Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Aug. 13, 2018 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | NEXEON MEDSYSTEMS INC | |
Entity Central Index Key | 1,416,172 | |
Trading Symbol | NXNN | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Type | 10-Q | |
Document Fiscal Period Focus | Q2 | |
Document Period End Date | Jun. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 1,965,646 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Current Assets | ||
Cash and cash equivalents | $ 342,121 | $ 883,962 |
Accounts receivable | 1,532,982 | 1,877,743 |
Grants receivable | 1,182,722 | 804,152 |
Inventory | 2,155,844 | 2,206,570 |
Other current assets | 106,221 | 157,621 |
Total Current Assets | 5,319,890 | 5,930,048 |
Property, plant and equipment, net | 3,506,406 | 3,569,832 |
Investments | 112,072 | 112,072 |
Intangible assets, net | 10,135,368 | 10,739,492 |
Total Assets | 19,073,736 | 20,351,444 |
Current Liabilities | ||
Accounts payable | 2,443,899 | 2,575,399 |
Accrued liabilities | 1,356,468 | 503,751 |
Current portion of long-term debt, net of original discount | 1,483,637 | 866,479 |
Advance grant payments | 568,858 | 935,817 |
Deferred liabilities | 181,067 | 174,230 |
Accrued interest | 74,612 | 78,049 |
Total Current Liabilities | 6,108,541 | 5,133,725 |
Long-term debt, net of original discount | 2,586,691 | 3,348,730 |
Total Liabilities | 8,695,232 | 8,482,455 |
Stockholders' Equity | ||
Common stock - 75,000,000 shares authorized, $.001 par value; 1,965,646 and 1,970,915 issued and outstanding at June 30, 2018 and December 31, 2017, respectively | 1,966 | 1,971 |
Additional paid-in capital | 15,743,360 | 15,523,606 |
Equity instruments to be issued | 65,839 | 65,839 |
Accumulated deficit | (5,419,115) | (3,743,438) |
Accumulated other comprehensive income (loss) | (13,546) | 21,011 |
Total Stockholders' Equity | 10,378,504 | 11,868,989 |
Total Liabilities and Stockholders' Equity | $ 19,073,736 | $ 20,351,444 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) (Unaudited) - $ / shares | Jun. 30, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 75,000,000 | 75,000,000 |
Common stock, shares issued | 1,965,646 | 1,970,915 |
Common stock, shares outstanding | 1,965,646 | 1,970,915 |
Consolidated Statements of Comp
Consolidated Statements of Comprensive Income (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Statements of Operations [Abstract] | ||||
Revenues | $ 2,819,164 | $ 106,196 | $ 5,689,198 | $ 115,234 |
Cost of revenue | 2,015,515 | 47,195 | 3,842,094 | 47,195 |
Gross profit | 803,649 | 59,001 | 1,847,104 | 68,039 |
Selling, general, and administrative expenses | 1,199,508 | 464,609 | 2,156,688 | 1,134,970 |
Research and development expenses | 687,579 | 621,034 | 1,206,838 | 1,302,884 |
Depreciation and amortization | 364,816 | 300,147 | 731,973 | 598,072 |
(Loss) from operations | (1,448,254) | (1,326,789) | (2,248,395) | (2,967,887) |
Other Income (Expense) | ||||
Interest income - related party | 614 | 1,954 | ||
Interest expense | (76,000) | (1,443) | (157,996) | (2,955) |
Loss on stock exchange | (37,788) | |||
Write-off of loan to related party | (167,262) | (167,262) | ||
Gain on sale of patent | 160,000 | 160,000 | ||
Loss before provision (benefit) for taxes | (1,364,254) | (1,494,880) | (2,246,391) | (3,173,938) |
Provision (benefit) for taxes | (638,246) | (570,714) | ||
Net (loss) | (726,008) | (1,494,880) | (1,675,677) | (3,173,938) |
Other comprehensive income | ||||
Foreign currency translation adjustment | (33,593) | (40,174) | (34,557) | (104,405) |
Comprehensive loss | $ (759,601) | $ (1,535,054) | $ (1,710,234) | $ (3,278,343) |
BASIC AND DILUTED PER SHARE DATA: | ||||
Net Loss per common share, basic and diluted | $ (0.37) | $ (0.88) | $ (0.85) | $ (1.94) |
Weighted average common shares outstanding, basic and diluted | 1,972,189 | 1,703,883 | 1,971,790 | 1,635,246 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net Loss | $ (1,675,677) | $ (3,173,938) |
Adjustment to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 731,973 | 598,070 |
Stock-based compensation | 379,749 | 540,775 |
Loss on exchange for stock | 37,788 | |
Gain on sale of patent | (160,000) | |
Loss on write-off of loan receivable | 167,262 | |
Non-cash interest | 68,567 | |
Change in operating assets and liabilities: | ||
Accounts receivable | 303,450 | 4,615 |
Grants receivable | (392,108) | (935,343) |
Inventory | (10,576) | (10,493) |
Other current asset | 50,377 | (78,435) |
Accounts payable | (95,755) | 252,858 |
Accrued interest receivable - related party | (1,370) | |
Accrued liabilities | 924,278 | (36,442) |
Advance grant payments | (369,255) | (122,708) |
Accrued interest payable | (3,437) | 595 |
Deferred liabilities | (35,458) | (12,492) |
Net cash provided by (used in) operating activities | (283,872) | (2,769,258) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Issuance of notes receivable - related party | (56,051) | |
Additions to property plant and equipment | (60,121) | (10,724) |
Net cash used in investing activities | (60,121) | (66,775) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from issuance of Common stock | 990,936 | |
Proceeds from debt | 362,459 | 2,688 |
Repayment to related party | 32,527 | |
Repayment of debt | (557,315) | (20,334) |
Repayment to related party | (415) | |
Net cash provided by (used in) financing activities | (194,856) | 1,005,402 |
Effects of exchange rate changes on cash | (2,992) | 6,304 |
Net increase (decrease) in cash and cash equivalents | (541,841) | (1,824,327) |
Cash and cash equivalents at beginning of year | 883,962 | 2,124,795 |
Cash and cash equivalents at end of year | 342,121 | 300,468 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Cash paid during period for interest | 89,429 | $ 2,360 |
Cash paid during period for taxes | 3,452 | |
SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES: | ||
Redemption of stock for patent sale | $ 160,000 |
Business - Nature or Organizati
Business - Nature or Organization | 6 Months Ended |
Jun. 30, 2018 | |
Business - Nature or Organization [Abstract] | |
BUSINESS - NATURE OR ORGANIZATION | NOTE 1 – BUSINESS – NATURE OR ORGANIZATION Unless the context otherwise requires, references to “we,” “our,” “us,” “Nexeon,” or the “Company” in these Notes mean Nexeon MedSystems Inc, a Nevada corporation, on a consolidated basis with its wholly owned subsidiaries, as applicable. Organization and Operations Nexeon MedSystems Inc was incorporated in the State of Nevada on December 7, 2015. Nexeon MedSystems Inc is a neuromodulation medical device manufacturing company. As a development-stage enterprise, the Company’s primary purpose is to develop and commercialize its neurostimulation technology platform for the treatment of various disorders via electrical stimulation of tissues associated with the nervous system. The neurostimulation technology platform was acquired through the acquisition of Nexeon MedSystems Belgium, SPRL (“NMB”). During 2016, the Company formed the following wholly owned subsidiaries: Nexeon MedSystems Europe, SARL (“Nexeon Europe”), Nexeon MedSystems Puerto Rico Operating Company Corporation (“NXPROC”), and Pulsus Medical LLC. Nexeon Europe is the holding company for NXPROC and Nexeon MedSystems Belgium, SPRL (“NMB”). NXPROC is focused on advanced computational biology and deep learning utilization associated with the Internet of Medical Things technology. Pulsus Medical, LLC conducts research and development related to cardiovascular disease technology acquired in its merger with Nexeon MedSystems, Inc., a private Delaware corporation (“NXDE”). On September 1, 2017, through its wholly owned subsidiary Nexeon Europe, the Company completed the acquisition of NMB, along with NMB’s wholly owned subsidiaries Medi-Line, S.A. (“Medi-Line”) and its holding company INGEST, SPRL (“INGEST”), which are incorporated under the laws of Belgium. INGEST is the holding company for Medi-Line. The Company believes Medi-Line provides the medical device manufacturing expertise and experience needed to scale its business. Medi-Line is a leading global source of innovative medical device solutions, with existing customers that include Fortune 50 companies and neurostimulator companies. On September 27, 2017 Nexeon MedSystems Inc began trading on the OTCQB platform under the symbol “NXNN”. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2018 | |
Summary of Significant Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited consolidated financial statements include the accounts of Nexeon MedSystems Inc and its wholly owned subsidiaries NXPROC, Nexeon Europe, Pulsus Medical, LLC, and NMB as of June 30, 2018 and December 31, 2017, and for the three and six months ended June 30, 2018 and 2017. The financial statements include the accounts of Medi-Line and INGEST as of June 30, 2018 and December 31, 2017 and for the three and six months ended June 30, 2018. The Company’s unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial statements, and with the instructions for Form 10-Q and Article 10 of Regulation S-X of the United States Securities and Exchange Commission (“SEC”). Accordingly, they do not contain all information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements. These unaudited consolidated financial statements should be read in conjunction with the audited financial statements of the Company, and related notes thereto, which are included in the Company’s Annual Report on Form 10-K as of and for the year ended December 31, 2017. In the opinion of the Company’s management, the accompanying unaudited financial statements contain all the adjustments necessary (consisting only of normal recurring accruals) to present the financial position of the Company as of June 30, 2018, and the results of operations and cash flows for the periods presented. The results of operations for interim periods are not necessarily indicative of the operating results for the full fiscal year or any future period. All significant intercompany accounts and transactions have been eliminated in consolidation. Management Estimates and Assumptions The preparation of the Company’s financial statements are in conformity with accounting principles generally accepted in the United States of America, which require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made; however, actual results could differ materially from these estimates. Cash and Cash Equivalents The Company considers those short-term, highly liquid investments with maturities of three months or less as cash and cash equivalents. The Company currently has no cash equivalents. Long-Lived Assets Long-lived assets such as property, equipment, and identifiable intangibles are reviewed for impairment whenever facts and circumstances indicate that the carrying value may not be recoverable. When required, impairment losses on assets to be held and used are recognized based on the fair value of the assets. The fair value is determined based on estimates of future cash flows, market value of similar assets, if available, or independent appraisals, if required. If the carrying amount of the long-lived asset is not recoverable from its undiscounted cash flows, an impairment loss is recognized for the difference between the carrying amount and fair value of the asset. When fair values are not available, the Company estimates fair value using the expected future cash flows discounted at a rate commensurate with the risk associated with the recovery of the assets. Property and Equipment Property and equipment are stated at cost. Equipment is depreciated using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are amortized based upon the lesser of the term of the lease or the useful life of the asset, and such expense is included in depreciation expense. Repair and maintenance costs are expensed as incurred. The Company capitalizes all furniture and equipment with cost greater than $1,000 and benefiting more than one accounting period in the period purchased. Inventories The value of inventories, comprised solely of finished goods, are stated at the lesser of net realizable value or cost, determined using the first-in, first-out (“FIFO”) method. To value inventory, management must estimate excess or obsolete inventory, as well as inventory that is not of saleable quality. This valuation involves an inherent level of risk and uncertainty due to the unpredictability of trends in the industry and customer demand for the Company’s products. In assessing the ultimate realization of inventories, management must make judgments as to future demand requirements, and compare those with the current or committed inventory levels. Reserve requirements generally increase as demand decreases due to market conditions and technological and product life-cycle changes. Write-downs of excess and obsolete inventories were $0 and $0 in the six months ended June 30, 2018 and 2017, respectively. Future events and variations in valuation methods or assumptions may cause significant fluctuations in this estimate, and could have a material impact on the Company’s results. Net Income (Loss) Per Share The Company calculates net income (loss) per share as required by Accounting Standards Codification subtopic 260-10, “ Earnings per Share” Revenue Recognition Revenues currently consist of single-use medical devices for the medical and pharmaceutical sectors at Medi-Line and pre-clinical neurostimulation device sales at NMB. In May 2014, the FASB issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes all existing revenue recognition requirements, including most industry specific guidance. This new standard requires a company to recognize revenues when it transfers goods or services to customers in an amount that reflects the consideration that the company expects to receive for those goods or services. The FASB subsequently issued the following amendments to ASU No. 2014-09 that have the same effective date and transition date: ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations; ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing; ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients; and ASU No. 