Goods 608,610 635,565 Reserve for Obsolescence (1,234,445 ) (1,304,240 ) $ 601,300 $ 585,267 |
Trade and Other Payables (Table
Trade and Other Payables (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Payables and Accruals [Abstract] | |
Schedule of Trade and Other Payables | Trade and other payables consists of the following: March 31, 2019 December 31, 2018 Trade Payables $ 1,147,529 $ 686,578 Accrued Expenses 869,142 1,227,172 Deferred Compensation 59,750 59,750 $ 2,076,421 $ 1,973,500 |
Share-based Payments (Tables)
Share-based Payments (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Summary of Stock Options Activity | The following table summarizes the option activities for the three months ended March 31, 2019: Weighted Weighted Weighted Average Average Average Remaining Aggregate Number of Exercise Grant Date Contractual Intrinsic Shares Price Fair Value Term (years) Value Balance at December 31, 2018 10,502 $ 30.41 $ 17.42 1.43 $ - Granted - - - - - Exercised - - - - - Forfeited (3,625 ) 29.02 22.40 - - Canceled/Expired - - - - - Balance at March 31, 2019 6,877 $ 31.14 $ 14.80 1.14 $ - Exercisable as of March 31, 2019 6,877 $ 31.14 $ 14.80 1.14 $ - |
Summary of Restricted Stock Units Activity | A summary of activity related to RSUs for the three months ended March 31, 2019 is presented below: Weighted Average Number of Grant Date RSUs Fair Value Balance at December 31, 2018 - $ - Granted 374,481 $ 0.97 Exercised - - Forfeited - - Canceled/Expired - - Balance at March 31, 2019 374,481 $ 0.97 Exercisable as of March 31, 2019 - - |
Summary of Warrant Activity | The table below summarizes the warrant activity for the year ended March 31, 2019: Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Warrants Price Term (years) Value Balance at December 31, 2018 2,110,737 $ 3.10 4.21 $ - Granted - - - - Exercised - - - - Forfeited - - - - Canceled/Expired - - - - Balance at March 31, 2019 2,110,737 $ 3.10 3.96 $ - Exercisable as of March 31, 2019 2,110,737 $ 3.10 3.96 $ - |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Lease Commitments | The schedule of lease commitments is as follows: Thorofare Pitman Equipment Lease Lease Lease Total Next 9 Months $ 99,000 $ 29,736 $ 4,617 $ 133,353 |
Revenue Information (Tables)
Revenue Information (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
Schedule of Revenue by Product Lines | Revenue by product lines was as follows: Three Months Ended March 31, Product Line 2019 2018 MicroParticle Catalyzed Biosensor (“MPC”) $ 23,320 $ 18,950 Particle ImmunoFiltration Assay (“PIFA”) 576,317 259,983 Rapid Enzymatic Assay (“REA”) - 9,900 Other 12,486 13,642 Total Revenue $ 612,123 $ 302,475 |
Schedule of Revenue by Geographic Area Determined Based On Location of Customers | The total revenue by geographic area determined based on the location of the customers was as follows: Three Months Ended March 31, Geographic Region 2019 2018 United States $ 612,123 $ 294,733 Rest of World - 7,742 Total Revenue $ 612,123 $ 302,475 |
Significant Accounting Polici_4
Significant Accounting Policies (Details Narrative) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2019USD ($)Breathalyzersshares | Mar. 31, 2018USD ($)Breathalyzersshares | Dec. 31, 2018USD ($)Breathalyzers | |
Restricted cash | $ 480,000 | $ 500,000 | |
Maturities of securities | less than one year | ||
Unrealized gain on securities | $ 29,343 | ||
Unrealized loss on securities | $ 16,843 | ||
Marketable securities, loss | (3,718) | 0 | |
Allowances for doubtful accounts for trade receivables | 611,082 | 606,835 | |
Bad debt expenses | 4,247 | 0 | |
Trade receivables | 324,524 | 176,326 | |
Depreciation expense | 5,435 | 13,675 | |
Intangible assets, net | 233,409 | 243,411 | |
Amortization expense | 10,002 | 42,777 | |
Accrued liabilities | 19,504 | 23,179 | |
Rebates recognized during period | $ 8,698 | 37,544 | |
Income tax examination, likelihood percentage | The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely to be realized upon settlement. | ||
Unrecognized tax benefits | |||
Income tax benefit | |||