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers. The Company adopted these amendments with ASU 2014-09 (collectively, the new revenue standards). The new revenue standards became effective for the Company on January 1, 2018, and were adopted using the modified retrospective method. The adoption of the new revenue standards as of January 1, 2018 did not change the Company’s revenue recognition as the majority of its revenues continue to be recognized when the customer takes control of its product. As the Company did not identify any accounting changes that impacted the amount of reported revenues with respect to its product revenues, no adjustment to retained earnings was required upon adoption. Under the new revenue standards, the Company recognizes revenues when its customer obtains control of promised goods or services, in an amount that reflects the consideration which it expects to receive in exchange for those goods. The Company recognizes revenues following the five-step model prescribed under ASU No. 2014-09: (i) identify contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenues when (or as) we satisfy the performance obligation. Revenues from product sales are recognized when the customer obtains control of the Company’s product, which occurs at a point in time, typically upon delivery to the customer. The Company expenses incremental costs of obtaining a contract as and when incurred if the expected amortization period of the asset that it would have recognized is one year or less or the amount is immaterial. Income Taxes The Company uses the asset and liability method of accounting for income taxes in accordance with ASC Topic 740, “Income Taxes.” ASC Topic 740.10.30 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements, and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740.10.40 provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. The Company has no material uncertain tax positions for any of the reporting periods presented. All tax positions are first analyzed to determine if the weight of available evidence indicates that it is more likely than not that the position will be sustained under audit, including resolution of any related appeals or litigation processes. After the initial analysis, the tax benefit is measured as the largest amount that is more than 50% likely of being realized upon ultimate settlement. If the Company is required to pay interest on the underpayment of income taxes, the Company recognizes interest expense in the first period the interest becomes due according to the provisions of the relevant tax law. If the Company is subject to payment of penalties, the Company recognizes an expense for the amount of the statutory penalty in the period when the position is taken on the income tax return. If the penalty was not recognized in the period when the position was initially taken, the expense is recognized in the period when the Company changes its judgment about meeting minimum statutory thresholds related to the initial position taken. Research and Development Expenses Research and development expenses are charges to expense as incurred. Research and development expenses include, but are not limited to, product development, clinical and regulatory expenses, payroll and other personnel expenses, materials, supplies, consulting costs, and non-recurring engineering costs. These expenses are assigned to the research, development, and clinical projects to develop the Company’s implantable neurostimulation, sensing, and recording technology for a variety of clinical therapeutic applications, and for manufacturing product development. The Company has been awarded grants subsidies for ongoing research and development projects from the National Institutes of Health Department of Health and Human Services, through the Public Service of Wallonia - Department of Technology Development and the Research Programs Department (the Wallonia region is located in South Brussels, in Belgium), and the Cancer Prevention and Research Institute of Texas to support our research projects with potential for commercialization. The Company receives the funding in a combination of advance payments at commencement of a project and through reimbursement requests. Invoices for applicable research, and development expenses as expenses are incurred. These grants and subsidies provide non-dilutive funds that do not include a repayment obligation. Participation by the granting agency typically accounts for 50% to 100% of the project costs in grants or subsidies. The Company recognizes the amounts receivable in regard to the grants contracts at fair value when there is reasonable assurance that the contract amount will be received and that all the conditions of the specific contract will be complied with in order to properly match the reimbursements with the specific expenditures that the specific contract intends to reimburse. The Company recognizes the amounts received in accordance with the contracts as a reduction of research and development expenses over the periods necessary to match the contract on a systematic basis to the costs that it is intended to compensate. The Company records, on the balance sheet, grants receivable (upon meeting the criteria discussed above) until cash is received. Where the Company receives payments in advance, it is recorded as advance grant payments on the balance sheet, and relieved against research and development expense as the associated costs are incurred. As of June 30, 2018, the Company has $1,182,722 in grants receivable for project expenses invoiced and to be invoiced, but not yet paid, which have been recorded as a reduction of research and development expense in the accompanying statement of operations, and $568,858 in advance payments received and yet to be expended. Foreign Currency Translation and Transactions The Company’s reporting currency is the U.S. dollar. The Company’s operations in Belgium use their local currencies as their functional currency. The financial statements in foreign currency are translated into U.S. Dollars (“USD”) in accordance with ASC Topic 830, Foreign Currency Translation. All assets and liabilities are translated at the period-end currency exchange rate. Stockholders’ equity items are translated at the historical rates, and income statement items are translated at the average exchange rate prevailing during the period. Translation adjustments resulting from this process are reported under other comprehensive income (“OCI”) in accordance with ASC Topic 220, Reporting Comprehensive Income as a Component of Stockholders’ Equity. Foreign exchange transaction gains and losses are reflected in the statement of comprehensive income. Fair Value Measurements The Company adopted the provisions of ASC Topic 820, “Fair Value Measurements and Disclosures,” The estimated fair value of certain financial instruments, including cash and cash equivalents, are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments. ASC 820 defines “fair value” as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value: Level 1 — Quoted prices in active markets for identical assets or liabilities Level 2 — Quoted prices for similar assets and liabilities in active markets, or inputs that are observable Level 3 — Inputs that are unobservable (for example, cash flow modeling inputs based on assumptions) The Company currently has no assets or liabilities valued at fair value on a recurring basis. Investments in Non-Consolidated Subsidiaries Investments in non-consolidated entities are accounted for using the equity method or cost basis, depending upon the level of ownership and/or the Company's ability to exercise significant influence over the operating and financial policies of the investee. When the equity method is used, investments are recorded at original cost, and adjusted periodically to recognize the Company's proportionate share of the investees' net income or losses after the date of investment. When net losses from an investment accounted for under the equity method exceed its carrying amount, the investment balance is reduced to zero and additional losses are not provided for. The Company resumes accounting for the investment under the equity method if the entity subsequently reports net income and the Company's share of that net income exceeds the share of net losses not recognized during the period the equity method was suspended. Investments are written down only when there is clear evidence that a decline in value that is other than temporary has occurred. The Company accounts for its investment in MicroTransponder, Inc. under the cost method due to the lack of significant influence. Leases Leases are reviewed and classified as capital or operating at their inception in accordance with ASC Topic 840, Accounting for Leases. For leases that contain rent escalations, the Company records monthly rent expense equal to the total amount of the payments due in the reporting period over the lease term. The difference between rent expense recorded and the amount paid is credited or charged to deferred rent account when presented on balance sheet. Acquired Intangibles Acquired intangibles include patents, patent licenses, trade secrets and know-how, and customer relationships acquired by the Company, which are recorded at fair value and are assigned an estimated useful life, and amortized on a straight-line basis over their estimated useful lives (ranging from 3 to 19 years) for assets with definitive lives. The Company periodically evaluates whether current facts or circumstances indicate that the carrying values of its acquired intangibles may not be recoverable. If such circumstances are determined to exist, an estimate of the undiscounted future cash flows of these assets, or appropriate asset groupings, is compared to the carrying value to determine whether an impairment exists. If the asset is determined to be impaired, the loss is measured based on the difference between the carrying value of the intangible asset and its fair value, which is determined based on the net present value of estimated future cash flows. Common stock Purchase Warrants and Other Derivative Financial Instruments The Company classifies as equity any contracts that require physical settlement or net-share settlement or provide us a choice of net-cash settlement or settlement in our own shares (physical settlement or net-share settlement), provided that such contracts are indexed to our own stock, as defined in ASC 815-40 “Contracts in Entity's Own Equity.” Stock-Based Compensation ASC 718 requires companies to measure all stock compensation awards using a fair value method, and to recognize the related compensation cost in its financial statements. Beginning with the Company’s quarterly period that began on January 1, 2016, the Company adopted the provisions of FASB ASC 718, and expenses the fair value of employee stock options and similar awards in the financial statements. The Company accounts for share-based payments in accordance with ASC 718, “ Compensation - Stock Compensation Measurement Objective – Fair Value at Grant Date The Company accounts for stock-based compensation to other than employees in accordance with FASB ASC 505-50. Equity instruments issued to other than employees are valued at the earlier of a commitment date or upon completion of the services, based on the fair value of the equity instruments, and is recognized as expense over the service period. During the six months ended June 30, 2018 and 2017, the Company recognized stock-based compensation expense aggregating $267,188 and $161,848, respectively, for Common stock options issued to Company personnel, directors, and consultants. During the six months ended June 30, 2018 and 2017, the Company paid stock-based compensation consisting of restricted Common stock to non-employees consultants and recognized an aggregate of $112,561 and $378,927 in expense, respectively. Recently Issued Accounting Pronouncements Management does not believe that any recently issued but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying financial statements. Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the AICPA, and the SEC during the current reporting period did not have, or are not believed by management to have, a material impact on the Company’s present or future consolidated financial statements. |
Business Combinations
Business Combinations | 6 Months Ended |
Jun. 30, 2018 | |
Business Combinations [Abstract] | |
BUSINESS COMBINATIONS | NOTE 3 – BUSINESS COMBINATIONS On September 1, 2017 (the “Acquisition Date”), the Company, through its wholly owned subsidiary Nexeon Europe, completed the acquisition of NMB pursuant to an acquisition agreement (the “Acquisition Agreement”) entered into on January 10, 2017, between Rosellini Scientific, LLC (“RS”), a Texas limited liability company controlled by our chief executive officer, William Rosellini, and Nexeon Europe (the “Acquisition”). RS was the sole shareholder of NMB, owning 107,154 shares (the “NMB Shares”). Pursuant to the Acquisition Agreement, RS granted to Nexeon Europe the exclusive and irrevocable right to purchase the NMB Shares upon the terms and conditions set forth in the Acquisition Agreement (the “Right to Purchase”). The consideration for the Right to Purchase was USD $1,000 (the “Acquisition Price”). Upon Nexeon Europe exercising the Right to Purchase, the Acquisition Agreement was automatically deemed converted into and considered a share transfer agreement for the purchase of the NMB Shares, and the Acquisition Price became the purchase price of the NMB Shares and was deemed to have been satisfied by Nexeon Europe to RS as of the date of the Acquisition Date. Due to RS controlling both the Company and NMB, the acquisition has been recorded as a combination of entities under common control, and the results of NMB for the three and six months ended June 30, 2018 and 2017 are reported retrospectively on a consolidated basis in the Company’s financial statements. Included in the acquisition of NMB are its wholly owned subsidiaries, Medi-Line and its holding company INGEST. On August 30, 2017, NMB acquired INGEST and Medi-Line for $1,648,240 (payable as €1,450,000 EUR cash), or $977.996 (€891,496 EUR) net of cash acquired. As part of the transaction, and prior to the acquisition, Nexeon Europe loaned NMB $970,400 (€818,075 EUR) pursuant to the existing loan agreement and promissory note, NMB secured a credit facility in the amount of $330,319 (€275,000 EUR), and Medi-Line loaned NMB $540,032 (€450,000 EUR). Payment of the purchase price included the settlement of a note payable in the amount of $120,007 (€100,000 EUR) and a dividend payable in the amount of $9,901 (€8,250 EUR) to the sellers of INGEST. The balance of the loan and all accrued interest related to the loan agreement and promissory note between Nexeon Europe and NMB, along with the $540,032 (€450,000 EUR) loan from Medi-Line to NMB, is eliminated through consolidation in the financial statements. We believe Medi-Line provides the medical device manufacturing expertise and experience needed to scale our business. Medi-Line is a leading global source of innovative medical device solutions, with existing customers that include Fortune 50 companies and neurostimulator companies. Medi-Line seeks to provide high quality and efficiency in the development, engineering, and manufacturing of medical devices for the med-tech and pharmaceutical industries. The acquisition of INGEST and Medi-Line was accounted for using the acquisition method, and, accordingly, the results of operations of INGEST and Medi-Line were reported in the Company's financial statements beginning on August 30, 2017, the date of acquisition. Unaudited Pro Forma Consolidated Results The following table provides unaudited pro forma results of operations for the three and six months ended June 30, 2018 and 2017, as if INGEST and Medi-line had been acquired as of January 1, 2017. The pro forma results include the effect of certain purchase accounting adjustments, such as the estimated changes in depreciation and amortization expense on the acquired tangible and intangible assets, and the recognition of grant subsidies. Pro forma results do not include any anticipated cost savings or other effects of the planned integration of INGEST and Medi-Line. Accordingly, such amounts are not necessarily indicative of the results if the acquisition had occurred on the dates indicated, or which may occur in the future. For the Three Months Ended For the Six Months Ended June 30, June 30, 2018 2017 2018 2017 Revenues $ 2,819,164 $ 1,676,322 $ 5,689,198 $ 3,735,103 Net income (loss) (726,008 ) (1,363,947 ) (1,675,677 ) (2,911,905 ) Net income (loss) per common share, basic and diluted (0.37 ) (0.80 ) (0.85 ) (1.78 ) |
Going Concern
Going Concern | 6 Months Ended |
Jun. 30, 2018 | |
Going Concern [Abstract] | |
GOING CONCERN | NOTE 4 – GOING CONCERN The accompanying financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company as a going concern. The Company has sustained operating losses since inception, and has an accumulated deficit of $5,419,115 as of June 30, 2018. In addition, the Company does not have sufficient continuing revenue to cover its future operating expenses. The Company currently has limited liquidity, and has not completed its efforts to establish an additional source of revenues sufficient to cover all of the projected operating costs of the ongoing neurostimulation research and development activities over an extended period of time. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities should the Company be unable to continue as a going concern. The Company will need to seek additional financing for continued operations, but there is no guarantee such financing will be available or on terms favorable to the Company. In the third quarter of 2018, the Company began to consolidate its manufacturing facilities in Niel, Belgium with its Medi-Line operations in Liege, Belgium. These operations include a facility, equipment, research and development staff, general and administrative. There is no guarantee these reductions by the Company will alleviate the going concern. |
Loans and Leases
Loans and Leases | 6 Months Ended |
Jun. 30, 2018 | |
Loans and Leases [Abstract] | |
LOANS AND LEASES | NOTE 5 – LOANS AND LEASES Loans and leases consist of the following as of June 30, 2018: Notes Payable 12.00% Senior Secured Convertible Promissory Note: On August 21, 2017, the Company entered into a securities purchase agreement with Leonite Capital, LLC (“LC”), a Delaware limited liability company, to provide the Company with additional resources to conduct its business. Pursuant to the securities purchase agreement, LC purchased a unit consisting of (i) a note in the principal amount of $1,120,000 at an original issue discount of $120,000, (ii) warrants to purchase 500,000 shares of the Company’s Common stockcommon stock, and (iii) commitment shares equaling 100,000 shares of the Company’s restricted common stockstock, valued at $100,000. Interest is at the rate of 12.00% per annum, and the maturity date is 24 months from the date of issue. The note is a senior secured obligation of the Company, with priority over all future indebtedness of the Company. LC shall have the right at any time, at LC’s option, to convert all or any part of the outstanding and unpaid principal amount and accrued and unpaid interest of the note into fully paid and non-assessable shares of common stockstock, or any shares of capital stockCommon stock, subject to beneficial ownership limitations of a maximum of 4.99% of outstanding common stockstock of the Company at time of conversion. The conversion price shall be, at the option of LC, $1.75, subject to a one-time re-pricing 275 days after the closing, or (ii) 80% multiplied by the price per share paid by the investors in a subsequent equity financing. An amount of $274,266 was recorded on the balance sheet as an original discount including a $120,000 original discount, $100,000 in restricted common stockstock and $54,266 as the fair value of the warrants issued in the transaction. The $274,266 will be expensed as interest expense over the 24-month term of the loan. For the LC loan, $933,333 is recorded as Current portion of long-term debt, net of original discount, and $186,667 is recorded as Long-term debt, net of original discount on the balance sheet. $(137,136) of the original discount is recorded as Current portion of long-term debt, net of original discount, and $(22,852) is recorded as Long-term debt, net of original discount on the balance sheet. 1.27% Secured bank Loan: On August 29, 2017, Medi-Line entered into a credit contract with CBC Banque SA (“CBC Banque”) in the original amount of approximately $2,036,362 (€1,700,000 EUR). The loan is secured by a mortgage on the Medi-Line manufacturing facility, and carries an interest rate of 1.27% per annum, with a seven-year term having monthly payments of interest and principal of approximately $23,365 (€21,175 EUR). $275,012 of the outstanding balance is recorded as Current portion of long-term debt, net of original discount on the balance sheet, and $1,524,527 is recorded as Long-term debt, net of original discount on the balance sheet. 1.27% Secured Bank Loan: On August 29, 2017, NMB entered into a credit contract with CBC Banque in the original amount of approximately $329,412 (€275,000 EUR). The loan carries an interest rate of 1.27% per annum, with a seven-year term having monthly payments of interest and principal of approximately $4,103 (€ 3,425 EUR). The loan is secured by the shares of NMB. $44,487 of the outstanding balance is recorded as Current portion of long-term debt, net of original discount portion on the balance sheet, and $235,697 is recorded as Long-term debt, net of original discount on the balance sheet. 0.72% Secured Bank Loan: On May 7, 2016, Medi-Line entered into a credit contract with CBC Banque in the original amount of approximately $68,781 (€57,420 EUR). The loan carries an interest rate of 0.72% per annum, with a 48-month term having monthly payments of interest and principal of approximately $1,454 (€ 1,214 EUR). The loan is secured by the assets of Medi-Line. Proceeds of the loan were used to acquire manufacturing equipment. The loan is secured by the shares of NMB. $15,379 of the outstanding balance is recorded as Current portion of long-term debt, net of original discount on the balance sheet, and $19,025 is recorded as Long-term debt, net of original discount on the balance sheet. Loan Subsidy: NMB was awarded a loan subsidy through the Public Service of Wallonia in the amount of $598,665 (€499,779 EUR). Of the total amount awarded, $179,600 (€149,934 EUR) is categorized as loan, with repayment amounts ranging from $5,986 to $23,947 annually from 2018 through 2032. The current portion of the liability is recorded as Current portion of long-term debt, net of original discount on the balance sheet in the amount of $5,987, and $176,613 is included as Long-term debt, net of original discount on the balance sheet. The award amounts in excess of the loan amount are invoiced for reimbursement and recorded as a credit to applicable research and development expenses. Revolving Credit: The Company has a revolving credit card with BB&T Financial with an outstanding balance of $12,996 as of June 30, 2018, a credit limit of $60,000, and a current APR of 25.4%; and a revolving credit card with Comerica Bank with an outstanding balance of $10,706 as of June 30, 2018, a credit limit of $11,000, and a current APR of 22.7%. Floating Rate Secured Line of Credit: On February 23, 2018, Medi-Line’s line of credit with CBC Banque was amended to increase the advance amount to €300,000 ($369,561) and to structure the financing as a straight loan with an interest rate of 1.25% above the EURIBOR rate for the period the funds are drawn down. The €300,000 was be available for drawdown through April 30, 2018, at which point the facility was reduced to €200,000, and further reduced €100,000 on May 31, 2018. The security includes a pledge of Medi-Line business assets in the amount of €300,000. The outstanding balance as of June 30, 2018 in the amount of $116,478 is recorded as Current portion of long-term debt, net of original discount on the balance sheet. Capital Leases Building Lease: On December 13, 2005, Medi-Line entered into a capital lease facility for the financing of the manufacturing facility construction in the amount of $3,425,880 (€2,860,000 EUR), with a 15-year term. Quarterly lease payments excluding VAT are $46,730 (€39,202 EUR). The Company has the right to purchase the building at the end of the lease term for three percent (3%) of the original lease amount. $183,305 of the outstanding balance is recorded as Current portion of long-term debt, net of original discount, and $470,014 is recorded as Long-term debt, net of original discount on the balance sheet. Equipment Lease: On February 4, 2015, the Company entered into a sale-leaseback transaction with Biotech Coaching S.A. for the sale and lease in the original amount of $131,765 (€110,000 EUR) for medical and clean-room equipment. In March 2015, the Company commenced leasing the equipment, with a 36-month term. Monthly lease payments excluding VAT are $3,824 (€3,192 EUR). The Company has the right to purchase the equipment at the end of the lease term for a residual value of $1,579 (€1,318 EUR). The remaining balance of the lease in the amount of $ 23,090 is recorded as Current portion of long-term debt, net of original discount on the balance sheet. Carrying Amount Long-Term Debt 12.00% Senior Convertible Secured Note, amortization begins 2018, 2019 maturity 1,120,000 1.27% Secured Bank Loan, monthly amortization, 2024 maturity 1,799,539 1.27% Secured Bank Loan, monthly amortization, 2024 maturity 280,184 0.72% Secured Bank Loan, monthly amortization, 2020 maturity 34,404 Floating Rate Secured Line of Credit 116,478 Loan Subsidy, amortization begins 2018, 2032 maturity 179,600 Revolving Credit 23,702 Capitalized Building Lease 653,319 Capitalized Equipment Lease 23,090 Less: Original purchase discount, net of amortization (159,988 ) Total Debt 4,070,328 Less: Current portion of debt, net of original discount current portion (1,483,637 ) Total Long-Term Debt $ 2,586,691 KBC Accounts Receivable Discounting Agreement: Medi-Line has an accounts receivable discounting agreement with KBC Commercial Finance, NV (“KBC ComFin”) for up to 85% of Medi-Line’s customer accounts receivables. Pursuant to the discounting agreement, Medi-Line will transfer title to KBC ComFin for all receivables that fall under the scope of agreement. The fee for the advance portion of the receivables transferred to KBC ComFin is the two-month LIBOR plus 1.5% on annual basis. As KBC ComFin holds the title to the receivables and assumes the insolvency risk for receivables that are transferred and fall under the scope of the agreement, invoices transferred per the agreement are reduced from Medi-line’s customer accounts receivable upon transfer and recorded to a KBC ComFin accounts receivable sub-account and netted against advances and final payments received per the agreement. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2018 | |
Income Taxes [Abstract] | |
INCOME TAXES | NOTE 6 – INCOME TAXES The Company is incorporated in the United States of America, and is subject to United States federal taxation. No provisions for United States income taxes have been made, as the Company had no U.S. taxable income for the six months ended June 30, 2018 and 2017. The effective income tax rate for the Company for the three months ended June 30, 2018 and 2017 were 21% and 34%, respectively. One of our subsidiaries generated income, and as of June 30, 2018 we accrued income tax in the amount of $22,481 according to the Belgian corporate income tax rate, but the other subsidiaries reported a loss and no tax provision was recorded. Beginning in 2018, the corporate income tax (“CIT”) levied in Belgium has been reduced to an effective rate of 29.58%. No state, region, or municipal income tax is levied. As of June 30, 2018, the Company has approximately $10,347,301 of net operating losses (“NOL”) carryovers to offset taxable income, if any, in future years, which expire in fiscal 2036. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based on the assessment, management has established a full valuation allowance against all of the deferred tax assets relating to the NOL period because it is more likely than not that all of the deferred tax assets will not be realized. On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (the “Tax Act”) was signed into law, making significant changes to the Internal Revenue Code. Changes include, but are not limited to, a federal corporate tax rate decrease from 35% to 21% for tax years beginning after December 31, 2017; the transition of U.S international taxation from a worldwide tax system to a territorial system; and a one-time transition tax on the mandatory deemed repatriation of foreign earnings. We have estimated our provision for income taxes in accordance with the Tax Act and guidance available as of the date of this filing, but have kept the full valuation allowance. As a result, we have recorded no United States income tax expense in the six months ended June 30, 2018. The Belgian government enacted in December 2017 a significant tax reform law. The new tax legislation contains several key tax provisions, including the reduction of the corporate income tax rate from the current 33.99% to 29.58% in 2018 and 2019, and 25% from 2021. Additionally, the use of net operating losses (which could previously offset 100% of taxable income) is now limited to offset only 70% of taxable income. On December 27, 2017, NXPROC was granted a tax exemption pursuant to Act number 73-2008 (“ACT 73”) by the Government of Puerto Rico, Department of Economic Development and Commerce (“PRIDCO”). The exemption allows NXPROC to obtain tax credits in the amount of fifty percent (50%) of approved applicable research and development expenses of NXPROC on an annual basis. As of July 23, 2018, the Company has received all government approvals and certifications from PRIDCO and received tax credits in the amount of $732,340, for research and development activity in 2017, which had been posted to Departamento De Hacienda (the Puerto Rican Department of Finance) system and the Company has received $593,195 in net proceeds from the sale of all available tax credits realizing proceeds of 81% of the face value of the tax credits and recorded a benefit to provision for income taxes in the amount of $593,195 for the proceeds from these tax credit sales. For the six months ended June 30 2018, the net provision for income tax was a benefit of $570,714 after taking into account the provision for income tax in the amount of $22,481 from the Belgian subsidiary and the benefit to provision for income tax in the amount of $593,195 for the NXPROC tax credit sales. |
Property Plant and Equipment
Property Plant and Equipment | 6 Months Ended |
Jun. 30, 2018 | |
Property Plant and Equipment [Abstract] | |
PROPERTY PLANT and EQUIPMENT | NOTE 7 – PROPERTY PLANT and EQUIPMENT Property plant and equipment at cost and accumulated depreciation as of June 30, 2018 and December 31, 2017 were: Estimated useful lives June 30, December 31, 2017 Land $ 96,884 $ 96,884 Capitalized building 39 years 3,017,552 3,017,552 Machinery and equipment 5 to 15 years 735,780 677,734 Total property plant and equipment – gross 3,850,216 3,792,170 Less: accumulated depreciation (343,810 ) (222,338 ) Total property plant and equipment – net $ 3,506,406 $ 3,569,832 Property plant and equipment depreciation expense for the six months ended June 30, 2018 was $125,813, and for the 6 months ended June 30, 2017 was $25,375. |
Intangible Assets
Intangible Assets | 6 Months Ended |
Jun. 30, 2018 | |
Intangible Assets [Abstract] | |
INTANGIBLE ASSETS | NOTE 8 – INTANGIBLE ASSETS Intangible assets that have finite useful lives are amortized over their estimated useful lives. Intangible assets as of June 30, 2018 and December 31, 2017 are as follows: Estimated useful lives June 30, December 31, 2017 Intangible assets with definitive lives: Patents, licenses, and intellectual property 4 to 20 years $ 10,363,097 10,363,097 Fair value of customer relationships at acquisition 10 years 600,000 600,000 Less: accumulated amortization (2,377,729 ) (1,773,605 ) Patents, licenses, and intellectual property – net 8,585,368 9,189,492 Intangible assets with indefinite lives: Fair value of trade secrets and know-how at acquisition 1,550,000 1,550,000 Intangible asset amortization expense for the six months ended June 30, 2018 was $606,160, and for the 6 months ended June 30, 2017 was $572,697. |
Inventories
Inventories | 6 Months Ended |
Jun. 30, 2018 | |
Inventories [Abstract] | |
INVENTORIES | NOTE 9 – INVENTORIES Inventory balances as of June 30, 2018 and December 31, 2017 are as follow: June 30, December 31, 2017 Raw materials and supplies $ 1,411,886 $ 1,811,749 Work in process 743,958 334,322 Finished goods — 60,499 Total inventories $ 2,155,844 $ 2,206,570 |
Segments of Business
Segments of Business | 6 Months Ended |
Jun. 30, 2018 | |
Segments of Business [Abstract] | |
SEGMENTS OF BUSINESS | NOTE 10 – SEGMENTS OF BUSINESS The Company operates in two distinct business segments within the medical device industry: manufacturing and neurostimulation. The manufacturing segment includes the manufacturing operations of our wholly owned subsidiary Medi-Line, located in Angleur (Liege), Belgium. Medi-Line manufactures single-use medical devices for the medical and pharmaceutical sectors, including radiopharmacy technology, urology products, and sterilization cases and trays, and designs, develops, and offers worldwide production and supply-chain capabilities for these products to its customers. The neurostimulation segment includes development, manufacturing, and commercialization of neurostimulation technology for the treatment of various neurological disorders through electrical stimulation of neural tissues. Our first commercial application of its platform will be the Viant™ Deep Brain Stimulation System. Operations for the neurostimulation segment are conducted in the United States, Puerto Rico, Belgium, and Germany. Other items of revenue not directly related to manufacturing or neurostimulation revenues are categorized as other operating income. Other operating income and expenses not directly related to a specific segment are identified as “other,” and not allocated to segments. An analysis and reconciliation of the Company’s business segments and geographic information to the respective information in the Condensed Consolidated Financial Statements follows. Revenue by geographic area are presented by allocating revenue from external customers based on where the products are shipped or services are rendered: Revenue by Segment: For the Three Months Ended For the Six Months Ended June 30, June 30, 2018 2017 2018 2017 Manufacturing $ 2,768,623 $ — $ 5,180,649 $ — Neurostimulation (8,849 ) 98,277 395,052 98,277 Other 59,390 7,919 113,497 16,957 Consolidated total $ 2,819,164 $ 106,196 $ 5,689,198 $ 115,234 Loss Before Income Tax by Segment: For the Three Months Ended For the Six Months Ended June 30, June 30, 2018 2017 2018 2017 Manufacturing $ (91,205 ) $ — $ 174,118 $ — Neurostimulation (1,400,988 ) (1,334,708 ) (2,506,010 ) (2,984,844 ) Other (1) 127,939 (160,172 ) 85,501 (189,094 ) Consolidated total $ (1,364,254 ) $ (1,494,880 ) $ (2,246,391 ) $ (3,173,938 ) (1) Amounts not allocated to segments include interest income (expense) and other income (expense), and amortization of acquisition intangible assets. Sales by Geographic Area: For the Three Months Ended For the Six Months Ended June 30, June 30, 2018 2017 2018 2017 Sales Non-domestic locations United Kingdom $ 1,248,579 $ 98,277 $ 2,643,509 $ 98,277 Belgium 884,309 — 1,729,688 — Switzerland 189,176 — 396,967 — Netherlands 141,884 — 349,168 — Norway 225,589 — 345,170 — Rest of world 70,237 — 111,199 — Consolidated sales 2,759,774 98,277 5,575,701 98,277 Other operating revenue 59,390 7,919 113,497 16,957 Consolidated revenue $ 2,819,164 $ 106,196 $ 5,689,198 $ 115,234 Long-Lived Assets: as of June 30, December 31, 2018 2017 Manufacturing $ 3,476,826 $ 3,535,516 Neurostimulation 8,064,356 8,643,118 Other 2,100,592 2,130,690 Consolidated total $ 13,641,774 $ 14,309,324 |