Accrued for penalties and interest | |||
Product cost of sales | 245,937 | 297,500 | |
Cost of net revenue | 11,919 | 26,944 | |
Net loss attributable to common shareholders | $ 916,958 | $ 1,859,991 | |
Weighted average basic and diluted common shares outstanding | shares | 12,483,209 | 8,956,279 | |
Shipping and Handling [Member] | |||
Product cost of sales | $ 12,486 | $ 13,641 | |
Patents, Trademarks and Customer Lists [Member] | |||
Intangible assets, net | 3,897,635 | ||
Intangible assets, accumulated amortization | $ 3,664,226 | ||
Sales Revenue, Net [Member] | |||
Concentration risk percentage | 89.00% | ||
Concentration risk, number of customer | Breathalyzers | 2 | 1 | |
Sales Revenue, Net [Member] | Customer One [Member] | |||
Concentration risk percentage | 45.00% | ||
Sales Revenue, Net [Member] | Customer Two [Member] | |||
Concentration risk percentage | 44.00% | ||
Trade Receivable [Member] | |||
Concentration risk percentage | 80.00% | 73.00% | |
Concentration risk, number of customer | Breathalyzers | 3 | 2 | |
Trade Receivable [Member] | Customer One [Member] | |||
Concentration risk percentage | 49.00% | 59.00% | |
Trade receivables | $ 458,902 | $ 458,902 | |
Trade Receivable [Member] | Customer Two [Member] | |||
Concentration risk percentage | 17.00% | 14.00% | |
Trade receivables | $ 156,988 | $ 111,037 | |
Trade Receivable [Member] | Customer Three [Member] | |||
Concentration risk percentage | 14.00% | ||
Trade receivables | $ 137,102 | ||
Cost of Goods [Member] | |||
Concentration risk percentage | 44.00% | ||
Concentration risk, number of supplier | Breathalyzers | 2 | 1 | |
Cost of Goods [Member] | Supplier One [Member] | |||
Concentration risk percentage | 31.00% | ||
Cost of Goods [Member] | Supplier Two [Member] | |||
Concentration risk percentage | 13.00% | ||
Trade Payables [Member] | Two Vendors [Member] | |||
Concentration risk percentage | 51.00% | ||
Concentration risk, number of supplier | Breathalyzers | 2 | ||
Trade Payables [Member] | One Vendor [Member] | |||
Concentration risk percentage | 10.00% | ||
Concentration risk, number of supplier | Breathalyzers | 1 | ||
Minimum [Member] | |||
Normal credit terms extended to customers | 30 days | ||
Minimum [Member] | Sales Revenue, Net [Member] | One Customer [Member] | |||
Concentration risk percentage | 10.00% | ||
Minimum [Member] | Cost of Goods [Member] | One Supplier [Member] | |||
Concentration risk percentage | 10.00% | ||
Maximum [Member] | |||
Normal credit terms extended to customers | 90 days |
Significant Accounting Polici_5
Significant Accounting Policies - Schedule of Marketable Securities (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Level 1 [Member] | ||
Marketable securities | ||
Level 2 [Member] | ||
Marketable securities | 4,477,525 | 5,272,998 |
Level 3 [Member] | ||
Marketable securities |
Significant Accounting Polici_6
Significant Accounting Policies - Schedule of Future Amortization Expense of Intangible Assets (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Accounting Policies [Abstract] | ||
2019 (nine months) | $ 30,006 | |
2020 | 40,008 | |
2021 | 40,008 | |
2022 | 40,008 | |
2023 | 40,008 | |
Thereafter | 43,371 | |
Intangible assets, net | $ 233,409 | $ 243,411 |
Significant Accounting Polici_7
Significant Accounting Policies - Schedule of Anti-dilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Total potentially dilutive shares | 2,492,095 | 2,406,688 |
Stock Options [Member] | ||
Total potentially dilutive shares | 6,877 | 31,875 |
Restricted Stock Units (RSUs) [Member] | ||
Total potentially dilutive shares | 374,481 | |
Warrants [Member] | ||
Total potentially dilutive shares | 2,110,737 | 2,374,813 |
Recent Developments and Manag_2
Recent Developments and Management's Plans (Details Narrative) - May 14, 2019 [Member] | Mar. 31, 2019USD ($)$ / shares |
Nasdaq minimum bid price requirement | $ / shares | $ 1 |
Cash and marketable securities | $ 4,220,000 |
Restricted cash | 480,000 |
Working capital | $ 3,670,000 |
Inventories (Details Narrative)