Equity
Equity | 6 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
EQUITY | NOTE 11 – EQUITY We effected a 1-for-14 reverse stock split of our outstanding common stock, or, the “Reverse Stock Split”, on June 25, 2018 and, unless otherwise indicated, all per share amounts set forth herein have been retroactively restated to reflect the Reverse Stock Split. The Company issued the following securities during the six months ended June 30, 2018: Common Stock Issuances On March 8, 2018, we issued an aggregate of 1,697 shares of restricted Common Stock for certain sales and marketing and software consulting services rendered by third-party consultants. The foregoing shares were valued at $14,840. 583 of these shares were issued to Daniel Powell, the Company’s vice president of sales and marketing at the time of issuance. These shares were issued for services provided by Mr. Powell prior to his employment by the Company. On April 19, 2018, we issued an aggregate of 7,195 shares of restricted Common Stock for certain research and development and valuation services provided by third-party consultants. The foregoing shares were valued at $97,721 Common Stock Redemption On May 22, 2018, the Company redeemed and cancelled 14,286 shares of its Common Stock from a former director as consideration for the purchase of certain intellectual property. Warrants The Company issued no Warrants for the six months ended June 30, 2018. Options Grants – 2016 Plan The Company may, from time to time, issue certain equity awards pursuant to our 2016 Omnibus Incentive Plan (the “2016 Plan”). The 2016 Plan was adopted by our board of directors on January 2, 2016, and was subsequently approved by our shareholders. On July 8, 2018, the Board of Directors of the Company approved an increase in the number of shares of common stock reserved for issuance pursuant to option grants under the 2016 Plan to 450,000 shares of common stock. During the six months ended June 30, 2018, the Company issued stock options to purchase a total of 96,947 shares of the Company’s common stock under the 2016 Plan, with exercise prices ranging from $10.64 to $20.00 per share, as follows: (i) As compensation for service to the Company as chief executive officer, the Company granted to William Rosellini an incentive stock option to purchase up to 17,858 shares of the Company’s restricted common stock with an exercise price of $10.64. The option to purchase 8,929 shares of common stock was immediately exercisable, and the option to purchase the remaining 8,929 shares of common stock vests on the anniversary of the grant date. The Company also granted a non-qualified stock option to purchase up to 64,286 shares of common stock with an exercise price of $10.64 per share. The option to purchase 2,679 common shares vests in equal monthly amounts beginning on March 1, 2018. The option to purchase the Company’s common stock expires three (3) years from the date they become exercisable pursuant to the grant vesting schedule. The fair value of the options was determined to be $226,009 using the Black-Scholes Option Pricing Model. (ii) As compensation for service to the Company as chief commercialization officer, the Company granted to Brian Blischak a non-qualified stock option to purchase up to 4,108 shares of the Company’s restricted common stock with an exercise price of $10.64 per share. The option was immediately exercisable at date of issue. The term of the option shall be for a period of eight (8) years from the date of issue. The fair value of the option was determined to be $12,855 using the Black-Scholes Option Pricing Model. (iii) As compensation for service to the Company as chief financial officer, the Company granted to Christopher Miller a non-qualified stock option to purchase up to 2,143 shares of the Company’s restricted common stock with an exercise price of $10.64 per share. The option was immediately exercisable at date of issue. The term of the option shall be for a period of three (3) years from the date of issue. The fair value of the option was determined to be $6,766 using the Black-Scholes Option Pricing Model. (iv) As compensation for service to the Company as vice president sales and marketing, the Company granted to Daniel Powell an incentive stock option to purchase up to 786 shares of the Company’s restricted common stock with an exercise price of $10.64 per share. The option was immediately exercisable at date of issue. The term of the option shall be for a period of three (3) years from the date of issue. The fair value of the option was determined to be $2,481 using the Black-Scholes Option Pricing Model. (v) As compensation for their service to the Company, the Company granted to non-executive employees incentive stock options to purchase up to 3,301 shares of the Company’s restricted common stock with an exercise price of $10.64 per share. The option to purchase 2,229 shares was immediately exercisable at date of issue, and the option to purchase 1,072 shares of common stock vests in equal monthly amounts of 90 beginning on March 1, 2018. The option to purchase the Company’s common stock expires three (3) years from the date they become exercisable pursuant to the grant vesting schedule. The fair value of these options was determined to be $10,420 using the Black-Scholes Option Pricing Model. (vi) As compensation for service as a director of the Company, the Company granted to Kent J. George non-qualified stock options to purchase a total of 893 shares of the Company’s restricted common stock on March 31, 2018 and 893 shares of the Company’s restricted common stock on June 30, 2018 with an exercise prices of $12.11 and $20.00 per share respectively. The options were immediately exercisable at date of issue. The term of the options shall be for four (4) years from the date of issue. The fair value of the option was determined to be $9,373 using the Black-Scholes Option Pricing Model. (vii) As compensation for service as a director of the Company, the Company granted to Michael Nietzel non-qualified stock options to purchase a total of 893 shares of the Company’s restricted common stock on March 31, 2018 and 893 shares of the Company’s restricted common stock on June 30, 2018 with an exercise prices of $12.11 and $20.00 per share respectively. The options were immediately exercisable at date of issue. The term of the options shall be for four (4) years from the date of issue. The fair value of the option was determined to be $9,373 using the Black-Scholes Option Pricing Model. (viii) As compensation for service as a director of the Company, the Company granted to Wes Dittmer a non-qualified stock option to purchase a total of 893 shares of the Company’s restricted common stock with an exercise price of $20.00 per share. The option was immediately exercisable at date of issue. The term of the option shall be for four (4) years from the date of issue. The fair value of the option was determined to be $5,778 using the Black-Scholes Option Pricing Model. Unless otherwise stated, the issuance of the above securities were deemed to be exempt from registration under the Securities Act in reliance upon Section 4(a)(2) of the Securities Act or Regulation D promulgated thereunder, or Rule 701 promulgated under Section 3(b) of the Securities Act as transactions by an issuer not involving any public offering or contracts relating to compensation as provided under Rule 701. The options were valued at $283,056 using the Black-Scholes option pricing model, with the following weighted average assumptions: Risk-free interest rate 2.43 % Expected life 3.26 years Expected dividends 0.00 % Expected volatility 55.97 % Fair value of the Company's Common Stock $ 10.93 Aggregate options expense recognized for the six months ended June 30, 2018, was $267,188. As of June 30, 2018, there were 90,175 shares available for grant under the 2016 Plan, excluding the 359,825 options outstanding. As of June 30, 2018, there were incentive stock options outstanding to purchase an aggregate of 191,592 shares of common stock, and non-qualified options outstanding to purchase an aggregate of 168,233 shares of the Company's common stock option activity, both within and outside the 2016 Plan, and Warrant activity for the six months ended June 30, 2018, are as follows: Stock Options Stock Warrants Weighted Weighted Average Exercise Shares Price Shares Price Outstanding December 31, 2017 262,878 $ 15.07 82,926 $ 32.52 Granted 96,947 10.93 — — Canceled — — — — Expired — — — — Exercised — — — — Outstanding at June 30, 2018 359,825 $ 13.95 82,926 $ 32.52 Exercisable at June 30, 2018 190,575 $ 14.32 82,926 $ 32.52 The range of exercise prices and remaining weighted average life of the options outstanding at June 30, 2018, were $10.64 to $28.00 and 2.13 to 7.67 years, respectively. The range of exercise prices and remaining weighted average life of the Warrants outstanding at June 30, 2018, were $24.00 to $42.00 and 1.14 to 4.15 years, respectively. Unless otherwise stated, the issuance of the above securities were deemed to be exempt from registration under the Securities Act in reliance upon Section 4(a)(2) of the Securities Act or Regulation D promulgated thereunder, or Rule 701 promulgated under Section 3(b) of the Securities Act as transactions by an issuer not involving any public offering or contracts relating to compensation as provided under Rule 701. |
2016 Omnibus Incentive Plan
2016 Omnibus Incentive Plan | 6 Months Ended |
Jun. 30, 2018 | |
Omnibus Incentive Plan [Abstract] | |
2016 OMNIBUS INCENTIVE PLAN | NOTE 12 – 2016 OMNIBUS INCENTIVE PLAN The 2016 Plan was adopted by our board of directors on January 2, 2016 and was subsequently approved by our shareholders. On July 8, 2018, the Board of Directors of the Company approved an increase in the number of shares of common stock reserved for issuance pursuant to option grants under the 2016 Plan to 450,000 shares of common stock. As of June 30, 2018, options to purchase a total of 359,825 shares of the Company's common stock were granted under the 2016 Plan with the following exercise prices and terms at grant date: as of June 30, 2018 Options to Options to Exercise Price Purchase Shares Term (yrs) Purchase Shares $ 10.64 92,482 3 210,177 12.11 1,786 4 63,396 14.00 191,804 8 86,252 17.50 67,502 20.00 2,679 25.20 1,786 28.00 1,786 Total Shares 359,825 359,825 The 2016 Plan is administered by the compensation committee which currently consists of three independent directors. The committee performs the requisite duties with respect to awards granted. The committee currently determines to whom awards are made, the timing of any such awards, the type of securities, and number of shares covered by each award, as well as the terms, conditions, performance criteria, restrictions, and other provisions of awards. The committee has the authority to cancel or suspend awards, accelerate the vesting, or extend the exercise period of any awards made pursuant to the 2016 Plan. Shares Available Under the 2016 Plan The maximum shares available for issuance under the 2016 Plan are 450,000 shares, subject to adjustment as set forth in the 2016 Plan. Any shares subject to an award that expires, is cancelled or forfeited, or is settled for cash shall, to the extent of such cancelation, forfeiture, expiration, or cash settlement, again become available for awards under the 2016 Plan. The committee can issue awards comprised of restricted stock, stock options, stock appreciation rights, stock units, and other awards, as set forth in the 2016 Plan. Transferability Except as otherwise provided in the 2016 Plan, (i) during the lifetime of a participant, only the participant or the participant’s guardian or legal representative may exercise an option or stock appreciation right, or receive payment with respect to any other award, and (ii) no award may be sold, assigned, transferred, exchanged, or encumbered, voluntarily or involuntarily, other than by will or the laws of descent and distribution. Change in Control In the event of a merger, the surviving or successor entity (or its parent) may continue, assume, or replace outstanding awards as of the date of the relevant transaction, and such awards or replacements therefore shall remain outstanding and be governed by their respective terms. Such awards or replacements can be executed in part on the condition that the contractual obligations represented by the award are expressly assumed by the surviving or successor entity (or its parent), with appropriate adjustments to the number and type of securities subject to the award and the exercise price thereof so as to preserve the intrinsic value of the award existing at the time of the relevant transaction. Alternatively, the surviving or successor entity (or its parent) could issue to a participant a comparable equity-based award that preserves the intrinsic value of the original award existing at the time of the relevant transaction and contains terms and conditions that are substantially similar to those of the award. If and to the extent that outstanding awards under the 2016 Plan are not continued, assumed, or replaced in connection with a merger or relevant corporate transaction, then all outstanding awards shall become fully vested and exercisable for such period of time prior to the effective date of the relevant transaction as is deemed fair and equitable by the committee, and shall terminate at the effective date of said transaction. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2018 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 13 – RELATED PARTY TRANSACTIONS During the six months ended June 30, 2018, the Company had the following transactions with related parties. Common stock Issuance On March 8, 2018, the Company issued 583 shares of the Company’s restricted Common stock to Daniel Powell, the Company’s vice president sales and marketing, for certain sales and marketing consulting services rendered by Mr. Powell prior to his employment by the Company. The foregoing shares were valued at $5,100. Options Grants – 2016 Plan On February 28, 2018, the Company granted the following stock options under the 2016 Plan: (i) As compensation for service to the Company as chief executive officer, the Company granted to William Rosellini an incentive stock option to purchase up to 17,858 shares of the Company’s restricted common stock with an exercise price of $10.64. The option to purchase 8,929 shares of common stock was immediately exercisable, and the option to purchase the remaining 8,929 shares of common stock vests on the anniversary of the grant date. The Company also granted a non-qualified stock option to purchase up to 64,286 shares of common stock with an exercise price of $10.64 per share. The option to purchase 2,679 common shares vests in equal monthly amounts beginning on March 1, 2018. The option to purchase the Company’s common stock expires three (3) years from the date they become exercisable pursuant to the grant vesting schedule. The fair value of the options was determined to be $226,009 using the Black-Scholes Option Pricing Model. (ii) As compensation for service to the Company as chief commercialization officer, the Company granted to Brian Blischak a non-qualified stock option to purchase up to 4,108 shares of the Company’s restricted common stock with an exercise price of $10.64 per share. The option was immediately exercisable at date of issue. The term of the option shall be for a period of eight (8) years from the date of issue. The fair value of the option was determined to be $12,855 using the Black-Scholes Option Pricing Model. (iii) As compensation for service to the Company as chief financial officer, the Company granted to Christopher Miller a non-qualified stock option to purchase up to 2,143 shares of the Company’s restricted common stock with an exercise price of $10.64 per share. The option was immediately exercisable at date of issue. The term of the option shall be for a period of three (3) years from the date of issue. The fair value of the option was determined to be $6,766 using the Black-Scholes Option Pricing Model. (iv) As compensation for service to the Company as vice president sales and marketing, the Company granted to Daniel Powell an incentive stock option to purchase up to 786 shares of the Company’s restricted common stock with an exercise price of $10.64 per share. The option was immediately exercisable at date of issue. The term of the option shall be for a period of three (3) years from the date of issue. The fair value of the option was determined to be $2,481 using the Black-Scholes Option Pricing Model. On March 31, 2018, the Company granted the following stock options under the 2016 Plan: (i) As compensation for service as a director of the Company, the Company granted to Kent J. George a non-qualified stock option to purchase a total of 893 shares of the Company’s restricted common stock with an exercise price of $12.11 per share. The option was immediately exercisable at date of issue. The term of the option shall be for four (4) years from the date of issue. The fair value of the option was determined to be $3,596 using the Black-Scholes Option Pricing Model. (ii) As compensation for service as a director of the Company, the Company granted to Michael Nietzel a non-qualified stock option to purchase a total of 893 shares of the Company’s restricted Common stock with an exercise price of $12.11 per share. The option was immediately exercisable at date of issue. The term of the option shall be for four (4) years from the date of issue. The fair value of the option was determined to be $3,596 using the Black-Scholes Option Pricing Model. On June 30, 2018, the Company granted the following stock options under the 2016 Plan: (i) As compensation for service as a director of the Company, the Company granted to Kent J. George a non-qualified stock option to purchase a total of 893 shares of the Company’s restricted common stock with an exercise price of $20.00 per share. The option was immediately exercisable at date of issue. The term of the option shall be for four (4) years from the date of issue. The fair value of the option was determined to be $5,778 using the Black-Scholes Option Pricing Model. (ii) As compensation for service as a director of the Company, the Company granted to Michael Nietzel a non-qualified stock option to purchase a total of 893 shares of the Company’s restricted common stock with an exercise price of $20.00 per share. The option was immediately exercisable at date of issue. The term of the option shall be for four (4) years from the date of issue. The fair value of the option was determined to be $5,778 using the Black-Scholes Option Pricing Model. (iii) As compensation for service as a director of the Company, the Company granted to Wes Dittmer a non-qualified stock option to purchase a total of 893 shares of the Company’s restricted common stock with an exercise price of $20.00 per share. The option was immediately exercisable at date of issue. The term of the option shall be for four (4) years from the date of issue. The fair value of the option was determined to be $5,778 using the Black-Scholes Option Pricing Model. Unless otherwise stated, the issuance of the above securities were deemed to be exempt from registration under the Securities Act in reliance upon Section 4(a)(2) of the Securities Act or Regulation D promulgated thereunder, or Rule 701 promulgated under Section 3(b) of the Securities Act as transactions by an issuer not involving any public offering or contracts relating to compensation as provided under Rule 701. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 14 – COMMITMENTS AND CONTINGENCIES The Company is subject to a patent royalty agreement that requires 3% of net product sales received from commercialization of the 35 patents or other intellectual property acquired in the merger with NXDE to be paid to NXDE, LLC. NXDE, LLC is special purpose entity formed at the time of merger for the purpose of receiving the above-mentioned royalty payments, if any, and is not an affiliate of the Company or NXDE. No sales have been generated from any of the acquired patents or intellectual property. The Company acquired a non-exclusive license to a portfolio of 86 patents, and is subject to a 6% royalty to Magnus IP GmbH of the net sales of all licensed products sold, licensed, leased, or otherwise disposed of pursuant to the license. No sales have been generated from the licensed intellectual property. |
Concentration
Concentration | 6 Months Ended |
Jun. 30, 2018 | |
Concentration [Abstract] | |
CONCENTRATION | NOTE 15 – CONCENTRATION For the six months ended June 30, 2018, two of our customers accounted for approximately 46.0% and 23.9% of revenue. For the six months ended June 30, 2017, one of our customers accounted for 100%. For the six months ended June 30, 2018, the company purchased approximately 25.6% of its products from one distributor, as compared to the six months ended June 30, 2017, where no distributor accounted for more than 10% of product purchased. For the six months ended June 30, 2018, one of our customers accounted for 73.0% of accounts receivable, as compared to the six months ended June 30, 2017, where no customer accounted for more than 10% of accounts receivable. For the three months ended June 30, 2018, two of our customers accounted for approximately 54.6% and 25.9% of sales. For the three months ended June 30, 2017, one of our customers accounted for 100%. For the three months ended June 30, 2018, the company purchased approximately 32.3% of its products from one distributor, as compared to the three months ended June 30, 2017, where no distributor accounted for more than 10% of product purchased. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 16 - SUBSEQUENT EVENTS On July 22, 2018, the Company granted to a new employee at NXPROC incentive stock options to purchase up to 38,572 shares of the Company’s restricted common stock with an exercise price of $11.00 per share. On August 1, 2018 the options to purchase 2,946 shares vested and an additional 758 shares vest on a monthly basis for the following 47 months. The term of the option shall be for a period of three (3) years from the date of vesting. The fair value of the option was determined to be $92,789 using the Black-Scholes Option Pricing Model. |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
Summary of Significant Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited consolidated financial statements include the accounts of Nexeon MedSystems Inc and its wholly owned subsidiaries NXPROC, Nexeon Europe, Pulsus Medical, LLC, and NMB as of June 30, 2018 and December 31, 2017, and for the three and six months ended June 30, 2018 and 2017. The financial statements include the accounts of Medi-Line and INGEST as of June 30, 2018 and December 31, 2017 and for the three and six months ended June 30, 2018. The Company’s unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial statements, and with the instructions for Form 10-Q and Article 10 of Regulation S-X of the United States Securities and Exchange Commission (“SEC”). Accordingly, they do not contain all information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements. These unaudited consolidated financial statements should be read in conjunction with the audited financial statements of the Company, and related notes thereto, which are included in the Company’s Annual Report on Form 10-K as of and for the year ended December 31, 2017. In the opinion of the Company’s management, the accompanying unaudited financial statements contain all the adjustments necessary (consisting only of normal recurring accruals) to present the financial position of the Company as of June 30, 2018, and the results of operations and cash flows for the periods presented. The results of operations for interim periods are not necessarily indicative of the operating results for the full fiscal year or any future period. All significant intercompany accounts and transactions have been eliminated in consolidation. |
Management Estimates and Assumptions | Management Estimates and Assumptions The preparation of the Company’s financial statements are in conformity with accounting principles generally accepted in the United States of America, which require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made; however, actual results could differ materially from these estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers those short-term, highly liquid investments with maturities of three months or less as cash and cash equivalents. The Company currently has no cash equivalents. |
Long-Lived Assets | Long-Lived Assets Long-lived assets such as property, equipment, and identifiable intangibles are reviewed for impairment whenever facts and circumstances indicate that the carrying value may not be recoverable. When required, impairment losses on assets to be held and used are recognized based on the fair value of the assets. The fair value is determined based on estimates of future cash flows, market value of similar assets, if available, or independent appraisals, if required. If the carrying amount of the long-lived asset is not recoverable from its undiscounted cash flows, an impairment loss is recognized for the difference between the carrying amount and fair value of the asset. When fair values are not available, the Company estimates fair value using the expected future cash flows discounted at a rate commensurate with the risk associated with the recovery of the assets. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost. Equipment is depreciated using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are amortized based upon the lesser of the term of the lease or the useful life of the asset, and such expense is included in depreciation expense. Repair and maintenance costs are expensed as incurred. The Company capitalizes all furniture and equipment with cost greater than $1,000 and benefiting more than one accounting period in the period purchased. |
Inventories | Inventories The value of inventories, comprised solely of finished goods, are stated at the lesser of net realizable value or cost, determined using the first-in, first-out (“FIFO”) method. To value inventory, management must estimate excess or obsolete inventory, as well as inventory that is not of saleable quality. This valuation involves an inherent level of risk and uncertainty due to the unpredictability of trends in the industry and customer demand for the Company’s products. In assessing the ultimate realization of inventories, management must make judgments as to future demand requirements, and compare those with the current or committed inventory levels. Reserve requirements generally increase as demand decreases due to market conditions and technological and product life-cycle changes. Write-downs of excess and obsolete inventories were $0 and $0 in the six months ended June 30, 2018 and 2017, respectively. Future events and variations in valuation methods or assumptions may cause significant fluctuations in this estimate, and could have a material impact on the Company’s results. |
Net Income (Loss) Per Share | Net Income (Loss) Per Share The Company calculates net income (loss) per share as required by Accounting Standards Codification subtopic 260-10, “ Earnings per Share” , as the Company has no dilutive securities |
Revenue Recognition | Revenue Recognition Revenues currently consist of single-use medical devices for the medical and pharmaceutical sectors at Medi-Line and pre-clinical neurostimulation device sales at NMB. In May 2014, the FASB issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes all existing revenue recognition requirements, including most industry specific guidance. This new standard requires a company to recognize revenues when it transfers goods or services to customers in an amount that reflects the consideration that the company expects to receive for those goods or services. The FASB subsequently issued the following amendments to ASU No. 2014-09 that have the same effective date and transition date: ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations; ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing; ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients; and ASU No. 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers. The Company adopted these amendments with ASU 2014-09 (collectively, the new revenue standards). The new revenue standards became effective for the Company on January 1, 2018, and were adopted using the modified retrospective method. The adoption of the new revenue standards as of January 1, 2018 did not change the Company’s revenue recognition as the majority of its revenues continue to be recognized when the customer takes control of its product. As the Company did not identify any accounting changes that impacted the amount of reported revenues with respect to its product revenues, no adjustment to retained earnings was required upon adoption. Under the new revenue standards, the Company recognizes revenues when its customer obtains control of promised goods or services, in an amount that reflects the consideration which it expects to receive in exchange for those goods. The Company recognizes revenues following the five-step model prescribed under ASU No. 2014-09: (i) identify contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenues when (or as) we satisfy the performance obligation. Revenues from product sales are recognized when the customer obtains control of the Company’s product, which occurs at a point in time, typically upon delivery to the customer. The Company expenses incremental costs of obtaining a contract as and when incurred if the expected amortization period of the asset that it would have recognized is one year or less or the amount is immaterial. |
Income Taxes | Income Taxes The Company uses the asset and liability method of accounting for income taxes in accordance with ASC Topic 740, “Income Taxes.” ASC Topic 740.10.30 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements, and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740.10.40 provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. The Company has no material uncertain tax positions for any of the reporting periods presented. All tax positions are first analyzed to determine if the weight of available evidence indicates that it is more likely than not that the position will be sustained under audit, including resolution of any related appeals or litigation processes. After the initial analysis, the tax benefit is measured as the largest amount that is more than 50% likely of being realized upon ultimate settlement. If the Company is required to pay interest on the underpayment of income taxes, the Company recognizes interest expense in the first period the interest becomes due according to the provisions of the relevant tax law. If the Company is subject to payment of penalties, the Company recognizes an expense for the amount of the statutory penalty in the period when the position is taken on the income tax return. If the penalty was not recognized in the period when the position was initially taken, the expense is recognized in the period when the Company changes its judgment about meeting minimum statutory thresholds related to the initial position taken. |