Inventories (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Inventory Disclosure [Abstract] | ||
Cost of goods sold for obsolete inventory | $ 24,460 |
Inventories - Schedule of Inven
Inventories - Schedule of Inventories (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Raw Materials | $ 489,330 | $ 542,761 |
Sub-Assemblies | 737,805 | 711,181 |
Finished Goods | 608,610 | 635,565 |
Reserve for Obsolescence | (1,234,445) | (1,304,240) |
Total Inventory, Net | $ 601,300 | $ 585,267 |
Trade and Other Payables - Sche
Trade and Other Payables - Schedule of Trade and Other Payables (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Payables and Accruals [Abstract] | ||
Trade Payables | $ 1,147,529 | $ 686,578 |
Accrued Expenses | 869,142 | 1,227,172 |
Deferred Compensation | 59,750 | 59,750 |
Trade and Other Payables, Total | $ 2,076,421 | $ 1,973,500 |
Share-based Payments (Details N
Share-based Payments (Details Narrative) - USD ($) | Mar. 29, 2019 | Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Dec. 07, 2018 | Aug. 07, 2017 | Jan. 23, 2014 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Closing stock price of common stock | $ 0.97 | ||||||
Stock options expenses | $ 2,712 | ||||||
Warrants [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Closing stock price of common stock | $ 0.97 | ||||||
Restricted Stock Units (RSUs) [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Grant date fair value | $ 0.97 | ||||||
Restricted stock unit expense | $ 3,906 | ||||||
Restricted Stock Units (RSUs) [Member] | Three Directors [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of shares authorized during period | 124,827 | ||||||
Grant date fair value | $ 0.97 | ||||||
Unamortized value | $ 359,341 | ||||||
Weighted average period | 10 months | ||||||
2013 Stock Incentive Plan [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of shares authorized during period | 103,750 | ||||||
Amended Plan [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of available for grants | 29,347 | ||||||
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 | 74,403 | ||||||
2017 Stock Incentive Plan [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of shares authorized during period | 168,750 | ||||||
Number of available for grants | 117,718 | ||||||
2017 Stock Incentive 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 | 51,032 | ||||||
2018 Stock Incentive Plan [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of shares authorized during period | 1,875,000 | ||||||
Number of available for grants | 1,500,519 | ||||||
2018 Stock Incentive 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 | 374,481 |
Share-based Payments - Summary
Share-based Payments - Summary of Stock Options Activity (Details) | 3 Months Ended |
Mar. 31, 2019USD ($)$ / sharesshares | |
Share-based Payment Arrangement [Abstract] | |
Number of Shares, Beginning Balance | shares | 10,502 |
Number of Shares, Granted | shares | |
Number of Shares, Exercised | shares | |
Number of Shares, Forfeited | shares | (3,625) |
Number of Shares, Cancelled/Expired | shares | |
Number of Shares, Ending Balance | shares | 6,877 |
Number of Shares, Exercisable | shares | 6,877 |
Weighted Average Exercise Price, Beginning Balance | $ 30.41 |
Weighted Average Exercise Price, Granted | |
Weighted Average Exercise Price, Exercised | |
Weighted Average Exercise Price, Forfeited | 29.02 |
Weighted Average Exercise Price, Cancelled/Expired | |
Weighted Average Exercise Price, Ending Balance | 31.14 |
Weighted Average Exercise Price, Exercisable | 31.14 |
Weighted Average Grant Date Fair Value, Beginning | 17.42 |
Weighted Average Grant Date Fair Value, Granted | |
Weighted Average Grant Date Fair Value, Exercised | |
Weighted Average Grant Date Fair Value, Forfeited | 22.40 |
Weighted Average Grant Date Fair Value, Cancelled/Expired | |
Weighted Average Grant Date Fair Value, Ending | 14.80 |
Weighted Average Grant Date Fair Value, Exercisable | $ 14.80 |
Weighted Average Remaining Contractual Term (Years), Beginning | 1 year 5 months 5 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 | 0 years |
Weighted Average Remaining Contractual Term (Years), Cancelled/Expired | 0 years |
Weighted Average Remaining Contractual Term (Years), Ending | 1 year 1 month 20 days |
Weighted Average Remaining Contractual Term (Years), Exercisable | 1 year 1 month 20 days |
Aggregate Intrinsic Value, Beginning Balance | $ | |
Aggregate Intrinsic Value, Ending Balance | $ | |
Aggregate Intrinsic Value, Exercisable | $ |
Share-based Payments - Summar_2
Share-based Payments - Summary of Restricted Stock Units Activity (Details) - Restricted Stock Units (RSUs) [Member] | 3 Months Ended |
Mar. 31, 2019$ / sharesshares | |
Number of RSUs, Beginning Balance | shares | |
Number of RSUs, Granted | shares | 374,481 |
Number of RSUs, Exercised | shares | |
Number of RSUs, Forfeited | shares | |
Number of RSUs, Cancelled/Expired | shares | |
Number of RSUs, Ending Balance | shares | 374,481 |
Number of RSUs, Exercisable | shares | |
Weighted Average Grant Date Fair Value, Beginning Balance | $ / shares | |
Weighted Average Grant Date Fair Value, Granted | $ / shares | 0.97 |
Weighted Average Grant Date Fair Value, Exercised | $ / shares | |
Weighted Average Grant Date Fair Value, Forfeited | $ / shares | |
Weighted Average Grant Date Fair Value, Cancelled/Expired | $ / shares | |
Weighted Average Grant Date Fair Value, Ending Balance | $ / shares | 0.97 |
Weighted Average Grant Date Fair Value, Exercisable | $ / shares |
Share-based Payments - Summar_3
Share-based Payments - Summary of Warrant Activity (Details) - Warrants [Member] | 3 Months Ended |
Mar. 31, 2019USD ($)$ / sharesshares | |
Number of Warrants, Beginning Balance | shares | 2,110,737 |
Number of Warrants, Granted | shares | |
Number of Warrants, Exercised | shares | |
Number of Warrants, Forfeited | shares | |
Number of Warrants, Cancelled/Expired | shares | |
Number of Warrants, Ending Balance | shares | 2,110,737 |
Number of Warrants, Exercisable | shares | 2,110,737 |
Weighted Average Exercise Price, Beginning Balance | $ / shares | $ 3.10 |
Weighted Average Exercise Price, Granted | $ / shares | |
Weighted Average Exercise Price, Exercised | $ / shares | |
Weighted Average Exercise Price, Forfeited | $ / shares | |
Weighted Average Exercise Price, Cancelled/Expired | $ / shares | |
Weighted Average Exercise Price, Ending Balance | $ / shares | 3.10 |
Weighted Average Exercise Price, Exercisable | $ / shares | $ 3.10 |
Weighted Average Remaining Contractual Term (years), Beginning | 4 years 2 months 16 days |
Weighted Average Remaining Contractual Term (years), Ending | 3 years 11 months 15 days |
Weighted Average Remaining Contractual Term (years), Exercisable | 3 years 11 months 15 days |
Aggregate Intrinsic Value, Beginning | $ | |
Aggregate Intrinsic Value, Ending | $ | |
Aggregate Intrinsic Value, Exercisable | $ |
Equity (Details Narrative)
Equity (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Trade and other payables | $ 2,076,421 | $ 1,973,500 | |
Share based compensation expense | 11,636 | ||
Mr. Yeaton [Member] | Employment Agreement [Member] | |||
Number of common stock issued | 15,000 | ||
Fair value of shares based on share price on date of grant | 15,874 | ||
Trade and other payables | $ 4,238 | ||
Share based compensation expense | $ 11,636 |
Commitments and Contingencies_2
Commitments and Contingencies (Details Narrative) - USD ($) | Mar. 08, 2019 | Jan. 14, 2019 | Nov. 15, 2018 | Sep. 29, 2014 | Jan. 07, 2013 | Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Sep. 24, 2014 |
Royalty expenses | $ 31,284 | $ 31,689 | |||||||
ChubeWorkx [Member] | |||||||||
Royalty expenses | 15,642 | ||||||||
Thorofare Lease [Member] | |||||||||
Operating lease with annual rentals including common area maintenance | 132,000 | ||||||||
Lease agreement, extended term | 7 years | ||||||||
Lease agreement, expiration date | Dec. 31, 2019 | ||||||||
Rent expense | 41,365 | 42,218 | |||||||
Pitman Lease [Member] | |||||||||
Operating lease with annual rentals including common area maintenance | 40,839 | ||||||||
Rent expense | $ 6,156 | $ 10,210 | $ 9,913 | ||||||