Research and Development Expenses | Research and Development Expenses Research and development expenses are charges to expense as incurred. Research and development expenses include, but are not limited to, product development, clinical and regulatory expenses, payroll and other personnel expenses, materials, supplies, consulting costs, and non-recurring engineering costs. These expenses are assigned to the research, development, and clinical projects to develop the Company’s implantable neurostimulation, sensing, and recording technology for a variety of clinical therapeutic applications, and for manufacturing product development. The Company has been awarded grants subsidies for ongoing research and development projects from the National Institutes of Health Department of Health and Human Services, through the Public Service of Wallonia - Department of Technology Development and the Research Programs Department (the Wallonia region is located in South Brussels, in Belgium), and the Cancer Prevention and Research Institute of Texas to support our research projects with potential for commercialization. The Company receives the funding in a combination of advance payments at commencement of a project and through reimbursement requests. Invoices for applicable research, and development expenses as expenses are incurred. These grants and subsidies provide non-dilutive funds that do not include a repayment obligation. Participation by the granting agency typically accounts for 50% to 100% of the project costs in grants or subsidies. The Company recognizes the amounts receivable in regard to the grants contracts at fair value when there is reasonable assurance that the contract amount will be received and that all the conditions of the specific contract will be complied with in order to properly match the reimbursements with the specific expenditures that the specific contract intends to reimburse. The Company recognizes the amounts received in accordance with the contracts as a reduction of research and development expenses over the periods necessary to match the contract on a systematic basis to the costs that it is intended to compensate. The Company records, on the balance sheet, grants receivable (upon meeting the criteria discussed above) until cash is received. Where the Company receives payments in advance, it is recorded as advance grant payments on the balance sheet, and relieved against research and development expense as the associated costs are incurred. As of June 30, 2018, the Company has $1,182,722 in grants receivable for project expenses invoiced and to be invoiced, but not yet paid, which have been recorded as a reduction of research and development expense in the accompanying statement of operations, and $568,858 in advance payments received and yet to be expended. |
Foreign Currency Translation and Transactions | Foreign Currency Translation and Transactions The Company’s reporting currency is the U.S. dollar. The Company’s operations in Belgium use their local currencies as their functional currency. The financial statements in foreign currency are translated into U.S. Dollars (“USD”) in accordance with ASC Topic 830, Foreign Currency Translation. All assets and liabilities are translated at the period-end period |
Fair Value Measurements | Fair Value Measurements The Company adopted the provisions of ASC Topic 820, “Fair Value Measurements and Disclosures,” The estimated fair value of certain financial instruments, including cash and cash equivalents, are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments. ASC 820 defines “fair value” as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value: Level 1 — Quoted prices in active markets for identical assets or liabilities Level 2 — Quoted prices for similar assets and liabilities in active markets, or inputs that are observable Level 3 — Inputs that are unobservable (for example, cash flow modeling inputs based on assumptions) The Company currently has no assets or liabilities valued at fair value on a recurring basis. |
Investments in Non-Consolidated Subsidiaries | Investments in Non-Consolidated Subsidiaries Investments in non-consolidated entities are accounted for using the equity method or cost basis, depending upon the level of ownership and/or the Company's ability to exercise significant influence over the operating and financial policies of the investee. When the equity method is used, investments are recorded at original cost, and adjusted periodically to recognize the Company's proportionate share of the investees' net income or losses after the date of investment. When net losses from an investment accounted for under the equity method exceed its carrying amount, the investment balance is reduced to zero and additional losses are not provided for. The Company resumes accounting for the investment under the equity method if the entity subsequently reports net income and the Company's share of that net income exceeds the share of net losses not recognized during the period the equity method was suspended. Investments are written down only when there is clear evidence that a decline in value that is other than temporary has occurred. The Company accounts for its investment in MicroTransponder, Inc. under the cost method due to the lack of significant influence. |
Leases | Leases Leases are reviewed and classified as capital or operating at their inception in accordance with ASC Topic 840, Accounting for Leases. For leases that contain rent escalations, the Company records monthly rent expense equal to the total amount of the payments due in the reporting period over the lease term. The difference between rent expense recorded and the amount paid is credited or charged to deferred rent account when presented on balance sheet. |
Acquired Intangibles | Acquired Intangibles Acquired intangibles include patents, patent licenses, trade secrets and know-how, and customer relationships acquired by the Company, which are recorded at fair value and are assigned an estimated useful life, and amortized on a straight-line basis over their estimated useful lives (ranging from 3 to 19 years) for assets with definitive lives. The Company periodically evaluates whether current facts or circumstances indicate that the carrying values of its acquired intangibles may not be recoverable. If such circumstances are determined to exist, an estimate of the undiscounted future cash flows of these assets, or appropriate asset groupings, is compared to the carrying value to determine whether an impairment exists. If the asset is determined to be impaired, the loss is measured based on the difference between the carrying value of the intangible asset and its fair value, which is determined based on the net present value of estimated future cash flows. |
Common stock Purchase Warrants and Other Derivative Financial Instruments | Common stock Purchase Warrants and Other Derivative Financial Instruments The Company classifies as equity any contracts that require physical settlement or net-share settlement or provide us a choice of net-cash settlement or settlement in our own shares (physical settlement or net-share settlement), provided that such contracts are indexed to our own stock, as defined in ASC 815-40 “Contracts in Entity's Own Equity.” |
Stock-based compensation | Stock-Based Compensation ASC 718 requires companies to measure all stock compensation awards using a fair value method, and to recognize the related compensation cost in its financial statements. Beginning with the Company’s quarterly period that began on January 1, 2016, the Company adopted the provisions of FASB ASC 718, and expenses the fair value of employee stock options and similar awards in the financial statements. The Company accounts for share-based payments in accordance with ASC 718, “ Compensation - Stock Compensation Measurement Objective – Fair Value at Grant Date The Company accounts for stock-based compensation to other than employees in accordance with FASB ASC 505-50. Equity instruments issued to other than employees are valued at the earlier of a commitment date or upon completion of the services, based on the fair value of the equity instruments, and is recognized as expense over the service period. During the six months ended June 30, 2018 and 2017, the Company recognized stock-based compensation expense aggregating $267,188 and $161,848, respectively, for Common stock options issued to Company personnel, directors, and consultants. During the six months ended June 30, 2018 and 2017, the Company paid stock-based compensation consisting of restricted Common stock to non-employees consultants and recognized an aggregate of $112,561 and $378,927 in expense, respectively. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements Management does not believe that any recently issued but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying financial statements. Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the AICPA, and the SEC during the current reporting period did not have, or are not believed by management to have, a material impact on the Company’s present or future consolidated financial statements. |
Business Combinations (Tables)
Business Combinations (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Business Combinations [Abstract] | |
Schedule of unaudited pro forma consolidated results | For the Three Months Ended For the Six Months Ended June 30, June 30, 2018 2017 2018 2017 Revenues $ 2,819,164 $ 1,676,322 $ 5,689,198 $ 3,735,103 Net income (loss) (726,008 ) (1,363,947 ) (1,675,677 ) (2,911,905 ) Net income (loss) per common share, basic and diluted (0.37 ) (0.80 ) (0.85 ) (1.78 ) |
Loans and Leases (Tables)
Loans and Leases (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Loans and Leases [Abstract] | |
Schedule of long-term debt | Carrying Amount Long-Term Debt 12.00% Senior Convertible Secured Note, amortization begins 2018, 2019 maturity 1,120,000 1.27% Secured Bank Loan, monthly amortization, 2024 maturity 1,799,539 1.27% Secured Bank Loan, monthly amortization, 2024 maturity 280,184 0.72% Secured Bank Loan, monthly amortization, 2020 maturity 34,404 Floating Rate Secured Line of Credit 116,478 Loan Subsidy, amortization begins 2018, 2032 maturity 179,600 Revolving Credit 23,702 Capitalized Building Lease 653,319 Capitalized Equipment Lease 23,090 Less: Original purchase discount, net of amortization (159,988 ) Total Debt 4,070,328 Less: Current portion of debt, net of original discount current portion (1,483,637 ) Total Long-Term Debt $ 2,586,691 |
Property Plant and Equipment (T
Property Plant and Equipment (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Property Plant and Equipment [Abstract] | |
Schedule of property plant and equipment at cost and accumulated depreciation | Estimated useful lives June 30, December 31, 2017 Land $ 96,884 $ 96,884 Capitalized building 39 years 3,017,552 3,017,552 Machinery and equipment 5 to 15 years 735,780 677,734 Total property plant and equipment – gross 3,850,216 3,792,170 Less: accumulated depreciation (343,810 ) (222,338 ) Total property plant and equipment – net $ 3,506,406 $ 3,569,832 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Intangible Assets [Abstract] | |
Schedule of intangible assets | Estimated useful lives June 30, December 31, 2017 Intangible assets with definitive lives: Patents, licenses, and intellectual property 4 to 20 years $ 10,363,097 10,363,097 Fair value of customer relationships at acquisition 10 years 600,000 600,000 Less: accumulated amortization (2,377,729 ) (1,773,605 ) Patents, licenses, and intellectual property – net 8,585,368 9,189,492 Intangible assets with indefinite lives: Fair value of trade secrets and know-how at acquisition 1,550,000 1,550,000 |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Inventories [Abstract] | |
Schedule of inventory | June 30, December 31, 2017 Raw materials and supplies $ 1,411,886 $ 1,811,749 Work in process 743,958 334,322 Finished goods — 60,499 Total inventories $ 2,155,844 $ 2,206,570 |
Segments of Business (Tables)
Segments of Business (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Segments of Business [Abstract] | |
Schedule of revenue by geographic area presented by allocating revenue from external customers | Revenue by Segment: For the Three Months Ended For the Six Months Ended June 30, June 30, 2018 2017 2018 2017 Manufacturing $ 2,768,623 $ — $ 5,180,649 $ — Neurostimulation (8,849 ) 98,277 395,052 98,277 Other 59,390 7,919 113,497 16,957 Consolidated total $ 2,819,164 $ 106,196 $ 5,689,198 $ 115,234 Loss Before Income Tax by Segment: For the Three Months Ended For the Six Months Ended June 30, June 30, 2018 2017 2018 2017 Manufacturing $ (91,205 ) $ — $ 174,118 $ — Neurostimulation (1,400,988 ) (1,334,708 ) (2,506,010 ) (2,984,844 ) Other (1) 127,939 (160,172 ) 85,501 (189,094 ) Consolidated total $ (1,364,254 ) $ (1,494,880 ) $ (2,246,391 ) $ (3,173,938 ) (1) Amounts not allocated to segments include interest income (expense) and other income (expense), and amortization of acquisition intangible assets. Sales by Geographic Area: For the Three Months Ended For the Six Months Ended June 30, June 30, 2018 2017 2018 2017 Sales Non-domestic locations United Kingdom $ 1,248,579 $ 98,277 $ 2,643,509 $ 98,277 Belgium 884,309 — 1,729,688 — Switzerland 189,176 — 396,967 — Netherlands 141,884 — 349,168 — Norway 225,589 — 345,170 — Rest of world 70,237 — 111,199 — Consolidated sales 2,759,774 98,277 5,575,701 98,277 Other operating revenue 59,390 7,919 113,497 16,957 Consolidated revenue $ 2,819,164 $ 106,196 $ 5,689,198 $ 115,234 Long-Lived Assets: as of June 30, December 31, 2018 2017 Manufacturing $ 3,476,826 $ 3,535,516 Neurostimulation 8,064,356 8,643,118 Other 2,100,592 2,130,690 Consolidated total $ 13,641,774 $ 14,309,324 |
Equity (Tables)
Equity (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
Schedule of black-scholes option pricing model, with the following weighted average assumptions | Risk-free interest rate 2.43 % Expected life 3.26 years Expected dividends 0.00 % Expected volatility 55.97 % Fair value of the Company's Common Stock $ 10.93 |
Schedule of stock option activity, both within and outside the 2016 Plan, and warrant activity | Stock Options Stock Warrants Weighted Weighted Average Exercise Shares Price Shares Price Outstanding December 31, 2017 262,878 $ 15.07 82,926 $ 32.52 Granted 96,947 10.93 — — Canceled — — — — Expired — — — — Exercised — — — — Outstanding at June 30, 2018 359,825 $ 13.95 82,926 $ 32.52 Exercisable at June 30, 2018 190,575 $ 14.32 82,926 $ 32.52 |
2016 Omnibus Incentive Plan (Ta
2016 Omnibus Incentive Plan (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
2016 Omnibus Incentive Plan [Abstract] | |
Schedule of company's common stock were issued under the 2016 Plan | as of June 30, 2018 Options to Options to Exercise Price Purchase Shares Term (yrs) Purchase Shares $ 10.64 92,482 3 210,177 12.11 1,786 4 63,396 14.00 191,804 8 86,252 17.50 67,502 20.00 2,679 25.20 1,786 28.00 1,786 Total Shares 359,825 359,825 |
Summary of Significant Accoun31
Summary of Significant Accounting Policies (Details) - USD ($) | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Summary of Significant Accounting Policies (Textual) | |||
Stock-based compensation expense | $ 267,188,000 | ||
Tax positions, description | More than 50% likely of being realized upon ultimate settlement. | ||
Property and equipment, description | The Company capitalizes all furniture and equipment with cost greater than $1,000 and benefiting more than one accounting period in the period purchased. | ||
Write downs of excess and obsolete inventories | $ 0 | $ 0 | |
Common stock, par value | $ 0.001 | $ 0.001 | |
Grants receivable | $ 1,182,722 | $ 804,152 | |
Advance payments received | 568,858 | ||
Directors and Consultants [Member] | |||
Summary of Significant Accounting Policies (Textual) | |||
Stock-based compensation expense | 267,188 | 161,848 | |
Non-Employees [Member] | |||
Summary of Significant Accounting Policies (Textual) | |||
Stock-based compensation expense | $ 112,561 | $ 378,927 | |
Maximum [Member] | |||
Summary of Significant Accounting Policies (Textual) | |||
Project costs in grants percentage | 50.00% | ||
Useful lives of acquired intangibles | 3 years | ||
Minimum [Member] | |||
Summary of Significant Accounting Policies (Textual) | |||
Project costs in grants percentage | 100.00% | ||
Useful lives of acquired intangibles | 19 years |
Business Combinations (Details)
Business Combinations (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Business Combinations [Abstract] | ||||
Revenues | $ 2,819,164 | $ 1,676,322 | $ 5,689,198 | $ 3,735,103 |
Net income (loss) | $ (726,008) | $ (1,363,947) | $ (1,675,677) | $ (2,911,905) |
Net income (loss) per common share, basic and diluted | $ (0.37) | $ (0.80) | $ (0.85) | $ (1.78) |
Business Combinations (Details
Business Combinations (Details Textual) | Jan. 10, 2017$ / sharesshares | Aug. 30, 2017USD ($) | Aug. 30, 2017EUR (€) | Jun. 30, 2018USD ($) | Aug. 30, 2017EUR (€) |
Business Combinations (Textual) | |||||
Business combination of net income | $ | |||||
Loan to NMB [Member] | |||||
Business Combinations (Textual) | |||||
Business combination of credit facility | $ 540,032 | € 450,000 | |||
Loan from Medi-Line to NMB | 540,032 | 450,000 | |||
NMB [Member] | |||||
Business Combinations (Textual) | |||||
Acquire shares of NMB | shares | 107,154 | ||||
Acquisition price | $ / shares | $ 1,000 | ||||
Nexeon Medsystems Inc. [Member] | |||||
Business Combinations (Textual) | |||||
Payable to acquire businesses | 1,648,240 | 1,450,000 | |||
Net cash acquired | 977,996 | 891,496 | |||
Business combination of credit facility | 330,319 | 275,000 | |||
Business combination of note payable | 120,007 | 100,000 | |||
Acquisition of dividend payable | 9,901 | € 8,250 | |||
Acquisition transaction cost | $ 970,400 | € 818,075 |
Going Concern (Details)
Going Concern (Details) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Going Concern [Abstract] | ||
Accumulated deficit | $ (5,419,115) | $ (3,743,438) |
Loans and Leases (Details)
Loans and Leases (Details) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Long-Term Debt | ||
Less: Original purchase discount, net of amortization | $ (159,988) | |
Total Debt | 4,070,328 | |
Less: Current portion of debt, net of original discount current portion | (1,483,637) | |
Total Long-Term Debt | 2,586,691 | $ 3,348,730 |
12.00% Senior Convertible Secured Note [Member] | ||
Long-Term Debt | ||
Total Debt | 1,120,000 | |
1.27% Secured Bank Loan [Member] | ||
Long-Term Debt | ||
Total Debt | 1,799,539 | |
1.27% Secured Bank Loan [Member] | ||
Long-Term Debt | ||
Total Debt | 280,184 | |
0.72% Secured Bank Loan [Member] | ||
Long-Term Debt | ||
Total Debt | 34,404 | |
Loan Subsidy [Member] | ||
Long-Term Debt | ||
Total Debt | 179,600 | |
Capitalized Building Lease [Member] | ||
Long-Term Debt | ||
Total Debt | 653,319 | |
Capitalized Equipment Lease [Member] | ||
Long-Term Debt | ||
Total Debt | 23,090 | |
Revolving Credit [Member] | ||
Long-Term Debt | ||
Total Debt | 23,702 | |
Floating Rate Secured Line of Credit [Member] | ||
Long-Term Debt | ||
Total Debt | $ 116,478 |
Loans and Leases (Details Textu
Loans and Leases (Details Textual) | May 07, 2016USD ($) | May 07, 2016EUR (€) | Feb. 04, 2015USD ($) | Feb. 04, 2015EUR (€) | Dec. 13, 2005USD ($) | Dec. 13, 2005EUR (€) | Apr. 19, 2018USD ($)shares | Feb. 23, 2018USD ($) | Aug. 29, 2017USD ($) | Aug. 29, 2017EUR (€) | Aug. 21, 2017USD ($)shares | Mar. 31, 2015USD ($) | Mar. 31, 2015EUR (€) | Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2018EUR (€) | Feb. 23, 2018EUR (€) | Dec. 31, 2017USD ($) | Aug. 29, 2017EUR (€) | May 07, 2016EUR (€) | Feb. 04, 2015EUR (€) | Dec. 13, 2005EUR (€) |
Loans and Leases (Textual) | ||||||||||||||||||||||||
Long-term debt, net of original discount | $ 2,586,691 | $ 2,586,691 | $ 3,348,730 | |||||||||||||||||||||
Interest expense | (76,000) | $ (1,443) | $ (157,996) | $ (2,955) | ||||||||||||||||||||
Discounting agreement, description | Up to 85% of Medi-Line's customer accounts receivables. Pursuant to the discounting agreement, Medi-Line will transfer title to KBC ComFin for all receivables that fall under the scope of agreement. The fee for the advance portion of the receivables transferred to KBC ComFin is the two-month LIBOR plus 1.5% on annual basis. | |||||||||||||||||||||||
Manufacturing [Member] | ||||||||||||||||||||||||
Loans and Leases (Textual) | ||||||||||||||||||||||||
Current portion of long-term debt, net of original discount | $ 183,305 | |||||||||||||||||||||||
Long-term debt, net of original discount | 470,014 | |||||||||||||||||||||||
Lease payable | $ 3,425,880 | € 2,860,000 | ||||||||||||||||||||||
Leasing equipment, term | With a 15-year term. | With a 15-year term. | ||||||||||||||||||||||
Floating Rate Secured Line of Credit [Member] | ||||||||||||||||||||||||
Loans and Leases (Textual) | ||||||||||||||||||||||||
Current portion of long-term debt, net of original discount | 116,478 | $ 116,478 | ||||||||||||||||||||||
Line of credit amount | $ 369,561 | € 300,000 | ||||||||||||||||||||||
Interest rate | 1.25% | |||||||||||||||||||||||
Line of credit , description | The €300,000 was be available for drawdown through April 30, 2018, at which point the facility was be reduced to €200,000, and further reduced €100,000 on May 31, 2018. The security includes a pledge of Medi-Line business assets in the amount of €300,000. | |||||||||||||||||||||||
Biotech Coaching S.A. [Member] | ||||||||||||||||||||||||
Loans and Leases (Textual) | ||||||||||||||||||||||||
Principal amount | $ 131,765 | € 110,000 | ||||||||||||||||||||||
Sale and lease | $ 131,765 | € 110,000 | ||||||||||||||||||||||
Monthly lease payments | $ 3,824 | € 3,192 | ||||||||||||||||||||||
Leasing equipment, term | The Company commenced leasing the equipment, with a 36-month term. | The Company commenced leasing the equipment, with a 36-month term. | ||||||||||||||||||||||
KBC Vendor Lease [Member] | ||||||||||||||||||||||||
Loans and Leases (Textual) | ||||||||||||||||||||||||
Leasing equipment, term | The Company has the right to purchase the building at the end of the lease term for three percent (3%) of the original lease amount. | The Company has the right to purchase the building at the end of the lease term for three percent (3%) of the original lease amount. | ||||||||||||||||||||||
Quarterly lease payments | $ 46,730 | € 39,202 | ||||||||||||||||||||||
Common Stock [Member] | ||||||||||||||||||||||||
Loans and Leases (Textual) | ||||||||||||||||||||||||
Restricted common stock, value | $ 97,721 | |||||||||||||||||||||||
Restricted common stock, shares | shares | 7,195 | |||||||||||||||||||||||
Securities Purchase Agreement (the "SPA") with Leonite Capital, LLC [Member] | ||||||||||||||||||||||||
Loans and Leases (Textual) | ||||||||||||||||||||||||
Principal amount | $ 1,120,000 | |||||||||||||||||||||||
Current portion of long-term debt, net of original discount | 933,333 | |||||||||||||||||||||||
Long-term debt, net of original discount | $ 186,667 | |||||||||||||||||||||||
BB&T Financial [Member] | ||||||||||||||||||||||||
Loans and Leases (Textual) | ||||||||||||||||||||||||
Credit outstanding balance | 12,996 | |||||||||||||||||||||||
Credit limit | 60,000 | $ 60,000 | ||||||||||||||||||||||
Current APR percentage | 25.40% | |||||||||||||||||||||||
Comerica Bank [Member] | ||||||||||||||||||||||||
Loans and Leases (Textual) | ||||||||||||||||||||||||
Credit outstanding balance | $ 10,706 | |||||||||||||||||||||||
Credit limit | 11,000 | $ 11,000 | ||||||||||||||||||||||
Current APR percentage | 22.70% | |||||||||||||||||||||||
12.00% Senior Convertible Secured Note [Member] | ||||||||||||||||||||||||
Loans and Leases (Textual) | ||||||||||||||||||||||||
Interest rate | 12.00% | |||||||||||||||||||||||
Total note discount | $ 274,266 | |||||||||||||||||||||||
Discount issue | 120,000 | |||||||||||||||||||||||
Current portion of long-term debt, net of original discount | ||||||||||||||||||||||||
Maturity date, term | 24 months | |||||||||||||||||||||||
Restricted common stock, value | $ 100,000 | |||||||||||||||||||||||
Restricted common stock, shares | shares | 100,000 | |||||||||||||||||||||||
Fair value of the warrants issued | $ 54,266 | |||||||||||||||||||||||
Interest expense | 274,266 | |||||||||||||||||||||||
Original discount | $ 274,266 | |||||||||||||||||||||||
Debt instrument, description | Reclassified, with a limitation of owning a maximum of 4.99% of outstanding Common Stock of the Company at time of conversion. The conversion price shall be, at the option of LC, $1.75, subject to a one-time re-pricing 275 days after the closing, or (ii) 80% multiplied by the price per share paid by the investors in a subsequent equity financing. | |||||||||||||||||||||||
Warrants to purchase common stock | shares | 500,000 | |||||||||||||||||||||||
12.00% Senior Convertible Secured Note [Member] | Leonite Capital, LLC [Member] | ||||||||||||||||||||||||
Loans and Leases (Textual) | ||||||||||||||||||||||||
Current portion of long-term debt, net of original discount | $ (137,136) | |||||||||||||||||||||||
Long-term debt, net of original discount | $ (22,852) | |||||||||||||||||||||||
1.27% Secured Bank Loan [Member] | ||||||||||||||||||||||||
Loans and Leases (Textual) | ||||||||||||||||||||||||
Interest rate | 1.27% | 1.27% | ||||||||||||||||||||||
Principal amount | $ 2,036,362 | € 1,700,000 | ||||||||||||||||||||||
Payment of interest and principal | 23,365 | € 21,175 | ||||||||||||||||||||||
Current portion of long-term debt, net of original discount | $ 275,012 | |||||||||||||||||||||||
Maturity date, term | 7 years | 7 years | ||||||||||||||||||||||
1.27% Secured Bank Loan [Member] | Long-term Debt [Member] | ||||||||||||||||||||||||
Loans and Leases (Textual) | ||||||||||||||||||||||||
Long-term debt, net of original discount | $ 1,524,527 | |||||||||||||||||||||||
1.27% Secured Bank Loan [Member] | ||||||||||||||||||||||||
Loans and Leases (Textual) | ||||||||||||||||||||||||
Interest rate | 1.27% | 1.27% | ||||||||||||||||||||||
Principal amount | $ 329,412 | € 275,000 | ||||||||||||||||||||||
Payment of interest and principal | 4,103 | € 3,425 | ||||||||||||||||||||||
Current portion of long-term debt, net of original discount | $ 44,487 | |||||||||||||||||||||||
Maturity date, term | 7 years | 7 years | ||||||||||||||||||||||
1.27% Secured Bank Loan [Member] | Long-term Debt [Member] | ||||||||||||||||||||||||
Loans and Leases (Textual) | ||||||||||||||||||||||||
Long-term debt, net of original discount | $ 235,697 | |||||||||||||||||||||||
0.72% Secured Bank Loan [Member] | ||||||||||||||||||||||||
Loans and Leases (Textual) | ||||||||||||||||||||||||
Interest rate | 0.72% | 0.72% | ||||||||||||||||||||||
Principal amount | $ 68,781 | € 57,420 | ||||||||||||||||||||||
Payment of interest and principal | 1,454 | € 1,214 | ||||||||||||||||||||||
Current portion of long-term debt, net of original discount | $ 15,379 | |||||||||||||||||||||||
Maturity date, term | 48 months | 48 months | ||||||||||||||||||||||
0.72% Secured Bank Loan [Member] | Long-term Debt [Member] | ||||||||||||||||||||||||
Loans and Leases (Textual) | ||||||||||||||||||||||||
Long-term debt, net of original discount | $ 19,025 | |||||||||||||||||||||||
Loan Subsidy [Member] | ||||||||||||||||||||||||
Loans and Leases (Textual) | ||||||||||||||||||||||||
Current portion of long-term debt, net of original discount | 5,987 | $ 5,987 | ||||||||||||||||||||||
Payment terms, description | Of the total amount awarded, $179,600 (€149,934 EUR) is categorized as loan, with repayment amounts ranging from $5,986 to $23,947 annually from 2018 through 2032. | |||||||||||||||||||||||
Loan subsidy through public service | 598,665 | $ 598,665 | € 499,779 | |||||||||||||||||||||
Loan Subsidy [Member] | Long-term Debt [Member] | ||||||||||||||||||||||||
Loans and Leases (Textual) | ||||||||||||||||||||||||
Long-term debt, net of original discount | 176,613 | 176,613 | ||||||||||||||||||||||
Equipment Lease [Member] | ||||||||||||||||||||||||
Loans and Leases (Textual) | ||||||||||||||||||||||||
Current portion of long-term debt, net of original discount | 23,090 | 23,090 | ||||||||||||||||||||||
Purchase equipment, lease term residual value | $ 1,579 | $ 1,579 | € 1,318 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||
Dec. 27, 2017 | Dec. 22, 2017 | Jun. 30, 2018 | Jun. 30, 2018 | Jun. 30, 2017 | |
Income Taxes (Textual) | |||||
Net operating losses | $ 10,347,301 | $ 10,347,301 | |||
Net operating losses carryovers, expiration date | Dec. 31, 2036 | ||||
Tax provisions reduction, description | The reduction of the corporate income tax rate from the current 33.99% to 29.58% in 2018 and 2019, and 25% from 2021. Additionally, the use of net operating losses (which could previously offset 100% of taxable income) is now limited to offset only 70% of taxable income. | ||||
Effective income tax rate | 21.00% | 34.00% | |||
Accrued income tax | 22,481 | $ 22,481 | |||
Implying an effective rate | 29.58% | ||||
Provision (benefit) for taxes | $ (638,246) | $ (570,714) | |||
Belgian [Member] | |||||
Income Taxes (Textual) | |||||
Provision (benefit) for taxes | 22,481 | ||||
PRIDCO [Member] | |||||
Income Taxes (Textual) | |||||
Tax provisions reduction, description | The exemption allows NXPROC to obtain tax credits in the amount of fifty percent (50%) of approved applicable research and development expenses of NXPROC on an annual basis. As of July 23, 2018, the Company has received all government approvals and certifications from PRIDCO and received tax credits in the amount of $732,340, for research and development activity in 2017, which had been posted to Departamento De Hacienda (the Puerto Rican Department of Finance) system and the Company has received $593,195 in net proceeds from the sale of all available tax credits realizing proceeds of 81% of the face value of the tax credits. | ||||
NXPROC [Member] | |||||
Income Taxes (Textual) | |||||
Provision (benefit) for taxes | $ 593,195 | $ 593,195 | |||
Minimum [Member] | |||||
Income Taxes (Textual) | |||||
Federal corporate tax rate | 35.00% | ||||
Maximum [Member] | |||||
Income Taxes (Textual) | |||||
Federal corporate tax rate | 21.00% |
Property Plant and Equipment (D
Property Plant and Equipment (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Line Items] | ||
Total property plant and equipment - gross | $ 3,850,216 | $ 3,792,170 |
Less: accumulated depreciation | (343,810) | (222,338) |
Total property plant and equipment - net | 3,506,406 | 3,569,832 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property plant and equipment - gross | $ 96,884 | 96,884 |
Capitalized building [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives | 39 years | |
Total property plant and equipment - gross | $ 3,017,552 | 3,017,552 |
Machinery and equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property plant and equipment - gross | $ 735,780 | $ 677,734 |
Machinery and equipment [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives | 5 years | |
Machinery and equipment [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives | 15 years |
Property Plant and Equipment 39
Property Plant and Equipment (Details Textual) - USD ($) | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Property Plant and Equipment (Textual) | ||
Depreciation expense | $ 125,813 | $ 25,375 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2018 | Dec. 31, 2017 | |
Intangible assets with definitive lives: | ||
Fair value of customer relationships at acquisition, Estimated useful lives | 10 years | |
Patents, licenses, and intellectual property | $ 10,363,097 | $ 10,363,097 |
Fair value of customer relationships at acquisition | 600,000 | 600,000 |
Less: accumulated amortization | (2,377,729) | (1,773,605) |
Patents, licenses, and intellectual property - net | 8,585,368 | 9,189,492 |
Intangible assets with indefinite lives: | ||
Fair value of trade secrets and know-how at acquisition | $ 1,550,000 | $ 1,550,000 |
Maximum [Member] | ||
Intangible assets with definitive lives: | ||
Patents, licenses and intellectual property, Estimated useful lives | 4 years | |
Minimum [Member] | ||
Intangible assets with definitive lives: | ||
Patents, licenses and intellectual property, Estimated useful lives | 20 years |
Intangible Assets (Details Text
Intangible Assets (Details Textual) - USD ($) | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Intangible Assets (Textual) | ||
Intangible asset amortization expense | $ 606,160 | $ 572,697 |
Inventories (Details)
Inventories (Details) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Inventories [Abstract] | ||
Raw materials and supplies | $ 1,411,886 | $ 1,811,749 |
Work in process | 743,958 | 334,322 |
Finished goods | 60,499 | |
Total inventories | $ 2,155,844 | $ 2,206,570 |
Segments of Business (Details)
Segments of Business (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | ||
Segment Reporting Information [Line Items] | ||||||
Revenue by Segment: | $ 2,819,164 | $ 106,196 | $ 5,689,198 | $ 115,234 | ||
Consolidated total [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenue by Segment: | 2,819,164 | 106,196 | 5,689,198 | 115,234 | ||
Loss Before Income Tax by Segment: | (1,364,254) | (1,494,880) | (2,246,391) | (3,173,938) | ||
Long-Lived Assets: | 13,641,774 | 13,641,774 | $ 14,309,324 | |||
Manufacturing [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenue by Segment: | 2,768,623 | 5,180,649 | ||||
Loss Before Income Tax by Segment: | (91,205) | 174,118 | ||||
Long-Lived Assets: | 3,476,826 | 3,476,826 | 3,535,516 | |||
Neurostimulation [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenue by Segment: | (8,849) | 98,277 | 395,052 | 98,277 | ||
Loss Before Income Tax by Segment: | (1,400,988) | (1,334,708) | (2,506,010) | (2,984,844) | ||
Long-Lived Assets: | 8,064,356 | 8,064,356 | 8,643,118 | |||
Other [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenue by Segment: | 59,390 | 7,919 | 113,497 | 16,957 | ||
Loss Before Income Tax by Segment: | [1] | 127,939 | $ (160,172) | 85,501 | $ (189,094) | |
Long-Lived Assets: | $ 2,100,592 | $ 2,100,592 | $ 2,130,690 | |||
[1] | Amounts not allocated to segments include interest income (expense) and other income (expense), and amortization of acquisition intangible assets. |