Lease, term of agreement | 29 months | 60 months | |||||||
Lease agreement, term description | The lease took effect on August 1, 2017 and runs through December 31, 2019. | ||||||||
Security deposit | $ 4,950 | ||||||||
Settlement Agreement [Member] | |||||||||
Settlement agreed amount | $ 2,250,000 | ||||||||
Insurance coverage amount | 500,000 | ||||||||
Loss Contingency, Damages Sought, Value | $ 500,000 | ||||||||
Settlement Agreement [Member] | Watts Action [Member] | |||||||||
Payment of attorney' fees | $ 200,000 | ||||||||
Settlement Agreement [Member] | ChubeWorkx [Member] | |||||||||
Percentage of royalty received | 5.00% | ||||||||
Percentage of royalty retain | 50.00% | ||||||||
Due to related parties owned | $ 549,609 | ||||||||
Settlement Agreement [Member] | ChubeWorkx [Member] | Royalty [Member] | |||||||||
Royalty revenue | $ 5,000,000 | ||||||||
Marketing Contract [Member] | |||||||||
Allegations, description | On November 15, 2018, Typenex Medical LLC ("Typenex"), a telemarketing entity with whom the Company had entered into a marketing and commission agreement dated September 30, 2016 (the "Marketing Contract"), filed an arbitration against the Company before JAMS ADR (the "Arbitration"), and an arbiter was appointed to the Arbitration on December 14, 2018. In the Arbitration, Typenex has stated that it seeks "at least" $220,500 based on the allegation that the Marketing Contract entitles Typenex to a commission on sales of certain of the Company's heparin-related products in the period two years from the Marketing Contract's expiration | ||||||||
Marketing Contract [Member] | Minimum [Member] | |||||||||
Loss Contingency, Damages Sought, Value | $ 220,500 |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Lease Commitments (Details) | Mar. 31, 2019USD ($) |
Lease commitments, Next 9 Months | $ 133,353 |
Thorofare Lease [Member] | |
Lease commitments, Next 9 Months | 99,000 |
Pitman Lease [Member] | |
Lease commitments, Next 9 Months | 29,736 |
Equipment Operating Lease [Member] | |
Lease commitments, Next 9 Months | $ 4,617 |
Related Parties (Details Narrat
Related Parties (Details Narrative) - Financial Consulting Strategies LLC [Member] | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Paid to related party | $ 23,506 |
Trade and other payables - related Party | $ 52,913 |
Revenue Information (Details Na
Revenue Information (Details Narrative) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
People's Republic of China [Member] | ||
Long-lived assets | $ 14,760 | $ 74,339 |
United States [Member] | ||
Long-lived assets | $ 296,670 | $ 1,272,816 |
Revenue Information - Schedule
Revenue Information - Schedule of Revenue by Product Lines (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Total product Revenues | $ 612,123 | $ 302,475 |
MicroParticle Catalyzed Biosensor ("MPC") [Member] | ||
Total product Revenues | 23,320 | 18,950 |
Particle ImmunoFiltration Assay ("PIFA") [Member] | ||
Total product Revenues | 576,317 | 259,983 |
Rapid Enzymatic Assay ("REA") [Member] | ||
Total product Revenues | 9,900 | |
Other [Member] | ||
Total product Revenues | $ 12,486 | $ 13,642 |
Revenue Information - Schedul_2
Revenue Information - Schedule of Revenue by Geographic Area Determined Based On Location of Customers (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Total Revenues | $ 612,123 | $ 302,475 |
United States [Member] | ||
Total Revenues | 612,123 | 294,733 |
Rest of World [Member] | ||
Total Revenues | $ 7,742 |
Employee Benefit Plan (Details
Employee Benefit Plan (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Percentage of matching contribution | 100.00% | |
Percentage of employers contribution based upon employee's pay | 3.00% | |
Employer contribution amount | $ 9,464 | $ 13,802 |
401 K Plan Matches 50% [Member] | ||
Percentage of matching contribution | 50.00% | |
Percentage of employers contribution based upon employee's pay | 3.00% | |
401 K Plan Maximum 5% [Member] | ||
Percentage of matching contribution | ||
Percentage of employers contribution based upon employee's pay | 5.00% |