Segments of Business (Details 1
Segments of Business (Details 1) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Sales Non-domestic locations | ||||
Consolidated sales | $ 2,759,774 | $ 98,277 | $ 5,575,701 | $ 98,277 |
Other operating revenue | 59,390 | 7,919 | 113,497 | 16,957 |
Consolidated revenue | 2,819,164 | 106,196 | 5,689,198 | 115,234 |
United Kingdom [Member] | ||||
Sales Non-domestic locations | ||||
Consolidated sales | 1,248,579 | 98,277 | 2,643,509 | 98,277 |
Belgium [Member] | ||||
Sales Non-domestic locations | ||||
Consolidated sales | 884,309 | 1,729,688 | ||
Switzerland [Member] | ||||
Sales Non-domestic locations | ||||
Consolidated sales | 189,176 | 396,967 | ||
Netherlands [Member] | ||||
Sales Non-domestic locations | ||||
Consolidated sales | 141,884 | 349,168 | ||
Norway [Member] | ||||
Sales Non-domestic locations | ||||
Consolidated sales | 225,589 | 345,170 | ||
Rest of world [Member] | ||||
Sales Non-domestic locations | ||||
Consolidated sales | $ 70,237 | $ 111,199 |
Segments of Business (Details T
Segments of Business (Details Textual) | 6 Months Ended |
Jun. 30, 2018Distributor | |
Segments of Business (Textual) | |
Number of operating segments | 2 |
Equity (Details)
Equity (Details) | 6 Months Ended |
Jun. 30, 2018$ / shares | |
Equity [Abstract] | |
Risk-free interest rate | 2.43% |
Expected life | 3 years 3 months 4 days |
Expected dividends | 0.00% |
Expected volatility | 55.97% |
Fair value of the Company's Common Stock | $ 10.93 |
Equity (Details 1)
Equity (Details 1) | 6 Months Ended |
Jun. 30, 2018$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Granted | 90,175 |
Stock Options [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Outstanding, Beginning | 262,878 |
Granted | 96,947 |
Cancelled | |
Expired | |
Exercised | |
Outstanding, Ending | 359,825 |
Exercisable | 190,575 |
Weighted Exercise Price, Outstanding, Beginning | $ / shares | $ 15.07 |
Granted | $ / shares | 10.93 |
Cancelled | $ / shares | |
Expired | $ / shares | |
Exercised | $ / shares | |
Weighted Exercise Price, Outstanding, Ending | $ / shares | 13.95 |
Exercisable | $ / shares | $ 14.32 |
Stock Warrants [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Outstanding, Beginning | 82,926 |
Granted | |
Cancelled | |
Expired | |
Exercised | |
Outstanding, Ending | 82,926 |
Exercisable | 82,926 |
Weighted Exercise Price, Outstanding, Beginning | $ / shares | $ 32.52 |
Granted | $ / shares | |
Cancelled | $ / shares | |
Expired | $ / shares | |
Exercised | $ / shares | |
Weighted Exercise Price, Outstanding, Ending | $ / shares | 32.52 |
Exercisable | $ / shares | $ 32.52 |
Equity (Details Textual)
Equity (Details Textual) - USD ($) | May 22, 2018 | Mar. 08, 2018 | Apr. 19, 2018 | Mar. 31, 2018 | Jun. 30, 2018 | Dec. 31, 2017 |
Equity (Textual) | ||||||
Fair value options | $ 283,056 | |||||
Option to purchase of common stock | 168,233 | |||||
Options expense recognized | $ 267,188,000 | |||||
Available for grants | 90,175 | |||||
Non-qualified options outstanding to purchase aggregate common stock | 191,592 | |||||
Description of reverse stock split | 1-for-14 reverse stock split | |||||
Options [Member] | ||||||
Equity (Textual) | ||||||
Option to purchase of common stock | 359,825 | |||||
2016 Plan [Member] | ||||||
Equity (Textual) | ||||||
Common stock reserved for issuance pursuant option grants under the 2016 Plan | ||||||
Stock issued option purchase, shares | ||||||
Option to purchase of common stock | 96,947 | |||||
Available for grants | ||||||
Options issued under the plan | 359,825 | |||||
Non-qualified options outstanding to purchase aggregate common stock | ||||||
2016 Plan [Member] | Minimum [Member] | ||||||
Equity (Textual) | ||||||
Exercise price | $ 10.64 | |||||
2016 Plan [Member] | Maximum [Member] | ||||||
Equity (Textual) | ||||||
Exercise price | $ 20 | |||||
2016 Omnibus Incentive Plan [Member] | ||||||
Equity (Textual) | ||||||
Common stock reserved for issuance pursuant option grants under the 2016 Plan | 450,000 | |||||
Exercise price | $ 10.64 | |||||
2016 Omnibus Incentive Plan [Member] | Minimum [Member] | Options [Member] | ||||||
Equity (Textual) | ||||||
Exercise price | $ 10.64 | |||||
Remaining weighted average life | 2 years 1 month 16 days | |||||
2016 Omnibus Incentive Plan [Member] | Maximum [Member] | Options [Member] | ||||||
Equity (Textual) | ||||||
Exercise price | $ 28 | |||||
Remaining weighted average life | 7 years 8 months 2 days | |||||
Daniel Powell [Member] | 2016 Omnibus Incentive Plan [Member] | ||||||
Equity (Textual) | ||||||
Exercise price | $ 10.64 | |||||
Fair value options | $ 2,481 | |||||
Option to purchase of common stock | 786 | |||||
Options monthly increments term | The term of the option shall be for a period of three (3) years from the date of issue. | |||||
William Rosellini [Member] | 2016 Omnibus Incentive Plan [Member] | ||||||
Equity (Textual) | ||||||
Exercise price | $ 10.64 | |||||
Fair value options | $ 226,009 | |||||
Option to purchase of common stock | 17,858 | |||||
Options monthly increments term | The option to purchase 8,929 shares of common stock was immediately exercisable, and the option to purchase the remaining 8,929 shares of common stock vests on the anniversary of the grant date. The Company also granted a non-qualified stock option to purchase up to 64,286 shares of common stock with an exercise price of $10.64 per share. The option to purchase 2,679 common shares vests in equal monthly amounts beginning on March 1, 2018. The option to purchase the Company's common stock expires three (3) years from the date they become exercisable pursuant to the grant vesting schedule. | |||||
Kent J. George [Member] | 2016 Omnibus Incentive Plan [Member] | ||||||
Equity (Textual) | ||||||
Exercise price | $ 12.11 | $ 20 | ||||
Fair value options | $ 9,373 | |||||
Option to purchase of common stock | 893 | 893 | ||||
Options monthly increments term | The term of the options shall be for four (4) years from the date of issue. | |||||
Michael Nietzel [Member] | 2016 Omnibus Incentive Plan [Member] | ||||||
Equity (Textual) | ||||||
Exercise price | $ 12.11 | $ 20 | ||||
Fair value options | $ 9,373 | |||||
Option to purchase of common stock | 893 | 893 | ||||
Options monthly increments term | The term of the options shall be for four (4) years from the date of issue. | |||||
Brian Blischak [Member] | 2016 Omnibus Incentive Plan [Member] | ||||||
Equity (Textual) | ||||||
Exercise price | $ 10.64 | |||||
Fair value options | $ 12,855 | |||||
Option to purchase of common stock | 4,108 | |||||
Options monthly increments term | The term of the option shall be for a period of eight (8) years from the date of issue. | |||||
Christopher Miller | 2016 Omnibus Incentive Plan [Member] | ||||||
Equity (Textual) | ||||||
Exercise price | $ 10.64 | |||||
Fair value options | $ 6,766 | |||||
Option to purchase of common stock | 2,143 | |||||
Options monthly increments term | The term of the option shall be for a period of three (3) years from the date of issue. | |||||
Wes Dittmer [Member] | 2016 Omnibus Incentive Plan [Member] | ||||||
Equity (Textual) | ||||||
Exercise price | $ 20 | |||||
Fair value options | $ 5,778,000 | |||||
Option to purchase of common stock | 893 | |||||
Options monthly increments term | The term of the option shall be for four (4) years from the date of issue. | |||||
Non-Executive Employees [Member] | 2016 Omnibus Incentive Plan [Member] | ||||||
Equity (Textual) | ||||||
Fair value options | $ 10,420 | |||||
Option to purchase of common stock | 3,301 | |||||
Options monthly increments term | The option to purchase 2,229 shares was immediately exercisable at date of issue, and the option to purchase 1,072 shares of common stock vests in equal monthly amounts of 90 beginning on March 1, 2018. The option to purchase the Company's common stock expires three (3) years from the date they become exercisable pursuant to the grant vesting schedule. | |||||
Common Stock [Member] | ||||||
Equity (Textual) | ||||||
Common stock value issuances for services | $ 14,840 | |||||
Common stock issued for services, shares | 1,697 | |||||
Restricted common stock, shares | 7,195 | |||||
Restricted common stock, value | $ 97,721 | |||||
Cancelled shares of common stock | 14,286 | |||||
Common Stock [Member] | Daniel Powell [Member] | ||||||
Equity (Textual) | ||||||
Common stock issued for services, shares | 583 | |||||
Warrants [Member] | ||||||
Equity (Textual) | ||||||
Available for grants | ||||||
Options issued under the plan | 82,926 | 82,926 | ||||
Cancelled shares of common stock | ||||||
Warrants [Member] | 2016 Omnibus Incentive Plan [Member] | Minimum [Member] | ||||||
Equity (Textual) | ||||||
Exercise price | $ 28 | |||||
Remaining weighted average life | 1 year 1 month 20 days | |||||
Warrants [Member] | 2016 Omnibus Incentive Plan [Member] | Maximum [Member] | ||||||
Equity (Textual) | ||||||
Exercise price | $ 42 | |||||
Remaining weighted average life | 4 years 1 month 24 days |
2016 Omnibus Incentive Plan (De
2016 Omnibus Incentive Plan (Details) - 2016 Plan [Member] | 6 Months Ended |
Jun. 30, 2018shares | |
2016 Omnibus Incentive Plan [Abstract] | |
Options to Purchase Shares | 359,825 |
Options to Purchase Shares | 359,825 |
Exercise Price 10.64 [Member] | |
2016 Omnibus Incentive Plan [Abstract] | |
Options to Purchase Shares | 92,482 |
Term (yrs) | 3 years |
Options to Purchase Shares | 210,177 |
Exercise Price 12.11 [Member] | |
2016 Omnibus Incentive Plan [Abstract] | |
Options to Purchase Shares | 1,786 |
Term (yrs) | 4 years |
Options to Purchase Shares | 63,396 |
Exercise Price 14.00 [Member] | |
2016 Omnibus Incentive Plan [Abstract] | |
Options to Purchase Shares | 191,804 |
Term (yrs) | 8 years |
Options to Purchase Shares | 86,252 |
Exercise Price 17.50 [Member] | |
2016 Omnibus Incentive Plan [Abstract] | |
Options to Purchase Shares | 67,502 |
Exercise Price 20.00 [Member] | |
2016 Omnibus Incentive Plan [Abstract] | |
Options to Purchase Shares | 2,679 |
Exercise Price 25.20 [Member] | |
2016 Omnibus Incentive Plan [Abstract] | |
Options to Purchase Shares | 1,786 |
Exercise Price 28.00 [Member] | |
2016 Omnibus Incentive Plan [Abstract] | |
Options to Purchase Shares | 1,786 |
2016 Omnibus Incentive Plan (50
2016 Omnibus Incentive Plan (Details Textual) - 2016 Plan [Member] - shares | Jul. 08, 2018 | Jun. 30, 2018 |
Omnibus Incentive Plan (Textual) | ||
Issuance pursuant to option grants | 450,000 | |
Options to purchase | 359,825 | |
Subsequent Event [Member] | ||
Omnibus Incentive Plan (Textual) | ||
Issuance pursuant to option grants | 450,000 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | Mar. 08, 2018 | Mar. 31, 2018 | Feb. 28, 2018 | Jun. 30, 2018 |
Related Party Transactions (Textual) | ||||
Fair value options | $ 283,056 | |||
Option to purchase of common stock | 168,233 | |||
2016 Omnibus Incentive Plan [Member] | ||||
Related Party Transactions (Textual) | ||||
Fair value options | $ 10,420 | |||
Options monthly increments term | The option to purchase 31,200 shares was immediately exercisable at date of issue, and the option to purchase 15,000 shares of Common Stock vests in equal monthly amounts of 1,250 beginning on March 1, 2018. The option to purchase the Company's Common Stock expires three (3) years from the date they become exercisable pursuant to the grant vesting schedule. | |||
Daniel Powell [Member] | 2016 Omnibus Incentive Plan [Member] | ||||
Related Party Transactions (Textual) | ||||
Fair value options | $ 2,481 | |||
Exercise price | $ 10.64 | |||
Option to purchase of common stock | 786 | |||
Options monthly increments term | The term of the option shall be for a period of three (3) years from the date of issue. | |||
Daniel Powell [Member] | Common Stock [Member] | ||||
Related Party Transactions (Textual) | ||||
Fair value options | $ 5,100 | |||
Option to purchase of common stock | 583 | |||
William Rosellini [Member] | 2016 Omnibus Incentive Plan [Member] | ||||
Related Party Transactions (Textual) | ||||
Fair value options | $ 226,009 | |||
Exercise price | $ 10.64 | |||
Option to purchase of common stock | 17,858 | |||
Options monthly increments term | The option to purchase 8,929 shares of common stock was immediately exercisable, and the option to purchase the remaining 8,929 shares of common stock vests on the anniversary of the grant date. The Company also granted a non-qualified stock option to purchase up to 64,286 shares of common stock with an exercise price of $10.64 per share. The option to purchase 2,679 common shares vests in equal monthly amounts beginning on March 1, 2018. The option to purchase the Company's common stock expires three (3) years from the date they become exercisable pursuant to the grant vesting schedule. | |||
Kent J. George [Member] | 2016 Omnibus Incentive Plan [Member] | ||||
Related Party Transactions (Textual) | ||||
Fair value options | $ 3,596 | $ 5,778 | ||
Exercise price | $ 12.11 | $ 20 | ||
Option to purchase of common stock | 893 | 893 | ||
Options monthly increments term | The term of the option shall be for four (4) years from the date of issue. | The term of the option shall be for four (4) years from the date of issue. | ||
Michael Nietzel [Member] | 2016 Omnibus Incentive Plan [Member] | ||||
Related Party Transactions (Textual) | ||||
Fair value options | $ 3,596 | $ 5,778 | ||
Exercise price | $ 12.11 | $ 20 | ||
Option to purchase of common stock | 893 | 893 | ||
Options monthly increments term | The term of the option shall be for four (4) years from the date of issue. | The term of the option shall be for four (4) years from the date of issue. | ||
Wes Dittmer [Member] | 2016 Omnibus Incentive Plan [Member] | ||||
Related Party Transactions (Textual) | ||||
Fair value options | $ 5,778 | |||
Exercise price | $ 20 | |||
Option to purchase of common stock | 893 | |||
Options monthly increments term | The term of the option shall be for four (4) years from the date of issue. | |||
Brian Blischak [Member] | 2016 Omnibus Incentive Plan [Member] | ||||
Related Party Transactions (Textual) | ||||
Fair value options | $ 12,855 | |||
Exercise price | $ 10.64 | |||
Option to purchase of common stock | 4,108 | |||
Options monthly increments term | The term of the option shall be for a period of eight (8) years from the date of issue. | |||
Chief Financial Officer [Member] | 2016 Omnibus Incentive Plan [Member] | ||||
Related Party Transactions (Textual) | ||||
Fair value options | $ 6,766 | |||
Exercise price | $ 10.64 | |||
Option to purchase of common stock | 2,143 | |||
Options monthly increments term | The term of the option shall be for a period of three (3) years from the date of issue. |
Commitments and Contingencies (
Commitments and Contingencies (Details) | Jun. 30, 2018 |
NXDE [Member] | |
Commitments and Contingencies (Textual) | |
Royalty payment percentage | 3.00% |
Number of patents | 35 |
Magnus IP GmbH [Member] | |
Commitments and Contingencies (Textual) | |
Royalty payment percentage | 6.00% |
Number of patents | 86 |
Concentration (Details)
Concentration (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018DistributorCustomer | Jun. 30, 2017Customer | Jun. 30, 2018Distributor | Jun. 30, 2017Customer | |
Sales revenue [Member] | ||||
Concentration (Textual) | ||||
Number of customers | 2 | 1 | 2 | |
Sales revenue [Member] | Customer one [Member] | ||||
Concentration (Textual) | ||||
Concentration risk, percentage | 54.60% | 100.00% | 46.00% | 100.00% |
Number of customers | Customer | 1 | |||
Sales revenue [Member] | Customer two [Member] | ||||
Concentration (Textual) | ||||
Concentration risk, percentage | 25.90% | 23.90% | ||
Product purchased [Member] | ||||
Concentration (Textual) | ||||
Concentration risk, percentage | 32.30% | 10.00% | 25.60% | 10.00% |
Number of distributor | 1 | 1 | ||
Accounts receivable [Member] | ||||
Concentration (Textual) | ||||
Concentration risk, percentage | 73.00% | 10.00% | ||
Number of customers | 1 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | Aug. 01, 2018 | Jul. 22, 2018 | Jun. 30, 2018 |
Subsequent Events (Textual) | |||
Fair value options | $ 283,056 | ||
Subsequent Event [Member] | |||
Subsequent Events (Textual) | |||
Stock issued option purchase, shares | 38,572 | ||
Subsequent event, description | The options to purchase 2,946 shares vested and an additional 758 shares vest on a monthly basis for the following 47 months. The term of the option shall be for a period of three (3) years from the date of vesting. | ||
Fair value options | $ 92,789 | ||
Term of options | 3 years | ||
Exercise price, granted | $ 11 |